RATING OF MACHINERY BILL.

HC Deb 11 May 1923 vol 163 cc2761-844

Order for Second Reading read.

Captain REID

I beg to move "That the Bill be now read a Second time."

As I am fortunate enough to have the opportunity of bringing in this Bill I will briefly state its objects for the benefit of those few who do not already recognise it as a "hardy annual." Though it has been hardy, I am afraid it has been a most unlucky annual, inasmuch as it has come up in the House several times before but it has never yet reached the period of full bloom. I sincerely hope this year we shall see it in flower. Its sole object is to provide that in estimating the value of any hereditaments used for trading or manufacturing purposes, machinery shall not be included, unless it is fixed or attached to the freehold. The exact meaning of my last sentence will be more clearly defined in Clause 1 of the Bill, where it says there shall be taken into account such machinery and plant only as is—

1. (1) fixed or attached to the hereditament, and cannot be removed from its place without necessitating the removal of some part of the hereditament; or
2. (2) used in or on the hereditament for producing or transmitting motive power or for heating, lighting or ventilating the hereditament."

I think I can sum up the position quite briefly. Movable machinery—I use the short title "movable" as it is more convenient—can be rated in England and Wales but not in Scotland or Ireland. Ireland can date her good fortune as far back as 1852, when the Valuation (Ireland) Act came into force. Scotland obtained this advantage from the Land Valuations (Scotland) Amendment Act, which came into force in 1902. This was the direct outcome of the findings of the Royal Commission on Local Taxation that sat up till 1901. In its Final Report the Commission dealt with the rating of machinery. I will read a short paragraph from that Report, which deals with the subject now under discussion. That in estimating the rateable value of any hereditament occupied for trade, business, or manufacturing purposes there shall be excluded from assessment any increased value arising from machines, tools or appliances which are not fixed or are only so fixed that they can be removed from their place without necessitating the removal of any part of the hereditament, but the value of any machinery, machine or plant used in or on the hereditament for producing or transmitting first motive power or for heating or lighting the hereditament shall be included. This conclusion is identical in substance with the present Bill. Scotland was wise enough to take advantage of the five years' deliberations of the Royal Commission. England and Wales, unfortunately, neglected to do so with the result that they are now at a very great disadvantage, and what adds insult to injury is the fact that movable machinery is only rated in some districts of England and Wales, and then seldom in a consistent manner.

The result of this strange state of affairs must be apparent to all. The rating burdens which are at present placed on many manufacturers are anyhow beyond all reasonable proportions, but when one takes into consideration that these struggling industries have to compete with the same class of industries in other districts and in other countries where machinery is not rated, then the whole situation resolves itself not only into a farce but even into a tragedy. Not only do Scotland and Ireland get an advantage over England and Wales, but so also does every foreign country. There is no foreign country in the whole of the world where movable machinery is rated. I know for certain that there have been manufacturers who would have liked to set up factories and start works in England or Wales but eventually settled in other countries. They have been frightened away by the unfairness and the uncertainty of our rating system as applied to machinery. This rate has discouraged manufacturers practically more than any other factor. What encouragement has there been to manufacturers to show any initiative whatsoever to put new machinery into their factories, to increase their output and increase their buildings, which naturally would result in an increase of employment? There has been no incentive whatsoever. In fact, I know that some industries at present are so crippled that it would be impossible for them to set up new mnt to, and those manufacturers who are in a position to put new plant into their factories dare not do so because of the uncertainty of the present rating system. The net result of all this is that it means less work for the workers. Consequently, the question affects not only capital but also labour, for it is a direct burden on the industries of the country. I somehow feel that even the opponents of the Bill will grant that there are many injustices as far as the rating of machinery is concerned. I understand that they maintain that when imposing rates someone has to suffer and that in this case if it is not the manufacturer it will be the rest of the community. As far as that contention goes, I agree up to a point. But I maintain that the difference in rates as far as the rest of the community is concerned would not be very apparent, for by promoting enterprise and increasing trade, the districts concerned would be developed and that would distribute the rating burdens over a much larger area and would distribute them amongst many more people.

Another consideration might be taken into account. In many places the rating authorities themselves might help in a very large way by cutting down expenditure, but that seems to be a consideration which never suggests itself to them. They prefer, instead, to oppose such legislation that is before the House at the present time. If these burdens on trade be removed, and trade improve, it will mean that the manufacturer will be in a position to pay better wages.

Lieut.-Colonel WATTS MORGAN

And to make more profit. [HON. MEMBERS: "Why not?"] Why does the hon. Member not say so?

Captain REID

Quite so, and by paying better wages it would mean that the manufacturers would indirectly be paying any slight temporary increase there might be in the local rates.

Let us consider that my assumptions are incorrect, although I have been into them very carefully. There always remains the main and wider question to be considered. Most of us will agree that the far-reaching effect of this Bill on industry and employment would warrant any slight temporary increase that there might be in the local rates. If during the War many of us had considered our individual inconveniences before the very grave main issue which was at stake, such lack of foresight would have reacted upon us by now with a vengeance. In the same way what we are now discussing has essentially to be considered from its wider and its eventual motive. If industry is not given some indication that her burdens to some extent are to be lessened, it will mean that in many cases industry will break down altogether, and those who are unemployed in consequence will wish to goodness that they had been given an opportunity of paying a fraction more on their rates, and thereby preventing such a catastrophe to themselves.

I suggest that the consideration that I have placed before the House may apply to any misgivings that agriculturists may have experienced. I will give a few incidental considerations so far as that community is concerned. It may be argued, quite reasonably, that if the machinery of factories is rated, so ought agricultural machinery to be rated. The converse of that would be, that if the rating of machinery is discontinued there would then be no precedent and no justification for ever placing a tax on agricultural machinery. I hope that agriculturists will vote for the Bill, because they will not only be helping to remedy the crying injustices of urban dwellers but also to a very large extent, they will be protecting their own interests. By helping industry in this way they will be putting the manufacturer in a position to turn out agricultural machinery at a much more reasonable price than at the present time. Not only do I hope we shall get the support of the agricultural Members, but I hope we shall get the support of the Scottish Members. I cannot believe that there are any Scottish Members who would not wish England and Wales to have the same industrial advantages as they themselves receive at the present time. If by any chance the forthcoming division shows that there are any dogs-in-the-manger from Scotland, then the next time that I am fortunate in the Ballot I shall have to bring in a Bill to rate all machinery in Scotland. Then those Members who oppose me to-day will be in honour bound to have to go into the lobby with me in support of my Scottish Bill of the future. To allay the fears of hon. Members, however, may I say that my last remarks are neither a threat nor a promise.

The only people who will regret the success of the Bill will be the Assessment Committees and the legal fraternity. The former will regret it because of the inconvenience it will cause to them, and the latter because of the pecuniary loss that it will entail. I know that on many subjects when the Opposition have no adequate reply they invariably say that the whole system ought to be considered as a whole and not piecemeal. I expect that will be said so far as this Bill is concerned. I agree that the question of rateable values as a whole ought to have been considered long ago, but I fail to see that that is any reason why the pressing injustices that now exist should continue until these exhausted inquiries are commenced, if they ever are commenced. This being a small Measure, I have been told that it is piecemeal legislation; but I feel somehow, that if it had been a large Measure I should have been told by the same people that it was far too comprehensive and embracing. I have also been told that this is not the right time to bring in such a Bill. When, so far as the Opposition is concerned, is it ever the right time to bring in any Bill? To a new and young Member who enters for the first time what we are told is the most revered legislative Chamber in the world, such delicate hypocrisy that I have just indicated at first causes one much bewilderment, but finally, I presume, becomes an education.

If ever there was an opportune moment to bring in such a Bill, now is the moment. What is the main reason why unemployment is so rife at the present time? It is because our cost of production is so high that we find at the present time it nearly impossible to compete in foreign markets. Rates are a most important factor in the cost of production. Therefore it is ludicrous to say that now is not the correct time to bring in such a Bill. The Coalition Government maintained time and time again that there was only one way to relieve unemployment, and that way was to stimulate industry. In this Bill we have an obvious way of helping to bring this about, but I noted that when this Bill came before the House, in practically the same form as it is now, when the last Government was in power, they did not go out of their way to help in this respect. I sincerely hope that the present Government will not imitate the Coalition Government in that way. May I say, in conclusion, that I am in no way whatsoever connected with any machine-using industry. The only reason that I have introduced this Bill is because I represent one of the important industrial districts of Lancashire, consequently I am in a position to know the hopeless situation that many manufacturers find themselves in at the present time.

Mr. W. ROBINSON

I beg to second the Motion, which has been moved so ably by the hon. Member for Warrington (Captain Reid). I believe the principle of the Bill to be correct. If we have got to have rating, we must have rating which is equitable. I support the Bill also because I believe that at present there is a burden, I suppose, on all industry, but certainly on the industry which I know best, the cotton industry, simply because it is an export trade, and as long as the cost of production is so high there is going to be unemployment. From the figures which I am about to give, it will be seen that from the point of view of the cotton industry there is ample reason for supporting this Bill. Since I came in I heard some Members saying that this was going to take the charge off the boss and put it on to the workers. I have come to this House with the object of trying to see both sides. Ever since I was a trade union official—and I have had a lot of experience—I have always contended that there are two sides, and if you cannot see both sides you are not fit to negotiate in any dispute. We shall be told in this Debate that this is going to take from the employing classes who are able to pay and put it on to the workers. I am certain that if the worker could have regular employment the increased rating that may accrue as a result of this would not be as great as the burden which they have to-day.

There is another hardship with regard to this business. In some districts loose machinery is rated and in other districts it is not, and employers in the cotton industry claim that it is a disadvantage to those who have charges for loose machinery, as they cannot go on the Exchange and deal in the same way as the others. With regard to this class of machinery, I do not see why it should be taxed, because it is interfering with the right of the employer to put in improved machinery. If he improves up goes the rateable value of the machinery, and his overhead charges are increased accordingly. There is a large number of dressmakers. If you are going to tax loose machinery in the cotton mill you could tax the dressmaker who is making a living and perhaps some little profit—I hope she is—on her machine in the same way. The same thing applies to the tailor; he is going to have his machines taxed. They are all loose machinery. Then you have the case of a woman whose health will not allow her to work inside a cotton mill or in any other industry outside her own house but stays at home and knits stockings. If you keep to the principle of taxing loose machinery you must tax her, and no one knows where such taxation will end. That is the reason why I support this Bill.

So far as the cotton industry is concerned it has issued to all members a circular which I hold in my hand which gives the position of the industry. The unions covered number 21; seven of these unions tax on fixed machinery, and 14 do not The seven which tax are Manchester, Barton-upon-Irwell, Huddersfield, Halifax, Leeds, Wigan and Warrington. The 14 which do not are Ashton-under-Lyne, Bury, Burnley, Blackburn, Bolton, Chorley, Failsworth, Haslingden, Oldham, Middleton, Rochdale, Salford, Stockport and Todmorden. This is a very serious position as will be shown by the figures which I will give with regard to a cotton mill in the Manchester Union. In 1914–15 the assessment was £1,350 with rating at 7s. 6d. in the £1, and the payment which they had to make was £523. In 1921–22 the assessment was increased to £2,688, but subsequently on appeal they obtained a reduction to £2,362. That in my opinion is a very serious position, and you cannot imagine with the small difference there is upon the cotton exchange of this country that you are going to work with these large overhead charges. In a cotton mill in Wigan Union they have exactly the same position. In 1914 the assessment was £1,808, rates were 9s. 2d., and the amount paid was £829. In 1920–21 the assessment was raised to £7,500, but on appeal it was reduced to £5,400, and with rates at 14s. 6d. they had to pay £3,915. In 1921–22 the same thing went on, and they had to pay £3,762. Then there was a cotton mill in the Leigh Union. These are all Unions which tax loose machinery. In the Leigh Union the same thing happened, In 1914 the assessment was £4,000, and the rate at 8s. 6d. meant that £1,700 had to paid. In 1920–21 the assessment was increased to £18,000; it was reduced on appeal to £9,800, which was more than double the figure of 1914, and £6,860 was paid, the rate then being 14s. In 1921–22 they had to pay £5,329, and in 1922–23 the assessment was reduced. The ultimate result was that £4,444 had to be paid.

I represent a district which has cotton, woollen, worsted and silk, and I say from long connection and full knowledge of the cotton industry of Lancashire that if we are to have equitable taxation there should be a proper understanding that the overhead charges should be as light as possible. My hon. Friend the Member for Warrington is right when he says that if this were done we should have more employment, and I believe better wages than we have to-day. The representatives of the operatives were yesterday discussing the question of the stabilisation of wages for another 12 months, and we got the employers in the cotton industry to agree with us to stabilise them for nine months. I believe that we should have more employment, and there would be less reduction of wages, if this Bill became law, and I have the greatest pleasure in seconding it.

The MINISTER of HEALTH (Mr. Neville Chamberlain)

I am rising at this very early stage only because I am obliged a little later to leave the House in order to fulfil another engagement. Therefore, it is necessary for me to speak now or not at all. I think I am right in saying that this is about the nineteenth time that this Bill has been introduced into this House. On rather more than half those occasions it has received a Second Reading. But there it has stopped. The flowers that bloomed in the spring have not succeeded in reaching the stage of fruit. I fear that that reflection will not be very consoling to my hon. and gallant Friend the Member for Warrington (Captain Reid) who has introduced this Bill in a speech of such admirable clearness and humour. Perhaps he will not find it any more consoling if I add that, though personally I hope he will get the Second Reading, as indicating the general sympathy of the House with the principle underlying the Bill, I cannot hold out to him any reasonable prospect that he will be more successful with this Bill than his predecessors have been on other occasions. Why do I say that? For this reason that anybody who studies the past history of these Bills must be driven to the conclusion that they have not progressed because there are certain preliminary difficulties in the way which were not surmounted by those Bills and which have not been surmounted by the present-Bill. As long as that is the case every one of those Bills must continue to be highly controversial in character. We all know that the result of that is that towards the end of a busy Session, a Bill shares in the general massacre, for then time becomes the scarcest and most precious commodity in this House, and those who have the power, that is to say the Government of the day, generally run away with the bulk of the spoils.

I may say at once that the Government will not put on the Whips for or against this Measure; they will leave it to the free vote of the House. I have something more than that to say, and perhaps it will be a little more agreeable to my hon. and gallant Friend, and will show that the Government have some practical sympathy with the case which he presented so persuasively. It has been pointed out that in this matter there is a considerable difference between Scotland and England and Wales. In Scotland the statutory position is that there is excluded from the rating of hereditaments any plant or machinery which cannot be removed without removing part of the hereditament, or which forms the motive power or part of the lighting or heating plant. In England and Wales there is no Statute which expressly lays down that machinery shall form part of the hereditament for rating purposes. There has been a great number of decisions in the Courts, so that there has been gradually built up a case law on the subject, the general effect of which is that fixed plant and machinery are rateable, but loose tools and movable chattels are not.

That is the general effect of the case law. But in practice there is a very great divergence. The practice varies very much even in towns closely adjacent to one another. The result is that you have manufacturers carrying on similar businesses under conditions which in other respects are almost identical, yet are so differently rated as to make a perceptible and substantial difference in the burden which they have to carry in competition with one another. Consequently and naturally, a very great deal of dissatisfaction arises. This Bill seeks to assimilate the law in England and Wales to the law of Scotland. There is a great deal to be said for uniformity of practice between the different countries. That view is strengthened by the consideration that we have now got the railways grouped into four large groups, which are not confined to one country or the other but reach into both. We have to contemplate in the near future a valuation of the Anglo-Scottish groups and an apportionment of their values between the two countries. If, when we proceed to that valuation, there is this radical difference in the method of rating machinery, it seems to me that if, will give rise to very considerable difficulty and perplexity and will require some very complicated and troublesome adjustment. The question then arises whether the present law in Scotland is satisfactory. On that I must quote to the House words which are no doubt familiar to many hon. Members. They represent the view of the Departmental Committee on Local Taxation in Scotland, which was published last year. The Committee was under the Chairmanship of Lord Dunedin. It considered this question of the rating of machinery, and reported: We have had our attention called to the somewhat chaotic state of decisions in connection with the rating of machinery and as to what items are to be considered assessable in industrial works. After pointing to recent developments the Report goes on: The real grievance seems to us to consist in the varying practice of assessors, which makes it, as matters stand, almost impossible for the owner of works to calculate with certainty what additional burden he may be assuming if he puts in additional machinery and other facilities. It has been suggested that some fresh definition should be sought which would ensure reasonable uniformity of practice. We think this is a proper suggestion, but the task of finding such a definition is only possible after practical inquiry is instituted as to the various classes of machinery employed and the effect of past decisions as applied to those classes. I do not think you could have put more I clearly and succinctly than that the difficulties which have arisen is Scotland as well as in England and Wales, and the necessity of finding some new definition which will ensure uniformity of practice, before you begin to legislate upon such a very complicated and delicate matter. That is one of the preliminary difficulties not yet surmounted. The other difficulty is one which is particularly acute and formidable now. The object of this Bill is to relieve industry of certain burdens which those who are promoting the Bill claim are hampering and checking the development of industry. Personally, I have always taken that view myself. But it must be clear that whatever burden you take off industry has got to be put on to some thing else. The question of whose shoulders are to be made bear it, is one which is not touched upon in the present Bill. I had a letter from a union in one of the large manufacturing towns in which they tell me that if the Bill were carried through they estimate that the deficiency in poundage would amount to 7d. in the £ of the rates, and the rates in that town are heavy already. It is clear, if that is at all the effect of the Bill, as it may well be, industry which has been relieved in its assessments would have to pay in increased poundage as much or almost as much as it had been relieved of in assessments. As to other means of meeting the deficiency, I think the hon. Member for West Middlesbrough (Mr. T. Thomson) would have no difficulty in finding means and in suggesting methods for their application so as to cover a much wider field than is covered by the Bill.

