NEW CLAUSE.℄(Estate Duty payable in respect of agricultural property to be charged in part or agricultural value at rate under Finance Act, 1919.)

HC Deb 17 June 1925 vol 185 cc547-621

(1) Where an estate in respect of which Estate Duty is payable on the death of a person dying after the commencement of this Act comprises or consists of agricultural property, the Estate Duty payable in respect of the agricultural property shall, instead of being charged on the principal value thereof at the appropriate rate payable under this Act, be charged as follows, that is to say, the duty 6hall be charged on the agricultural value of the property at the appropriate rate payable under the scale of rates set out in the Third Schedule to the finance Act, 1919, and shall be charged on the amount by which the principal value of the agricultural property exceeds the agricultural value thereof (in this Act referred to as "the excess principal value") at the appropriate rate payable under the scale set out in the Fourth Schedule to this Act.

(2) For the purposes of this Section the agricultural value of agricultural property shall be taken to be the value which the property would bear if it were subject to a perpetual covenant prohibiting its use otherwise than as agricultural property, decreased by the value of any timber, trees, wood, or underwood growing thereon.

(3) Where any agricultural property is subject to a mortgage, debt, or in cumbrance in respect of which an allowance is by law to be made for the purposes of Estate Duty, the mortgage, debt, or in cumbrance shall, for the purposes of this Section, be apportioned between the agricultural value of the property and the excess principal value of the property in proportion to the amounts of those two values respectively.

(4) In this section the expression "agricultural property" means agricultural property within the meaning of paragraph (g) of Sub-section (1) of Section twenty-two of the Finance Act, 1894, and the expression "appropriate rate" means the rate of Estate Duty appropriate to the principal value of the estate passing on the death of the deceased.℄[Mr. Guinness.]

Brought up, and read the First time.

The FINANCIAL SECRETARY to the TREASURY (Mr. Guinness)

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

This Clause fulfils the undertaking given by the Chancellor of the Exchequer in the early hours of yesterday morning. The Clause gives no advantage whatever to agricultural estates over and above the position which they enjoy at the present time. It merely provides that the purely agricultural value of agricultural property which passes at death will be charged, as now, under the 1919 scale which is found applicable, according to the size of the estate, to the whole of the property. The remainder of the value—

Mr. WESTWOOD

A ruling was given by the Chairman of Ways and Means the other day, to the effect that no one could move a Clause, to come in at the end, unless it was the individual whose name was down to the Clause. The name in this case is the Chancellor of the Exchequer. It is not being moved by the Chancellor of the Exchequer.

The DEPUTY-CHAIRMAN

That Rule does not apply to Members of the Government.

Mr. MARCH

Why should there be any distinction between Members of the Government and Members of the Opposition, more particularly Members on the back benches? How are we going to keep in order if that is going to be allowed?

The DEPUTY-CHAIRMAN

I do not want to occupy the time of the Committee with an explanation.

Mr. MARCH

Surely there cannot be a procedure for one and not for others.

Mr. GUINNESS

Over and above the purely agricultural value, the remainder of the value, for instance, the prospective building value, will be chargeable at the increased rate, which is again arrived at not by treating the value of the real estate as a separate estate, but aggregating it with all the other property passing at death. The Clause needs very little explanation. The only point which may conceivably not be clear to those who have not come in contact with the rather complicated law as regards landed property, is the provision in Sub-section (2) that in arriving at the agricultural value, the timber, trees, wood, or underwood growing thereon shall be excluded. The reason for that is that timber is already left out from the principal value, until that timber is sold, or until the whole estate is sold. when the amount due for the sale of timber has to be paid to discharge the deferred obligations of the Death Duties. From the standpoint of justice to individuals, I think there are many grounds for this new Clause. There is nothing new in distinguishing between the case of landed property and other property. Indeed, our code of taxation is full of special treatment as between one class of property and another. The right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) recognised that when he brought in various exemptions for different kinds of landed property. It is not only a question of landed property. Our code of taxation is full of allowances for special cases and special individuals. That has been added to very considerably in this Budget by allowances in the Income Tax, and so forth. I know that the question of justice to individual claims may not appeal to hon. Members opposite, so much as the economic effects which may be expected from intensifying the tendencies which have recently been shown under the existing scale of Death Duties towards the break up of agricultural estates. For the most part, land in this country is farmed by tenants who supply the working capital, while the landlord℄

Mr. MacLAREN

What does the landlord supply?

Mr. GUINNESS

I said that the tenant provided the working capital, while the landlord℄I had not finished my sentence.

Mr. MacLAREN

What does he supply?

Mr. GUINNESS

He provides the fixed capital.

Mr. HARDIE

What is the fixed capital?

Mr. GUINNESS

The fixed capital is the land, the—

Mr. HARDIE

Does he make the land?

Mr. GUINNESS

It is his interest in the estate. The buildings, the land and the owner's value in the estate. It is necessary under the existing scale of Death Duties for many estates to be realised, and it is becoming more and more difficult to do so in the open market, owing to the decreasing net yield from agricultural property, and the decreasing advantage of that class of investment from the point of view of income. This is compelling the tenants to buy their own holdings, and to make their insufficient capital suffice not only as working capital but also for the fixed capital which was previously supplied by the landlord. In this respect, landed enterprise in agriculture is in a very different position from enterprise, say, in a joint stock company, where there is no corresponding division of interest between working capital and fixed capital, and where the sales of title of a certain portion of the property do not deplete the working capital which is needed for the enterprise.

Nothing that we are doing in this Finance Bill can stop the process of breaking up agricultural estates, but we can avoid accelerating it. This Clause is, I think, fully justified, because it will give time to the agricultural industry to adapt itself gradually to these new conditions and not be subject to still further sudden drains on that capital which is so urgently needed.

Mr. LLOYD GEORGE

The right hon. Gentleman has stated succinctly and quite clearly the purport of the Clause. He referred to the fact that I had been responsible on many occasions for exceptions in respect of certain classes of property. That is true. There are some of these exceptions for which I am responsible, and I am very glad of it. For instance, there are exceptions in respect of old pictures and works of art, which we were very anxious should not be sold, and that every inducement should be given to the owners not to part with them, as at that time our American friends were buying most of our best pictures. Therefore, as Chancellor of the Exchequer, I proposed exceptions from any object of that kind. But this is a different class of thing, and the right hon. Gentleman must really know that. It is really, in substance, an exception for a class. Here is an exception which is going to cost the Exchequer £500,000. In the first place, someone has to find that £500,000, if it is not to be found by the owners of agricultural land. I take it the Chancellor of the Exchequer needed that £500,000, otherwise he would not have included it in his original provisions. Therefore, someone has to find that money.

Mr. WALLHEAD

Silk stockings.

Mr. LLOYD GEORGE

That has been cut down already, so there is no additional revenue from that. Therefore, there will be £500,000 to be found. What is the ground upon which the Government have proposed this exception for a particular class? Taxation is very high. The principle is a very dangerous one, for the very reason that the taxation in this country is very high. The people have borne it with very great patience. They have responded to the calls of the country in an exemplary manner. That is very largely due to the fact that, on the whole, every class of the community has been called upon to make its sacrifice, as was the case during the War. During the War the people responded to the call for sacrifices of all kinds because there was a general feeling that everybody without distinction had the same demand made upon him according to his ability and power. But the moment the Government begin to introduce provisions of this kind which create a privileged class and say that every class of the community must nay this particular tax except one, that is the beginning of discontent with the taxation of this country and it may be the breakdown of it. It is a very serious innovation which has been introduced and it was not worth while.

I ask the Chancellor of the Exchequer what case he has for it in equity? As one who has had to deal with political forces I realise that the Chancellor of the Exchequer had his political difficulties, and I am not putting that, I assure him, as a super, but I may put first of all this question to him. From the point of view of equity and fair play what ground is there for imposing this additional taxation on every class of the community and saying that this particular class shall be exempt? That is what it comes to. I will give a few illustrations of how unfair it is. The Chancellor of the Exchequer said the other night that when a man dies leaving stocks and shares the executors can sell them, that there is a ready market for them, and that they do not experience the same difficulty as the owner of agricultural land in finding the ready cash to meet the demands of the Exchequer for Death Duties. That is not quite so. I put to him the other Day the case of the tradesman, the factory owner or the industrial employer who has not converted his business into a limited liability company, or the industrial employer who may have converted his business into a limited liability company, for the shares of which there is no market℄and there are a great many cases of that kind.

Let us take the first. Take the case of a tradesman who has a shop, and who dies leaving property worth from £30,000 to £40,000. The executors have to pay an extra sum now in respect of Death Duties. Where can they find it? A man of that kind, as a rule, borrows money in advance of his savings in order to develop his business, and it may be assumed that there is a liability on that to the bank at the time of his death. What are the executors to sell? They cannot sell the shop, which is the necessary means of livelihood of whoever will carry on the business. They have to go to the bank, where probably there is already an overdraft, to borrow money not merely to pay the old Death Duties but the increased Death Duties imposed by the Chancellor of the Exchequer, which is a very difficult thing to do, certainly in these times of depression. It is said, "But look at the position of the landowner." But he has no difficulties of that kind. He has a marketable commodity, which he can dispose of, the sale of which does not interfere with his business. No doubt it narrows or contracts his estate, but it is not an interference with the big business which he is conducting, while in the first case it is.

