HC Deb 15 June 1925 vol 185 cc220-41
Sir ROBERT SANDERS

I beg to move in page 13, line 13, after the word "shall" to insert the words so far as regards personal property and real property other than agricultural. After the facility of the other side in getting concessions from the Chancellor, I hope our turn may have come. It is my object to show that in regard to the increase in Estate Duty there is a case for special treatment of agricultural property. I think I can prove that the Chancellor's system, by which the remission made in Super-tax is said to balance the increase of revenue from Estate Duty, does not apply in this particular case. In such a balance as the Chancellor has foreshadowed I think it should be provided that the interest of 5 per cent. on the increased sum charged for Estate Duty should be the same as the amount saved by the reduction of the Super-tax. Assuming on the average that that is so with regard, say, to personal property bringing in an income of 5 per cent., it certainly is not so—and the balance is shifted against the taxpayer—when the valuation of the capital is so high that the income actually derived from it, instead of being 5 per cent., is, as with the case of landed estates so often happens, actually under 3 per cent. of the amount on which Estate Duty is paid. That is the case, very often with regard to agricultural land, and the reason is that the capital valuation is out of all proportion to the income actually received. I assume that the Chancellor wishes to maintain, in regard to all the sorts of property in which his Budget deals, that balance on which he says his Budget is based. If so, it is only fair to the owners of this class of property that he should either reduce the rate charged on estates that are valued on the present scale or else reduce the scale on which the valuations are made.

This Amendment is directed to the former course. There is a new Clause on the Paper in the name of my hon. and gallant Friend the Member for Rye (Sir G. Court-hope) and others, which lays down the method by which the latter course could be adopted. I do not know which the Chancellor would prefer, but if he will adopt that of my hon. and gallant Friend he will satisfy me, and if he adopts mine I think he will satisfy my hon. and gallant Friend. I do not wish—and it is not necessary for the purpose that I have in view—to attack the present system of valuation. It is undoubtedly the business of the valuer to try to arrive at the price at which the article valued can be sold at the present moment, and I must say I am sometimes absolutely amazed at the price at which agricultural land is sold in the open market. That only bears out my contention that, if you levy the increased rate on the full valuation, you do not maintain the balance the Chancellor has foreshadowed. Of course I am quite aware it may be said that if a a man is, for sentimental or other such reasons, prepared to give an uneconomic price for the land he buys, it is his fault, and he. must expect the tax gatherer to come down and make a demand on him. That may apply to the new purchaser, but it does not apply to the old owner and I am quite sure it is not in the interests of our country life to compel the owners of estates of, say, 2,000 or 3,000 acres to sell, or break up, these estates. Not only it is not in the interests of the country, but it is not treating them fairly, because you cannot sell land in the same way, or at the same expense, as that at which you can sell stocks or shares. It is not a matter of 2/6 in the £100: the commission may sum up to 4 per cent. or 5 per cent. These constant sales are a curse to the agricultural industry. They do more than anything else to bring about that feeling of insecurity of tenure of which we have heard a good deal from the benches below the gangway opposite, but which is, undoubtedly caused to a great extent by this system under which the present owner is forced to sell the whole, or a portion, of his estate. That is not only the feeling of landlords, but I have here an extract from a memorandum issued by the Farmers' Union in answer to a request sent out by the Minister of Agriculture. They say: The National Farmers' Union, an organisation of working farmers, makes no claim to a special knowledge of the problems which beset the agricultural landlord, but the Union cannot be oblivious to the manner in which Death Duties have contributed to the break-up of estates and the creation of a shortage of capital required for the equipment of the land. These considerations are of obvious importance since anything which induces a withdrawal of capital from the industry inevitably obstructs the attainment of the Government's aim of a real agricultural policy. We regret the new Budget should have contained a proposal to add to the difficulties of the industry in this matter. Quite apart from that, I am convinced that you are doing a bad day's work if you give the country squire notice to quit. The villages would lose by it, and, in regard to all country work, the counties would lose men who have done, and are capable of doing in the future very valuable work indeed. Therefore it is as a matter of public policy, as well as a matter of consistency with the system the Chancellor of the Exchequer has laid down, that I ask him to give special treats merit to the special case made out for agricultural land.