The point I want to put to the House, however, is that these are questions which involve very serious and somewhat complicated considerations, and before you begin to bring about a change which would involve such radical alterations in valuations throughout the country you ought to have clearly before you what is the way in which you are going to surmount these difficulties. The Dunedin Committee suggested that the first difficulty to which I have alluded is one which must be made the subject of practical enquiry by a person or persons specially chosen for the purpose. It will be remembered that last year my right hon. Friend the Member for West Swansea (Sir A. Mond)—the late occupier of the office which I now hold—was ready to set up a Departmental Committee of inquiry into these matters. I take it, the only reason why he did not proceed with the setting up of that Committee was that the Bill itself never got beyond the Report stage. [An HON. MEMBER: "And he lost his job."] In case I should lose my job, I would prefer to lose no time in following the course which the right hon. Gentleman had in mind and in setting up a Departmental Committee to make these inquiries: first, as to whether it is possible to find some new definition which will ensure uniformity of practice, and, secondly, as to what is to become of the burden of which industry is to be relieved. I may remind the House that the Government already have in preparation a Bill which is to deal with the whole general question of valuation and rating reform. The preparation of that Bill is far advanced, but it still requires a good deal of discussion and perhaps of negotiation with the various interested parties throughout the country, and I do not imagine it will be possible for it to be introduced this Session. Nevertheless, if the inquiry to be made by the Departmental Committee which I am proposing to set up results in a report of a practical character, before we have had time to introduce our general Bill dealing with valuation and rating reform, it seems to me that the Bill would be the most appropriate and proper place in which to embody any suggestions dealing with this minor and more isolated or confined subject of the rating of machinery and that in that way it would find its niche in any alteration in our general system. I hope the announcement which I have made will do something to console my hon. and gallant Friend. If he does not succeed in carrying his Bill into law, he will feel he has not altogether wasted his time in once more bringing this subject to the attention of the House; that the Government have demonstrated in the most practical manner they can, their desire to make real progress with this matter; that they do feel fundamentally in sympathy with the principles which he has in mind and that they do feel that a system which imposes penalties upon the enterprise of our manufacturers cannot be good for the trade and enterprise of the country.

Sir DOUGLAS NEWTON

I beg to move to leave out the word "now," and at the end of the Question to add the words "upon this day six months."

When this Bill, or a Bill in similar terms, was before the House some twelve months ago it was urged by those opposed to the Measure that the time was inopportune for it. Whatever may have been the force and truth of that argument at that time I suggest—particularly in view of the announcement which has been made by the Minister of Health—the present time is certainly most inopportune to proceed further with the Measure. We have at the present time a great congestion of Parliamentary business, particularly upstairs. It may be that that congestion has been accentuated owing to the regrettable illness of the right hon. Gentleman the Member for the City of London (Sir F. Banbury), but the fact remains that there is a great deal of work upstairs and a further burden should not be imposed upon the Committees unless useful legislation is to be the fruit of their labours. This Bill is named the Rating of Machinery Bill and I think that Title is misleading and confusing. The rating of machinery suggests—not perhaps to Members of the House but generally—a Bill relating to the putting on of rates and not, as is the case with this Bill, the taking off of existing rates. I think it is fair comment and a reasonable proposal to make that when the promoters of the Bill bring the Measure up again in another 12 months, they should endeavour to find a new Title more in keeping with the real purpose and object of the Bill. I suggest that they should adopt the Title of the Relief of Manufacturers Bill.

I hope the House will forgive me if I venture to draw their attention to the great age of this Measure. As has already been stated, it has been before the House nineteen times, and as long ago as 1902 it was referred to as the hardy annual. It is still with us. I suggest that if this Bill had any real substance and any considerable measure of merit, it would have received, throughout those changing scenes and changing Governments, at any rate the support of one Government. This seems to me to give us food for thought, and that it should be a warning not to proceed with this Measure if, after such a long period before the public, it has failed to obtain the support of any one Government during those years. The Bill proposes to exempt certain classes of machinery from rating. It upsets and reverses the whole of our rating position at the present time, and now that householders are being badgered with coloured papers and in other ways, I suggest that this is not the time for a further drastic upheaval of our rating system. The Government are putting forward proposals for the revision of our rating system, and if changes are to be made—and I think that a change is long overdue—I suggest that they should be made with all the weight and force of a Government measure, and in a comprehensive way, and not by means of piecemeal and sectional legislation of this kind, sectional legislation which is going to shift the burden from one set of shoulders on to another set of shoulders, which is going to cut large slices off the assessments, and which is going to take away large portions of rateable property. After all, someone has got to pay, and the question as to who it should be is not referred to in this Bill, nor has it been referred to in the speeches which have been made by the mover and seconder of the Second Reading.

I suggest that if this Bill were passed it would mean higher assessments and higher rates for other people, and higher rates inevitably lead sooner or later to higher rents, which in turn are equivalent to a lowering in the wages of workmen. Those who are in favour of this Bill have failed to establish any case. If rates are to be reduced on factories, then they are going to be increased on the shops, the co-operative stores, the rented houses, and the businesses of the country generally, and this is no time to take the rates off the factories, which have long borne them, and to transfer them on to these other and, in the main, poorer establishments. I would like to remind the House of the great increases which have taken place recently in our rates. In a return published by the Ministry of Health for the financial year 1921–22, and in the Estimates for 1922–23, I find that, in spite of an increase in the assessable value amounting to 6.8 per cent. since the year 1914, the rates have increased on the average by no less than 98 per cent., which means that where a man was called upon to pay 1s., he is now called upon to pay 2s. The rate per head of population is now £4 3s. 4d. There are urban areas in which the rates run as high as 28s. 6d. in the £ and rural areas where they are as high as 25s. 1d. in the £ and it is no time further to increase the rates in those or any other areas.

12 N.

I object to this Bill because it removes the load from those whom I regard as better able to pay, and puts it on to others who are less able to do so. The proposals, while they affect directly a very small section of the community, yet indirectly affect the community as a whole, and they affect almost every hereditament. May I give an example? In the County of Durham, for which I have been supplied with some figures, I find that the assessable value of statutory companies and industrial companies which would be directly affected would amount to 47 per cent. of the total assessment. There, at once, you are able to realise what a problem the Assessment Committees throughout the country would be thrown up against, if in one county the assessments which would be interfered with represent 47 per cent. of the total assessments. Re-assessment would be a very costly matter, and, as has been pointed out, it may well be that the businesses which at first sight would appear to gain an advantage as a result of re-assessment would not, in the end, do so, because, although they would gain on the assessment, they would lose by the increased poundage which would be charged, so that the relief would not be real or substantial. Again, how are the provisions of this Bill to be interpreted? What is plant fixed or attached which cannot be removed? How can you draw a line between permanently fixed and attached? After all, the engineering profession is a great profession and full of resource. What is mobility? Almost everything is more or less mobile and can be moved. It is a matter of time more than anything else. In the case of railway companies, it is not clear what would be the position in regard to railway lines. They are attached to the sleepers and could be moved. Are they to escape assessment for rating purposes? It may be that the soil is regarded as a hereditament. I do not know what the interpretation of the Law Courts might be, but we do know that the Law Courts do not always interpret the law in the way in which some of us expect. In regard to electricity works, many great corporations have machinery which is fixed and rateable at present, but which could be removed, and provision would be made for its removal if, by so doing, they could drive a coach and four through this Measure.

I have brought forward these illustrations because I think that practical illustrations tend to bring home the great difficulties of putting in force any measure of this kind. It has been suggested that the present law is obscure and difficult to work, and that a definition is required in order to ensure uniformity. I can only say that, owing to the common sense which is exercised by the assessment committees throughout the country, great difficulties have not, in fact, arisen. If however a definition to ensure uniformity be required, then we are given to understand that a Committee is shortly going to be set up by the Minister of Health, and it will be able to explore the situation and provide such a definition. We find the promoters of this Bill rushing in where the members of the Dunedin Committee were quite unable to face the task, and who said that before any action was taken an expert investigation would have to be made. There is another aspect of this matter, and that is the question of the effect on loans. Nearly every local authority throughout the country has borrowed money, which is borrowed against the security of the rates, and those rates include in their value the valuation of machinery.

If you are going to clip off a large section—it will be a large section in some areas—of the rateable value, the security of those loans will be at once reduced, and the difficulties of those local authorities, with all the improvements they may desire to effect, with all the problems with which they are faced, will be at once increased and added to. I do think we ought to be told what the effect of a proposal of this kind, which interferes with our rating system to such an extent, would be upon the borrowing powers of our local authorities. At the present time the local authorities, whose influence cannot be wisely ignored, numbering as they do some 1,148 urban authorities and 13,000 rural parishes—the local authorities as a whole are against the proposals in this Bill. The County Councils' Association are against this Bill. The great Association of Assessment Committees of England and Wales are against the further progress of this Measure in Parliament. They recognise—and they are best qualified to express an opinion—the magnitude of the task which this Bill would impose upon them, and they recognise the great difficulties, the unfairness and injustice. I have no doubt that if this Bill were passed, it would give relief to the captains of industry.

Lieut.-Colonel WATTS-MORGAN

Only some.

Sir D. NEWTON

There are two kinds of machines. There is the machine in the shop, and there is also the human machine. Is it fair to take it off the machine in the shop to put it on with added weight to the human machine? When we go into a big factory, and hear the wheels of industry, which, after all, are inseparable from toil and labour, and when we emerge from that factory, which is possibly run on up-to-date lines which may be well lit, well heated, and the welfare of the workers may be reasonably provided for—but when we come out of that factory, how often do we do so to go into slums which are alongside that great factory. We all, I think, appreciate and recognise the great debt which the country has to pay for the advance in material prosperity due to the application of machinery, but I do claim that it is unreasonable to urge that a tax, which has long been paid by machinery, should be taken off, when adjacent to those factories are so many pressing problems which have long required solution, and for which money is required by the local authority in order that it may be able to better the condition of the workers in those districts. The congestion of our cities to a great extent must be laid at the door of machinery, and therefore, it is only fair that the machinery user should be called upon to square up to his burden and carry his burden, in the same way as other ratepayers have to bear their burden. I would venture very respectfully, for the reasons I have indicated, to urge the House to reject this Measure. We do not want the great task of further valuation, and the great expense which it would entail. After all, the assessment committees are opposed to it, and the law has worked, I submit, reasonably well in the past few years. In view of the announcement which has been made, it appears inopportune to proceed to this great change, which, if given effect to, would relieve the few at the expense and worsening of the condition of the many. I, therefore, ask the House to reject this Measure.

Mr. TREVELYAN THOMSON

I beg to Second the Amendment.

In seconding the postponement of this measure, I would say that if we were gathered here merely as an academic debating assembly, our sympathy with the excellent speeches in which this measure was moved might lead us to give it a Second Reading, but I submit, in view of the announcement of the Minister of Health, it would be foolish, as practical business men, to legislate first, and inquire afterwards. The Minister has announced that the Government are prepared to appoint forthwith the Departmental Committee which the right hon. Member for West Swansea (Sir A. Mond) promised, and was unable to fulfil, and surely we should be stultifying ourselves as business men and men of common-sense to seek to legislate in advance of that inquiry taking place. I put it to supporters of the Bill who are here essentially as business men putting forward a business proposition, would they, with regard to their own businesses, ever dream of launching out into large expenditure and into new developments before their committee of experts had reported to them as to the lines on which those changes had to be made? Therefore, I know that as business-men and men of common-sense, they will say, after the announcement of the Minister, that the only course to follow is to withdraw this Bill, and to wait for the inquiry and its result.

I am sure the House as a whole is in favour of the principle of relieving industry and improvements in general from rating and taxation, but that is a very different thing from saying that we are going to single out one particular type of machinery, one particular type of improvement, and exempt them, at the cost and expense of the rest of the community. Why should we say that plant which is loose plant should not pay rates, and plant which is fixed plant should pay rates? Surely from an industrial point of view, you would be differentiating very unfairly between one manufacturer and another. When you come to the larger question of improvements as a whole, why differentiate and say that one type of machinery, one type of improvement, shall be exempt, but that other improvements—improvements in housing, building and structure shall have to pay an extra rate? It is favouring one special class of manufacturer as against another. If you want to relieve industry and improvements, you should begin on a sound basis. Why should you penalise the manufacturer who puts up a factory on modern lines, with every convenience to the worker, who provides amenities in the way, possibly, of recreation rooms, baths and all the facilities which help to improve the human machine? You say, "I am going to continue to rate him on his improvements, but I am going to exempt another manufacturer on his machinery." I say you want to exempt improvements and machinery all round, and, until you can do that, it is no use tinkering with the thing in this half-measure. It has been suggested that half a loaf is better than no bread. That is perfectly true, but if that half loaf be obtained by taking from someone else who would be left with less than half a loaf, you are doing an injustice.

I have heard it said that because you are in favour of reducing rating you must accept this. We are all in favour of the reduction of taxation, but who, because of that, would abolish, say, the beer duty at the expense of putting an increased duty upon sugar or tea? We want to be logical in these matters, and look at the thing from the general point of view, and I submit that, at a time like the present, when the need above all others is more houses and better housing, to bring in a Measure which would in any way make it more difficult to produce houses by increasing their rating would be a serious detriment, and an injury to the community as a whole. We have had a startling illustration of the actual working of a Measure of this kind since this Bill was before the House last year. There has been a re-assessment for railway rating. There has been a reduction, if you like, on the burden of the machinery of the railway companies. What has been the result? In large industrial towns, an increased rate has been put on to cottage property, other industries, fixed plant and machinery in order to relieve the railway companies. There you have the most striking illustration of what would be the actual effect in practice of a Measure of this sort. You would relieve one limited class of industry and put added burdens on to the community as a whole, on to cottage property, and on to fixed plant. Therefore, I have no hesitation in asking the House, in view of the announcement of the Minister of Health, to reject this Bill. I am glad to see the hon. and gallant Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood), who a year ago was one of those ardent supporters of this Bill, has seen the error of his ways—

Colonel WEDGWOOD

No change here!

Mr. THOMSON

—due no doubt to the argument put forward by my hon. Friend, Major Harry Barnes, who was then a Member of this House—

Colonel WEDGWOOD

Therefore Major Barnes has ceased to be a Member!

Mr. THOMSON

—whom he twitted with the errors of his arguments. Now the hon. and gallant Gentleman the Member for Newcastle-under-Lyme has seen the error of his ways. Instead of being a supporter of this Measure he is seeking the wider interests, and is not apparently wishful to tinker and apply this partial cure until we can get a sound and comprehensive Measure dealing with the whole question. The Minister very well inquired: "Who is to bear this added burden?" It would be out of order for me to go into that question, but surely until we are prepared to reform the whole of our rating system—which is long overdue—until we are prepared to put the taxes on unoccupied land and site values and not on to industry, it is no good tinkering in this half-hearted way with a Measure of this sort. Therefore I appeal to the House at a time when industrial concerns are sadly burdened, at a time when claims are being put forward in relation to the needs of necessitous areas to relieve their excessive taxation and say that you ought not to seek to put on to a section of these districts added rates in order to give partial, half-hearted, and tinkering relief to a very limited class of the community.

Mr. SIMPSON-HINCHCLIFFE

I have waited for a very long time in this House without making my maiden speech, although on several occasions previously I had arranged to speak on agriculture and on cotton. Unfortunately I was not able to do so. There are a great many other hon. Members desirous of speaking on this question, and the only point that I desire to bring forward, and a most important one, has already been put forward by the Mover and Seconder of the Bill. Therefore the House will get an advantage in my not repeating what has been said, although perhaps that advantage will not extend to my constituency who possibly desire to know what I had to say. We are told that this is the nineteenth appearance of this Bill. I presume it will be able to walk from the House on this occasion back into its pigeon hole without the assistance of anybody. But I would really impress upon the House the importance of this Measure, particularly in my part of the world. I represent a constituency which has cotton, steel, and iron machinery in it. Half that division is rated, and half is not rated. The point is this: In my constituency there is a cotton mill which is rated on its machinery, and there is another mill making exactly the same material and paying the same wages which is not rated. The overhead charges in the one mill are very much greater than in the other. These two manufacturers have to go to Manchester market to sell their product. How can they compete in the same market when there is so much difference in the overhead charges which have got to be put on to the material that they are selling? In Lancashire to-day the cotton trade is very bad. Orders are very few, and when you get a chance of taking them you take them at any price to keep your people going.

The point I want to make is that in the case of the mill which is not rated it enables the man to sell his goods at a certain price—which to-day is practically the cost price—while the other man is unable to get orders, with the result that instead of being able to run his mill full time, or four days a week, he has to run it four days a fortnight. Behind all that there is being created a great deal of unrest and discontent amongst the workpeople themselves. Again, the rating of his machinery, in my opinion, penalises a man who wants to make improvements. In the first place a man who has a mill with old machinery is lightly let off as against the man who wishes to take the old machinery out and replace it with new. He is penalised by his assessment being higher. Thus you tend to put a stop to improvements. Everyone in this House knows what an advantage it is to keep up-to-date by introducing modern machinery and the latest improvements; by this Bill you will be penalising the man who endeavours to do that. If you have this machinery you are going to produce a better quality of goods and more goods, and the conditions under which these are produced are much better in every way. Therefore you are penalising the men who are introducing new machinery and endeavouring to do what they can for their own locality. It is argued by some people that the rates when they are transferred from one shoulder fall on to the shoulders of another. That may be all right, but what, where these mills are heavily rated on their machinery and a few miles away there is no rating, will prevent the man from transferring his machinery out of the highly-rated area into the non-rated area?

Mr. R. RICHARDSON

That is one of the points.

Mr. SIMPSON-HINCHCLIFFE

And who will be the people to pay when these mills are closed. If this were the popular Measure it is said to be, why has not the whole country adopted it? It is a desirable thing to get uniformity of rating, yet only seven out of 21 areas in the cotton world and a great part of Yorkshire have accepted the Bill. In my division, as I have said, a portion is highly rated, and the other easily let off. Perhaps hon. Members may think that we people who are easily let off—my own firm is not rated—would have an advantage over competitors, and that I would not be here voting as I do, but the point is that we manufacturers who are not rated are absolutely in favour of this burden being removed, because we like to meet our competitors fairly, to start from the same mark, and we also like, if possible, to take orders. Every Chamber of Commerce in the country is unanimously in favour of the Bill. I trust that hon. Members will give it their full support this afternoon. I could have said a great deal more, but I am not desirous of wearying the House. I do think that at present we are penalising people of enterprise, and I for one will be very glad to support this Bill, and I also thank the House for breaking the ice so nicely for me.