In addition there is no difficulty in his borrowing money. If he is already mortgaged up to the hilt there will not be very much Death Duty to pay. You may assume that a landowner with large Death Duties to pay must have considerable assets upon which you are levying Death Duties. In the first case the executor is embarrassed to find the additional Death Duties; in the second case the trustees or the executors have no difficulty at all in placing their hands on quickly convertible cash, because there is a ready market for agricultural land in the country. Let me put another case. Suppose a trader has saved money. Take an ordinary country town with tradesmen in it, some doing well and some not. The men who save money generally choose between two classes of investments. Some of them proceed to buy land. If they buy land, if they put their money into land, they do not increase the employment of the community by one man. Suppose, on the other hand, they say "we will put our money into the development of our trade or business," here at any rate they are developing local industries, and they are promoting employment. It is in the interests of the particular community that capital should be used in that way, and it is especially the case in these little rural towns. If a man puts his money into land he is not doing any particular good to anybody. [HON. MEMBERS: "Why not?"] What I mean is that there is no particular good to the community in transferring the ownership from one person to another.

I am not in the least attacking the development of land, quite the reverse. If he were to put his money into the development of the land then he would promote employment, but if he puts his money into land simply as an investment, by the mere purchase of the land he does not create employment for anybody except for the lawyer. [Laughter.] On the other hand, if he puts his money into some local industries there undoubtedly he is promoting employment. But see what happens by this Clause. In the first place he is let off 5 per cent. in his Death Duties. In the second case, the executor would have to pay 5 per cent. more. Is that fair? It is really a premium upon the purchase of land. The Chancellor of the Exchequer says, "You put your money into enterprise for the benefit of the community. I will teach you! I will fine you £4,000 or £5,000 for doing that!" He visits the sins of the father upon the children by making them pay an extra Death Duty, because the father has invested his money in a way that is of some use to the community. That is not fair. It is unjustifiable, and there is no justification in the particular difficulty, which the Chancellor of the Exchequer mentioned the other day, of the landlord placing his hand upon cash.

Let us go beyond that and take some of the depressed industries of this country. Take the case of collieries, of iron and steel furnaces, of the tinplate trade, or of the shipbuilding yards. What happens there? Even if such a business is converted into a limited liability company, and the executor has to sell the shares, who will buy them now? How is he going to realise? You may say that his Death Duties will not be high. They will, because although for the moment trade is depressed, there is an asset which will be valued by the Treasury for the purpose of Death Duties and, possibly, a very considerable asset. Therefore, the Death Duties would be high. Here are men who have to go to the banks for the purpose of obtaining cash to carry on their business. The banks are loaded up to the brim with overdrafts of this kind, and it there is a death the executor has to go to the bank again to raise money to pay to the Exchequer, and he will have to pay the extra 4 or 5 per cent. That is indefensible, if you are going to let off the land-owning classes of this country.

I put this to the Chancellor of the Exchequer, that it creates a very special sense of injustice in those cases, which is bound to be very disastrous to the revenue. I ask him is there any special reason for the privilege which is given to this class which he is denying to other classes of the community. The farmer gets nothing under this. You may say that there are not many farmers who have £12,500. There are just as many farmers who are worth £12,500 as there are landlords. There are not very many such landlords in this country. The number, I should say, of the land-owning classes who own over £12,500 would be only a very few thousand. There is quite the same number of farmers who own that amount. When the farmer dies the executor has to pay not merely the old Death Duties but the new Death Duties upon his stock. What justice is there in that to the farmer whose enterprise is vital to the development of the farm? Everyone who has made any examination of the position with regard to farming knows that one of the difficulties with respect to agriculture is that it is under-capitalised. The landowner has the land. There it is. It will remain, whatever happens to the landlord. But if you begin to impoverish the man with the working capital, then you are doing an injustice and an injury to the community. You are making him pay this one, two, three, four or five per cent. extra.

The CHANCELLOR of the EXCHEQUER (Mr. Churchill)

Are you taking the case of a tenant farmer who does not own his land?

Mr. LLOYD GEORGE

Yes.

Mr. CHURCHILL

If his stock is worth sufficient to enable his estate to be charged with the increased rates of Death Duty at something like 5 per cent., his stock will be worth £20,000 if it is worth anything.

Mr. LLOYD GEORGE

There is no use in the right hon. Gentleman going off on a small point of that kind. He himself takes it at £12,500. At £12,500 he begins to increase.

Mr. CHURCHILL

One per cent.

Mr. LLOYD GEORGE

That is right. If it is over that it gets to 2 per cent. I am quite prepared to take it at 1 or 2 per cent.

Mr. CHURCHILL

The right hon. Gentleman said 5 per cent.

Mr. LLOYD GEORGE

I am taking the whole of them in general. There are farmers who have the necessary amount. They are very exceptional, I agree, but there are a few farmers who have considerable capital. There is a farmer whom I know who has 40,000 acres. If he stocked that farm in anything like the way in which it ought to be stocked he certainly ought to have £200,000. He does own the land, he is a tenant farmer who has taken the land. [HON. MEMBERS: "Who is he?"] I will give hon. Gentlemen, who are asking me, the name later on if they wish. I know two of them, one with 30,000 acres and the other with 440,000 acres. But I am willing to take the increase at from 1 to 2 per cent. Here is a man who has farming stock, and in cases of that kind who come within the figure, especially if they have saved money, they will have to pay upon their stock the addition of 1 or 2 per cent. and the landlord gets off. I ask the right hon. Gentleman how he justifies t7ie discrimination which he has made against the farmer in that case? Upon what ground does he do it? The case that he made was that the landowners are rendering more special services to the community than any other class, and that, therefore, they are entitled to special privileges.

I wonder whether the right hon. Gentleman has taken the trouble to read some of the comments made by a Member of the Government of which he is such a prominent figure, with regard to the part played by the landowners in recent years? If I were to make this criticism, hon. Members opposite would say, "Here you are attacking the landlords again." Therefore, I shall not use any words of my own, because no words of mine could possibly be equal in severity and sternness to those used by a Member of the present Government. I refer to Lord Bledisloe, who is one of the greatest authorities on agriculture in this country. I first made his acquaintance as Secretary of the Landowners' Association when he came to ask for a remission in respect of repairs upon agricultural buildings. He, therefore, cannot be suspect. He is a landowner, and there is no man who has made a closer study of agriculture in this country and abroad. What does he say? The prime condition under which farm tenancy can prosper is the owner's knowledge and management of his estate, similar to that exercised by the manager of an industrial company or business. He also says: The landowner has neither the knowledge nor the inclination to give his tenants the lead which they required. That statement was made in an address to the British Association only two years ago. Another of his statements is: Whereas at the end of the eighteenth and the beginning of the nineteenth century certain progressive English landowners were definitely and admittedly the leaders of the industry, to-day, and for the past 60 years, landowners have ceased to lead: Coke of Norfolk and his contemporaries in introducing developments which benefited the whole industry also benefited themselves and their whole environment, because these improvements were introduced on sound business lines. Land to-day in the hands of British landowners is more than ever an amenity, and although there are many whose serious impoverishment operates as an inducement to put their estates upon a business footing they are sadly conscious that they have not the knowledge to do so. That is a statement by one of the Ministers of the present Government. I will take next a very distinguished agricultural expert, I suppose the most distinguished agricultural expert in this country, who is now in the employ of the Government—Sir Daniel Hall. He says: Landowning in England has ceased to be a business; yet it is only by personal knowledge and hard work that owners can become leaders of their tenants and develop the capacities of their estates. He goes on to speak of landowners playing for safety, compensating themselves for low returns by social position and amenities of landowning, and occasionally making a lucky stroke in selling profitably the land "which always has a monopoly value." Those are opinions expressed by two men who are above suspicion, as far as sympathy with the landowning class is concerned. I ask the Chancellor of the Exchequer upon what ground does he single out a class which answers a description of that kind, given by men who are in complete sympathy with their order? By what equity, by what principle of fair play does he choose them for special privilege and exemption, and say that men who are risking their capital in such enterprises as collieries or factories or shipbuilding or farming are not to receive any sort of exemption, but that this landowning class which, according to these gentlemen, is suffering from an amiable incompetence, is to receive benefits running from one to five per cent.? It is utterly unjustifiable in equity and in fair play and upon any principle of fair taxation. The right hon. Gentleman is giving an exemption of £500,000 to the landowners of the country. That will not save even that class, and it will certainly not save agriculture. What he is doing will not even postpone the crash, the inevitable crash, of the present system. What is largely responsible for the high Death Duty paid by agricultural land? It is its monopoly value. I have just been reading a report of the Surveyors' Institute upon that subject. The report points out that landowners are assessed upon the basis of what the land will fetch in the market, on the assumption that each farm is sold separately. But that is the value.

Sir PHILIP PILDITCH

When was that principle introduced? Was it not in 1910?

Mr. LLOYD GEORGE

Then I am responsible, and I am very glad of it, because it is perfectly fair. I will tell my hon. Friend why. If they were to sell, as they do sell, in order to meet Death Duties, they get their full monopoly value in the market. [HON. MEMBERS: "A forced sale!"] It is not a forced sale in the least; it is no more a forced sale than the forced sale by executors who hold stocks and shares. It is exactly the same thing. There is a market where they can cash their value. It is a monopoly value, which has no reference to the industrial value of land. It is a value which is largely, though not entirely, created by the landowners themselves. What do I mean by that? They naturally want to keep their estates together, and they do not put land into the market if they can avoid it. I agree with hon. Gentlemen opposite that they do it only when they are forced to do it. But that keeps up the value of land. Let any man who has lived in a village, as I have done, go and ask for an acre of land for the purpose of building a house there. He will not get it. I know cases where one has to pay, in a village with a population of 1,200, no less than £600 for an acre of land. Why? Because every landowner in that parish and in the two adjoining parishes refused to sell a single yard of land for the purpose of building a house, and this site was the only one which was available, and it was necessary to pay an extravagant monopoly value.

Sir GERALD HOHLER

Was that agricultural land?