Colonel Sir GEORGE COURTHOPE

I wish to support the Amendment, and in doing so am very glad to have heard the chorus of friendly interruption from the opposite benches which suggested that if this Amendment be accepted the opposition will all be satisfied. [HON. MEMBERS: "You would be satisfied! "] I would be satisfied, and I think some Members of the Opposition would be satisfied. I also want to put a reason for the Amendment from a rather different angle which I think will appeal to my right hon. Friend, the Member for Carnarvon Boroughs (Mr. Lloyd George). One of the great reasons, in my opinion, for the difficulties of the agricultural community is the lack of working capital caused by the fact that a great many tenant farmers having, say, a capital of £15 per acre available, have been compelled to put the whole of that working capital into the purchase of their farms and they are dependent upon what they are able to borrow for the cultivation of their land, with the result that the national loss and risk has been very much increased thereby. Anything that is done to increase the probability of the break-up of estates and the enforced purchase by tenants of their holdings—I am not arguing against occupying ownership, for I am in favour of it—is to be avoided. I am arguing against the enforced purchase by tenants, who cannot afford the purchase, of their holdings, but are compelled to do so by the almost economically compulsory break-up of estates by land owners through Death Duties. Death Duties are the greatest form of compulsion towards the break up of estates, and the tenant farmers are put in the position that they are deprived of the working capital necessary for adequate cultivation of their holdings. The national loss is very considerable, and for that reason I recommend this Amendment to the Chancellor of the Exchequer, and I hope he will see his way to accept it. Some of us have put down a series of Amendments and new Clauses on the Paper, designed to relieve the burden of Death Duties on land, but we shall feel, if this Amendment be accepted, that very large relief is given; probably the greatest relief the Chancellor of the Exchequer has in his power to give at the present moment, and, probably, we will not press the Clauses we have put down on the paper. But I do press the desirability of giving a special concession to agricultural land in these cases where agricultural landowners are hit, because it is in the national interest that agricultural landowners should not be hit.

Mr. CHURCHILL

I am aware of the very weighty and strong feeling which exists among supporters of the Government on the subject of the increase I am proposing in the Death Duties. I Have never been under any illusion on that subject. I can assure my hon. Friend that I have from the beginning felt that in laying an additional burden upon the Death Duties we were taking a very serious step, and one which undoubtedly gives rise to hardship and dissatisfaction among many of those who support the Government. But we have already passed a Clause which relieved the Super-tax payer of approximately the same amount as has been proposed to place upon the Death Duties and I am bound to find the necessary revenue to pay for the concession which has been made to the Super-tax payers. Therefore it would not be possible for me to make any modification or mitigation in the Clause imposing the increased Death Duties, or the Schedule of the Duties, which effects in a substantial manner the revenue which I require. Agricultural land as such plays a very small part in the Death Duties in this country. I was surprised when I came to the Treasury to see how small a part it played. It is between 1/18th and 1/20th part of the total sum of, I think, over £60,000,000 which is collected under the heading of Death Duties. I do feel the force of some of the arguments that have been used in regard to agricultural land and in placing agricultural land in a position different from other forms of property. It is quite true as my right hon. Friend, the Member for Wells (Sir R. Sanders) who moved the Amendment pointed out, that when a landed estate is to be broken up for Death Duty, the portion cut off costs 2, 3, 4 and even 5 per cent. to realise which has to be borne by the successor, the property owner, whereas if stocks and shares have to be sold, only a very small commission, a quarter per cent. sometimes, is all that is required to transfer the appropriate block of shares. That is one of the reasons and there are other reasons brought forward which certainly must weigh and ought to weigh with me.

But we have not set out in this Budget to make any concessions to agricultural land at all. It may be in the future—in this Parliament or in future Parliaments—that the general question of the burden resting on agriculture will come up, but in the conception of the Budget of this year no such idea formed part of the plan which I proposed and the Cabinet approved. But it was not my intention to add in a serious manner to the burdens resting upon agricultural land, and I find that it would be possible for me, without upsetting the balance of the Budget or depriving myself of the means of paying for the cost of the tax remission, to exempt agricultural land, as such, from the operation of the increased scale of Death Duties. It would be necessary to limit this concession entirely to agricultural land as such. For instance, agricultural land having a building value, stands in a different category. The process which it seems to me we could adopt would be as follows: The estate would consist of agricultural land and of other forms of property. It would be valued as a whole and the figure thus fixed would regulate the rate of duty. But then you would proceed to value the agricultural land separately, and where agricultural land had no building value it would be charged at the existing rates of duties and not at the increased rates; but where the land had a building value, the agricultural land with the building value would be charged in respect of its agricultural value only at the existing rates of duty. It will cost me £225,000 in the present year, and £500,000 in the full year, or 1/20th of the yield of the increase in rates which has to be imposed.