Sir ALFRED MOND

The right hon. Gentleman the Minister of Health who, unfortunately, has not been able to stay in the House, in the remarks that he made on this Bill said that this proposal was a "hardy annual." It has been before the House very many times, and has obtained a Second Reading on many occasions, but has not yet found its way on to the Statute Book. This, of course, is due to the fact that, like all private Member's Bills, it has had to take its chance in the ballot and for time to be found for it. The only reason why it is not on the Statute Book to-day is because it was talked out on the last occasion with a very narrow margin of time. My hon. Friend says that this Bill is not popular, but is he not aware that every Chamber of Commerce in the country is in favour of it? I know that some of the rating authorities are against it, but surely they ought not to be the body to determine questions of rating like this. The Minister of Health has expressed the opinion that this Bill ought to have a Second Reading, and I hope we shall carry it through. I do not think this question should be left in the air, and the promoters should endeavour to get it passed into law if they can. We have been told that a Departmental Committee is going to be set up. It is quite true that on the Third Reading last year I offered to appoint a departmental committee, and I did so in the hope of obtaining an agreement between the promoters and the opponents on some points of detail.

One of the chief questions which arose then was the time at which the new law should operate, and on that occasion it was found impossible to arrive at a settlement, and because of that the Departmental Committee was not proceeded with. After all, this Bill does not deal with any great fundamental question of principle. There is an impression that there are some extraordinary difficulties in the way of rating machinery, but I think there is a good deal of misapprehension on this point, and it is the object of this Bill to remove it. This Measure is intended to introduce unanimity in the law. The hon. Member for Sowerby (Mr. Simpson-Hinchcliffe)—who has just made his maiden speech, upon which I congratulate him—pointed out how people in the same industry and in the same district very often were being rated upon a different basis.

Lieut.-Colonel WATTS-MORGAN

The law has been laid down.

Sir A. MOND

I beg the hon. Member's pardon; the law has not been laid down and no legal decision has really laid down the law. The difficulty has arisen owing to the fact that when we thought we were going to get a decision in the case of Kirby v. the Hunslet Union, the decision then taken did not really cause the difficulty, and that is why this Bill is being introduced. I cannot understand the arguments used by the hon. Member for Cambridge (Sir D. Newton), and listened to them with some amazement. He spoke about what would happen to the railways under this system, but I would like to point out to him that the system of rating railways is entirely different, and they are not rated on this principle at all.

Sir F. BANBURY

They are rated on what they are supposed to earn in the district through which they go.

Sir A. MOND

I hope that when the new Measure is introduced dealing with a new system of valuation the whole question of the rating of railways will be placed upon a more logical basis. The real difficulties are those connected with the whole rating system. The same system which has been applied where land is the raw material is applied to our complicated industrial system, with the result that there are endless discussions in every factory as to what is rateable and what is not. The assessment authorities have agreed in some cases, and there has been a compromise as to the capital value. All I would say on this point is that a reform of our rating system is much overdue, and I hope that it will not be much longer delayed. I do not, however, see why this question of the rating of machinery should be hung up. The hon. Member for Cambridge was very eloquent on the fact that, by adopting this Bill, the relief given would only fall as a burden on other ratepayers, but if this happens and other industrial interests are affected, why cannot they go to the same source as the agricultural interest in order to get relief?

Mr. R. RICHARDSON

Why do you not go?

Sir A. MONO

All I wish to point out is that the agricultural interest is allowed to be relieved to the extent of £4,000,000 per annum. I do not say that I agree with that principle, but it is perfectly unreasonable to oppose this Bill on the ground that there is no source from which the industrial section of the community can be relieved in case they suffer through this Bill, because they can proceed in the same way as the agricultural interest has done.

Sir D. NEWTON

There is a great difference between the rating of the raw material on which agriculture depends and the rating of machinery, and I suggest that there is no parallel whatever between those two things.

Sir A. MOND

I am quite ready to argue that point when the time comes, because there is a great deal to be said on that subject. All these distinctions which are now being drawn between raw material and manufactured goods remind me very much of the Tariff Reform controversy. As manufacturers we are not willing to have our money distributed amongst the agricultural interests on a plea of that kind.

Sir F. BANBURY

I hope you will not be made bankrupt in consequence.

Sir A. MOND

If it is a sound principle to relieve any part of the rating of machinery, it is obvious that it is just as sound to do it out of the Exchequer as it is to do it, from the same source in the case of the agricultural industry, and it is no argument to say that the thing is unsound and bad for the country and to put forward that this redistribution is affecting somebody else as a reason why it cannot be done. Obviously, if it is a good thing, the redistribution ought to take place. The argument that this proposal is going to inflict an enormous burden on other interests has not really been proved. I remember when I was a Minister these allegations were made, but I never found them substantiated. We could never find any real basis for these figures, and I must say that that argument leaves me entirely cold. Of course, as I said, our rating system wants a considerable amount of readjustment, and the readjustment it mostly wants is to take the burden off industry and to put it on raw material, namely, land values. That would be a real adjustment in a national and economic manner. Hon. Members who oppose this Bill want to know where the solution is to be found. Members of assessment committees have the idea that the burden would fall on owners of cottage property and shopkeepers when there are land values, the taxation on which would more than cover it.

In spite of the difficulties that have been raised and in spite of the Departmental Committee which is going to be set up, I myself shall on this occasion, as I have done on other occasions, support this Bill, and I hope that the House as a body will do the same and will at last give a tardy measure of redress in a cause which has now been standing over for a very long time. The inequality of competition between English manufacturers and Scottish manufacturers and between English manufacturers in adjoining areas, if it had been better understood, would not have been allowed to last so long. It is only because it is complicated and difficult to understand that it has been allowed to continue. It is all to the advantage of the rating authorities to get a real and thorough exposition of the law. In spite of the Report of the Dunedin Committee, which of course is an important one and which requires that respectful attention to which it is entitled, I do think, if the Bill be passed in the way that it is drafted, that it will relieve the very great difficulty of manufacturers and uniform practice, and, on the whole, I think it will be more beneficial to the rating authorities, detrimental as they seem to think it will be.

Mr. CECIL WILSON

Although I should like to see the exemption of all machinery from rating, I am not prepared to vote for this Bill to-day. We have heard a good deal, more particularly from those who are supporting the Bill, in regard to the difficulty in which manufacturers are placed because of the increased assessment when improvements have taken place. I should like to remind the House that machinery is exempt from taxation in the Dominions, where improvements are exempt and where the principle of taxation of land values is in operation. I think it has been forgotten that there has been a very considerable change since the introduction of electrical power and since electrical power has taken the place of steam power. The power works and the whole equipment bringing the power into the factory is subject to rating, and the suggestion is that immediately you get to the factory everything there should be exempted from rating; in other words, you are proposing to tax the raw material of power and to exempt that which has derived its strength from the raw material. Further while a certain amount of machinery is to be exempt, there are other manufactures which are not to be exempt. I am speaking now more particularly of furnaces. There is a great deal of very heavy machinery in the Sheffield trade which would not come under this Bill at all. There is the further great difficulty, which has always been experienced and to which the right hon. Member for West Swansea (Sir A. Mond) referred just now, of determining what is or what is not actually attached to the hereditament. I would like to read from the judgment of Lord Halsbury in the case of Kirby v. Hunslet Union: Considerable difficulty has doubtless arisen through the confusing of two different things. The question of what is and what is not attached to the freehold is fraught with important consequences in our law; and undoubtedly if the Statute had been always understood to refer simply to the rateable value of the four walls of time building and its roof, I could understand a great deal of the argument which has been suggested to us. It is enough to say that for a period of certainly more than half a century, erroneously according to the learned counsel who has just addressed us, but undoubtedly in fact, judges of the greatest eminence have recognised the fact that although a particular set of machinery may, by reason of the peculiarity of the manufacture, or what not, be not affixed to the freehold so as to become part of the land, or hereditament, yet, if the thing is being so occupied, if the premises are being so employed, and the machinery in those premises is being so used as that it makes the factory appropriate to the particular industry carried on therein, the machinery itself is not to be disregarded in assessing the value of that thing occupied, as it is, with the accommodation and furniture which is necessary for it to carry on the manufacture that is there being conducted. Then he goes on to refer to the very great difficulty that there is in determining what is and what is not attached to the hereditament. While that is so in regard to the general Act, there are local Acts, in one of which you include and in another of which you exclude the pipes of gas works or of water companies, which only tends to show that there is very great confusion in the whole rating system. We want a complete revision of that system. We want to bear in mind that rating authorities have taken different views in regard to it. There are certain industries in which the whole method of attachment is in doubt. For instance, silk weaving machinery held to the floor has been held not to be rateable, while other machinery which is of a heavier character has been held to be rateable. In the second and third Clauses of this Bill it is suggested that it should operate from the 1st April next year. Everybody who knows anything about revaluation must recognise that it is entirely impossible to revalue in that time. I want to refer more particularly to the position as it would affect the city of Sheffield. The total rateable value there is some £2,400,000. Without going into the matter fully, it is estimated as nearly as may be that under this Bill, if it were to come into operation, some £200,000 would be excused, which means that the present rates of 22s. in the £ must be increased to 24s. for the purpose of relieving a very small part of the whole community, and that the effect upon works without power, warehouses, saleshops, and houses generally is going to be an increase to an amount for which there is no possible justification. One does not quite like to speak of this Bill as class legislation, but it certainly is a piece of sectional legislation, and I hope the House will reject it. We need, as has been said, a complete revision of the whole rating system, and one is glad to have the assurance of the Minister of Health as to what is going to be done very shortly in regard to it.

Major Sir KEITH FRASER

I had to put on my considering cap before I decided to support this Bill whole-heartedly, because I represent a constituency which is half agricultural and half manufacturing. I have been pledged to support this Bill for some years, and, at the same time, I find recently that the Clerk to the Leicestershire County Council has written asking me to oppose this Bill. I am very glad to have this opportunity of explaining my views, and of stating the reasons why I am supporting the Bill. I think each county Member, in every constituency in England, has received a similar letter to the one I have received, and I notice that most of the County Members have found it convenient to be away on this occasion. I have definitely made up my mind to support this Bill. I am perfectly certain I am right, and that the electors of the agricultural community in Leicestershire will agree with me, when they know my views. The rating has been too high ever since the War, and nothing has been done to bring down the rates and taxes. You must have unity amongst the ratepayers if you are going to succeed. If the agriculturists say, "Do not vote for the factory hands," and vice versâ, we shall do no good with any Government, either with this or any other Government. We shall be disunited. We shall blow like chaff before the wind, while all the Government will have to do will be to sit still and look at us, and they will not make any endeavour to reduce the present burden of rating and taxation. I think everyone looks rather despondently at the rating and taxation—

Sir WILFRID SUGDEN

No.

Sir K. FRASER

But every cloud has a silver lining. I would remind the House that in the last Parliament, when things looked rather black, the then Chancellor of the Exchequer was asked what he was going to do to assist us in respect to the various anomalies which existed then in regard to taxation, rating, and so forth, and what steps the Government were going to take. All he said was, "We are not living in normal times, and you must expect anomalies." Since then, nothing has been done. Now that this Government has promised to to help, I am hopeful. One does not grow fat on hopes that taxation will be reduced. Everyone is hoping that the Government are really going to face this proposition, and to put taxation and rating on a proper level.

If hon. Members want to get that done, they must support every endeavour which is brought forward in that direction, whether it be a sectional endeavour, as this is, or on broad lines, in order to call attention to rating and taxation, and to get it put on a sound and better footing. I know that the Government have promised to bring in a Measure. We shall probably have a Committee of inquiry, or something of that nature, appointed to go into the matter. I ask hon. Members to remember that Government promises are like piecrusts, and you cannot trust one of them. We have to keep on at this, and we must be united in order to impress on the Government that we are fed up with this sort of thing. We want to see the foreigner made to pay; we do not want this continual heavy taxation and rating which will break the backbone of this country. In regard to this Bill, I am sure I cannot say anything better than has already been said. As hon. Members know, overhead charges are causing a great deal of unemployment in this country, and unless we can get taxation reduced we shall have greater unemployment. What is the sense of giving unemployed pay, when you can give men work if you have less taxation? There, I am getting on a broad subject. One reason why I am supporting this Bill more than any other is, that if you feel justified in rating a machine, surely you are equally justified in rating a mechanic, a workman, an engineer, a baker, a candlestick-maker, or the man who lays bricks. You should tax the bricklayer according to the utmost capacity of his output. If he can lay 1,000 a day—[An HON. MEMBER: "300!"]—you should tax him according to his laying capacity at 1,000. It is equally as reasonable to tax individuals as machinery. It is quite beyond reason that this system of taxation should continue to exist. I do not know that the factories are going to benefit very much by the Bill, however, because they will be assessed according to their cubic capacity, and I do not think it will impose a large burden outside the factories themselves. It is really on the general principle that I support this Bill, in order to bring to the front and to keep prominent the question of rating throughout the country. We must keep pegging away at it, either in small sections, pushing on this point and that; and we must be united, in trying the best we can to get a reduction of taxation and rating very soon.

Lieut.-Colonel WATTS-MORGAN

I should like to join in the congratulations which have been made to the hon. and gallant Member for Warrington (Captain Reid) on the very excellent and admirable way in which he introduced this small, but what we regard as very injurious and very dangerous Bill. I support the Amendment of the hon. Member for Cambridge (Sir D. Newton). As we pointed out last year, it will very materially affect all the industrial districts, and especially those of South Wales, if any change is to be made at the present moment. As has been pointed out by almost every speaker, both in favour of and against the Bill, the Bill has a wrong title. As was pointed out by the hon. Baronet who spoke last, it should be named "The Exemption of Machinery from Rating Bill." We have heard a great deal about the increased trade and increased wages that the Bill is to bring about. I do not want to travel over the same ground of objection that has been already indicated, but the hon. and gallant Member who introduced the Bill said that it was going to cheapen the cost of agricultural machines. If that is going to be the case, I fail to understand where the large increase that he promised to the men employed in these factories is going to come from. He did not say, although I prompted him to do so, that because of the employment of this machinery they would economise in space and would be able to bring about a number of other improvements, and in doing that they also looked forward to obtaining a larger measure of profits.

1.0 P.M.

I want to emphasise one point before I deal with a remark or two made by the right hon. Gentleman the Member for West Swansea (Sir A. Mond). In our district we have, for many years to come, mortgaged and pledged the rates as they are to-day for the loans which we have, unfortunately, had to obtain. Over and above the normal number of people receiving Poor Law relief from the rates, we have had, during the last two years, anything between 12,000 and 15,000 men unemployed, and in order to relieve them we have had to obtain loans to a very large amount. If any immediate change is to be made, it is bound to affect materially the question of rates and the possibility of the ratepayers of our district being able to pay. The right hon. Gentleman the Member for West Swansea said that all the Chambers of Commerce were in favour of this Bill, but, as the hon. Member for Cambridge has pointed out, all the County Councils Associatons and Municipal Associations—all the rating authorities in the country—are opposed to it. They, of course, are opposed to it because they are the people who have to find the ways and means of raising the money. Chambers of Commerce do not concern themselves very much about raising money for administrative purposes; they are only concerned with paying their way. I will be so bold as to assert that the judgment quoted by my hon. Friend the Member for Attercliffe (Mr. C. Wilson) in Kirby v. Hunslet Union, is perfectly correct. That decision has laid it down that the rating authorities have it in their power to rate machinery in the same way as is done by the seven unions in Lancashire and Yorkshire which have been mentioned. I think the Seconder of the Bill said that there were seven who rated movable and fixed machinery in those districts and that there were 14 who did not. The law to-day is as it is being carried out by the seven authorities which do rate machinery in those districts. The decision in Kirby v. Hunslet Union, notwithstanding the eminence of the right hon. Gentleman the Member for West Swansea, has decided that they were quite within their rights in doing so. I sincerely trust that the promise we have had to-day from the Minister of Health will induce our friends to withdraw this Bill and leave the matter to be considered by the Departmental Committee which is to be set up. I join issue with what the right hon. Gentleman the Member for West Swansea said. I would ask that the terms of reference of the Committee should be widened. I should like them to include the last paragraph of the Amendment standing in the name of my hon. and gallant Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood), which relates to land values, but I do not know how that is going to be done. The right hon. Gentleman was against Labour when he was a Member of the Government. He has been a vacillator, but we shall welcome him back into the fold if he will carry out the promises and pledges that he has given. I hope we shall get his active support in seeing that land values bear a fair and reasonable proportion of the expense of carrying on the affairs of this country.

Sir RYLAND ADKINS

I am afraid that the few remarks which I shall venture to address to the House may be very dull after the gay and graceful philosophy of my hon. and gallant Friend the Member for Harborough (Sir Keith Fraser) and the pleasant turn for political dialectic which my hon. and gallant Friend the Member for East Rhondda (Lieut.-Colonel Watts-Morgan) displayed. In fact, I feel rather timid in speaking immediately after him, because, on all these matters of local government, we nearly always agree, and I very rarely have to face the terrific position of opposing him on a matter of this kind. This afternoon, however, although I enjoyed his speech as much as ever, I did not find it quite so persuasive as I usually do What, after all, is his argument, and what was the argument of my hon. Friend who spoke so clearly and powerfully on the woes of Sheffield? Their argument is that the change which this Bill seeks to effect would, incidentally, be temporarily to the disadvantage of certain local authorities. Let us frankly admit in this House that it is almost impossible to make any change, particularly in a matter so complex as rating, without involving some disadvantages as well as advantages, and that we have to balance the one against the other as well as we can. The objects of this Bill, as has been said by various hon. Members in their different ways, are, first of all, to make the law clear; secondly, to make the law more uniform; and, thirdly, to avoid putting a burden upon those matters which are held by many of us to be the raw material of necessary industry.

First of all, as regards making the law clear, I heard my right hon. Friend the Member for West Swansea refer to the famous case in the House of Lords. I heard my hon. Friend the Member for Attercliffe (Mr. Cecil Wilson) and my hon. and gallant Friend the Member for East Rhondda, with a certainty of conviction that some of us find it difficult to attain to, saying they were quite certain that decided the matter out and out With very great deference to my hon. and authoritative Friend, I submit that it has not made it by any means clear or certain, and that you cannot explain the variety of practice by the fallen human nature of an assessment committee swayed one way, and the equally fallen human nature of an assessment committee elsewhere swayed the other way and when my hon. and gallant Friend said, with an emphasis that appalled me for the moment, that all county councils, all municipal boroughs, and all rating authorities of all kinds were opposed to this, I do not quite like to contradict because I am terrified by his omniscience, but I a little doubt whether that has not got a touch of the telling methods which we all enjoy in his speeches. I think it has. At any rate I am permitted to be a member of a county council. I am even permitted, by the kindness of my hon. and gallant Friend, to be Chairman of the County Council Association for the moment, and yet it has never been made an acid test of that position that one must not support a Bill for excluding machinery from rating. I see other hon. Members who are in the same position that I am in, and the hon Member for Thirsk (Mr. Turton), who no doubt ought to be here to-day as Chairman of our Parliamentary Committee, exacted from me a pledge that I would be here and speak in the way I am doing before he departed to that leisure which he no doubt deserves.