Mr. LLOYD GEORGE

It was used as agricultural land. At that time it happened to be a very small holding. It was the only agricultural land which you could get anywhere. That creates a monopoly value. The landlord complains that he is being taxed upon a basis which he himself has helped to create. If he insists upon a monopoly value he must pay his taxes upon the basis of a monopoly value. That is not unfair in the least. That is the whole difficulty with regard to agriculture. Take a farm of 200 acres. Suppose you let it at £1 an acre. If it is sold, owing to the monopoly value of land the farmer has to pay, in respect of the freehold, something which is more than the commercial value of that land. In, some districts he will have to pay 25 years' purchase, in some districts 20 years' purchase, and in others something between the two. He will probably have to pay for that farm the equivalent of £5,000 in some districts, and £4,500 in others. What does that mean? At 5 per cent. he would have to pay £250. In addition to that the whole cost of repairs will fall upon him, and he would be in a very good position if he got off with something which is the equivalent of £300 a year. What is that? It is not the commercial value of the farm; it is not the value of the land for the man who cultivates it. He is paying for a monopoly value, a fictitious value, and the landlord who is in a position to receive that amount complains that the Exchequer is taxing him upon something which he himself has assisted to create.

The fact of the matter is that the landlord, in respect of taxation, is being strangled by his own privileges. The unfairness to the farmer is this. If he had a monopoly value for his produce in the markets, of course he could pay a monopoly price for his farm; but there is free competition in his markets and no free competition in the land. The result is that whenever you have sales of this kind the farmer is put in a very disastrous position. I am going to use an argument which at first sight the right hon. Gentleman will probably say is a defence of his position. I would point out that this does not go anywhere near the root of the difficulty. Take an estate, a fairly large estate, where the rents before the War were £10,000 a year. I will assume that the rents have gone up 15 per cent., which roughly represents the present position. If they have not gone up by 15 per cent. my case is all the stronger. Let us see how it works out. I am assuming that before the War, between costs of management and repairs, the rent would be brought down to £8,000. It makes no difference whether the land was 5,000 acres let at £2 an acre or 10,000 acres let at £1 per acre. I am putting the costs of management and repairs fairly low. The landowners' associations put them higher. I assume that the net rent before the War would be £8,000. Income Tax and Super-tax before the War would have been £591. There would have been an expendable income of £7,410. Let me at once say that the figures given by the various landowners' associations make larger deductions on both accounts, but I am putting the case moderately.

5.0 P.M.

Take the present case. The rent has gone up to £11,500. I am assuming an addition of 15 per cent. The Income Tax is 4s. I am assuming a Super-tax which is equal to what would be deducted, and I make a larger deduction for repairs. Why? As any landlord knows, the cost of repairs is now nearly twice as much as it was. [HON. MEMBERS: "More."] That makes my case all the stronger, but I have worked out my figures on the basis that the cost has more or less doubled. That brings the net amount down to £7,650. The Income Tax and Super-tax would be £2,484, leaving an expendable income of £5,165, which means that the landlord has £5,000 as against £7,400 which he had before the War, even assuming the increase in the rent. But his Death Duties have gone up by 7 or 8 per cent., and I am not counting the additions put on by the right hon. Gentleman.

Mr. CHURCHILL

It would be a £200,000 estate.

Mr. LLOYD GEORGE

I should put it at £220,000. When you come to the Death Duties this is the difference. Before the War the heir had to pay £26,400 on the basis of 22 years' purchase; he would now have to pay £48,000. I am taking it on the assumption that no alteration has been made at all. That is the basis upon which I am arguing. What does that mean? Does anyone imagine that under these conditions it is possible for the present system to continue? That is the point which I want to put to the Committee. Lord Bledisloe, in the course of the same paper, said that you could not keep landed estates together, apart from external aid, for more than two generations under the present system. I agree with the case put forward by hon. Gentlemen opposite to that extent, but I want to point out that it is idle to make concessions of 1, 2, 3, 4 or 5 per cent. It does not get anywhere near the root of the matter. You are merely creating a sense of inequity and inequality, a sense of unfair treatment, a feeling that you are putting one rate of charge upon one class of property and another upon another class of property, and you are doing it without achieving any purpose at all.

The Government ought to face the problem on much broader and bigger lines. Undoubtedly the position is very serious. I am making no charge against landlords in the least. I could give the case of the best landlord I know, who has about the best buildings in the county where he lives, and whose rents are about the fairest, and no men could have done their duty better towards their tenantry and the community than he and his father before him did. But since the War and since all these heavy charges were made he has been unable to do what he was doing before. Drains are clogged up and cannot be put right because of the cost of material and labour, other work of the same kind cannot be done, but a tenant of this landlord said: "I do not blame the landlord in the least. He is the best landlord in the county, but this is the system." And the Government, instead of giving small concessions, ought to face the real problem. The Minister of Agriculture went down to Wales the other day and made a speech which was very serious. The right hon. Gentleman had been seeing the country there, and he was in a part of the country which has been famous for excellent farming—the Vale of Glamorgan, a very fertile and productive country. I think it was somewhere down there, but if not it does not matter. The right hon. Gentleman, in any case, said: In Wales, including Monmouthshire, of a total area of 5,000,000 acres no less than 3,700,000 acres consists of grass land of which a large quantity is in poor condition, not merely because it is of indifferent quality but because a considerable amount of inherently good land has been let down by neglect. No man who knows the countryside can fail to realise that things are worse than they were before. The land is deteriorating, buildings are getting into disrepair, there is dilapidation where previously some sort of effort was made to cope with it, and the rates are constantly going up. What does it mean? The landlord is the source of supply for that particular part of the capital. The partnership—and I am expressing no opinion one way or the other about it, but the partnership did exist on the good estates—is bankrupt. The landlord cannot, in the face of these figures, continue to do what he was doing. These two per cents. and three per cents. are not things that matter. There are the rates, there is the Super-tax and the Income Tax—which no man will see down to half-a-crown for a long time, and even if it were down, the conditions would still be bad, and there is the increase in the cost of materials. No landlord can do it without surrendering his position in the district and becoming an absentee landlord, and then practically handing the rent over for the purpose. The system has broken down. I am not making these remarks as an attack upon the landlord system, I am making them purely from the point of view of emphasising to the House of Commons that the conditions are so completely changed owing to the War and the burdens of the War, that the partnership in the future is quite impossible, and the Government will have to consider the whole problem on very different and much broader lines.

The country districts are falling into disrepair and deterioration. Men are becoming idle in many districts and there is less labour. There is bound to be because there is no one who can spend money. This is not an indictment against a class, but an acknowledgment of the facts which every landlord knows as well as myself and every land agent throughout the country. There they are, going on the strength of repairs done before the War, of buildings erected before the War, of drains laid down before the War, and year by year all that is vanishing. Where is the money to come from for this purpose? This one, two and three per cent. is pure mischief. It is merely giving a small concession which creates the impression in other sections of the community that there is inequity and inequality between one class and another, and you are really achieving nothing. As an hon. Friend of mine said the other day, it is forcing the landlord to the front of the battle on very bad ground—on the worst ground that he could possibly choose. It is a mistake from the point of view of the landowning classes themselves who have chosen this battleground; it would be better for them to say frankly, "The system has broken down. We cannot discharge the obligations which we did our best to discharge before the War. We are not in a position to do so." Therefore, I ask the right hon. Gentleman in regard to this part of his Budget to look at this matter, not from the point of view of conciliating one interest by making a concession here and winning the support of another interest by making a concession there, but rather from the point of view of being a trustee with other co-trustees on that bench for the interests of a very great nation and of a very great industry vital to this nation at a time of deep emergency in its history.

Mr. WILLIAM GRAHAM

No one on these benches will disagree in the least with the condemnation of the existing system which has just been expressed by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), although I need hardly say that on analysis our remedy would be found to differ very widely from his. But the problem before us this afternoon is a problem of taxation and we must address our minds to it with the object, firstly, of trying to ascertain what is the position of the landowners of this country at the present day, secondly, of trying to find out what is being done by the agricultural community—after all, they are an important part of this question—and thirdly, of asking ourselves whether the proposal of the Chancellor of the Exchequer is a sound device in taxation. I think on most of these grounds we will be able to see that the Chancellor's proposal is of a dangerous character at present. I read the speech made by the right, hon. Gentleman in the early hours of the morning a day ago, and I heard the short explanation which was given by the Financial Secretary this afternoon, and it is perfectly clear that the proposal which they now put forward touches only a very limited part of this problem. The Chancellor of the Exchequer said he was surprised at the very small part which these estates comprising agricultural land play in the aggregate of rather more than £60,000,000, which is the yield of the Death Duties in this country. I believe he put it at not more than one-eighteenth or one-twentieth of the total. He himself went on to point out that the total cost of this concession in the present year is only £225,000, and £500,000 in a full year, so that by no stretch of the imagination is this proposal going to do anything at all to stop the break-up of estates—which was part of the case put to the Committee—and if it is not going to do that and if it is not going to help agriculture in any way, then I think there is absolutely no case for it at all. Certainly there is no case in taxation.

As regards the landowners no one can seriously dispute that very great changes are taking place. There is a sentiment attached to land. A great deal of land has been purchased by people who are well able to pay. The difficult circumstances attaching to a portion, at least, of the land in this country are not really traceable to high taxation, but to the manner in which that land has been bought for reasons widely different from those we have under consideration. Then again all kinds of concessions have been given to the landowning and agricultural community. There is to-day a differential rating system over a large part of the country so far as they are concerned, and they have had other concessions from time to time, all of which must be remembered when we are invited to make a concession which would place them on a different footing from all other people in the community who are liable to Death Duties. I think on that ground the Chancellor of the Exchequer fails in the case which he endeavoured to make out. But by far the more important issue in the matter which we are considering turns on the fact that in this country we do not really know, in taxation; what the agricultural community is doing, and I think I will be able to make that point abundantly plain. Much has been made of the break-up of estates and the withdrawal of capital at a critical time in agricultural history, and the effect of that upon the tenant farmer and the occupying owner. But at the centre of this whole issue is the question as to what is really being done in British agriculture.