I am obviously not going to ask the Committee to assent to a change of this character in the Budget proposals to-night. I could not accept the Amendment which my right hon. Friend has proposed for that reason, and also because the words have to be more carefully stated and rather more, elaborately framed, but I should be prepared to make this matter definite by the time the Report stage comes on in ample time for the House to consider it and to place upon the Paper an Amendment which will leave agricultural land, as such, where it is in this matter at a cost of £500,000 in a full year.

1.0 A.M.

Mr. LLOYD GEORGE

This is a very serious departure from the principles upon which these duties have been assessed from the first moment they were initiated. It was a principle of complete equality between the various owners of property and various classes of property. There was no distinction between the classes of land. That principle has been accepted by every party in this House. For the first time the Chancellor of the Exchequer has announced a departure from that principle, and that at one o'clock in the morning, without any opportunity for the House to consider the importance of the proposal. The right hon. Gentleman has said that he does not propose to do it to-night, but what he does propose is that notice should be given that on the Report stage we shall vote either for or against his proposal; that we are not going to have a Committee stage at all upon the proposal, which is a complete departure from every principle and policy. I cannot conceive upon what ground he is doing it. The Death Duties, of course, are a very onerous burden upon other classes of property, and there is no reason why special favour and privilege should be extended to owners of agricultural land as compared with others. The right hon. Gentleman seems to think that all the rest of the property in this country is in stocks and shares. That is not the case. It is not the case of a manufacturer who has converted his concern into a limited liability company. That is not the case of the small holder of property who conducts a business without any help from the public. Why should agricultural land be favoured? This is class legislation of the worst kind. I agree with everything that has been said by the right hon. Gentleman with regard to the effect upon agricultural property from the point of view of the breaking-up of estates. Do they really imagine that this concession of £500,000 is going to make a difference? Not the slightest. Anyone who goes through the accounts will know that perfectly well. The Income Tax and Super-tax and the in- crease of Death Duties in 1919 are so onerous that any Government wishing to deal with this problem ought not to deal with it in the way of discriminating between one class of the community and another. It is a thoroughly vicious principle. They ought to deal with the problem of agricultural land as a whole. What difference is this going to make? From the point of view of the breaking-up of estates it is not going to delay that process by a single year and it is simply establishing a principle which is a pernicious one in itself. It is established for the first time by this Amendment and when the Chancellor of the Exchequer proposes it to this House, I shall resist it. There was an Amendment that the same advantage should be given to agricultural land in respect of repairs when you estimate it for Death Duties. That is given in the computation of the Income Tax. It is a direct incentive to the land owner to do his duty towards his property and there is a good deal to be said for that. That was in the interests of the community but this proposal is without principle and a departure from the equality of treatment to which every taxpayer is entitled.

Sir R. SANDERS

I beg to ask leave to withdraw my Amendment. [HON MEMBERS: "NO!"] In doing so, I wish to thank the Chancellor of the Exchequer for the concession which he has made.

The DEPUTY-CHAIRMAN

The right hon. Gentleman does not appear to have the leave of the Committee to withdraw the Amendment.

Mr. PETHICK-LAWRENCE

I must really express my amazement at the suggestion of the Chancellor of the Exchequer that he will accept this Amendment. The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) has put the case very strongly from the point of general equity as between owners of different classes of property, but I would venture to suggest to the Chancellor of the Exchequer that he will, by accepting some such proposal as this, bring about inextricable confusion in the whole state of Death Duties settlement. This Amendment is quite meaningless unless it is taken in conjunction with two or three more of the complicated Amendments which follow later and we shall be getting our Death Duty administration in inextricable confusion. I suggest that the Chancellor should think over this again between now and the Report stage and that he should reconsider his decision. I cannot think he is giving the attention to the matter which it deserves and for my part I and the members of my party will give it our very determined opposition.