Therefore I want to make it quite clear that there is no such fervent unanimity among persons who are honestly concerned, day in and day out, to levy and to raise rates and to carry out local government against this Bill. I agree that it does not solve the most difficult of all problems. I agree that there are real objections to it. On the other hand, are they not overruled by the advantages it would bring about? My hon. Friend the Member for Cambridge (Sir D. Newton) comes here from his rural shades and instead of talking to us, as he occasionally does to our great advantage, about his rural experiences, he argues that in some mysterious manner the passing of this Bill will be injurious to rural interests. I do not want to suggest that his profound sectional knowledge leads in any way to sectional argument. I was as puzzled as anyone as to his argument with regard to fixtures. We cannot grow to man's estate; we cannot try to earn a precarious livelihood; we cannot find where to lay our heads without very early in life finding the difference between landlords' and tenant's fixtures, and all we say when we are dealing with this question of the rating of machinery is that the principle which lies at the difference between landlord and tenant fixtures should have far more regard paid to it than is the case at present. Therefore those of us who support this Bill do it because we know that in many parts of the country, to a different degree no doubt in one place and another, the existing law is working real harm. It is working great harm by means of its uncertainty. There is nothing more injurious to civic peace and the right sort of contentment than knowing that the burdens between different kinds of people are in unfair proportion, and if you find, as you find under the present law, that in one neighbourhood moveable machinery is rated, and in another neighbourhood it is not, it creates an irritation far beyond the material difference. We are so constituted, even I think those Members of Parliament who are opposing this Bill, as to feel the most acute annoyance if our own difficulties are not also felt by our neighbours and it is very annoying to find that they are escaping burdens which fall on us.

Lieut. - Colonel WATTS - MORGAN

Sophistry!

Sir R. ADKINS

I should have thought it was elementary human nature. If my hon. and gallant Friend has got to such a delightful state of civilisation that he has escaped from it we shall listen to him with all the greater pleasure when he explains how he got to his high spiritual level. Most of us are very much affected by whether we are fairly treated compared with other people or not, and under the present state of the rating of machinery there is real grave discrepancy between one area and another. Competition which cannot be avoided is made unnecessarily unfair, and there is a real grievance which ought to be redressed, not in the interests of any one set of persons but in the interests of the common weal itself. One or two speakers have said, no one more strongly than my hon. and gallant Friend, that the offer of the Minister to appoint a Departmental Committee ought to be sufficient for all of us, and we ought now to withdraw the Bill gracefully and deal with whatever the next Bill may be. That offer we value, but it will be of much more value if this Bill gets a Second Reading than if it does not. Many of us know the difficulties that attach to the relief of agricultural ratepayers, but whatever the difficulties that attach to that problem, we are not sorry to see it raised and made prominent because it brings us a step nearer to the proper readjustment of all kinds of raring. Similarly with regard to this. If you have the fact that this House has passed the Second Reading of a Bill whose object is to correct present injustice, to call attention to the unreasonable ness of the present law, and to the fact that you have one law it Scotland and another in England, and the House of Commons shows it appreciates the real difficulty and unfairness of the present position, that would be a guide and a help to the proceedings of the Departmental Committee which my right hon. Friend has promised. Therefore, not in any sectional sense and not merely, or even chiefly, because one knows how hardly this presses on industries in a precarious position, but because the passing of this Bill would be one more step towards getting a general and thorough overhauling of the whole rating question, I commend it to the House, and I am sure the anxiety expressed so ably by some of my hon. Friends is really largely the product of their own great faculties of forecast and imagination and it really need not trouble them, and if this is read a Second time we shall be a little nearer what we all agree in wanting, a complete overhaul of the most pressing and at the same time the most difficult of local government questions.

Mr. TUBBS

I want, in supporting this Bill, to obtain uniformity in the rating of machinery not merely throughout England, but throughout Great Britain. I should not like to say anything at all disparaging, or anything which would hurt Scottish feelings. We feel that they are able and have been able, this Session at any rate, to look after themselves. But if I am right, Scotland has an advantage to-day over England in the rating of machinery. It is determined that they cannot rate movable machinery in Scotland. They have that advantage, therefore, in considering this point. We have to take into consideration the fact that there is a difference in the United Kingdom, and a difference even in the counties themselves. The county authorities in one county may exercise their judgment and rate movable machinery, and another authority in the same county may omit to do that. I am not asking for any privilege or any bonus for the manufacturers; but I do suggest that the time has come when we should have uniformity of rating throughout Great Britain. It is suggested that local authorities should have the power of rating movable machinery. On that principle, I do not see why, by a stretch of imagination, you should not rate the contents of farm buildings. In a farm building there may be a petrol engine which does certain work, and that should equally be rated. By a still further stretch of the imagination, I do not see why you should not rate a cow, because it is a producer as much as any article of machinery. Therefore, you have such a wide licence that it brings a certain amount of unrest to the minds of manufacturers as to what the local authorities are going to do in the way of rating.

I support this Bill because we have heard from the Minister of Health that the Government are going to set up a Departmental Committee to look into the matter. I am a manufacturer, representing the constituency where my works are situated, and I have been approached by county councils who oppose this Bill, and by chambers of commerce who support it, while a very large number of my constituents are agriculturists. Between these interests I have some difficulty in deciding as to which people should have our consideration. The agricultural industry has recently been promised a very large relief in the way of rates. We, as manufacturers, ask for uniformity of rating and not for any relief. Give us uniformity throughout Great Britain. With rating in its present condition, we want to cut the rates down to the utmost possible limit. If we burden certain factories in certain districts, the tendency is to make the overhead charges such that we may lose a large amount of export trade. If we have the factories fairly leniently dealt with, they will be better able to get and keep the export trade upon which we so largely depend. If the factories are kept going at the full, more wages will be paid, and there will be greater prosperity in the district, thereby creating more demand for houses, the occupiers of which will be able to pay rates. If, on the other hand, the factories work short time, there is greater difficulty in people finding a living and in paying their rates. In the Departmental Committee that is going to be set up we shall have, I believe, the right instrument for revising the whole of the rating of Great Britain, and putting it on a uniform basis. I support this Measure because I think the discussion on the Bill in Committee will be of very considerable value to the Departmental Committee in arriving at a decision.

Notice taken that forty Members were not present; House counted, and forty Members being present—

Mr. LAMB

I have listened to the Debate for two hours and twenty minutes and, consequently, a great deal that has been said by hon. Members has covered what I intended to say. As I object to the tremendous amount of repetition which we have at times in our Debates, I hope that I shall not inflict upon the House any repetition of what has been said. I am definitely in favour of the objects of this Bill, if I understand the objects to be, to relieve the burdens on industry or to equalise the burdens which are placed upon industry by rating. It is in the interests of the employer and in the interests of the employed that they should have this relief and equality of treatment in regard to rating. The hon. Member for Warrington in introducing the Bill has done one good thing in drawing attention to this question, although it may be termed a hardy annual. I understand it has been introduced about 19 times, and on this occasion we are informed by the Government that the incidence of rating and taxation are to be considered by a Departmental Committee.

My objection to the Bill is so strong that I cannot vote for it, although I agree with its objects. I do not think that now is the time to start piecemeal legislation, and especially in view of the fact that a Departmental Committee is to be appointed we ought to wait a little longer and have legislation on a comprehensive scale for dealing with the question as a whole, and not sectionally. I also object to the Bill on the ground of the great expense that will be incurred in the revaluation. The amount of machinery that would be affected would be about 30 per cent. of the machinery, which will be a considerable item. The main object I had in rising was to make some reference to the question as it affects agriculture. It is stated that agriculture is being relieved to the extent of £4,000,000. We in agriculture have always advocated that the incidence of taxation and rating should be considered as a whole, and we look upon this relief as given until such time as the redistribution should be completed as a whole and not sectionally.

We have always objected to relief being given to agriculture at the expense of the rates, and we have claimed that what is going to take place in this case is that relief given to agriculturists should be compensated for in so far as rating is concerned by a grant from the Exchequer. That is the way in which we look upon such temporary relief as can be given to any industries until the matter is dealt with as a whole. It has been suggested that the machinery in agriculture is not rated. I claim that it is. I believe that in the past land has borne a far greater share of the burden of rating and taxation than it ever ought to have done, because we in agriculture look upon our land as being the machinery or the raw material from which we manufacture the food of the people. Our object is to manufacture that food as cheaply as we can, compatibly with a reasonable standard of living for those employed in the industry, and any relief which we can have for the raw material from which the food is manufactured naturally we hope to return to the community by having a greater bulk of food for the people. Agreeing thoroughly with the object of the Bill, I shall vote against it, because I do not think that this is the proper time to bring it forward.

Mr. MIDDLETON

I support the Bill. In doing so I am at a great disadvantage compared with many Members who have spoken, inasmuch as they have for the most part been experts, and I have no knowledge of the law on the subject. I am not a manufacturer, and can look at the problem only from the plain point of view of a back bencher, who wants to arrive at a commonsense judgment. Notwithstanding that the hon. Member for West Middlesbrough (Mr. T. Thomson) could not see how anybody with commonsense could vote for the Bill, I heartily support it, because it gives me an opportunity of testifying to a fundamental principle which I hold. That is that you should not rate improvements on movable machinery or even houses or buildings. This enables me to testify to my belief that you should tax the land upon which the buildings are placed. Holding those views I am bound to support a view which would relieve movable machinery from rates. A great deal has been said, and I suppose political capital against me will be made out of it, to the effect that those who vote for this Bill will vote for the employers to get more and the workers to get less, and that the workers' families will have to pay additional rates because of the relief given to the manufacturer. But it is no satisfaction to the workers to know that the present system of rating is leading to the restriction of manufacture, and it would be a benefit to the workers as well as to the community as a whole if we could devise a rating system which would enable manufacturers to produce more cheaply.

It might be argued that by this procedure we should help to increase the glut in the warehouses, but my view is that if you cheapen productions you will get your money back in the foreign market, and that is a point of view which ought to be examined very closely, even by Members on this side, before they vote for the rejection of the Bill. It is desirable that we should create new wealth. I think that we can by this means do something towards getting the wheels of industry running again. There are people who hold that if you make things easier for the manufacturer you should get a bargain on behalf of the worker, and I am one of them, and I would agree to make it easy for manufacturers to make additional profit only if I could make certain that some of those additional profits will come back to the workers as additional wages. That is the work of trade unions. That is what they are for when they fight employers—to make certain that the workers are getting their due share of the wealth which they create.

There is a case in point which illustrates better what I mean than I can describe it in my own words. In the printing trade when the linotype machine was introduced, for a time it supplanted a number of workers, but its effect on the printing industry was so great that it led to more and, more printing and more and more employment. The workers were up against the fact that they were called upon to handle a machine which is very largely automatic in character. But they did not give way on that account and say that they were content to receive less wages. On the other hand, they said, "We will work the machine on condition not only that our wages are not reduced, but that they are increased over and above the wages paid for other sections of work"; and that holds good to-day. Printers are now being restricted from putting down new plant and machinery, with the market in a bad condition, because they fear additional burdens in those places where the machinery is liable to local rates. I will vote for this Bill because I believe that it will force municipalities to face the taxation of land values. If this Bill had been in operation two or three years ago, I believe that the Manchester authorities would have been forced to rate the land on which the machines and mills rest. Because I believe that it would be one way of furthering a principle for which I stand I shall vote for this Bill.

Mr. DARBISHIRE

As a Member of the party to which I belong I have been of two minds as to how I should vote on this Bill. I have been drawn in two directions. I was pleased to see that apparently there is at last some glimmering perception on the other side of the fact that taxation of improvements is a very bad thing for industry as a whole. That naturally pleases very much any Member who stands for the taxation of land values. On the other hand, I am inclined not to vote for it because it does not go far enough. The hon. Member for Carlisle (Mr. Middleton) supports the Bill because he says that it testifies to a principle for which he stands That is, the taxation of land values. But this Bill does not stand for that. This Bill only goes half-way. It is going to take a tax off improvements, but it is not going to do what we stand for, that is, to put the tax on the site value, the town value of the land, not the value at which the land is put, but the real value of the land if it were put to its proper use.

When I came into the House I was in two minds as to what to do, but I have come to the conclusion, after listening to several speeches, that it is my duty to oppose this Bill. Hon. Members have said that they have received letters from chambers of commerce and county councils, and it seemed to me that they had been influenced by the views of those bodies. Surely a Member comes here not to be influenced by opinions from his constituency, but to act in accordance with what he considers to be right. I have also received letters from county councils and from chambers of commerce, but I shall not be influenced by what these bodies think; I intend to be influenced by what I think is the right thing to do. To my mind there is no object at present, especially in view of the speech of the Minister of Health, in pressing forward this Bill. Hon. Members have spoken of uniformity and certainty, and have said that if we could bring the law of England and Wales into line with the law of Scotland we would get uniformity. I do not know whether it has been quoted, but I have here the report issued last year by the Departmental Committee on Local Taxation in Scotland. In Scotland the proposals of this Bill are the law of the land. The report says: We have had our attention called to the somewhat chaotic state of decisions in connection with the rating of machinery and as to what items are to be considered assessable in industrial works. The real grievance seems to us to consist of the varying practice of assessors, which makes it, as matters stand, almost impossible for the owner of works to calculate with certainty what additional burden he may be assuming if he puts in additional machinery and other facilities. You have, therefore, the same chaos in Scotland, and you will not get away from chaotic conditions by making the law of England uniform with the law of Scotland. I was influenced by the statement made by the hon. Member for West Middlesbrough (Mr. T. Thomson). In view of the fact that there is to be a Committee to consider the whole question of rating and taxation, it is useless and a waste of time for us to vote in favour of this Bill. The last speaker seemed to think that the Bill will assist manufacturers. Of course any bonus will assist manufacturers. It is a very simple thing for the State to vote them £100,000,000, but you cannot create wealth by Act of Parliament or by bonuses or subsidies. Any bonus or subsidy has to come out of some other person's pocket, and in the long run you do not improve the trade of the country by direct or indirect bonuses of this character.

Major MOLSON

Unlike the last speaker, I am not in doubt as to whether I should vote for or against this Bill. The hon. Member said that we ought to vote as we think right. For that reason I intend to support the Second Reading of the Bill. I supported a similar Bill last year. I think that the manufacturers of England, compared with those of Scotland, are suffering from unfair disabilities. Moreover, certain localities are unfairly taxed compared with their next-door neighbours. We have been told this morning that of 21 cotton factories in Lancashire seven were rated and 14 were not rated, and one hon. Member told us that he knew of manufacturers in his own constituency who were rated and others who were not rated. It is not our business to consider from where rates have to come. The assessors of rates have to deal with the assessment and should do so fairly. If this rating cannot be removed from the manufacturers it ought to be distributed fairly throughout the country. In Gains-borough there is a large firm of agricultural implement manufacturers, and that firm is rated very severely. Only last year I was told that its assessment was raised from £8,000 to over £40,000. The firm appealed and got a reduction. Such a system presses very hardly on the working men of Gainsborough. There has been a terrific amount of unemployment, and a great deal of it is due to the severe rivalry of other firms with which Gains-borough has to compete.

Another point to be borne in mind is the very great injustice that a rate should necessarily go on an agricultural community because it is removed from a manufacturer. I represent an agricultural community. The firm to which I am referring makes agricultural implements in a very large way. The removal of unfair rating of that firm would tend to reduce the price of implements, and in any event it would give more employment to the workers. This Bill serves to emphasise some of the absurdities of the present system. We hear much about the rating of movable machinery at works. If you tax movable machinery at works I can see no reason why you should not rate furniture in a house in the same way, for furniture is movable just as machinery is. If you carry the idea to a logical conclusion every workman's tools ought to be rated also. Of course I am against any such method. I am strongly in favour of doing justice to those manufacturers who are now unfairly rated. We ought not to postpone doing justice to them because there is the promise of a Government inquiry. I distrust these Government inquiries coming on soon. We may have to wait a long time before an inquiry is concluded. Let us do justice first and the inquiry can follow.

Mr. OLIVER

What has been said regarding the exemption of machinery from local rating can be said with equal force for other forms of property. If it is proposed to exempt machinery why should we not put forward the same plea for working-class houses, for schools, for sewers and Government property? You could apply the same arguments as have been applied to the purposes of this Bill, with even greater justification to such things as I have mentioned. I have heard this matter discussed several times and I have heard the argument put forward which has been used to-day that, machinery which is not attached to the hereditament is a tenant's chattel, just as a table, a chair, a bed or any other piece of furniture is a tenant's chattel in a dwelling house, and if one is rated why not the other? I submit that there is a vast difference between furniture in a home and machinery in a factory. By the introduction of machinery some of the greatest fortunes in this country, nay, in the world, have been made, but I defy anyone to say that fortunes have been made by the introduction of furniture into the homes of the people. I cannot see any relationship between the two things and, for this particular purpose, the essential difference is that one produces an income and the other does not. If one cannot admit machinery and take it into account how could you possibly rate, say, a brewery? Land and buildings alone does not make a brewery; you are bound to include the plant and machinery. Could you possibly rate a railway company by merely taking into consideration the land and the buildings? You must take into consideration what the particular industry is being used for Much has been said to-day to show that by rating machinery you penalise enterprise, prevent employers from developing their industry, and prevent all kinds of improvements to the detriment generally of trade. Is it not true that every form of improvement is rated? When a tradesman in a town has built up a business, improved his premises, introduced electricity, and so forth, does not the rating assessor come to him and say, "Your property will fetch more in the market, consequently your assessment will be greater."