Have we any accurate record of that at all? From the very institution of the Income Tax in this country, the cultivators of the land have been in an exceptional position. They have never been exposed generally to the duty that all other taxpayers have of making a return of their actual profit from year to year. They have had the benefit of a system of paying on one time or less or, at its highest point, two times their annual valuation, and that has been accepted from the cultivators of agricultural land as the basis on which they are to be assessed for Income Tax. Now, without going into the remoter history of this problem at all, it will hardly be disputed that, during the War years, at least, the agricultural community did remarkably well, yet at the highest point they were only taxed on two times the annual valuation. It is perfectly true that they have always had the option of going on to ordinary Schedule D assessment, based on actual profit, but what impressed me during the time that we studied this question in the Royal Commission on the Income Tax, and during the years that we have discussed it since, is that not even in times when depression was widely argued did more than a very small fraction of the agricultural community avail themselves of the opportunity of going on to the basis of their actual profits, so that it is at least fair to assume they were doing better under the system of taxation on so many times the annual valuation.

The Royal Commission in 1920 made a unanimous recommendation that that system of applying Income Tax to the agricultural community should cease, and that they should be placed on the basis occupied by practically all other payers of Income Tax in this country, but from that day to this, notwithstanding a good deal of effort in this House and outside, no step has been taken, and so we arrive this afternoon at a discussion of the position of the owners and cultivators of land—because they are bound up in this problem together—without being able to say definitely what is the agricultural income of Great Britain that we could bring within the scope of Income Tax review. A perfectly obsolete argument was offered to that state of affairs in that farmers did not keep books. Some people even went so far as to say that they could not reasonably be expected to keep them, notwithstanding about 50 or 60 years of elementary education, and that they were entitled, largely because of the fluctuating character of their industry, to this special concession. Nobody in the whole of the investigations of the Royal Commission on the Income Tax, which was a very representative body, ever for one moment thought that that plea could be sustained, and it was regarded as plainly a national duty in this matter of the taxation of the agricultural community, and for very much wider reasons, that we should find out exactly how farming operations stood. Unfortunately, as I have said, we are not in that position this afternoon, and I fail to see how you can take any step in the alteration of the scale of Death Duties in Great Britain, affecting, admittedly, the agricultural community, until you know exactly the position that the agricultural community occupies.

Moreover, I think it is perfectly fair to mention the historical advantage that that community has enjoyed. There is not the least doubt that this system of taxation has inured to the advantage of large sections of people engaged in agricultural operations, and I should imagine that, so far from abnormal times entitling them to any further concession, that is an argument that should be used against them. I do not dispute there is a certain agricultural depression at the present day—no one can deny that—but, after all, if we make an analysis of that agricultural depression, I am afraid that part of it might have been avoided by the agricultural community, because it is undeniable that many of them thought these war-time prices were going to last for a much longer period, and in other directions, sometimes not connected with their industry at all, they bit off financially very much more than they could chew. All these things are perfectly fair arguments this afternoon, and, in my judgment, they go right to the root of this concession which the Chancellor of the Exchequer proposes. After all, he defended it as something in the interests, not merely of the land-owning class, but of agriculture as a whole.

The only other point I want to put is this, and I think it is one of some substance in this Debate. The Chancellor of the Exchequer has followed an unusual and, in some respects, rather an amusing course in these Budget discussions. Throughout, his whole effort seems to have been to set off one section of the community against another, and one of the methods of his balancing scheme was to say definitely, over and over again, in respect to the concession he is giving to Super-tax payers, which is so far also an advantage to the class we have now under review, that he proposed to make this change in the scale of Estate Duty, yielding after a full year, approximately, the same amount, and to apply it, as he put it, to practically the same class of people. Now, he himself, for no sufficient reason at all, departs from that principle and makes a concession of £500,000 in a full year to one particular class. I fail to see how he is going to justify that in later Debates; but, quite apart from that altogether, this is an interference, for a very dangerous reason, with the scale of Estate Duties in this country. In effect, it comes to this, that he is going to give a differential rate of a rather lower amount to certain classes on the transfer of estates, and he does that because of an element of hardship which he thinks is involved, but anyone familiar with either the history of Death Duties or the present practice will agree that nine out of ten men who are called upon to pay Estate Duty at the present time, or the people representing them who pay it, could put up all kinds of hardships, and I am bound to say, as one who would not make any concession to them at all, but would, in fact, increase the scale of Death Duties, that some of them could put up a very much better case than the people who are putting up this case to-day.

Be that as it may, the real point for the Committee to consider is whether you are going to begin the principle of giving a differential rate in the scale of Death Duties in Great Britain, because of the apparent hardship to a class, even in a time of general industrial and agricultural depression. I do not think, on any analysis, you can embark upon a proposal of that kind with any safety at all, and, consequently, what the Chancellor of the Exchequer proposes may be the beginning of a substantial modification of the whole Death Duties scheme, because next year others will be able to come forward, with even stronger arguments, and assuming that they get an equally cordial reception, their cases will be difficult to refuse. On these grounds, I think this proposal absolutely fails, and, so far as we on this side of the House are concerned, we propose to resist it at every stage.

Mr. CHURCHILL

The right hon. Gentleman the Member for Central Edinburgh (Mr. W. Graham), who has just spoken, has, in a temperate manner, examined the proposal which is now before the Committee, and he has criticised it, as was to be expected, in accordance with the general view of these matters adopted by his friends and party. He has described it as a very dangerous departure in taxation, and as the prelude to a whole system of special remissions and advantages, given to one class or another, over the whole area of the Death Duties. But even in the course of making these criticisms the right hon. Gentleman made, as he always does, several reasonable admissions. He admitted the force of the existing agricultural difficulty, and he pointed out that this class of property was under a considerable depression at the present time. His point, which he made in his concluding observations, was that I was departing from the exact balance which I had dwelt so strongly upon as between the remission of Super-tax and the addition to the Death Duties. Well, I suppose I must admit that the balance is deranged to the extent of one-twentieth part. It was not an absolutely mathematical balance before, because, in fact, in the present year, we are losing £2,000,000 on the remission to the Supertax payers over and above the receipts to be obtained from the increased Death Duties, and so the actual balance between the two sides of the account will not be achieved until next year. I do not think that this very small derangement alters substantially the broad justice of the treatment which the Budget gives to the problem, and I do not think that it seriously affects the arguments which I have used a good deal in that connection. Still, I must admit that, for what it is worth, it is a relevant point. Out of £10,000,000 addition to the Death Duties, £500,000 has been abandoned in respect of this particular kind of property. I must admit that, as far as it goes. I do not wish to deal with this upon a purely mathematical basis, but in a practical spirit and in one which deals with the broad issues at stake.

Now I come to the speech which was delivered by my right hon. Friend the Leader of the Liberal party in the House of Commons, the Member for Carnarvon Boroughs (Mr. Lloyd George). I am glad to see my right hon. Friend returning to his place, because, curiously enough, the very first speech I had the opportunity of making in this House, a quarter of a century ago, was delivered in reply to him. During the whole of that period I have only once had the opportunity of following him in debate, and on that occasion a pressing engagement led him to leave the Chamber, so that I did not have the opportunity of his presence. [An HON. MEMBER: "When?"] During the War. Although I have not been often called upon to reply, or attempt to reply, to him, I have studied over a long period of time, with very great attention, his argumentative methods, and have often admired the enormous skill and persuasiveness with which he manages to plead or argue any cause in which he is concerned. I traced, during the course of his speech, many of the processes of argument which I had so often admired in former years. But I think my right hon. Friend, for once, was a little less successful than usual in combining two mutually contradictory sets of arguments. One part of his speech was devoted to condemning in the sternest terms this exceptional favour to one particular class of prosperous, fortunate individuals who were enjoying the amenities of the land, the monopoly value of the land, and who had all these advantages, financial and otherwise. The other part of his speech was devoted to showing how this paltry remission could not in the slightest degree touch the grave problems with which land is afflicted, or avert the doom which is swiftly approaching it through the agency of Death Duties and high taxation.

It takes great still to reconcile those two opposite sets of arguments. Moreover, the right hon. Gentleman is qualified to present each of these cases with such extreme colour and force, that when they are placed in juxtaposition, it makes the task of combining them in one argumentative case all the more serious. As regards what he said about exceptional treatment, it is the case that agriculture has always been treated on a different basis in many respects for taxation purposes. No one has ever pretended that no exception can ever be made in the treatment of a particular kind of property. It there were anyone who would be precluded from using such an argument, it would be my right hon. Friend himself. He, from the very beginning of his political career, has always treated the land on an entirely different footing from other kinds of property. Sometimes he has treated it in an unfavourable and invidious way, and suggested that it should bear exceptional and special burdens, and sometimes he has extended to it special benefits. But never, at any moment in his career, whether actuated by stern or by benevolent moods, has he advocated that and should be treated in the same way as other property. We had the mood of the Land Value Duties, the Increment Duties, the Undeveloped Land Duties, all dealing with a particular class of property in a particular way. It was argued in those days that taxation should have no regard to the particular class of property at all, and should only have regard to the individual deriving advantage and benefit from the property. It was the task of my right hon. Friend to develop, with his great power, the argument that you should have regard to the special source and the special character of the property, and that taxation should have regard to that.

Mr. LLOYD GEORGE

My right hon. Friend has forgotten, of course, all his past experience, but he will not mind if I remind him of a little partnership of that kind, where we excepted agricultural land on that occasion.