Mr. T. WILLIAMS

There is certainly something to be said why this concession should not be granted. It is perfectly true that the Mover simply selected an agricultural area where little or no land is in use or about to be used for building purposes. There may be something to be said for the proposal, but when we remember that the figures the Minister of Health gave only a few days ago when he told us that some 56,000 acres of land had been taken for housing purposes during the last four years, for which £4,000,000 had been paid, or an average of £200 per acre, it seems to me that the breaking up of an estate is a very profitable proposition. If the Mover of the Amendment would take land ownership of the whole instead of taking that portion called agricultural land then, I think, their proposal would not be accepted by the majority of this House. While extra burdens are being placed upon those least able to bear them, Super-tax does not or ought not to commend itself to further reductions being granted to this particular class. May I also remind the Chancellor of the Exchequer that the particular section to whom he is contemplating giving half a million of pounds are the section who are not going to make any contribution to the new pensions scheme? I want to suggest that the individual who merely owns the land and receives rent is going to make no contribution to the new pensions scheme. It seems to me that it is the greatest monstrosity of the Budget, and one that the Committee ought to resist to the very last moment. Surely the Chancellor of the Exchequer can find a section of the community well deserving assistance for the services they render to the community, and certainly a section who are much more in need than those he proposes to help. As the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) has said, to have made this concession at this time of the night, when a fair proportion of Members have already left the House, is not playing the game with the House. The Chancellor of the Exchequer is certainly playing the game of the hon. and right hon. Gentlemen opposite, but in its most comprehensive Sense it is not playing the game with the House. I hope Members on this side will resist this encroachment upon the ordinary elementary rights of the poorer section of the community by making certain concessions to those who have already had certain concessions made. I hope it will be resisted to the very last.

Mr. FENBY

I would like to ask the Chancellor of the Exchequer to give a little fuller and more detailed information to the suggestion that he has made to the Committee in response to Members behind him. We are told that if the proposal to be made in this Clause is carried through it will do something to destroy the system of landlordism we have in this country. I do not intervene in this Debate in order to join in any attack upon the present landlord system of this country or the landlords. The present Minister of Agriculture, if he is correctly reported, recently made use of a statement that the present system of landlordism had broken down. He is a very high authority, but there may be two opinions about that. The Chancellor of the Exchequer to-night is adopting, in my opinion, a preferential system of dealing with the matter that does not commend itself to me. Why should he feel so tender in his economic conscience for that large body of supporters behind him and the Prime Minister concerning a question of landlordism and estates? Why not have turned a sympathetic ear to other sections of the taxpayers of this country equally as well? May I ask him that when he suggests that he will have a different valuation for purely agricultural land and land that has a building value, how he or anyone else will be able to draw up and set in operation a watertight piece of machinery that will decide either the one or the other?

May I say this? The Chancellor of the Exchequer ought to know that so far as the prospective building value of agricultural land is concerned to-day, ten years ago the prospective building value of what was agricultural land purely was confined to about two or three miles on the borders of growing towns and cities. But to-day nobody can tell within five, ten or fifteen miles of the borders of any growing town or city what is the prospective building value of agricultural land, because transport has altogether revolutionised the idea of values of land in our agricultural areas. In recent years land that was let for agricultural purposes at less than £1 per acre is being sold today at 10s. a yard by the same owner That increase has been due to the development of the estate by the enterprise and growth of the community and not of the particular owner. We are told the return from agricultural estates compared with the capital value is very small. That very often is the fault of the landlord and of no one else. Those of us who have had to do with the agitation for obtaining land for small holdings and allotments—whenever we want land for that purpose in small quantities—we soon find out when we make inquiries how much is the value put upon the land by the particular owner. I would like to protest against what, in my opinion—I do not say it offensively but very sincerely—is the preferential treatment of the Chancellor of the Exchequer in regard to this question. Let us take the Super-tax payer. I hope I may be in order as I want to hang a point upon that. If you take the Supertax payer he is getting relief out of this Budget. How does he come to pay Supertax. Very largely it was not his own fault. During the War many men became rich not because of their ingenuity or efficiency but because they could not help it because of the necessity of the nation at that particular time. In my opinion we borrowed far too much during the War and taxed far too little, with the result that a great many people at the end of the War and to-day were in the position to be asked to pay Super-tax, and they are receiving relief from the Chancellor of the Exchequer on the money they are enjoying which is absolutely and honestly the property of the State. From that I want to come to land. Who is the man who is asked to pay this Estate Duty. You may know his resting place but you do not know his address. It is the man who follows on, who inherits the estate who pays the duty. The amount of money the Chancellor of the Exchequer has virtually promised to give by his concession is not going to prevent the break up of estates. I am not going to quibble at the amount, be it large or small; I object to the principle for this preferential treatment. It is entirely wrong and very dangerous. I echo the protest of my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) against it, and I hope no countenance whatever will be lent by the parties on this side of the Committee to the suggestion that has been made.