Major MOLSON

There is a great difference between fixed machinery and movable machinery. Machinery of the kind to which the hon. Member refers is to be rated according to the Bill which provides that all machinery for making electricity and for heating light and ventilating and so forth is to be rated. I might point out that I also used the argument about workmen's tools, which is more important than the argument about the furniture.

Mr. OLIVER

I merely mentioned electricity incidentally. But I think the principle holds good, that what has been argued in favour of machinery can be argued in favour of other forms of property. I was asking with regard to improvements, is it not true that houses are continuously having assessments increased for improvements? Is not the introduction of a bathroom into an artisan's home taken into account? If a workman has a flat-fronted house and flat windows and if a bay is made, is not that taken into account? I cannot understand why you should ask for the exemption of machinery and not at the same time seek exemption for other forms of improvement as well. If one form of improvement can be exempted it should apply all round. I know there are inequalities in the country and it has been stated to-day that in one district machinery is rated while in another it is not. Prima facie that looks very unfair, but when all the circumstances are known it will be seen that the interpretation given in this Debate to the existing law does not apply. I happened to be on the Assessment Committee in a town and the local Chamber of Commerce pointed out to us that being in competition with two other towns, the rating of machinery operated very unfairly to them and was to the advantage of the competing towns where the machinery was not rated. On investigation it was found that in these two towns the machinery was not rated but something else almost equivalent was rated, namely, the windows. The rate was assessed at so much per window but that system did not operate in the town on whose Assessment Committee I sat.

In another town the factor taken into consideration is the horse-power of the particular factory, so that if machinery is actually excluded in some districts other corresponding factors are introduced which more or less balance the effect of the exclusion. That will be found to be the case on an examination of the assessments of the various boroughs of the country. It would be absolutely disastrous for any town to assess machinery to the disadvantage of manufacturers and employers, because one thing would be exceedingly obvious, that they could not induce new industries to come to their town, and thereby it would paralyse the development of industry on their own doorsteps. There are many rating anomalies which require immediate investigation, and that is why I object to the matter being dealt with in a piecemeal fashion. I will give the House a concrete instance of the anomalies which exist. A piece of land was sold in the town of Derby, and the price was £9,000. I am given to understand by those acquainted with the value of land that it was regarded as extraordinarily cheap. I turned up the rate book to ascertain the value at which it was rated, and I found it was rated on the princely valuation of £100. That shows clearly that reform is necessary and that something should be done to secure that property worth £9,000 is assessed at its proper selling value.

We have another glaring anomaly in the towns. We have big trades that necessitate big premises, and the assessment is on the premises that are used. Next door are very small premises. The firm employing the large building may have a very small trade and may find it very difficult to get an existence, but next door are very small premises, such as might be used for jewellers, or other businesses not requiring very large premises, and they might be making a lot of money and have a tremendous turnover, but their contribution to the local rates is very small as compared with that of the business requiring very large premises. The same thing applies to the professional man. He has a little place in a back street, and he may be an accountant, a solicitor, or a doctor. His income might be great, but his contribution to the local rates is extremely small because of his premises. All these are factors which our Amendment takes into consideration, and we argue, with some justification, that there are so many rating anomalies that it is essential that we should not permit one body to come here asking for piecemeal legislation, but that we should allow the body of machinery users who feel that they are aggrieved to join the great mass of people in our towns and counties who have real, genuine rating grievances. We say that they should join the general throng, and, in consequence, I believe that we should tackle not alone the question of the rating of machinery, but the greater question of getting the much needed reform of the whole problem of rating.

Sir J. HARMOOD-BANNER

I have been rather disappointed at the tone of the speeches which have been delivered against this Bill. For instance, the hon. Member for Ilkeston (Mr. Oliver), would not give us what we want, until we come in and join with him in removing some other anomaly, that he would not do what we require unless he first got the right to tax land values. I am bound to say, on that question, that. I have always voted in favour of the rating of land values, but I should never think of coming to this House, and saying, "I will not do justice to you, because I want the House first to give me taxation of ground values."

Mr. OLIVER

We do not admit the justice of your case in this Bill.

2.0 P.M.

Sir J. HARMOOD-BANNER

There are two points that we have seriously to consider. We do not want to put our laws upon Scotland, but certainly we do not want Scotland to have preferential rights over us, and we do not think it right that the great shipowners of the Clyde and the big Paisley manufacturers, like the great firm of Coats, should have a freedom from rating which the poor manufacturers in Manchester and elsewhere do not possess. We say that taxation and rating should be on right and proper and equal lines. It is said that there are differences in Scotland, but they have not shown us what the differences are, although I think it is generally admitted in this House that Scotland is out of the Rating of Machinery Bill, whereas we are in. The other point is, Do we consider additional machinery good for this country? I venture to point out that we all agree that the only method of increasing wages is by making trade and commerce so easy for the manufacturer that he can get bigger profits, and so pay greater wages, and anybody who, like myself, has been a manufacturer all his life, knows all the great additions of machinery, especially electrical machinery, that there have been in the last 20 years, which have tended to raise wages enormously. You have only to look in the "Times" of this morning to see there the report of a meeting of Americans, at which they were discussing their trade and commerce. An American there—I forget his name—described in full the enormous improvement in American trade. He did not put it down to the great influx of gold, which he wished they could get rid of, but he stated that, in consequence of the enormous powers of production in their country, obtained by the extra machinery which they have put in, he had little fear in regard to the expert trade of America. He thought they would be able to produce goods, with their hard work, their concentration, and all the magnificent machinery that they now have, at such prices as would enable them to compete with any other export trade in the world.

Hon. Members who oppose the Bill say, "Do not let the manufacturer have increased electrical appliances, or anything of that sort, for the purpose of improving business, but let him sit down as he is, because he will only have a burden of extra rates placed upon him." I cannot see the justice of that at all. I do not want to repeat what has been said so ably already, but I am quite certain of the inequality between us and Scotland in matters of rating, whereby you see one set of overseers placing an assessment on a lot of machinery here, and almost next door, where there is a similar trade, you see them doing exactly the opposite thing. Those are inequalities, yet we are told we must do nothing to do away with them, because the hon. Member opposite is going to force us to come into line with him and agree to the taxation of land values. He mentioned windows and improvements, which we could put into dwelling-houses, but I would point out that unless those improvements raise the rent of the house you cannot get a penny more on the assessment. In fact, sometimes we get less when those little additions to our comfort have been put in. I do not agree that these improvements are rated. It is only in letting a house at a higher rent that you are able to get a higher assessment, and not because you put in a bay window or a bathroom. Anybody who has any experience of overseers knows that unless the rent goes up, the assessment does not go up, and the new assessments which are now being made are without reference to improvements.

I cannot, for the life of me, see why those things which add to the prosperity of the country., which enable us to compete with America and other countries, which are put into our various works for cheapening production—not cheapening wages—should be subjected to a heavy rate and a heavy tax. I cannot understand the opposition to this Bill, especially of those Members who are such reformers that they are always telling us that injustices here, there and everywhere ought to be remedied, but who, when they are shown a glaring injustice, will not allow us to remedy it, unless we give them something to their way of thinking, and entirely different from that which is before this House. I hope we shall pass this Bill. I know we shall have difficulty in getting it through ad we had last year, but I am quite sure that the commonsense of the community wants to do what is right in the interest of the country and of the working man himself.

Colonel WEDGWOOD

I always enjoy the annual discussions on this Bill, because they bring to reformers on this side the unexpected and unusual support of so many hon. Members opposite. The main argument for this Bill—the argument that has beer put forward again and again—is that, if you take rates off machinery, it will not be for the benefit of the manufacturers, but it will cheapen production, and therefore make goods cheaper. That is the sound economic argument in favour of this Bill—that the reduction of rates means the reduction of an overhead charge in manufacture, and, consequently, the goods produced can be produced more cheaply. That, I think, hon. Members opposite will admit is the argument in favour of taking rates off machinery. It does not benefit any particular class. It benefits the community as a whole. They get cheaper goods, and not only cheaper goods, but more employment, because the cheaper we can produce in this country, the larger will be our export trade. That is a perfectly sound argument. Nothing can be said against that argument. But why do hon. Members confine it to movable machinery? Why do they not apply the same cast-iron water-tight argument to fixed machinery? Would not that also cheapen production, benefit the consumer and increase the opportunities for employment in this country?

Why, therefore, do we have an annual debate on this trifling corner of a great question? We who consider that the bigger question should be considered, must necessarily be in two minds about this Bill dealing with a corner of the great, question. Is it worth while to attempt this slight instalment? No doubt it would help matters, but look back on the history of the last 30 years. This Bill has been up again and again year after year. You have never got it through. You have got the Second Reading in most cases, and it has gone to Committee, and been obstructed there, generally by the agricultural interest It has never got on the Statute Book, because a private Member's Bill stands very little chance in any circumstances, least of all when the agricultural interest is against it. In the Amendment which I and some of my friends have put on the Paper, we suggest what I believe to be the best course, not only for the people who advocate this Bill, but for increased production in the country as a whole, namely, that this matter should be referred to a Select Committee of this House, which can take evidence, not merely on the small question of movable machinery, but take evidence on the whole question of the incidence of the rates at the present time. The hon. Member who moved the rejection of this Bill pointed out, when it was urged on this side, that there might be a grant from the Exchequer in aid of local rates to make up for the loss, that there was no comparison between a grant in aid of rates which would make machinery cheaper, and a grant in aid of rates for the agricultural interest. There is no comparison between the two, but obviously it is more in the interest of the community as a whole that there should be a grant in aid of cheapening machinery than a grant in aid of putting additional money into the pockets of the landlord. Of the two, I would infinitely prefer a grant in aid of machinery.

But we do not want any grants in aid at all. What we urge is that there should be an inquiry into our present rating system, and the hon. Member for Ilkeston (Mr. Oliver) pointed out quite rightly that no man at the present time can improve his property without receiving a visit from the assessment committee, who say, "You villain! You have been improving your property, employing more labour, and making the street look better. We will fine you for it." Where else will you find such a system? I do not know. Certainly you will not find it in the Dominions. It is not only the man who improves his machinery who is fined. What is more important is the effect on factories and improvements. I think the system is universal, but certainly in North Staffordshire whenever a mine is closed down, the proprietors of that mine cease to pay rates in respect of it, but when it is open again, and men are allowed to get coal out of the earth for the benefit of the community, again the authorities come down and say, "You villain! You are allowing men to work and get coal. We will fine you," and they put a rate upon the tonnage, which adds to the cost of the coal, and increases the cost to the community as a whole. That system really cannot be explained to an ordinary intelligent man without that man seeing how absurd and ludicrous it is, not only to trade as a whole, but to the employment of British labour in our own country. So long as you continue in this way to penalise the employment of labour, you will have less of the goods we all want, and less employment in producing those goods.

We have debated the housing question until we are tired of it, but, I think most hon. Members who are in favour of this Bill will agree with me, that just as we only get cheap and plentiful food by taking off taxes on food, so are we only likely to get cheap and plentiful houses by taking off the tax on houses. Now that houses in this country are having their assessments raised by 25, 40 and, in some cases, 125 per cent. for Income Tax purposes, which will be followed inevitably by an increase for rateable value, it seems to me a most admirable time to take up the whole question of the incidence of rating. That is why we put this Amendment on the Paper, and perhaps the Government might extend the terms of reference to the Departmental Committee so as to cover the point in the Amendment, which is That this House declines to proceed further with a Bill to remedy one defect in the system of assessing local rates, and recommends that the whole question of the incidence and method of assessing and levying local rates be submitted to a Select Committee of this House, with a special instruction to consider the desirability and method of obtaining an increased contribution from land values. A change in the basis of rating on the lines suggested in the proposal that I have just read would do more to improve British trade and cheapen production in this country—and it is that we want—than any number of special Bills such as this. If you are not going to change the central system at least give us an opportunity, not by a Departmental Committee, but by a Select Committee of those responsible for legislation to consider this question of rates pressing upon trade and industry, and see whether or not we cannot devise a more suitable system.

Mr. LORDEN

The last speaker has suggested that we might also include fixed machinery. He is doubtless aware that the Royal Commission appointed in 1896, which sat till 1902, suggested that machinery fixed to hereditaments might be included in rating, therefore the line of least resistance was to adopt the recommendations of that Commission.

Colonel WEDGWOOD

But the hon. Gentleman is aware, is he not, that there was a Minority Report of that Commission which recommended that fixed machinery should not be included in rating, and that improvements should be relieved for rating?

Mr. LORDEN

I am perfectly aware of that, but I do not know anybody in favour of this Bill would expect that we were going to get anything more than the Majority Report of that Commission; therefore, this Bill has been framed on those lines. I am rather in agreement with the hon. and gallant Gentleman that machinery of all descriptions should be free from rating. Then we had one or other hon. Members pointing out that, whereas a site was sold for a large sum of money, it was only rated at £100. I suppose it was rated on the rental that it was producing. If it was not, then the overseers were not doing their duty. It does not seem to me that that has any bearing on the point of the land that will be affected, for it may have been used for a different purpose.

I want, however, to deal with this question from another point of view. In my opinion and in that of a great many people rating of machinery was excluded entirely by the Act of 1840. There was a small Act passed then called the Poor Rate (Exemption) Act, 1840. Prior to that stock-in-trade was rated; so were the contents of houses. To say that you ought to rate a warehouse that contains machinery, whereas you ought not to rate.—you do not rate—a warehouse of similar dimensions and with contents five or six times as valuable in the adjoining warehouse is an anomaly which is perfectly absurd. It is asked why should we not go into trite whole question? The whole question, I believe, has been before every Government that I can remember since I was quite a youngster, and each Government has tried to do something in this way. They have never succeeded. Why? Because there is such a diversity of opinion, such a difficulty in dealing with the matter with the result that the matter has been left alone, and you have got such an anomaly as the rating of machinery in one borough, and in the next no rating. It is time something was done.

I served on an assessment committee in which two boroughs were joined together. The union was common to both. I served several years on that committee, and the rating surveyor for one borough used to bring up his reports concerned with the rating of fixed machinery, leaving alone that machinery that was not really fixed to the soil, or fixed to a hereditament. The other surveyor for the other borough always brought up everything for rating, the whole of the machinery whatever the place. Hon. Members can quite see that anomaly. There is no secret about the places. I refer to Wandsworth in the one case, and Battersea in the other. The matter was not just left to the assessment committee without expert advice; but there it was, and you had questions put to the surveyors as to why identical property should be differently dealt with. The assessment committee were in the habit of dealing with these properties on exactly identical lines where possible, with the result that appeals from Battersea often went to quarter sessions. That small Act of 1840 clearly eliminated stock-in-trade, machinery, and personal property. You might just as well put in furniture or the decorations of a house; that would be exactly on "all fours" with the present system. It does seem to me that when you have an opportunity of redressing what is an absolute anomaly and injustice as between one borough and another—I am not going outside the Metropolis in this matter—you ought to do it. In 28 boroughs there are possibly 15 or 16 different systems dealing with this matter, and it often is a matter entirely of the opinion of the rating surveyor, taken together with some of those extraordinary decisions, which have been given in the courts of law.

I do not propose to deal with the other aspects of the case. I am not a lawyer. I am glad I am not. But I have in my time had a good deal to do with them, and anybody who deals with these gentlemen suffers for it in the long run. The thing is this: that in this case you have an absolute thing that can be dealt with, and why should you not deal with this matter rather than drag in some of the other things that many of us have got set views upon. There is an Amendment on the Paper directing attention to land values. Every single taxer ought to be delighted to get one anomaly out of the way.

Colonel WEDGWOOD

We are delighted to get allies at any time.

Mr. LORDEN

You will never get allies to see exactly with you. If you look at what is happening at the present time in Europe you will see that that is only too true. Why, therefore, should you not deal with this special aspect of the subject? Last year we got to the Report stage of this Bill, and I believe that if it had not been for the right hon. Baronet the Member for the City of London (Sir F. Banbury) objecting to a Bill that came afterwards, we probably should have got our Third Reading. I hope that those hon. Members will not go into the Lobby against this Bill, because it does not embrace everything they desire. I hope they will be prepared to go a step. Most things in this world are done by steps and stages, and if you try to make a revolution in anything somebody generally gets hurt. We do not wish to hurt anybody, and all we desire to do is to improve industry. We want to cheapen the cost of production, and thus reduce the cost of manufactures. The Minister of Health has stated that we must place the rating somewhere, but how much is it that you have to place. The right hon. Gentleman said that in one place it would amount to 7d. in the £, but; in my opinion, the manufacturers there have not been looking after their own interests, because if they had appealed to a higher Court they would have got relief, because they were not taxable on such machinery. If you deal with this question, as is proposed by this Bill, it would only make a very small material difference. I hope we shall give this Measure a Second Reading, and then I trust the Government will give facilities for passing it into law.

Mr. JOHN MURRAY

I have a certain amount of interest, in this matter, and I sympathise with some of the views which have been expressed. This Measure deals with a subject which opens out in a good many important directions, and raises some very large issues such as those indicated by the hon. and gallant Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood). For those issues I have a considerable amount of sympathy, but I think it is desirable in dealing with this Bill that we should try to keep within the four corners of it. This Measure is intended to deal with certain anomalies in regard to rating and it declares those anomalies to be a bad thing. I represent a city in which some parts have adopted one system of rating machinery and other parts are governed by another system, with the result that on one side of a street you may have industrial enterprises governed by one system and on the other side they are governed by another system. That is undesirable. It only leads to a congregating of industrial enterprises in those parts where they get the best treatment and most relief from rating burdens. I think it is quite clear that particular districts should not be given an advantage in attracting industries which ought to be spread over the whole country. Therefore I sympathise with the principle of this Bill.

The difficulty, however, is that there is hardly a place where any very definite principle is followed, and whatever he the rating authority, or the principles by which any public authority claims to be guided, the fact remains that the actions of those authorities are extremely different. I do not object to going step by step in this matter, and I am quite willing to do that rather than proceed by one immense bound, as was suggested by the hon. and gallant Member for Newcastle-under-Lyme, but you must, be sure that each step you take is suited to the circumstances of the time. I submit that this Bill is not suitable for the present time. I go back to November last year, when some of as were fighting for and against the idea of a capital levy. I fought hard against that principle. I did so because at that time all classes of the community were rated and taxed up to the hilt, and the great question was how to get the taxes and the rates down, and the general remission of those charges was what everybody had in view. Whatever can be said for or against a capital levy, at any rate it means that a great shifting of taxation would take place. Some people would be relieved and some would have their burdens increased still more, and that appeared to me to be a thoroughly wrong thing to do.