Mr. CHURCHILL

I am dealing with the broad, general question. My right hon. Friend is perfectly free to pick and choose between different classes, but certainly it was with great surprise that I found him holding me up as if I were guilty of some high crime and misdemeanour, because, following his mood, I have also been prepared to deal with a particular class of property in an exceptional manner. But there are many other instances in which land has been treated in a special way under the taxation system of the country. I am not going to weary the Committee with a great number of details, but in the case of the original Estate Duties in the Finance Act of 1894, special treatment of agricultural property was given. The principle value was not to exceed 25 times the annual value, and so on. That was part of the original foundation of the tax. It is quite true my right hon. Friend abolished that in his Budget. But to say, as he did the other night, this was the first time in the case of the Estate Duties that any differentiation had been introduced, is to ignore the actual foundation of the Estate Duties as presented by Sir William Harcourt in 1894. Then, the right hon. Gentleman himself exempted timber by a very wise provision, which has been productive of much advantage to the gathering wealth of the country in afforestation. He exempted timber from the scope of the Death Duties until it was cut down. Timber is a growing asset, but really it is not different in principle from the reserves of public companies. These aspects of taxation may be held to stand together to some extent where the capital is being increased, where the future is being provided against, but the right hon. Gentleman picked out this one particular item which deals with agricultural property without attempting at the time—and very naturally—to apply the same principle to the others. There he applied a thoroughly exceptional treatment to the problem. Then, he himself gave special relief, in the Finance Act of 1914, by the quick-succession relief to land and also to business. That was exceptional treatment. Again, farmers have long received preferential treatment in regard to Income Tax. They can choose, as everyone knows, between being assessed in respect of their profits under Schedule "D," or by reference to the rental value of the land they occupy, and, naturally, they exercise that option in every case to the disadvantage of the State, and choose what is most favourable to them. There is a purely exceptional treatment of a problem connected with agriculture. Then the right hon. Gentleman gave, in his Budget, a special exemption to the agricultural class by the Income Tax relief granted in respect of the cost of maintenance, repairs, insurance, and management of property, beyond the flat-rate allowances, and the principle which he introduced has been extended to all land and all houses at the present time.

I am only pointing out that the right hon. Gentleman has no ground at all for making a serious attack on me for having introduced a new principle, because I have made an exception in regard to the present increase of the Death Duties in the case of agricultural land as such. That ground has been covered, and no one has covered it more effectually, and in many cases more widely, than my right hon. Friend himself. Land is by no means the only subject of taxation which enjoys special treatment. There is no doubt whatever that the co-operative societies at the present time are not assessed for Income Tax on exactly the same basis as other classes of property. [HON. MEMBERS: "Yes, they are!"] It is quite true that the result of making the change would not lead to any large increase of revenue, but it is not true to say they are not differently treated.

Mr. NEIL MACLEAN

Such a tax would cost more to impose than would be received, because of the number of claims for repayment.

Mr. CHURCHILL

If the hon. Gentleman is not opposed to their being placed on the same footing, I should be glad to know it. The conclusion which I have reached on that matter is that the financial advantage would be small, and the political disputation would be considerable. I do not think we ought to throw out challenges, because, after all, there is a very strong feeling amongst other enormous bodies of His Majesty's subjects who are engaged in retail trade, the shopkeepers, that co-operative societies are placed in a position of unfair advantage. But I do not take the view that this calls for action at the present time, because I am advised that the financial advantage to the Exchequer would be small, and I am afraid we should find that we should be in for a very hot political argument, and my desire is to obtain the necessary money with the minimum of friction.

I am only using this argument in order to show very clearly to the Committee that the theory that you never, in any circumstances, differentiate in your treatment between classes of property, is not one which finds any support in our practice, or in the principles or views of any Party in the House. The very Order Paper yesterday was covered with new Clauses proposing all sorts of exceptions in particular cases. The hon. and gallant Member for Caithness (Sir A. Sinclair) had an Amendment on the Paper—"Relief from increased Death Duties in certain cases"—proposing that there should be relief for particular classes of taxpayers from the increase in the duties which we are imposing. [An HON. MEMBER: "In order to preserve your balance!"] Never mind the reason. We have all got our reasons. If anyone wants to make exceptions, he always has a reason. The question I ask is whether any exception can be justified, or whether it is against sound finance and good fiscal principle to make any exceptions.

I say that, so far as the exceptional treatment argument is concerned, there is, from the point of view of precedent, and from the point of view of public policy, absolutely no foundation for the charge. The Statute Book is filled with exceptions, and agricultural land has often, if not always, been treated by successive Chancellors of the Exchequer in certain respects on a different footing. It is very natural that it should be so, because, as I have pointed out, it is in an exceptionally difficult position in regard to the realisation of assets passing at death. The expense alone of realising those assets as compared with many other forms of property—British stocks and shares, for instance—is four or five times as great. That is only one thing, and the illustrations could be greatly extended.

I am not attempting to give any positive benefit in respect of agricultural land. All that the Government are doing is conferring upon them a non-addition to the burdens they bear, and I cannot feel that this entitled any critic of the Government to employ severe and harsh language. I must admit I was astonished at the picture which my right hon. Friend conjured up of the tenant farmer, who owned no land, but who had such valuable stock that he might have to pay as much as 5 per cent. extra under the new scale of duties. I am bound to say I never contemplated the existence of any very large class of farmers whose stock was worth £50,000 or £60,000, and never owned an acre of land. But it may be that a particular case exists.

Mr. LLOYD GEORGE

I certainly corrected that by saying 1 or 2 per cent.

Mr. CHURCHILL

Even if you put it at 1 or 2 per cent., that will be a tenant farmer who owns stock worth between £25,000 and £30,000. It seems to me that the case of such a man, not owning any land at all, makes him a member, at any rate, of a rather restricted class, and if I am unwittingly inflicting upon him any injustice all I can say is that that justice is very small in the case of Death Duties operating on that scale. It will only be 1 or 2 per cent.

The right hon. Gentleman opposite proceeded to quote the case of an estate of 10,000 acres producing a revenue of, let us say, £10,000 a year, and he traced the incidence of taxation before the War and after the War upon an estate of that kind. I have not checked the figures given, but they seem to me to be reasonable. The conclusion the right hon. Gentleman drew from those figures was that they show that the weight of taxation has become so heavy, particularly in respect of the Death Duties, that the existing system of land tenure can not possibly continue—which is perfectly logical. He said so crushing and destructive is the taxation that falls through the Death Duties upon agricultural estates that the existing system cannot possibly endure; it is passing away and is condemned. What greater argument could there be in favour of not at this moment needlessly adding to the pressure which, according to the right hon. Gentleman, is already carrying destruction over a whole class of the community, and to the existing system? It may well be that the alteration we are making, as was said the other night, is a paltry remission, and that having regard to the general pressure of taxation it will have no effect in the general movement of events in any decisive manner. At any rate, even on the admission of the right hon. Gentleman, the whole of the landed and agricultural property in this country is being driven into liquidation by the pressure of taxation and the Death Duties, and that, I would suggest, is a ground, at any rate, for not adding to the burden. That ground has been much more strongly expressed than I should have dared to express it for making the exception at the present time.

Changes which are very considerable are undoubtedly taking place in our rural life. Hitherto the land-owning classes of this country have financed the farmer, and if, as the right hon. Gentleman says, they are being taxed out of existence, being crushed by the weight of taxation, if, I say, that is the case, then it is perfectly clear that the farming community will have to obtain their capital in the future in some other way. Whether they will obtain it so cheaply as they have hitherto got it from the land-owning class has yet to be proved. No other method is in sight at the present moment. Would it not, however, even on the hypothesis of the right hon. Gentleman, be most imprudent on our part to accelerate the process of the extinction of the existing system, while at the same time we are not prepared with any alternative method of financing the great operation of farming the land of the country? No! The right hon. Gentleman does, I think, fully justify in his argument the exemption of agricultural land from the present increase of Death Duties. He has fully shown by the precedents of his long public career that the exceptional treatment of land and other property in certain cases is fully justified. Under these circumstances I shall ask the Committee to support the Government in making the remission, which is in no sense a favour to a particular class, which avoids adding new difficulties to the conditions of rural life, already of a character which plainly gives cause for the most grave concern and anxiety to the nation at large.

Mr. RILEY

It has been stated that there is no intention of conferring any particular benefit upon agriculture other than that which is being given to-day. It may be true that the proposal will not confer additional benefit, but it is quite true that it will continue the special benefit which agriculture has enjoyed for some time now. Obviously, however, when the matter is carefully looked at it will be seen that under this proposal agricultural land is going to receive additional benefits as compared with other forms of property. Something might possibly have been said in favour of the comparatively smaller benefit which the relief from additional Death Duties will give agricultural land if this policy were a continuation of the policy persistently applied to agriculture. My right hon. Friend the Member for Central Edinburgh (Mr. Graham) mentioned that in the matter of Income Tax assessment agricultural property has enjoyed special privileges for many years. What are the facts with regard to the special assessment of agricultural property in the matter of rates? Since 1896 onwards the owners and occupiers of agricultural property have been receiving a special benefit of not less than £6,000,000 per year! Local rates were first reduced one half, that amounted to about £6,000,000 a year; then in 1923 there was a further reduction from a half to a quarter, and to-day agricultural property in that respect only bears a quarter of the rateable liability compared to other forms of property. I think I am quite within the mark in saying that from 1896 down to the present day there has been a relief to agricultural property of no less than £100,000,000. It is proposed to extend that principle by a further concession now.

Two arguments have been put forward this afternoon as an excuse. One was that there is nothing new in this policy and that a differentiation has often been made. We on these benches object to that differentiation. It is a bad system. Agricultural property should be treated equitably like other forms of property The argument put foward by the Financial Secretary to the Treasury, which was that unless you are going to allow concessions of this kind to agricultural property agricultural estates will be broken up, that the monopoly would not be maintained if taxation was to be applied equally all round. Some of us are of the opinion that that would be of great benefit to the country; very much more than happens to-day. Owing to the present system, monopoly has got the grip it has at the present day. The argument put forward by the Financial Secretary seems to me to be one that should be opposed, and I hope the House will refuse to continue to re-enact this iniquity between agricultural property and other forms.