Mr. LAMB

I do not propose, at this time of the morning, to attempt to keep the Committee long, especially in view of the fact that the Chancellor of the Exchequer has promised to make a, proposal which I think will deal very adequately with the request that we have made from this side. But the last speaker says that it will be difficult to deal with the question in view of the fact of the building value of certain land. Let me point out to him that the Chancellor said it was his intention not to include land with a building value, and his argument that you cannot tell what value building land has is one which I think he will find will not be borne out in fact when the valuers come to deal with the question. At any rate, it is one which would not touch by a long way the bulk of the land which would be covered by this Clause. The hon. Member for Don Valley (Mr. T. Williams) as quite under a misunderstanding when he said this concession would lie with the rent-receiving landlord only. It would not. There are, unfortunately, many men at the present time who are and have been forced to become occupying owners, who are themselves responsible for the cultivation of the land. And let me say here that there has been no greater blow to the agricultural industry that the one which, largely by the Death Duties, has compelled the breaking up of these large estates, and for this reason. There is no industry in the country which is raising part of its capital at such a low rate of interest as the agricultural industry. Landlords, in the past, have provided their share of the capital at even no rate of interest whatever, simply receiving for themselves the amenities of living on their estate, and it is one of the greatest blows to the industry as a whole that the men should be forced, not from their own desire, but from the mere fact of having to retain their holding and their home to become occupying owners of the farm they had previously rented from a landlord. It has made them take from the capital which was necessary for the actual cultivation of the land a certain proportion to be locked up, to, part pay for the farms which they have had to buy. The right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) said he did not believe in the differential treatment being made to agricultural land. There is a certain force in his argument, but unless this concession is made here you are going to agree to an increase of the charges upon land. That is what I object to, and I do sincerely hope that the result of the Chancellor's foreshadowed concession may possibly mean that agricultural land will not suffer as undoubtedly it will suffer if this Clause is left as it is.

Mr. J. HUDSON

I think the Chancellor of the Exchequer has managed to plunge us into something of what I consider to be a first-class political issue. He smiles, rejecting that point of view. All the same, the issue in which we are involved is out of all proportion in its importance to the £500,000 he proposes to rob the Exchequer of in order to meet this claim of the landlord class. According to the Chancellor of the Exchequer, this Budget is a Budget of balances. I wonder what balance he is going to provide in order to meet this particular concession. That is not dealt with at all. We shall be glad to know before this matter is concluded what he does propose to set off as a balance against this. There is a very large number of issues—the superphosphate issue is one—upon which he might provide a balance, but I do not press that matter so closely for the reason that I, in common with all the Members on these benches, am utterly opposed to any attempt at all at the present moment to give any concession of any kind to a landlord class that has done go well out of the community, particularly during the last few years. Hon. Members opposite forget that all improvements that have recently been made in the community through railways and new roads have increased the value of agricultural land enormously. [An HON. MEMBER: "Nonsense."] Well, an hon. Gentleman says "Nonsense." I will give him an example. There has been recently a case in the Manchester district—the famous De Trafford estates—that has made in the last few years tens of thousands of pounds, I believe hundreds of thousands of pounds, out of the sale of land near the Manchester Ship Canal. But now they go further a field with their purely agricultural land—ten, twelve, or fourteen miles out of Manchester, to the Wilmslow and Alderley districts. And at the present moment, for purely agricultural land upon which to-day you may still see the ploughman engaged, they will ask you, if you ask for a quarter of an acre of land for building an ordinary cottage, £500 or £600 an acre, demanding that you shall buy a full half acre plot, insisting that you shall pay £2,000 or £2,500 for the cottage or house that you put on that plot. These are the conditions that this landlord class to-day is extracting from the community. The men who want to get out of Manchester into the country places to live on this agricultural land are met by demands of that sort, and yet it is the De Trafford Estates that will receive out of the Chancellor's proposal, with regard to all that land, that the De Trafford Estates classify as agricultural land—

Mr. CHURCHILL

The hon. Gentleman has really not understood what I endeavoured to convey. I have no doubt it was my fault. The valuation is made in exactly the same way as it is made now by the authorities, and there is no question of the landlord describing his property either as agricultural or building land. The valuation of the estate is taken for the purpose of assessing the total value, and no concession is given in regard to any of this building value of which the hon. Member is talking. That will continue to bear, not only the existing rates of duty, but the enhanced rates of duty. It is only so far as purely agricultural value exists, either beside the building value or underneath the building value, that the duty will be left.