I offer the same objection to this Measure because it is seeking relief for one class at the expense of another. It is seeking relief for the industrialists at the expense of some other people who are already rated as heavily as they can bear. I am against any change or supposed reform at the present time which would really have the effect not of reducing the total burden, and not of spreading the reduction uniformly over all, but would have the narrow effect of concentrating a new burden upon certain shoulders and relieving other shoulders. In principle I support the Bill, and really nobody can oppose it, but in practice this Measure is extraordinarily inopportune. The policy suggested by the Minister of Health is one which would meet my difficulty in regard to Clause 2. According to this Clause no change is going to be until a certain date in 1924, which is only one year ahead. I submit that within that very short period no substantial change in the business of the country can take place. Up to that time all classes will be over-taxed and overrated, and 1924 is too early to make the shift of taxation that this Bill would entail. For these reasons I welcome as an alternative the decision of the Minister of Health to set up a Departmental Committee. Anyone who knows anything about Departmental Committees knows that we shall be quite safe until after 1924, and by the time the Committee reports, and by the time its report has been considered by the Cabinet and adopted by the Ministry, better times may have returned. It may then be more practical to shift the burden of taxation, and by then the argument which can be brought against the application of this Bill now may have disappeared.

Mr. R. RICHARDSON

I approach this matter with some hesitancy. I feel, as a man who has been engaged in administrative work, that some change is absolutely necessary, but I am against this Bill, because of its unfair incidence as between one sort of machinery and another. It would appear to me that whatever occurs money must be found to carry on our social services, and, if these people are relieved of this burden of taxation, then it must necessarily fall upon other people who use machinery which cannot under any circumstances be used without being attached to the hereditament. I come from a county which is practically an industrial county. Forty-seven per cent. of the whole rating in that county is from industry, and 25 per cent. of that 47 per cent. is mining. Everyone knows that in mining there is practically no machinery that is not fixed. If they try to get rid of rating by detaching the machinery, it will lead to further accidents, and everyone will admit that accidents in and about the mines are numerous enough without increasing them. As I have said, 25 per cent. is mining. The other 22 per cent. is going to get some relief in some way.

Let me give an example or two as to how this Bill will operate in that county, and I will give actual figures which have been worked out and which will show how unfair the incidence of rating would be under this Bill. I take first, works and shipbuilding yards. The rateable value is £930,000, and 31 per cent. is movable machinery. Therefore, that industry would get rid of one-third of its assessable value, and that must be thrown on to somebody else. Then I take engineering works. Their rateable value is £320,000, and the assessment of the machinery which is not fixed is exactly half. Consequently, those works, again, would get clear of half their assessable value, and that must go on to some other industry. It must be borne in mind that half the assessable value of the county is practically industry. I now come to a coal mine, one that is raising 1,250,000 tons per annum. The assessable value is based on the cost per ton raised, 5d., with an additional 2d. per ton for machinery. The machinery that is not fixed amounts to .7 per cent. of the rateable value. The rateable value at present is £35,000, and relief would be given only to the extent of £250. Therefore, mining would have to bear the increased rate, and again would go down wages and up would go the price of coal. We have adopted that which we have been told ought to be the position in all industries, the co-operative system of dividing the profits after we have paid all the expenses, and of every £ that came upon the mines as increased costs, and rates are costs, the miners would have 83 per cent. to pay.

The mining industry is probably the worst placed industry of any in the country. The men are working to-day for less than a living wage—a man with a wife and perhaps four or five children gets only 6s. 8d. per day—and yet this legislation means that that miserable wage possibly will again have to be reduced. Hon. Members do not agree, but I have been there since I was a boy, and I have seen these things in operation. We are told that we have to compete with everybody else, and that every penny thrown on to industry means so much less for the workers. We are told that we must not send up the cost or the consequences will be felt by our wives and families. I agree, as an administrator, that something must be done, and I am glad that the Minister of Health has announced that he is going to set up a Committee to go into the matter. I know only too well what has happened, Ina I do not want to narrow the basis of assessment. I want to broaden it and to throw it upon people who are now getting clear altogether and who can afford to bear it. I want to throw some of the burden of local taxation upon the people who own the land values, and who own the site on which my own house stands and on which I have to pay taxation. I want to throw it upon the people who own the royalties. In Durham £1,250,000 is taken every year from the mining industry by the royalty owners. They let down our public buildings which causes additional rates, and they tell us that we must seek other sites for our schools. The local education authority cannot select the land. It has to put down its school where the children are; it cannot go far away; and it is in every case absolutely tied down to one spot. We selected a site for our school. It was a piece of waste land, paying no rates whatever. When we took it, paying £1,210 an acre for that land, we knew we had to pay rates. We want those people who hold the land up to pay their share of the burden before it is put on to us.

The Government are going to appoint a committee of inquiry. If the committee is going to work it should commence from the beginning. No change should be made until it has gone through the whole matter, and worked out every detail. It is a difficult matter, and whoever tackles rating, tackles one of the greatest problems this country has faced for some years. Everything depends upon it. We want to see—and I feel sure almost all hon. Members will agree—that the people who ought to pay shall pay, and not throw the burden back on to the poor. Hundreds and thousands of people have been summoned because they are unable to pay the rates now levied on them, and to increase further the burden on these people would be a catastrophe of the first order, and would cause a great deal of unrest in this country. We want to see the country at rest. We want to see industry going, as it did before the great catastrophe of the War. We ought to proceed carefully, and not shift the burden that one man has borne so long, on to the back of another who is groaning under still heavier taxation. Let us all do our best to share the burdens of the country, which must be borne equally all round. I hope the House will refuse the Bill a Second Reading to-day, and that it will be brought up again by the Minister in such a way that justice will be done all round.

Mr. HANNON

We have all been delighted with the eloquent disquisition of my hon. Friend who has just sat down. I think, however, that he drew an entirely exaggerated picture of the evils that would result from the passage of this very small—

Mr. RICHARDSON

Very dangerous!

Mr. HANNON

—and very just Measure of relief to the industry of the country. One would imagine, from the speeches which have been delivered in opposition to this Bill, that we, who are promoting it, are seeking for something which would inflict a very grave injustice upon a very large mass of ratepayers in this country. Nothing of the kind. My hon. Friend the Member for Cambridge (Sir D. Newton), who in his delightfully seductive way, moved the rejection of the Bill, said we were going to transfer a certain burden of local taxation from machinery to agriculture.

Sir D. NEWTON

No, to other ratepayers.

Mr. HANNON

"Other ratepayers" include agriculture, and I think the hon. Member was particularly thinking of agriculture, and he will have present to his mind, no doubt, that this House, and the policy of the Government at the moment, is moving in the direction of doing a very great deal for agriculture. I do not object to that. It is very desirable that agriculture, as the great basic industry of this nation, should be recognised, and ample assistance given to it. We should not forget, however, that the industries of this country, out of which the great mass of the people derive their livelihood, ought, at least, to have as much consideration in the eyes of this House as any other branch of national industry. This Bill, as has been indicated by hon. Members, simply aims at bringing about equality in the administration of the rating law. Since 1841, as a matter of fact, machinery as such, has not been subject to taxation, but decisions have been taken from time to time in which, in calculating the rateable value of buildings, machinery was taken into account. That has grown up steadily into a system entirely chaotic, every assessment committee in the country pursuing its own particular course, with no sort of order at all. This Bill simply asks that the principles of a uniform application of rating shall apply to the whole country. That there shall not be one law for Scotland—with all its great national qualities, I do not think Scotland is entitled, in the eye of the Legislature of this country, to differential treatment—that there shall not be one law for the manufacturer in this country who is, after all, carrying the great burden of the nation on his back, and another law for the manufacturer in Scotland. As my hon. Friend pointed out, in introducing the Bill, there should not be one set of circumstances governing the cost of production in this country and another set of circumstances governing the cost of production in foreign countries. Therefore, I ask that a measure of equality and fair play should be established in the interests of the manufacturer. I should like to point out that the Minister of Health, in his admirable statement in relation to this Bill, said he was anxious that the Bill should get a Second Reading.

Lieut.-Colonel WATTS-MORGAN

No, he did not say that.

Mr. HANNON

He indicated that it was his personal desire that it should get a Second Reading.

Lieut.-Colonel WATTS-MORGAN

There was no anxiety.

Mr. HANNON

The well-recognised exactitude of my hon. and gallant Friend opposite always comes into play in this House when he is putting Members right, and I thank him very much for putting me on the right line. The Minister of Health made it as plain as possible that he desired that this Bill should receive a Second Reading. I suggest it should receive a Second Reading for this reason, that the gingering-up process in relation to the Government is a very important factor in the proceedings of this House. The Minister of Health, in his statement, referred to the statement made by the right hon. Member for West Swansea (Sir A. Mond), and pointed out that the promise of the right hon. Member for West Swansea had not taken effect. In the world of politics, promises do not always take effect. I do not agree with my hon. and gallant Friend the Member for Harborough (Sir K. Fraser), who said we could not trust the promises of the Government. I absolutely trust the promises of this Government. I am quite satisfied that the promise made by my right hon. Friend from the Front Bench this morning will be carried out in the spirit and in the letter, but at the same time I think it would help my right hon. Friend very much if he had a Second Reading of this Bill by this House to support him in giving effect to that promise.

We who are interested in the promotion of this Bill are very much gratified that the Minister has undertaken to appoint a Departmental Committee to examine all the incidence of this very important question. We hope that that Committee will be appointed in the shortest possible time, and we hope its Report, full and comprehensive as it may be, will lead up to the Measure which the Minister indicated would be brought before this House in order to regularise the present somewhat disorderly system of valuation and local taxation in this country. I would, however, make just one suggestion. I would call to the attention of the House the findings of the Royal Commission on Local Taxation in 1901, which recommended that machinery for motive power and lighting should be excluded from that general category of machinery which it was suggested should not be subject to taxation. The word "first," suggested by the Royal Commission, should have occupied a place in this Bill. For example, many manufacturers who are now installing electrical plant, and who take their power in a secondary way from first-power sources, ought not to be subject to taxation, and, therefore. I hope that, if this Bill receivesa Second Reading and goes to a Committee, measures will be taken in Committee to amend it in the direction of freeing those who have installed electrical plant for the working of their industries and who take their power from outside sources, and that those who have their own steam plant working electrical generators will also be considered in the incidence of taxation affecting those appliances.

The substance of this Bill has, it is true, been before this House for 20 years. The measure of justice which the Bill seeks to concede to British industry has been called for for 40 years. The House of Commons to-day, in giving a Second Reading to this Bill, will be doing something for which there has a been a long outstanding demand, and will remove a very heavy load from many of the small manufacturers in this country, in whose cost of production rating is a factor of very great importance. Let me take my own City of Birmingham, the greatest city in the whole world. We have 1,760 small manufacturers, and the great majority of them have machinery detached from the hereditament. This Measure will bring them very substantial relief; and when one considers the hundreds of thousands of people whose daily livelihood depends upon the continuous employment of the machinery of these factories, the House will see that some measure of sympathy must be extended to this proposition. Every Chamber of Commerce in the country, I think without exception, has asked for the passing of this Measure. Every business man in the country who is contributing to the prosperity of industry to-day is in sympathy with the Measure. So far as I know, two great organisations, namely, the county councils—and, indeed, I think that in many cases the county councils themselves have not taken any action at their own instance; the action has been taken by the central organisation which professes to speak for them—and, I believe, the Coal Association have shown opposition to the Bill. My hon. Friend opposite, who spoke so eloquently and touchingly on the danger to those employed in the coal industry if this Bill were to become law, is, I think, conjuring up bogeys for himself.

3.0 P.M.

Lieut.-Colonel WATTS-MORGAN

On a point of Order. The hon. Member is taxing his imagination. I never instanced the coal industry at all.

Mr. HANNON

I was not referring to the hon. and gallant Gentleman, but to the hon. Member for Houghton-le-Spring (Mr. R. Richardson). I try to say something concerning the hon. and gallant Member for East Rhondda (Lieut.-Colonel Watts-Morgan) whenever I can, but I was not referring to him that time, attractive as his personality is in this House.

Lieut.-Colonel WATTS-MORGAN

I am much obliged to you.

Mr. HANNON

I believe all that is best in the industrial and economic thought of this country is in favour of this Measure, and I confidently ask the House to concede, at last, a measure of justice to the prosperity of British enterprise which has been so much too long delayed.

Mr. CHARLES ROBERTS

—[HON. MEMBERS: "Divide!"]—I have no intention of talking this Measure out, or of standing in the way of the House coming to a decision very soon, but I want to say a word or two on the subject. The only criticism I should be inclined to make on the speech we have just heard, is that, if the hon. Member really thinks this Measure is going to pass into law in the present Session, he has a greater optimism than I can aspire to. I have never seen a Bill where a vote given for the Second Reading was more definitely a vote for the principle of the Bill with very little chance of anything further coming from it during the present Session. Personally, I regret it, but I think it should be recognised, and I think that that ought to determine the votes given for or against the Measure. The case for it has been very well argued, and I do not wish to repeat the arguments, but I have been much struck by the fact that the opponents, or at all events, those who sit on this side of the House, seem to be in sympathy with the objects of the Measure, and to be driven by their own arguments up to the very verge of voting for the Second Reading, and then, from one cause or another, they shy off and say they are going to vote against it. For instance, my hon. and gallant Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood) widened the argument. He saw in the Bill a Measure going in his direction, and he thought that the arguments in favour of it were very sound. In fact, they were part of his gospel of taxing land values.

The only comment I should like to make upon that, if it is not going too wide, is that ray hon. and gallant Friend, who seems to think that that reform is the solution of all the ills to which the flesh is heir, presupposes in his argument that land remains private property, and yet he belongs to a party which officially proposes the nationalisation of land. Quite apart from that, it does seem to me to be strange that, having argued that this is a Measure which does something of what he wants, which clears away from the rating system certain objects—movable machinery—which he thinks certainly ought not to be rated, he then puts on the Order Paper an Amendment saying that he declines to proceed with this Bill—I suppose until he gets his whole programme. His enormous revolutionary change is not likely to come at a single blow. I should have thought if he could not get existing houses entirely free from rating it would be worth while getting new houses free from rating. It might have been worth while accepting this Bill as part of his proposals, but he does not seem to trust his convictions unless he can get the whole that he requires.

Then I am bound to say I think the agricultural community in its opposition to this Measure is singularly ungracious. Its argument is that you must not have piecemeal or sectional treatment of this subject, and at the present moment it is clamouring for and accepting with open arms sectional treatment for itself. The agricultural community is asking for sectional treatment, which is going to benefit may be one class of British farmers, the wheat growers in Norfolk, and at the same time going to benefit another class of British farmers who if they were left to themselves certainly could not make out an equal claim for that relief of rates. At the moment when they are taking exceptional treatment for their community, which is going to work in totally different ways in different branches of their own industry, it seems to me very ungracious to say "We object to any sectional treatment of the subject. Let us deal with it only on comprehensive lines. Let us wait until the Departmental Committee has dealt with the whole subject." We know that the last Commision on rating 25 years ago took six years to arrive at a decision and that nothing has happened. Under these circumstances, at a moment when the agricultural community is accepting a great boon at the hands of the State, they might be willing to extend sectional treatment to other members of the community. There are others of my friends who are afraid that this Measure, while clearing away an admitted anomaly, will penalise the other ratepayers—house property, mining and whatnot. I think the hon. Member who spoke from the Labour Benches put the case of mining with some force. But his argument amounted to this, that the mining community at present is not taxed on movable machinery and he thinks therefore that other machinery users should not be put in the same position as the mining industry but that they are to be under a special disability from which the mining community is free.

My hon. Friend thinks—I am sure that is one of the objections which will prevent a good number of votes being given on this side of the House for the Bill—that if this Measure is carried now it will throw an extra burden upon ratepayers and house owners in urban districts. I think that consideration would be of great force if this Measure was now being read a Third time and the result of this vote would be to pass it into law, but what we are doing to-day surely is giving a vote for the principle. The elimination of movable machinery from rates is a principle which ought to be adopted in any comprehensive treatment of the rating question. It surely is not for us to say within the limits of this Bill how exactly we are going to find the extra money which would require to be raised. For the purposes of a Second Reading vote that is not a matter which we need consider. It does not necessarily mean that the burden is to be thrown upon the urban districts. If it were I am rather inclined to think this is not a bad time to effect the change because factories in most parts of the country are being very heavily re-assessed, and the rates upon them are being raised very largely, and it may well be that out of that large increase of the assessments even if you concede this measure of justice the burden on the rest of the property owners in the district might be lightened by the high re-assessment of the works. The question of raising the money is a problem which has to be dealt with in any comprehensive treatment of the subject. It can be done by extra grants from the Exchequer. It can come, as I should like to see it, by taxation of land values. I think you can get other sources of raising money. Therefore I do not for a moment wish to be forced into the position of saying that one is bound to make up the deficiency by extra taxation on the small owners of property in the urban districts. That does not follow. That is not involved in a vote for the Second Reading, and I shall give my vote on that understanding.

Mr. PETO

After the speech of the hon. Member for Derby (Mr. C. Roberts), I think there is very little still to be said in support of this Bill. I was going to pay him the compliment of saying that he has gone over, most comprehensively, practically every argument for the Bill, and has riddled the opposition from the beginning of this Debate. We have had two speeches his and the speech of the hon. and learned Member for Middleton (Sir Ryland Adkins), which left very little argument standing in opposition to this Bill. We have also had a speech from the right hon. Member for West Swansea (Sir A. Mond), whose name is on the back of the Bill, but who gave the Bill such tepid support that I almost think the Bill would have been as well without his advocacy. The most remarkable thing in this Debate has been that the hon. Member for Warrington (Captain Reid), who introduced the Bill, showed extraordinary prescience for a young Member as to what would be the opposition to the Bill. He pointed out, before a single word had been said against it, that two or three things would happen. He said that we should be told that this was the wrong time to introduce the Bill, and that we should be told that we must not deal with one injustice under which the industry of the country is suffering, without a comprehensive measure which would deal with everything. The only thing that he failed to forsee—because he did not know the hon. and gallant. Member for Newcastle-under-Lyme (Colonel Wedgwood) as well as I do—was that there would be a speech from the hon. and gallant. Member, and speeches from other hon. Members in which, like King Charles's head, would appear the inevitable taxation of site values. We have had a speech from the hon. and gallant Member for Newcastle-under-Lyme on his Amendment which did not deal with a single word of the Bill but with his alternative of taxation of site values. We have nothing to do with that.