6.0 P.M.

Mr. KIDD

There was a striking difference between the speech of the right hon. Gentleman the Member for Central Edinburgh (Mr. Graham) and the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George). The speech of the one was temperate and consistent while the speech of the other was inconsistent and intemperate. Hon. Gentlemen opposite above the Gangway take exception to the private system of land-owning, as they take exception to private property of any other kind. Generally, therefore, no Member on this side will resent the attitude of the Labour Members because they are consistent in this matter. Whatever the rights or the wrongs of nationalisation, as in the present case, theirs is a perfectly consistent attitude, and a perfectly natural one for the Labour party to take up. The right hon. Gentleman the Member for Carnarvon Boroughs, however, was much less consistent and more difficult to follow. He discovered that the present system was going all to pieces. Does he suggest nationalisation? If he does not, does he think it better to break up the large estates? He will correct me if I misrepresent his arguments, but they seem to me to amount to this: that at least in the land system in earlier times there were excellencies which we do not find in the industrial system, for in the old days certainly the laird and the landlord did their duty by the tenants and towards the public service. That is a fact. The system, however, he says, is breaking down because of the burdens thrown upon it. Does the right hon. Gentleman propose to relieve the land of those burdens? If so, he is justifying the policy put forward by the Chancellor of the Exchequer; or does he propose nationalisation, or does he propose the policy of breaking up estates and putting the land into the hands of many more holders? He has left us in a fog as to what he proposes, though we are all in agreement that land is overburdened. In the first part of his speech he seemed to show that he had some difficulty in getting rid of the distinction between the ownership of land and the ownership of other forms of investment. Hon. Members from Scotland on the Labour Benches, although they differ from me on the nationalisation of private property, have no difficulty in appreciating the essential distinction between the ownership of land and the ownership of an industrial investment. The land system in this country does not rest on a profit basis, does not rest on the ordinary basis of profit and loss as applied to industry, but rests on a social basis. I do not know whether they have the clan system in Wales, I suppose it has broken down there, but it has not broken down in Scotland. The right hon. Gentleman will find the spirit of the clan system running all through the land in Scotland.

Mr. N. MACLEAN

The land for the clan, not the land for the owners.

Mr. BUCHANAN

There is no Kidd clan!

Mr. KIDD

We will take the humour later. All through the land system we find that the land rests on a social basis. If I invest money in an industrial security, I do it for the return it will bring me and in the hope of an appreciation in the capital value, and so does the right hon. Gentleman the Member for Carnarvon Boroughs. If I inherit an estate in land, I do not expect that I am going to get an increase in the capital value of it. Some Members may say that I have no right to hold it, that I have no right to gratify the sentiment, of retaining acres that have been in my family for generations. If while in possession of that land my people have sought to house their farmers well and their cottagers well, and have let them have land at the lowest possible price, in order to stimulate successful agriculture, they have done a service which, normally, distinguishes the position of the landowner from that of the holder of an industrial investment.

Again I come back to Scotland, and I speak with some knowledge of land. In Scotland we are dealing with a difficult climate, with a soil which naturally is not too fruitful. Does any hon. Member believe it would have been possible to develop the agriculture of Scotland to the point of excellence it has reached but for this close co-operation of laird and tenant, where the laird enjoyed the prestige of his possession of land and against that prestige has had to balance the relatively low rent at which the land was let? The right hon. Gentleman the Member for Carnarvon Boroughs has talked glibly about monopoly value. What is happening at the present time? The solidarity of a lot of old estates is being destroyed by the heavy burdens put upon the land. The land comes into the market, and farmers have to pay heavy-prices for it. Luckily for them, they are called on to pay these heavy prices immediately after the period of war profits has placed them in a fairly good position. But there is this consideration above and beyond all else, that we are now getting rid of the social element in land, and once we have got rid of that, once we have got rid of the factor represented by the sacrifice which the landowner made for the sake of social prestige, the price of land is bound to rise.

I am not holding a brief for any landowner, but I appreciate how much agriculture has owed to the mere fact that land rests on a social basis. As Labour Members are not getting nationalisation at this time I appeal to them to balance the present system, under which the farmer works the land with the benefit of the landowner's capital at the lowest price, a system which leaves the farmer the largest possible amount of his capital for working the land, against some other system under which the capital of the farmer is so tied up in the land that he is impoverished for the task of working it. What the right hon. Gentleman the Member for Carnarvon Boroughs has proved is that it is time we made a beginning in relieving land of its burdens. Reference has been made to the differentiation already made between land and other property. Take the question of local rates. If I have a factory, on what do I pay local rates? My income from that business may be very large, but I pay local rates only on the little bit of building, it may be a very little bit; but if I am a landowner I pay rates on the whole of the land. The captain of industry pays the rates on his building only, he does not pay rates on his raw material—which is what the land is to the farmer. There is a great deal to be said for the argument that agricultural land let by the landowner to the farmer should not be rateable at all, but should be regarded as raw material, and, with the exception of the value of one or two buildings, no rates should be imposed on the land. If that policy had been pursued, land would to-day have been enjoying a prosperity which for the moment it has lost.

We welcome the action of the Chancellor of the Exchequer, for though it is not a very big concession we see in the action a realisation on the part of this Government of its duty to land, a realisation that it is about time for us to turn back on our trail. We have gone too far in the direction of inciting the public against the landowner. Land being visible, as an industrial investment is not, I could, if I were a man without principle, excite feeling against landowners—because their property is visible. One could talk about monopoly value and about the leisured rich; but I would appeal to my Labour friends above the Gangway, if they cannot get nationalisation, to agree with me that the landowner has suffered from excessive burdens and that there was nothing wrong with the old system, that on the contrary it was a great system. The Prime Minister has been appealing for a return of the social instinct in industry. What we want in industry is more of the spirit that has prevailed throughout the centuries. Give us the same social sense in industry and I might almost be a follower of the representatives of Clydebank. We welcome the Chancellor of the Exchequer's attitude as being one that indicates that this Government are determined, while not doing anything over generous, to act towards the land with complete fairness, regardless of how they may be misrepresented in the country.

Major Sir ARCHIBALD SINCLAIR

Listening to the speech of the Chancellor of the Exchequer has only deepened the impression which I gained two nights ago of the mistaken sense of fairness, the inexpediency and the unwisdom of his proposals with regard to Death Duties on agricultural land. All who are interested in the future of agriculture must agree that at least one good result has come from this controversy, and that is that the imagination, the driving force and the inventive powers of the Chancellor of the Exchequer have been enlisted in the solution of the problem of agriculture. He has not hitherto been conspicuous for his knowledge of or the interest he has taken in agricultural problems, and that may account for the fact that he was not sufficiently acquainted a few months ago, when he introduced his Budget, with the circumstances which he has been so vividly describing. It was only after an agitation conducted from the benches behind by Private Members and by institutions which exist to serve the interests of the landed property class that he has introduced the proposals which we are discussing this afternoon. The fact that he has not hitherto taken this interest in the problem of agriculture may also account for the difficulty which he tells us he experienced in following the argument of my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George). He said that my right hon. Friend in the first part of his speech represented the landlords as being bloated and prosperous, and as asking, "Why are you giving this additional advantage to the landed class?" My right hon. Friend said nothing of the sort. What he did say was, that in addition to the agricultural value of land which the landlord receives there are other fictitious values under the present system —the monopoly value, the social value, the value which is given, as the hon. Member for Linlithgow (Mr. Kidd) said, by the social prestige afforded by the ownership of land, and there is the sporting value of land. When an estate or any part of it is realised for Death Duties or for any other purpose the owner receives cash for all these values. Therefore, the community say, and the owners of every form of property say, "If we have to pay on the full value of our property, it is only fair that the landowner should pay on the full value of his property."

It is absurd to speak as though Death Duties are the only thing that force landed estates into the market. Everybody knows that landlords have been hit by a great number of other causes. They had great expenses to meet immediately after the War for reconstruction work on their estates, and many of them have had to pay off their debts—the banks came down upon them and forced them to realise part of their property. If estates are being realised, as they are being, and landowners are receiving all the values of the property, the agricultural value, the sporting value, the social value, the amenity value, then the whole community will say, and the predominantly urban electorate especially—I appeal to Members from rural constituencies to note this—that landowners ought to pay on the same basis as all other owners of property.

My right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) illustrated his argument by referring to the case of a man living in a town who had the choice of investing his money either in an industry in that town or in the ownership of land. He pointed out that if he invested in industry adding to the economic wealth of the country he would have to pay upon the additional scale of Death Duties, but if he invested in the ownership of land he would not have to pay that increase. He might have gone further and said that if this man invested his money in tenant farming and employed men on the land to reclaim it, and cultivate it and bring it into a higher state of production, he would then have to pay the higher rate of Death Duty, whereas if the land was merely transferred to him from some other person, he would only have to pay at the lower rate of taxation.

The Chancellor of the Exchequer has put the case for the proposed remission of the Death Duties, first of all on the ground of justice and equity to the individual, and under that heading he mentioned one justification. The right hon. Gentleman said it costs the landlord more to realise his estate and transfer it than it does in the case of other forms of property. I think that is quite an arguable proposition. The hon. and gallant Member for Ashford (Major Steel) had an Amendment on the Paper dealing with that point, but you cannot base upon a case for a concession to meet a particular hardship an argument for a general exemption from a duty which applies to every other form of property. It is, however, from the point of view of the welfare of the industry that the case has been argued by hon. Members on the back benches opposite. They have pointed to the scarcity of capital in the industry in every country and that is a very serious problem which those interested in agriculture have to face.