Mr. HUDSON

Even if it is the case that the valuation is given officially, there is much land in the possession of the De Trafford Estate at the present time that will be exempted of part of the taxation that the Chancellor proposes in connection with this scheme. Why should that estate company have such a benefit? This is another example, and a glaring one, of the Chancellor of the Exchequer's willingness to give sops to those who least need them. The right hon. Gentleman the Member for Carnarvon Boroughs asked what could have been the motive which led the Chancellor to make this concession. It is not in keeping with any of the things he did in the past with regard to landlordism. There is not the least justification in the Chancellor's speeches for this concession he is making. What has happened is this. He has given sop after sop to a greedy class, but he realises that he has really failed to get the complete sympathy and support of the Members behind him. He goes from bad to worse, giving sops where he finds the pressure keenest. I intend to oppose with all my strength this proposal, and I believe the great mass of the members of my party will offer equal opposition to this proposal.

Mr. RHYS

I congratulate the Chancellor of the Exchequer on the courage with which he has faced this issue. There is no doubt whatever that the Death Duties have hit the industry harder than anything else could. I would just develop one step further an argument of an hon. Member who has just spoken. When farmers have to pay for their land they, as a rule, put down one-third in cash and two-thirds are left on mortgage. The farmer has, therefore, to pay interest on the mortgage, and that stops the money being put back into the land. Consequently we see fences broken down and land not in the clean condition in which good agriculturists like to see it. Unless we do get some sort of relief we are going to find the industry will really suffer to such an extent that it will not recover. I am perfectly prepared to defend the good landlord. He has fulfilled a function which is of inestimable value to the country. He had improved the land and provided the roads.

Mr. B. SMITH

And supplied the labour?

Mr. RHYS

I have always said Labour and Capital should co-operate.

Mr. B. SMITH

The fellow on top all the time.

Mr. RHYS

My hon. Friend says the man on top all the time. I do not know what he means by that. Be that as it may, I hope that in the future we shall even see a further relief from the burdens on agriculture. We are always told this is the basic industry of the country, but when a proposal is made to benefit it there is a storm of protest from hon. Members on both sides of the Gangway opposite. I propose to support this proposal of the Chancellor of the Exchequer because it is the first gleam we have had in this Budget of anything to assist agriculture. Agriculturists have searched through the Budget to see what was going to be done for them and the small farmer and the small squire, whom I regard as the backbone of the country, found nothing there. We can say now that their interest has not been forgotten. That the Conservative Government is not going to neglect agriculture altogether, and I hope the Chancellor of the Exchequer will stand fast against all political criticism and capital which may be made out of this proposal. If he does so he will be conferring one of the greatest boons conferred upon this industry for a long time.

Major Sir ARCHIBALD SINCLAIR

I beg to move, "That the Chairman do report Progress, and ask leave to sit again."

Mystification has obviously been felt by a number of Members as to what the Chancellor of the Exchequer actually proposes to do. I cannot help thinking that it is very unfortunate that we should be discussing at this hour of the night an Amendment which the Mover attempted to withdraw and which the Chancellor of the Exchequer declares himself unable to accept, and yet it is in some curious and obscure way understood to embody a new policy of the Government which is a very great departure from the policy followed in taxation of this kind since it was first introduced 30 years ago.

Mr. CHURCHILL

indicated dissent.

Sir A. SINCLAIR

We are asked to discuss it without a Committee stage on which we could discuss the details. For example, there is the question which the hon. Member for Huddersfield (Mr. J. Hudson) raised—the question of the definition of the building value of land. I cannot see how that is to be defined. I know a place where the farms have a building value. It depends entirely upon the fact that they may eventually be used for development based on London 40 miles away. I cannot see how the Chancellor can reach a satisfactory definition of building land. I think we ought to have such a definition before us before we give a. second reading to this Clause. On the more general policy, this means giving £500,000 to landlords of varying types, and different intentions, all over the country. That is not going to help agriculture in any sense. The hon. Member for Romford (Mr. Rhys) stated he was prepared to defend the good landlord. It is invidious for either of us to do that. Is he prepared to back up the bad landlords who are not playing their part in the agricultural industry?

Mr. RHYS

Does the hon. Member mean by the bad landlord the landlord who asks the price for land at which it is valued for Death Duties? I think he is asking a fair price.