I do not believe that any section of Members of this House is more in favour of the authority of this House in legislation than hon. Members on those benches. Yet we have had three or four speeches—and one very strong one by the hon. and gallant Member for East Rhondda (Lieut.-Colonel Watts-Morgan)—in favour of this judge made law, which is practically opposed to the perfectly clear terms of the Statute of 1840. Gradually we have had, much to the profit of the legal profession, decision after decision on these questions which culminated in the notable decision of the House of Lords, in which Lord Halsbury gave the judgment which the hon. and gallant Member and another hon. Member quoted. But all that that did was to lessen the flood of litigation on this subject that has been going on ever since 1840. To that extent we are indebted to it, but it does not settle anything. Hon. Member after hon. Member pointed out that even in different parts of the same borough you get different systems of rating, and the only substantial argument against this Bill is that it throws the burden upon somebody else. Obviously, you cannot lighten the burden in one direction without distributing it somewhere else. But to say it will injure the agricultural industry in this country is an entire delusion. On the contrary, it is very likely to work in the opposite direction. If you have a system which rates machinery, even movable machinery, machinery which is the property of the tenant and not the landlord, you discourage the establishment of new industry and the best way of relieving agricultural rating, apart from the great measure of relief which agriculture will get this year from the action of the Government, is to establish more and more widely distributed industries in more or less rural areas.

To say that because a new factory is going to be rated upon an equitable system, a system on which every factory in Ireland and Scotland is rated, and many factories in this country, because we are going to have uniformity of law, law made by this House, you are going to increase the rates upon rural industry in the neighbourhood of these new factories is a delusion. It leaves out of account altogether two other factors. Undoubtedly what we suffer from more than anything else in rural areas is the want of alternative occupation. If we can have factories distributed here and there rated upon an equitable system we shall have alternative employment, and less unemployment in the country. Unemployment is one of the greatest burdens, if not the greatest burden, upon the rates of this country, and a system of inequitable rating must inevitably tend to the discouragement of industry and the prevention of our power of competing in foreign markets, and to that extent—I do not place it too high—it injures the employment of people in this country in many industries that have their markets overseas.

I hold the view that it is short-sighted and a mistake to adopt a dog-in-the-manger policy, The hon. Member who spoke last pointed out that agriculture should be the last industry to oppose some relief for other industries in the matter of rates. I quite agree. My hope is that it will take a longer view than is taken in some quarters at present, and will realise that this country as a whole lives by industry. The agricultural industry must find markets, and everything that injures the great industries of the towns is indirectly an injury to agriculture. This Bill removes the greatest inequality of our rating system, an inequality that applies only to this country, and only partially here. It does not apply to Ireland or to Scotland. We have heard from the Treasury Bench that a Departmental Committee is to be set up with a view to future legislation. That is a stronger argument in favour of the Bill. We all know how slowly these Committees work, how much evidence they have to collect, how much has to happen before they bring in a report, and how long a time elapses after that before any legislative action is taken. If we can remove one part, and a considerable part, of the matter into which they have to inquire, we shall shorten the inquiry and shall hasten what hon. Members opposite ask for, namely, a general revision of the rating system of this country. I de not ask merely for the Second Reading of the Bill. The argument that has underlain many speeches, the inuendo that this is a hardy annual, that the Bill gets only to a Second Reading and perhaps consideration in Committee, ought not to be regarded as against the Bill. Hon. Members who respect this House should regard it as something of a disgrace that for 20 years we have brought in a Measure and still have not passed it. The Bill is only the counterpart of what was passed for Scotland in the year after a Committee reported in favour of what is in this Bill. Those are reasons why we should pass the Bill in the course of the present Session.

Mr. HEMMERDE

I regret that I have not been able to listen to a great deal of this Debate, but I think that I have heard enough of it to appreciate the somewhat novel sense of seeing people like the hon. Member who has just spoken speaking in favour of the un-rating of improvements. Apparently his view is that, although for years many of us have been urging un-rating of improvements generally as a great boon to agriculture and other industries, the only time when he can favour the un-rating of improvements is when the shoe happens to pinch his particular friends. If anyone says to me that if we pass this Bill we shall throw the whole of the rating system into chaos, I say that that is precisely why I am going to vote for the Second Reading. I want to throw the whole scheme into chaos. I have just spent two hours trying to explain to a French naval officer what our rating system is. He absolutely declined to believe it. What is our rating system? To-day we have complaints from a number of people that machinery improvements are rated and—to use the words of the last speaker—it causes unemployment. I do not know how many years I have been urging that in this House and I have no doubt we shall be urging it for many more years unless there is a change of Government, because everybody knows this Government is not going to un-rate improvements. This Government believes in rating and in taxing improvements. This is the only civilised country in the world which taxes Opera. Other countries subsidise it. We do not realise that improvements are things which should not be taxed.

I have heard the hon. Member who spoke last deal on many occasions with agricultural questions and for many years we have been urging the rating of land values, which would throw the burden of rates on the heavily valued land and relieve the burden upon lowly valued land. It would have exactly the same effect as that which the hon. Member now claims will be produced if we un-rate improvements in the way of machinery. I am glad to claim him as a convert on this question. I can understand the position of those who say that we ought to deal with this matter in one Bill and reform our rating system once and for all, but I am quite content if we can get the principle established and get the support of certain hon. Members with whom we have been struggling for years for the principle that improvements should be un-rated, and that the rating of improvements causes unemployment. Let us at any rate mark that stage in our progress. Hon. Members opposite have persistently in season and out of season opposed the un rating of improvements and the taxation of land values, as though it were something that could only come from a Socialist Government, whereas, as a matter of fact, it is one of the supreme questions of individualism. It is a good thing to find that they are at last realising what we are driving at when hon. Members like the hon. and gallant Member for Newcastle - under - Lyme (Colonel Wedgwood) and my humble self deal with the un-rating of improvements. I support the Bill with the greatest possible enthusiasm. I will support the un-rating of all improvements. I detest the taxation of all industry whether it be great or small. One of my hon. Friends has suggested that this is a small matter of principle, which might be allowed to pass on a Friday afternoon, but I do not take that view. It is a big matter of principle, and I vote for it because I believe it is a very big thing indeed.

I have never been able to understand why the industrialists of this country should throw in their lot with the holders of land value, who are not industrialists, and who do not work. I always believed there was a definite cleavage between individualism and Socialism in this country, and I could never understand why so-called individualists should throw in their lot with the dead cause of the rating of improvements and with the old decaying parts of our land system. The ideas underlying the opposition to the rating of machinery are ideas which should come to much greater fruition in this House among hon. Members on the benches opposite. I look forward to a time when we shall find again, as happened a few years ago, the whole of the Conservative Members for Liverpool pledged to the rating of land values. I look forward to the time when that will become part of the ordinary Conservative creed in this House once more.

I support this Bill simply for the reason that I regard the rating of improvements as a perfectly rotten system. Only this morning I was discussing the legal aspects of another matter referring to this question—a large site in London, very largely under-rated at the moment, because undeveloped. Certain people Ranted to purchase that site in order to place upon it magnificent buildings, and the whole question is, Can they do it? Because if they do it, they will be spending the best part of £500,000, but not only will that mean an annual rental value of something like £25,000,000 or £30,000,000—[HON. MEMBERS: "Thousands, not millions!"]—yes, £25,000 or £30,000. I give my hon. Friends opposite what satisfaction they may get from that elementary blunder, but, as a matter of fact, below that blunder comes a perfectly plain question. Are the people with whom I was consulting going to build upon that site buildings that will cost them, with the land, about £500,000, or are they not? In my view, the whole question depends upon your rating system. So long as you rate the buildings they cannot build, but if you rate the site value they can build. If you will put your rates off machinery, off improvements, on to site values, then you will get a state of affairs in this country that will be very different from what you have got at present.

It is very interesting to find how partial is the enthusiasm of certain hon. Members opposite for this Bill, but I want to get down to root principles. A few years ago there was a town in Wales which came very prominently before the public mind upon this question. The ground values of that town, almost all in the possession of one man, were valued at about £300,000 a year. The rates of that town, not one penny of which fell upon the ground values, were also about £300,000 a year. I should have thought that it did not want demonstration to show that it would be a good thing for that town if the £300,000 of rates fell upon the £300,000 of ground values, but I do not suppose I should get many of my hon. Friends opposite to agree with that. They prefer to see a tax on industry, machinery, and all the other things, and the town taxed twice over, that is to say, £600,000, whereas under the scheme of the unrating of improvements they would be taxed once only, £300,000, the two taxes of £300,000 coinciding, and therefore, when we begin to touch this question at all—

Mr. PETO

Where does the other £300,000 come from?

Mr. HEMMERDE

As a matter of fact, the bulk of the ground values in that town are owned by the Marquess of Bute.

Mr. PETO

What I asked was, Where did the ether £300,000 come from?

Mr. HEMMERDE

I am afraid I was speaking too fast for the hon. Member. Let me go through it again. There were £300,000 of ground values going into the hands of certain landlords, and £300,000 of rates going to the town council, but not one penny of the rates was levied on the ground values. Is that right? Is that good for industry? What I say is, not that the whole of the £300,000 should fall on the ground values, but that a very large part of it should.

Mr. PETO

I understood the hon. and learned Member to say that the town was to be rated twice over—£600,000.

Mr. HEMMERDE

That is precisely what I did say, and I accept it entirely It only shows, if I may say so without offence, how utterly misunderstood is the position of some of us who have been fighting this question for years, and it is no doubt because we have not put it very clearly. Let me put it again. My own impression is that there are a good many Members in the House who understood perfectly clearly. But I will try again. [HON. MEMBERS: "Oh!"] If hon. Members opposite did understand it, then I do not understand why they cheered the interruption. If they did not understand, then no doubt they want to know what I was saying. Let me say again, the town of Cardiff was taxed in that way, not £300,000, but £600,000. What we ought to try to do is to make those two taxes coincide by putting the taxes Cardiff raises upon the ground values which exist only owing to the exertions of the people living in Cardiff. Does anyone doubt that?

Mr. PETO

Will the hon. and learned Gentleman explain to me how they can get £600,000 of rates in Cardiff out of 1300,000?

Mr. HEMMERDE

I never said so. What my hon. Friend did not realise is that Cardiff got £300,000 in rates, but the Marquess of Bute got another £300,000, and what I want to see is that the £300,000 levied by Cardiff falls, not on the machinery of the manufacturers of Cardiff, but upon the ground values owned by the Marquess of Bute.

Mr. PETO

Does the hon. and learned Gentleman mean that one man should pay the whole rates?

Mr. HEMMERDE

Nothing will give me greater pleasure than to give way to the hon. Member again and again if that is the sort of point he wants to put. If his point is that I now say that one man should pay, instead of the whole of the citizens of Cardiff, I say that I regard it as a grave public scandal that any one man should own any town in this country. I may, during the last few years, not always have been identified actively with the party with whom I am at present sitting, but I was certainly speaking on this subject 20 years ago on Labour platforms, and upon this question I have never altered at all. It amazes me that people should know their case as individualists so badly that they do not realise that at the present time they are driving every progressive man from individualism into the Socialist ranks, because we know perfectly well that in no other ranks can we get justice done upon this elementary question. You are driving them there simply because you will not look into these questions. This subject happens to pinch a few people opposite, and so machinery is to be un-rated. What they do not realise is that there is no connection in the world between the sort of individualist creed professed in this country and the defence of these rotten economics which allow a few people to get rich at the expense of the entire community. [An HON. MEMBER: "Lawyers!"] I accept with the greatest enthusiasm any suggestions from my hon. Friends opposite. I know lawyers are always suspect to them, because lawyers have to live by their brains, and they think it is unfair. I know that for years they have always felt the same way. There is something uncanny about a man having to live by his brains. But I have no feeling about the matter at all. Everybody knows that I am a lawyer, and a good many people know that if some hon. Members were in difficulty they might possibly come to me for advice. Whether that would be wise or not, I am not going to discuss on a Friday afternoon.

On the general issue as to whether we ought to go on taxing industry or not, I welcome this Debate. I detest the Income Tax. I detest Super-tax. But, mind, I detest other taxes more. I would be willing to pay more Income Tax to get rid of much worse taxes, like the sugar tax and so on. Why I am against those taxes is precisely why I am against the taxing of machinery, because until you have exhausted all other sources of revenue you have no right to tax industry, whether small or great. It follows therefore that until you tax what the public create you have no right to tax private persons, rich or poor. That is why I stand here as a whole-hearted advocate of the unrating of improvements and the taxation and rating of land values.

I came down to the House to-day without the slightest intention of speaking upon this question, but seeing—if I may say so—my old colleague sitting opposite, one who has been in the House with me for many years, speaking in this most unaccustomed strain, I could not help realising that this was the moment that we should nail down what he and his friends were saying, that it is bad for industry that you should rate improvements and machinery. When you have pursued that thought to its logical conclusion you will come to no other conclusion than that on the whole—[Laughter]—I may point out that is perfectly good English—you will come to no other conclusion than that the whole system of the rating of industry and the taxing of industrious people, rich and poor, is rotten, and that if you can avoid it you ought to. That is the whole basis on which we have worked for years. You can avoid it if you will think. When I see hon. and right hon. Gentlemen on the other side of the House taking to themselves the care of agriculture and never taking the trouble to realise for one moment where this preposterous rating system takes agriculture, then I can only say, as one who represents a large number of agriculturists, that the agriculturists have a right to say: "Save us from our so-called friends!"

In conclusion I want to say this, quite shortly. I am delighted to find the support we are getting from the other side of the House upon this prime principle of the unrating of improvements. If we can only go on and develop this dawning of economic intelligence on that side of the House, and get them to give tongue to it, Heaven knows where it may lead to. [An HON. MEMBEE: "You may get to the Woolsack."] I realise from that remark, if I may say so, how the argument has gone home. Everybody knows quite well that upon this point, quite apart from the question of lawyers, I have been for 20 years fighting a hard battle, on this one question, the unrating of improvements. It may be that some new Members of the House do not realise that some of us have been for the best part of a quarter of the century fighting for this cause, and we are quite prepared for another similar period. I, however, have only intervened in this Debate to-day to welcome the support of men who I have never previously thought would come into this fight with us. I hope, as their economic intelligence develops, we shall have many another great fight for the unrating of improvements, and for the establishment of a proper system.

Dr. CHAPPLE

We have had two very eloquent speeches this afternoon from two very capable. "single taxers," both of them equipped with great knowledge of the single tax principle. One of them is going to vote for the Bill and the other against it, and therefore I do not see what light and leading we are going to get from them. I am going to support this Measure. I am saying that now because at the end of my speech there may be some doubt about that point. I say that because of the doubts in my mind after hearing many speeches as to what are the intentions of some hon. Members who have addressed the House. I support this Measure because it is, in my view, a payment on account of something in the direction of a great reform. It has been said that the best is always the enemy of the good, and I cannot understand why those who want more than this Bill gives will not accept it because it is not enough. One objection put forward in the circular issued against this Measure is that it is reform piecemeal. That is the only reform of which the British race is capable. The genius of our country is that in reform we are evolutionary and not revolutionary, and we generally take tentative steps and proceed continuously. By supporting this Measure we are really only taking a little on account, and I cannot understand hon. Members refusing this because they cannot get the whole. Anyone who is in favour of the exemption of improvements from rating ought not to oppose this Bill. On a proposal like this when we get hon. Members opposite going in the right direction we ought to guide them and coax them on.

The circular issued by the opponents of the Bill tells us that if we exempt machinery from rating the burden will fall upon agriculturists and private householders. If that be so what will happen? They will come along and say, "We, too, want exemption from rating," and how can you logically refuse them? That is the way this infant nation of ours toddles along the path of reform. We pass in this way from one little reform to another after we have demonstrated that it is right. This reform is in the right direction, and when it is passed it can be quoted as a precedent for other similar reforms. On this point I can quote Scotland. A Scotsman once dropped a sixpence in the Strand. A number of helpers gathered around to look for it but failed to find it. The following day before returning, this Scot thought he would have one last look for his lost sixpence. When he arrived at the place where he had lost it, he found that the corporation workmen had lifted all the blocks. When he returned to Scotland and was asked what he thought, of the English, he said, "Mon, they are thorough." We are thorough, and I say that we can show our thoroughness by passing the Second Reading of this Bill and taking this as a payment on account. In Scotland they have this reform, and I think Scotland should not enjoy a privilege and a right that is not also enjoyed by England. A large amount of experience has been gained in Scotland since 1902 on this point and that experience is available, for our guidance when discussing this Bill and putting it through Committee. The only difficulty that has arisen in Scotland has been a difficulty as to what is movable and what is fixed machinery. That is all a matter of definition, and the definition can be strengthened and elaborated in Committee. That is a purely Committee point. I do not think that we ought to waint for a Select Committee. That Committee might report against the reform. We do not know how long that Committee might take to report. I think, whenever we have an opportunity of taking one step along the line of reform, we ought to take that step, and, because we have this opportunity now, I am going to support the Bill.

Mr. J. JONES

Representing as I do one of the most congested industrial districts in Great Britain, I want to support this Bill on general principles, while at the same time holding certain views regarding the matter of local and national taxation. I believe that there ought to be only one tax, and that a tax according to means and not according to what somebody else imagines you are worth. We have discovered in the East End of London some gentlemen representative of the profession that have spoken here this afternoon can in a comparatively small office make an income of thousands a year and they are assessed only upon the value of the property they possess so far as local taxation is concerned; but a man who employs 500 or 600 men is assessed upon the value of the building that he happens to occupy in the course of his trade. That system of taxation is wrong. We ought to have taxation according to ability to pay, and every man, whether he is a bookmaker or a docker, ought to pay his fair proportion according to his circumstances. That would mean the abolition of indirect taxation. We want an alteration in the method of taxation. We object to districts where we have a huge concentrated population of industrialists being rated up to the eyebrows while others are able to escape because economically they are in a more favourable position. I am glad to know that the Government have at least suggested that they are going into the matter. I wish they would make it, not merely a Departmental Committee, but a kind of Commission to go into the entire question of taxation from the standpoint of the community as a whole. Let everybody pay their share, and nobody more than their share. If any differentiation is going to take place, it should be in favour of the man who earns what he

gets as against the man who does not earn what he gets. That system of taxation is the only fair one. I shall support the Bill on general principles, hoping that, when the Committee reports, we may have an opportunity of going into the whole question.