This affects not only the landlord but also the tenant farmer. The right hon. Gentleman the Member for Carnarvon Boroughs said that a large number of tenant farmers would be liable to the increased scale of Death Duties under the proposals being made this year, and he said that they would not share in the remission which was being given to the landowners, but the Chancellor of the Exchequer tried to make out that the number affected would be very small. I have here a list of 32 farms in a parish in Berwickshire, and out of these 32 there are three cases in which the tenant farmers' interest will be affected. In one case the capital of the tenant farmer amounts to £18,000, in another case £14,000, and in the third case £16,000, and in each of these cases the tenant will be liable for the increased scale of duties and the landlord will be exempt under the Chancellor of the Exchequer's proposal. If you take the landlord's interest in the land and add it to the tenant's interest, there will be a large number of occupying tenants who would have a capital in excess of the £12,500 provided for under this proposal. Are you only going to give exemption to the land-owning interest? Take the case of an occupying owner whose landlord's capital is £7,500, and the tenant's capital is £7,000, making a total of £14,500. Will he be assessed under the new scale of duties, or will he be given a remission only in respect of his actual interest as landowner.

Mr. CHURCHILL

The total value of his own estate from all sources will be taken as the basis on which the scale of Death Duties will be fixed, and the agricultural part of the estate will be chargeable at the low rate.

Sir A. SINCLAIR

That is what I thought, and I think it works out very unfairly. If there was a landowner and a tenant farmer in the illustration I have given the landowner's interest would be £7,500 and the tenant farmer's capital £7,000, and the farmer would not come in for the increased taxation at all.

Mr. CHURCHILL

Naturally he comes under the rates appropriate to the higher scale.

Sir A. SINCLAIR

Therefore these men would escape only in respect of their occupying interest, whereas if they were tenant farmers they would not have to pay on their tenant farming interest. The hon. Member for Romford said he would always be ready to stand up for the good landlords. But we must not be blind to the fact that there are a number of landlords who are bad—not morally bad—but bad from the economic point of view or regarded as partners in the agricultural industry. From many points of view I think it is a good thing to have large estates broken up. Bacon said that property is like muck. The more it is spread the better it is. But recently, when land has passed out of the hands of the old landowning families it has too often fallen into the hands of men who have obtained it for social prestige, or the sporting value which it possesses. One particular case has been mentioned of an estate in Scotland which has been almost entirely broken up, and has been bought for the most part by rich men who come there to obtain good sport, and they are now planting coverts for pheasants on arable land.

Mr. CHURCHILL

This relief does not apply to deer forests.

Sir A. SINCLAIR

No, this relief does not apply to deer forests but would apply to the case of those who buy mixed property, and it would apply to the agricultural side of those estates. The land to-day is mostly in the hands of those who have bought it since the War, and who have purchased it for its amenities and sporting value. My point is that the people who have bought all this land for its sporting value, its amenity value, or its social value will share in the benefits which are now being bestowed on land by the proposals of the Chancellor of the Exchequer. I hope the right hon. Gentleman will at any rate confine his concession to those who are playing their proper part in the industry, and who are concentrating their attention on the development of the agricultural side of their estates and keeping them in a good state of repair and increasing production.

There was an Amendment on the Paper standing in the name of the hon. Member for Ashford and others which would have given relief to estates in regard to expenditure on maintenance and repairs, and the upkeep of farms. That Amendment and other Amendments of that character struck me as being something that would assist the agricultural industry, whereas the proposals now being put forward by the Chancellor of the Exchequer are not designed to assist the agricultural industry, but are providing benefits which will go mainly to the landlords. I cannot understand why the Government should run counter to those modern conceptions upon which the Chancellor of the Exchequer claimed in his opening speech to have framed his Budget expounded when the right hon. Gentleman introduced his Budget. The Chancellor of the Exchequer complained the other night of the exaggeration which he said had characterised speeches on this question from the Liberal Benches, and he stated that this was a very small point—merely the remission of something like £500,000.

Mr. CHURCHILL

I was only quoting the language of my hon. Friend opposite

Sir A. SINCLAIR

The Chancellor of the Exchequer certainly said that he deprecated the exaggeration of the importance of the proposals which he had heard from the Liberal Benches, and he said that this was quite a small thing simply to overcome the difficulties of transferring estates at death. The hon. Members who have supported this Amendment have put this question on very different grounds. As a matter of fact any exaggeration on this question came originally from hon. Members on the Government side. I do not, however, think that they have indulged in undue exaggeration because hon. Members who have spoken from those benches have spoken with a full knowledge of the seriousness of this question, and the Chancellor of the Exchequer is deceiving himself if he thinks the picture they have drawn was in any degree exaggerated. Arable land is giving way to grass; grass land is becoming depreciated and waterlogged for lack of proper drainage; pasture land is going back to bracken and weeds; buildings are out of repair, out of date, out of scale; the head of stock is very largely restricted, and, as a result, the manurial values are lost by which the productivity of the soil could be increased.

All this will not be affected in any way by the Chancellor's proposal, because it does not apply to the tenant farmer. The landlords' difficulties are not solely due to Death Duties, but, as my right hon. Friend pointed out, to the accumulation of burdens, which has fallen upon the landlords in recent years, and have made it increasingly impossible for them to fulfil their functions in the industry. The present rate of Death Duties, as Lord Bledisloe, the Parliamentary Secretary to the Ministry of Agriculture in the present Government, has said, means the extinction of the present landowning families in two generations, and the people who are buying the land under the present system are not people with the old traditions of interest in the agricultural industry and of love for the countryside, but are people who are buying the land mainly for the sporting and amenity values which they obtain. Therefore, it seems to me that these proposals will only have the effect of dragging agriculture down into the arena of party politics; they will push the most vulnerable and least popular partner in the industry into the forefront of public discussion and criticism; they will arouse the deepest suspicion in the minds of the urban electorate as to the Government's attitude towards the whole question, and will prejudice the discussion by the urban electorate of the Government's agricul- tural proposals when they are finally evolved and brought forward, and they will be ultimately fatal to the interest of those on whose behalf these exemptions have been designed.

They will do all this without doing anything, I do not say to cure the present condition of agriculture, because that is not the business of the Chancellor of the Exchequer, but without doing anything to arrest the processes I have described. They are due to the conditions which now exist, and the only effect of the Chancellor's proposal is to give exemption from the new burdens which are being imposed. The old burdens, however, will persist, and the consequences will continue. The Financial Secretary just now spoke of the tendency towards the breaking up of estates, and said that agriculture would adapt itself gradually to the new conditions. But the very reverse is taking place. It is too late to talk about the tendency towards the breaking up of estates; they are being broken up. Twenty-five per cent. of the land of the country now is in the occupation of occupying owners. It is too late to talk in that way, and, far from the agricultural system adapting itself to the new conditions, it is deteriorating and going from bad to worse.

Hon. Members must realise that it is true to say that there is now in operation a revolution in the countryside, due, in the first place, to the democratic tendencies and modern conceptions to which the right hon. Gentleman referred in opening his Budget. The hon. Member for York (Sir J. Marriott), in an interesting book on the land question, has said that the accumulating burdens were preventing landlords from fulfilling their functions, and that, again, is another cause of this revolution. Mr. Harling Turner, in an interesting article in the "Glasgow Times" of the 19th January, said that he knew of many cases where farmers, by judicious selection of grass seeds and appropriate treatment of the land, are now making, not the proverbial two, but four or five blades of grass grow where one grew before, and the capital of these farmers will now be attacked under the right hon. Gentleman's proposal. The march of science and the spread of education are favourable features in this revolution in the countryside of Britain, and they are features which the right hon. Gentleman ought to do everything he can to help; but there is nothing in the Government's proposal to help tenant farmers who want capital in order to make use of the fruits of scientific research. Mr. Harling Turner, who is a very great expert and is tie Commissioner of the Duke of Portland, went on to say in his article: In a very short time there will be anything from 60 to 70 per cent. of our arable land requiring re-draining. That was under the present system, before the additional Death Duties were proposed. Therefore, as my right hon. Friend the Member for Carnarvon Boroughs said, if under the present system the landlords are incapable of carrying out these functions—they have not the money, but they are not to be blamed for that; the money is not in the industry to enable them to do it—it is apparent that the right hon. Gentleman's concessions will do nothing to help the industry in its present difficulties, and, as Lord Bledisloe has said, in two generations the estates of the existing landed families must be broken up. Therefore, it is not too much to say that a revolution is proceeding at the present time in the countryside, and it is absurd to suppose that you can arrest these processes of decay by the proposals which the Chancellor of the Exchequer has made. I appeal, therefore, to the Government, and I appeal also to my fellow landlords and those who represent that interest on the other side of the Committee, not to snatch at this bone for which the right hon. Gentleman the Member for Wells (Sir E. Sanders) sat up and begged, and which the Chancellor flung to him disdainfully, but rather to lend a hand and attempt to devise other means whereby the agricultural industry can be pulled together—other means for the revival of rural life in Britain, other means for repopulating the British countryside—and thus win honour and credit for the landowners of Great Britain.

Sir PHILIP PILDITCH

I could not help wondering, during the early part of the speech to which we have just listened, whether the hon. Baronet (Sir A. Sinclair) had really grasped the meaning of this Clause, because I understood him to ask, why should not the excess value of agricultural landed property above the agricultural value be taxed—that is to say, the value which is derived from amenities, possible future building value, and so on? As I read the Clause, the excess value will be taxed, and it will be taxed on the higher scale; and may I mention, in the hearing of the Chancellor of the Exchequer, that that is just what I am going to ask him to take into consideration? The estimated extra value will not only be taxed on the higher scale, but it will be so taxed now, before it can be realised. This excess value is a thing which may never be realised, or, if it is realised, it may not be realised for a great many years; and yet, as I gather from the Clause as it stands, the higher tax upon it will have to be paid now, on a death at the same time as the tax on the agricultural value of the estate. I do not know whether, between now and Report, my right hon. Friend would be prepared to take that point into consideration.