Sir A. SINCLAIR

I was referring to the general condition of agriculture at the present time. The hon. Member said many things with which I agree. Amazement has been expressed at the price at which land is being sold at present, a price is being paid far exceeding its economic value in an enormous number of cases, with the result, as the mover and seconder of the Amendment said, it is being bought in a great many cases by occupying owners who are having to pay these excessive prices to avoid eviction. This additional burden is laid upon agricultural land. The value for which these people are paying in many cases is the additional value far and above the agricultural value. They pay for the sporting value and the amenity value in some cases. I admit that argument must not be pressed and that in many cases there is a definite monopoly, but these are the values landlords are receiving at the present time and you cannot divide landlords into two categories, those who have kept their land and those who are selling it. Surely everyone outside the landed interest must see it is grossly unfair when they sell their land as against the man with the small holding. It is unfair that the small holder should have to pay on a full value whereas the landlord should not pay on a full selling value. So long as you have the present system, slow and clumsy as it is at the present time, you are bound inevitably to come up against the demand of the community that the landlord should pay on the full value. To me it seems disastrous that this paltry gift should be offered to agriculture at the present time. It will pull agriculture right down to the level of party politics. Landlords will be in the forepart of public discussion if the right hon. Gentleman persists in the action which he proposes to take. To my mind it is a gift which the landed interest of this country will live to rue. How anxious the position of agriculture is at the present time. Here we are discussing this matter of a remission when agricultural industry is in such a state that land is being ruined for lack of capital. The Minister of Agriculture in a speech recently referred to the condition of land in Wales and the serious decline in recent years in arable land. This little remission is going to do nothing for agriculture.

Mr. LAMB

On a point of Order. Has the hon. Gentleman the right to say this is a remission of taxation?

Sir A. SINCLAIR

The present state of agriculture is not due to the Chancellor's proposals to increase taxation. Agriculture at the present time is going from bad to worse. It is not going to be cured by such a proposal. You will make no advance or take any step towards improving agricultural industry by singling out the landed interests for exemption from the additional Death Duties which are being put on every form of property at the present time. The case of the occupying owner was suggested. I agree with the case of the man who had to buy his holding since the War. His is a case which demands the sympathy of this Committee and of the whole country. It is a very hard case. I should be glad to be corrected when I say that this will help only to the extent of his actual ownership. It will not help him in the value of his stock and equipment, and after all the tax is required, not only for the landlords of this country, but for occupying owners and tenant farmers. These tenant farmers will get no help. We shall expect the Chancellor of the Exchequer to say whether the tenant farmer will be assisted by this concession. I think not. The situation of the agricultural industry is so serious that, far from assisting the industry, this concession will tend to prejudice it. I would therefore appeal to the right hon. Gentleman to give this matter further consideration. I think he has been rushed into making this concession by his hon. Friends, and it is unfortunate that we should have to discuss it at this time of the morning without information as to what he means and without definition or any definite Amendment to discuss. Therefore, I think I shall be in order if I move to Report progress, so that we can see what the Chancellor's proposals really are, and give consideration to such a grave departure of policy.

Mr. LLOYD GEORGE

I trust the Chancellor of the Exchequer will, before the Motion is put to the Committee, give us some sort of assurance that we will get his form of Amendment which he proposes to insert so that we can examine it in Committee. It could be done without delaying the Budget at all. For instance, to-morrow he can move it. I do not think it is necessary, according to the Rules of the House, that it should be done to-night, so long as we have the opportunity of seeing it in time. He could put it down as a new Clause. In any case, it would have to be a new Clause. Why should not the Chancellor of the Exchequer give us the opportunity in Committee of examining it? The rules of the House are so rigid on the Report stage that it would be impossible to give proper examination to this proposal. It is a very serious proposal, and though we have had to examine it at a moment's notice he seems to have realised himself the multitude of points it would raise.

The DEPUTY-CHAIRMAN

Is the right hon. Gentleman speaking on the Motion to report Progress?

Mr. LLOYD GEORGE

Yes, I am entirely for reporting Progress. I have just put to the Chancellor the desirability of moving to report Progress now in order that he should give notice of the Amendment to-morrow or the day after. It is quite impossible to rush the Procedure on a subject of this kind, and the Committee cannot let it go without discussing it fully. There would be a motion down and we would be able to discuss it in Committee. He will not lose time by it. If he gave us the opportunity of discussing a definite proposal, it would be far better because everything or at any rate a good deal depends upon the definition the Chancellor of the Exchequer gives of his proposal. I therefore, urge him on this Motion to report Progress to give us an undertaking that before the Budget leaves the Committee stage he will let us know what it is.

Mr. CHURCHILL

I think there is a good deal to be said for what the right Son. Gentleman has said since I have been asked whether it is possible to make some concession in the case of agricultural land. I have indicated an amendment to be put down in time for the Report stage, and Amendment which exempts from the increased duties agricultural land and involves a diminution of £500,000 in revenue. The right hon. Gentleman vies with speakers above the Gangway in trying to represent some departure from tradition. It is a most absurd and ridiculous exaggeration. The right hon. Gentleman expresses the hope that I should be prepared to explain the Amendment. I shall be prepared to cite it on the proper occasion. I do not propose to do so tonight. The discussion will come much better when the actual text of the new clause has been placed upon the Paper.