Question put, "That the word 'now' stand part of the Question."

The House divided: Ayes, 177; Noes, 75.

Division No. 146.]	AYES.	[3.56 p.m.
Adkins, Sir William Ryland Dent	Galbraith, J. F. W.	Newman, Colonel J. R. P. (Finchley)
Alexander, E. E. (Leyton, East)	Ganzoni, Sir John	Newman, Sir R. H. S. D. L. (Exeter)
Alexander, A. V. (Sheffield, Hillsbro')	Gibbs, Colonel George Abraham	Nicholson, Brig.-Gen. J. (Westminster)
Archer-Shee, Lieut.-Colonel Martin	Gilbert, James Daniel	Norman, Major Rt. Hon. Sir Henry
Banner, Sir John S. Harmood	Goff, Sir R. Park	Norton-Griffiths, Lieut.-Col. Sir John
Barnett, Major Richard W.	Gray, Frank (Oxford)	Oman, Sir Charles William C.
Benn, Sir A. S. (Plymouth, Drake)	Greaves-Lord, Walter	Parker, Owen (Kettering)
Bennett, A. J. (Mansfield)	Gretton, Colonel John	Parry, Lieut.-Colonel Thomas Henry
Bentinck, Lord Henry Cavendish-	Guest, Hon. C. H. (Bristol, N.)	Penny, Frederick George
Birchall, Major J. Dearman	Guinness, Lieut.-Col. Hon. W. E.	Perring, William George
Blades, Sir George Rowland	Gwynne, Rupert S.	Peto, Basil E.
Bonwick, A.	Haistead, Major D.	Phillipps, Vivian
Bowerman, Rt. Hon. Charles W.	Hamilton, Sir R. (Orkney & Shetland)	Potts, John S.
Bowyer, Capt. G. E. W.	Hannon, Patrick Joseph Henry	Pownall, Lieut.-Colonel Assheten
Broad, F. A.	Harbord, Arthur	Pringle, W. M. R.
Brown, J. W. (Middlesbrough, E.)	Harris, Percy A.	Rae, Sir Henry N.
Bruton, Sir James	Hawke, John Anthony	Raeburn, Sir William H.
Buchanan, G.	Hayday, Arthur	Rankin, Captain James Stuart
Buckingham, Sir H.	Hemmerde, E. G.	Reid, D. D. (County Down)
Buckie, J.	Henderson, Rt. Hon. A. (N'castle, E.)	Remer, J. R.
Buckley, Lieut.-Colonel A.	Henn, Sir Sydney H.	Remnant, Sir James
Bull, Rt. Hon. Sir William James	Hilder, Lieut.-Colonel Frank	Reynolds, W. G. W.
Burgess, S.	Hill, A.	Rhodes, Lieut.-Col. J. P.
Burnie, Major J. (Bootle)	Hinds, John	Richards, R.
Butler, H. M. (Leeds, North)	Hodge, Rt. Hon. John	Richardson, Sir Alex. (Gravesend)
Buxton, Charles (Accrington)	Hodge, Lieut.-Col. J. P. (Preston)	Richardson, Lt.-Col. Sir P. (Chrtsy)
Cadogan, Major Edward	Hogge, James Myles	Roberts, C. H. (Derby)
Cassels, J. D.	Holbrook, Sir Arthur Richard	Roberts, Rt. Hon. G. H. (Norwich)
Cecil, Rt. Hon. Sir Evelyn (Aston)	Hood, Sir Joseph	Russell, Alexander West- (Tynemouth)
Chadwick, Sir Robert Burton	Hopkins, John W. W.	Russell-Wells, Sir Sydney
Chapple, W. A.	Houfton, John Plowright	Samuel, A. M. (Surrey, Farnham)
Clayton, G. C.	Howard-Bury, Lieut.-Col. C. K.	Shakespeare, G. H.
Clynes, Rt. Hon. John R.	Hume, G. H.	Shaw, Hon. Alex. (Kilmarnock)
Colfox, Major Wm. Phillips	Irving, Dan	Short, Alfred (Wednesbury)
Cope, Major William	Jarrett, G. W. S.	Simon, Rt. Hon. Sir John
Cotts, Sir William Dingwall Mitchell	Johnston, Thomas (Stirling)	Simpson, J. Hope
Croft, Lieut.-Colonel Henry Page	Johnstone, Harcourt (Willesden, East)	Simpson-Hinchcliffe, W. A.
Davies, Alfred Thomas (Lincoln)	Jones, J. J. (West Ham, Silvertown)	Snowden, Philip
Davies, J. C. (Denbigh, Denbigh)	Jowett, F. W. (Bradford, East)	Spencer, H. H. (Bradford, S.)
Doyle, N. Grattan	Jowitt, W. A. (The Hartlepools)	Stanley, Lord
Duncan, C.	King, Captain Henry Douglas	Stott, Lt.-Col. W. H.
Ede, James Chuter	Kinloch-Cooke, Sir Clement	Thorne, G. R. (Wolverhampton, E.)
Edmonds, G.	Lansbury, George	Thornton, M.
Edmondson, Major A. J.	Leach, W.	Thorpe, Captain John Henry
Ednam, Viscount	Linfield, F. C.	Titchfield, Marquess of
Ellis, R. G.	Locker-Lampson, G. (Wood Green)	Tout, W. J.
England, Lieut.-Colonel A.	Locker-Lampson, Com. O. (Handsw'th)	Trevelyan, C. P.
Entwistle, Major C. F.	Lorden, John William	Vaughan-Morgan, Col. K. P.
Evans, Capt. H. Arthur (Leicester, E.)	Lort-Williams, J.	Wallace, Captain E.
Evans, Ernest (Cardigan)	Lowe, Sir Francis William	Watts, Dr. T. (Man., Withington)
Fairbairn, R. R.	Loyd, Arthur Thomas (Abingdon)	White, Lt.-Col. G. D. (Southport)
Falcon, Captain Michael	Macnamara, Rt. Hon. Dr. T. J.	Whitla, Sir William
Falconer, J.	Manville, Edward	Windsor-Clive, Lieut.-Colonel George
Falle, Major Sir Bertram Godfray	Margesson, H. D. R.	Wise, Frederick
Fawkes, Major F. H.	Marshall, Sir Arthur H.	Wright, W.
Foot, Isaac	Middleton, G.	Yate, Colonel Sir Charles Edward
Ford, Patrick Johnston	Millar, J. D.	Yerburgh, R. D. T.
Foreman, Sir Henry	Molloy, Major L. G. S.
Fraser, Major Sir Keith	Molson, Major John Elsdale	TELLERS FOR THE AYES.—
Frece, Sir Walter de	Mond, Rt. Hon. Sir Alfred Moritz	Captain Reid and Mr. W. Robinson.
NOES.
Adamson, Rt. Hon. William	Banbury, Rt. Hon. Sir Frederick G.	Batey, Joseph
Adamson, W. M. (Staff., Cannock)	Barnes, A.	Bellairs, Commander Carlyon W.
Ammon, Charles George	Barnston, Major Harry	Brown, Major D. C. (Hexham)
Brown, Brig.-Gen. Clifton (Newbury)	Hartshorn, Vernon	O'Grady, Captain James
Button, H. S.	Hay, Captain J. P. (Cathcart)	Oliver, George Harold
Cape, Thomas	Hayes, John Henry (Edge Hill)	Paling, W.
Charleton, H. C.	Henderson, T. (Glasgow)	Pilditch, Sir Philip
Churchman, Sir Arthur	Jenkins, W. (Glamorgan, Neath)	Ponsonby, Arthur
Colvin, Brig.-General Richard Beale	John, William (Rhondda, West)	Richardson, R. (Houghton-le-Spring)
Craik, Rt. Hon. Sir Henry	Jones, T. I. Mardy (Pontypridd)	Ritson, J.
Darbishire, C. W.	Kelley, Major Fred (Rotherham)	Roberts, Frederick O. (W. Bromwich)
Davies, Evan (Ebbw Vale)	Lambert, Rt. Hon. George	Salter, Dr. A.
Dixon, C. H. (Rutland)	Lane-Fox, Lieut-Colonel G. R.	Scrymgeour, E.
Dudgeon, Major C. R.	Lees-Smith, H. B. (Keighley)	Shinwell, Emanuel
Duffy, T. Gavan	Lloyd, Cyril E. (Dudley)	Snell, Harry
Dunnico, H.	Lowth, T.	Thorne, W. (West Ham, Plaistow)
Edwards, C. (Monmouth, Bedwellty)	MacDonald. J. R. (Aberavon)	Warner, Sir T. Courtenay T.
Erskine, Lord (Weston-super-Mare)	Malone, Major P. B. (Tottenham, S.)	Watson, W. M. (Dunfermline)
Eyres-Monsell, Com. Bolton M.	March, S.	Watts-Morgan, Lt.-Col. D. (Rhondda)
Furness, G. J.	Maxton, James	Webb, Sidney
Gates, Percy	Mercer, Colonel H.	Weir, L. M.
Gosling, Harry	Morrison, R. C. (Tottenham, N.)	White, Charles F. (Derby, Western)
Grenfell, D. R. (Glamorgan)	Murray, John (Leeds, West)	Wilson, C. H. (Sheffield, Attercliffe)
Griffiths, T. (Monmouth, Pontypool)	Murray, R. (Renfrew, Western)
Grundy, T. W.	Nicholson, William G. (Petersfield)	TELLERS FOR THE NOES.—
Hardie, George D.	Nichol, Robert	Sir Douglas Newton and Mr. T.
		Thomson.

Bill read a Second time.

Motion made, and Question put, "That the Bill be committed to a Committee

of the Whole, House."—[Lieut.- Colonel Watts-Morgan,]

The House divided: Ayes, 56; Noes, 180.

Division No. 147.]	AYES.	[4. 5 p.m.
Adamson, Rt. Hon. William	Grundy, T. W.	Nicholson, William G. (Petersfield)
Adamson, W. M. (Staff., Cannock)	Guinness, Lieut.-Col. Hon. W. E.	Nichol, Robert
Ammon, Charles George	Hardie, George D.	Paling, W.
Barnes, A.	Hartshorn, Vernon	Ponsonby, Arthur
Batey, Joseph	Hay, Captain J. P. (Cathcart)	Richards, R.
Bellairs, Commander Carlyon W.	Hayes, John Henry (Edge Hill)	Richardson, R. (Houghton-le-Spring)
Brown, Major D. C. (Hexham)	Henderson, T. (Glasgow)	Ritson, J.
Buckie, J.	Jenkins, W. (Glamorgan, Neath)	Salter, Dr. A.
Button, H. S.	John, William (Rhondda, West)	Snell, Harry
Cape, Thomas	Jones, T. I. Mardy (Pontypridd)	Thomson, T. (Middlesbrough, West)
Charleton, H. C.	Kelley, Major Fred (Rotherham)	Thorne, W. (West Ham, Plaistow)
Colfox, Major Wm. Phillips	Lambert, Rt. Hon. George	Watson, W. M. (Dunfermline)
Darbishire, C. W.	Lane-Fox, Lieut.-Colonel G. R.	Webb, Sidney
Dudgeon, Major C. R.	Lees-Smith, H. B. (Keighley)	Weir, L. M.
Duffy, T. Gavan	Lowth, T.	White, Charles F. (Derby, Western)
Dunnico, H.	March, S.	Wilson, C. H. (Sheffield, Attercliffe)
Edwards, C. (Monmouth, Bedwellty)	Morrison, R. C. (Tottenham, N.)
Gosling, Harry	Murray, John (Leeds, West)	TELLERS FOR THE AYES.—
Grenfell, D. R. (Glamorgan)	Murray, R. (Renfrew, Western)	Captain O'Grady and Lieut.-
Griffiths, T. (Monmouth, Pontypool)	Newton, Sir D. G. C. (Cambridge)	Colonel Watts-Morgan.
NOES.
Adkins, Sir William Ryland Dent	Clynes, Rt. Hon. John R.	Galbraith, J. F. W.
Alexander, E. E. (Leyton, East)	Colvin, Brig.-General Richard Beale	Ganzoni, Sir John
Alexander, A. V. (Sheffield, Hilisbro')	Cope, Major William	Gates, Percy
Archer-Shee, Lieut.-Colonel Martin	Cotts, Sir William Dingwall Mitchell	Gibbs, Colonel George Abraham
Banner, Sir John S. Harmood-	Davies, Alfred Thomas (Lincoln)	Gilbert, James Daniel
Barnett, Major Richard W.	Davies, Evan (Ebbw Vale)	Goff, Sir R. Park
Barnston, Major Harry	Davies, J. C. (Denbigh, Denbigh)	Gray, Frank (Oxford)
Benn, Sir A. S. (Plymouth, Drake)	Doyle, N. Grattan	Gretton, Colonel John
Blades, Sir George Rowland	Ede, James Chuter	Groves, T.
Bonwick, A.	Edmondson, Major A. J.	Gwynne, Rupert S.
Bowerman, Rt. Hon. Charles W.	Ednam, Viscount	Halstead, Major D.
Bowyer, Capt. G. E. W.	Ellis, R. G.	Hamilton, Sir R. (Orkney & Shetland)
Broad, F. A.	England, Lieut.-Colonel A.	Hannon, Patrick Joseph Henry
Brown, Brig.-Gen. Clifton (Newbury)	Entwistie, Major C. F.	Harbord, Arthur
Bruton, Sir James	Erskine, Lord (Weston-super-Mare)	Harris, Percy A.
Buchanan, G.	Evans, Capt. H. Arthur (Leicester, E.)	Hawke, John Anthony
Buckley, Lieut.-Colonel A.	Evans, Ernest (Cardigan)	Hayday, Arthur
Bull, Rt. Hon. Sir William James	Eyres-Monsell, Com. Bolton M.	Hemmerde, E. G.
Burgess, S.	Falcon, Captain Michael	Henderson, Rt. Hon. A. (N'castle, E.)
Burnie, Major J. (Bootle)	Falconer, J.	Henn, Sir Sydney H.
Butler, H. M. (Leeds, North)	Falle, Major Sir Bertram Godfray	Hilder, Lieut.-Colonel Frank
Cadogan, Major Edward	Fawkes, Major F. H.	Hill, A.
Cassels, J. D.	Foot, Isaac	Hinds, John
Cecil, Rt. Hon. Sir Evelyn (Aston)	Foreman, Sir Henry	Hodge, Lieut.-Col. J. P. (Preston)
Chadwick, Sir Robert Burton	Fraser, Major Sir Keith	Hogge, James Myles
Chapple, W. A.	Frece, Sir Walter de	Holbrook, Sir Arthur Richard
Clayton, G. C.	Furness, G. J.	Hood, Sir Joseph
Hopkins, John W. W.	Molloy, Major L. G. S.	Roberts, Rt. Hon. G. H. (Norwich)
Houfton, John Plowright	Molson, Major John Elsdafe	Russell-Wells, Sir Sydney
Howard, Capt. D. (Cumberland, N.)	Mond, Rt. Hon. Sir Alfred Moritz	Samuel, A. M. (Surrey, Farnham)
Howard-Bury, Lieut.-Col. C. K.	Newman, Sir R. H. S. D. L. (Exeter)	Shakespeare, G. H.
Hume, G. H.	Nicholson, Brig.-Gen. J. (Westminster)	Shaw, Hon. Alex. (Kilmarnock)
Irving, Dan	Norman, Major Rt. Hon. Sir Henry	Short, Alfred (Wednesbury)
Jarrett, G. W. S.	Norton-Griffiths, Lieut.-Col. Sir John	Simon, Rt. Hon. Sir John
Johnstons, Harcourt (Willesden, East)	Oman, Sir Charles William C.	Simpson, J. Hope
Jones, J. J. (West Ham, Silvertown)	Parker, Owen (Kettering)	Simpson-Hinchcliffe, W. A.
Jowett, F. W. (Bradford, East)	Parry, Lieut.-Colonel Thomas Henry	Snowden, Philip
Jowitt, W. A. (The Hartlepools)	Penny, Frederick George	Spencer, H. H. (Bradford, S.)
King, Captain Henry Douglas	Perring, William George	Stanley, Lord
Kinloch-Cooke, Sir Clement	Peto, Basil E.	Stott, Lt.-Col. W. H.
Lansbury, George	Phillipps, Vivian	Thorne, G. R. (Wolverhampton, E.)
Leach, W.	Pilditch, Sir Philip	Thornton, M.
Linfield, F. C.	Pownall, Lieut-Colonel Assheton	Titchfield, Marquess of
Locker-Lampson, G. (Wood Green)	Pringie, W. M. R.	Tout, W. J.
Locker-Lampson, Com. O. (Handsw'th)	Rae, Sir Henry N.	Watts, Dr. T. (Man., Withington)
Lorden, John William	Raeburn, Sir William H.	White, Lt.-Col. G. D. (Southport)
Lort-Williams, J.	Rankin, Captain James Stuart	Whitla, Sir William
Lowe, Sir Francis William	Remer, J. R.	Windsor-Clive, Lieut-Colonel George
Macnamara, Rt. Hon. Dr. T. J.	Remnant, Sir James	Wise, Frederick
Malone, Major P. B. (Tottenham, S.)	Reynolds, W. G. W.	Yerburgh, R. D. T.
Manville, Edward	Rhodes, Lieut.-Col. J. P.
Margesson, H. D. R.	Richardson, Sir Alex. (Gravesend)	TELLERS FOR THE NOES.—
Marshall, Sir Arthur H.	Richardson, Lt.-Col. Sir P. (Chrtsy)	Captain Reid and Mr. W.
Mason, Lieut.-Col. C. K.	Roberts, C. H. (Derby)	Robinson.
Millar, J. D.	Roberts, Frederick O. (W. Bromwich)

Bill committed to a Standing Committee.

The remaining Orders were read, and postponed.

Whereupon Mr. SPEAKER adjourned the House, without Question put, pursuant to Standing Order No. 3.

Adjourned at Twelve Minutes after Four of the Clock till Monday next (14th May).