Mr. RAMSAY MacDONALD

Is there to be a new Clause?

Mr. CHURCHILL

Yes, and I shall endeavour to put it on the Paper as soon as possible. I quite agree that the Committee should have ample opportunity of studying it and decide upon it with a precise knowledge. At the present moment I am not asking the Committee to come to any decision, and have merely stated that at a later date we shall have the proposal. There is no reason why we should report Progress now, and I cannot accept such a Motion.

Mr. MacDONALD

We do not understand exactly how the business stands. Is the Amendment to be put down for the Report stage or to-morrow? I am asking for it to be put down on the Report stage and not to-morrow. The Chancellor has made the matter worse by confessing that for the last three or four days not only he had made up his mind that this alteration should take place but that the Committee of Ministers exploited it, decided in favour of it, and that the Cabinet had also decided on it. In any event, whatever may be the merits or demerits of his conception, he must treat the House of Commons fairly, and I do not think it ought to be allowed at this unreported stage. If the Chancellor of the Exchequer does mean that, I think certainly those for whom I speak will have to support the Motion to report Progress. It is a most improper procedure. If I am speaking under a misapprehension, and the Chancellor really does mean to put it down to-morrow, then, so far as I am concerned—

Mr. CHURCHILL

I am quite ready to put it down in the Committee stage of the Bill among the New Clauses. It has had a certain amount of discussion to-day and we are anxious to get this stage completed by Wednesday night. I take notice what my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) has said, that such a. procedure on our part will not necessarily delay the matter. During the course of to-morrow I will put a Clause down, so that it can be discussed among the New Clauses on Wednesday. I shall be quite prepared to put this Clause on the Paper in time for it to be discussed with the New Clauses at this stage of the Bill. Is that what the right hon. Gentleman asks?

Mr. LLOYD GEORGE

I understand the right hon. Gentleman now is prepared to put a Clause down in time to enable us to discuss it on the Committee stage?

Mr. CHURCHILL

Yes.

Mr. LLOYD GEORGE

I am sure my hon. Friend will withdraw the Motion to report Progress under the circumstances. It is far better, I agree, that a discussion should take place when we can see the actual proposal before the Committee.

2.0 A. M.

Captain BENN

May I ask exactly what the procedure is? When the new Clauses are taken, so far as I am aware, there is only one Government Clause. Does the right hon. Gentleman propose to put it down this morning and take it this afternoon? It will be rather inconvenient, whether taken in daylight or in the small hours of the morning.

Mr. CHURCHILL

I will undertake that this New Clause shall be put down in time for discussion with the others.

Sir A. SINCLAIR

I beg to ask leave to withdraw the Motion to report Progress.

Motion, by leave, withdrawn.

Question again proposed, "That those words be there inserted."

Sir R. SANDERS

I beg to ask leave to withdraw my Amendment.

HON. MEMBERS

No!

Amendment negatived.

Major RUGGLES-BR1SE

I do not propose to move my Amendment—in page 13, line 14, to leave out from the word "be" to the end of line 10, and to insert instead thereof the words the scale set out in Section seventeen of the Finance Act, 1894, this Section shall be deemed to be incorporated hereby in this Act. The Amendment that stands in my name is very largely met by the concession which the Chancellor of the Exchequer has just announced to the House. The purpose of this Amendment was in order to exclude agricultural property, that agricultural property should not be aggregated with other property whether reality or personality for the purpose of arriving at the particular value of an estate. The arguments which have been given from many questions of the House in favour of a previous Amendment moved by the right hon. Member for Wells really meet the case and I do not propose to say anything further on this particular Amendment except to say that the concession which has been made by the Chancellor of the Exchequer does go a very long way to meet us.

Clause ordered to stand part of the Bill.

Clauses 20 (Determination for purposes of succession duty of date on which succession arises), 21 (Liability of Dominion Governments to taxation in respect of trading operations), 22 (Further relief from tax in respect of income of High Commissioners, Agents-General, and their staffs), 23 (Continuance during current financial year of Section 68 of 10 and 11 Geo. 5. c. 18), and 24 (Construction, short title, application and repeal), ordered to stand part of the Bill.

The CHAIRMAN

The first of the New Clauses on the Paper—(Customs duty on lace)—is not in Order, because the Resolution has not been reported to the House.

Ordered, "That the Chairman do report Progress, and ask leave to sit again."—[Mr. Churchill.]

Committee report Progress; to sit again. To-morrow.