I think most people in the House who are interested in the condition of agriculture will be grateful to my right hon. Friend for the attempt he has made to meet the situation in some way. It does not go very far. Judging from part of the speech of the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), anyone would think it was a very serious and very far-reaching boon which was being granted to the agricultural industry, but I should like, in addition to pointing out that the tax on the extra part of the value of the property will be required to be paid now, to point out that the hon. Baronet and his Leader seemed to think that something in the nature of an unfortunate exemption, or unfair or too kindly treatment, is being granted to the agriculturist in these matters. I need not go into the general principle of that, because the argument developed by the right hon. Gentleman the Member for Carnarvon Boroughs on that point has been already fully dealt with by the Chancellor of the Exchequer, on the question whether or not it is possible that exemption should be given or has been given to agriculture as against the rest of the community.

But I should like to point out that, very little in the way of an exemption is granted, in favour of agriculture by this concession. When the right hon. Gentleman the Member for Carnarvon Boroughs was in the House, I ventured to remind him that it was he who originally changed the basis of the valuation of agricultural property, which, until 1910, was always calculated upon a number of years' purchase of the annual value. In 1910 the right hon. Gentleman, in his memorable Budget, altered that, so that the value of agricultural property was calculated on the value of the component parts of the estate, assuming the holdings to be separately submitted to public competition. Surely, the Committee will see that that is not a fair way of valuing property at any specific moment, such as the moment of death. You arrive at a false and too high value by assuming then that you could wait for a long period of years while each separate component part of an agricultural property was put into the market at the most favourable time, but every other kind of property is valued as at the moment of death, when the tax becomes payable. Therefore, in nine cases out of 10, the changed system brought in by the right hon. Gentleman in 1910, has increased unfairly the amount which agriculture has to pay by way of Death Duties as compared with the rest of the community.

Because of that principle, laid down for the first time in 1910, I doubt very much whether there is anything in this new Clause of the Chancellor of the Exchequer that is of the nature of exceptionally favourable treatment of agriculture. In 1919 the scales of duty were increased, and in order that the Committee may understand how the situation really stands with regard to the question of the Budget scale of duties and the exemption according to this Clause, I should like to point out what the effect would be upon an agricultural property of reasonable size. I ought, perhaps, at once to say that I have no personal interest in this matter. I am an exceedingly small landowner. I only own a small manorial property in my native County of Devon, which I bought because it happened to have been in the possession of my forbears two or three hundred years ago, and, as far as I know, there is no building value attaching to it, and there is certainly no social or amenity value to me. Therefore, I am not likely to be affected whether this Clause is passed or not. I simply know sufficient of how it would affect larger properties by the experience I have as a small landowner myself.

If you take an estate worth £40,000, under the scale of duties before the Budget was brought in the owner paid on death £4,000, at 10 per cent. of the value. If that estate were producing 2 per cent. on that £40,000, and, as: most Members know, the outgoings on agricultural estates make that statement not an unfair one, that means that there is an income of £800 a year from that property. To pay the Death Duties under the scale of 1919 represents five complete years' income of that estate. How is that money going to be found? The right hon. Gentleman the Member for Carnarvon Boroughs seemed to-day not to mind the process of the breaking up of estates. He did not think that in 1919, when he made that memorable speech at Caxton Hall which a good many of us heard, nor in 1920, when he was passing—and I in those days was following him into the Lobby—the Corn Production Act, nor, indeed, did he think it so lately as two years ago, when he made that very sensible speech in this House about December, 1923, in which he was dealing with the state of the agricultural industry, and did justice to the position of the landowners, who, he said, were the people from whom the capital was always found, though it was not now being found so readily as it used to be, for the purpose of building, drainage, and all the accessories without which farming cannot be carried on with profit.

I should like to compare that £4,000, which was the amount which would be payable under the position before the Bill, with the position after the Bill. That has been increased from £4,000 to £5,200. All the Chancellor of the Exchequer does by this Clause is to put the agricultural-owner back from having to pay £5,200, which would represent something like 6½ years' income of the property, to what it was before the Budget was brought in. He puts us back to a sum which amounts to five years' income of the property. I would suggest to him, that by next year he might use his ingenuity to find a way in which he could put back the condition of agriculture in this matter to something like the position in which it was before the change which was effected in 1910, which did a good deal to damage the industry, as affecting landowners, tenant occupiers, and labourers as well.

With reference to the breaking up of estates. It has been estimated that 80 per cent. of such sales are to occupying tenants, who borrow two-thirds of the money to pay for them on mortgage. The mortgage interest usually exceeds the inclusive rent hitherto paid. Tithe, repairs and other outgoings are transferred, on such a sale, from the owner to the owner-occupant, and the latter consequently is crippled for want of capital. The result of that is that economies have to be effected in labour and in the use of feeding stuffs and manures, and there is a falling off in the standard of conditions of farming and the equipment of the land, deterioration of buildings and decreased production with disastrous results to all classes concerned in agriculture. I hope therefore that, as a step though small, in the direction of minimising this injury to the industry and the State, the Committee will pass this small and certainly justifiable concession.

Mr. CHURCHILL

May I remind the Committee that time is getting on, and there are a good many Amendments on the Paper to this Clause. It was understood that we should get the conclusion of the new Clauses by a quarter-past eight, to enable us to get on to the Schedules at such an hour as not to lead to a very prolonged sitting. That was the general understanding. Of course, the Committee is master of its own time, but, if the other two Clauses are to be discussed at all, I suggest that we ought to be very short on this general Debate.

Mr. SNOWDEN

I know nothing about any understanding that the Clauses were to be finished by a quarter-past eight. This is a very important Clause indeed. Of course, the right hon. Gentleman wants to get on with the Bill, but a number of my friends want to speak, and I do not think we could finish the discussion just now. Perhaps he will let it go on a little while, and see if it shows any disposition to come to a close.

Mr. CHURCHILL

I readily assent to that. I only struck a note of warning. The Government are entirely in the hands of the Opposition in regard to the way the time is used.

Mr. WHEATLEY

I will respond to some extent to the appeal which is suggested in the remarks of the Chancellor of the Exchequer, and will endeavour to confine my remarks within a very short space. The discussion of this Clause has very naturally turned on the condition of agriculture. In my opinion, the Committee could not be discussing a more important subject. The condition of agriculture is a determining factor in the prosperity of any country, and, if I could have detected in the proposal which has now come from the other side any glimmering of a policy of reconstruction, I should have felt considerable difficulty in entering a word of criticism or of opposition to such a proposal. Had there been any indication on the part of the Government that they were taking a big view of the question of the condition of agriculture and its relations to the general industrial state of the country, I think any party which put any unnecessary difficulty in the way would have been guilty of national conduct which was open to very severe criticism. But, as I say, I can find no glimmering at all of any policy of that kind here.

What is the state of affairs, taking a broad view of it, with which we are confronted to-day? We have an agricultural industry, which was wrecked during the 19th century particularly, and now we are face to face, in the industrial and national situation, with the results of that wrecking. It comes very badly from the Liberal party particularly to be taking up the time of the House and the country with statements deploring the state of our agriculture, because all down through the past century the Liberal party had considerable political power, and they had behind that political power a great volume of industrial power, and all that political power and all that industrial power was used, intentionally, for the purpose of ruining agriculture in order to provide for a new industrial system, the cheap labour, and what they regarded as the cheap commodities which were essential to the creation of industrial millionaires. They had not any very serious opposition from the party opposite, who claim, and have some reason to claim, to represent the agricultural industries.

7.0 P.M.

That being the state of affairs we are up against, we have to deal with it, whatever may be our views of the history of it, and to whomsoever the blame may be attributed. Reference has been made to the change that has taken place in the land tenure of the country since the period of the War. I have not had time to ascertain the figures, but I believe in Scotland since the War, one-third of the farms have passed out of the hands of landlords into the hands of occupying owners—into the hands of the people who work the land. There would have been a policy if the Chancellor had brought forward a proposal for assisting those who were engaged in the working of the land. It could have been argued very strongly that, at any rate, here was a method by which people who were performing work of the very highest national importance were being relieved in a way which would prevent anyone else from absorbing the Parliamentary relief. But when you come forward and ask us to assist agriculture, that is the production of food, by giving a relief to the owning class who toil not, who contribute nothing to the production, but who rely for their incomes on the exploitation of the farming class, we are entitled to say that is a way of granting relief that does not appeal to us as a method of assisting agriculture. I said there was no policy. The policy might be this, that there are still on the benches opposite a number of supporters of the Chancellor of the Exchequer who suspect his present political faith, and that it is necessary to give a sop to them in order to ensure the stability of the Chancellor in his newly-found political position. But that is not an argument or a reason which appeals to people on this side of the House. We have been taught to regard the Chancellor of the Exchequer as a person of reckless courage, a person who would bring forward bold proposals, who might make mistakes and involve us in heavy losses, but, at any rate, a person who was prepared to take risks. There is no sign of courage or of a comprehensive grasp of the national situation in the proposal which we are discussing here. It is paltry in the extreme, and the very pettiness of the proposal is being used as an argument for its serious consideration by the House. In the opinion of those for whom I speak, it is too small and too mean to deserve serious consideration. We are faced at the moment with an industrial situation in which, at the rate of fifty thousand a week, our industrial workers are being thrown on the streets. That is a situation which demands the most serious attention of the House and of the responsible Members of the House. Instead of dealing with that situation in a manner that would be creditable to the Government of this country and to its Parliament, we are dealing with a paltry proposal to give half-a-million a year to the political friends of the Chancellor of the Exchequer. For these reasons, the Members for whom I speak will oppose this Clause.

Mr. MacLAREN

I have taken great interest in the Debate this afternoon, because this subject has a very keen interest for me. I could not help thinking how well it rounds off the general scheme of affairs in the hands of the present Chancellor of the Exchequer. Very skilfully he has introduced the thin end of the wedge of Protection, with great skill he has introduced Colonial preference, and now the blessed Trinity of Conservatism is finding a vent in giving expression to a preference to the landowners of England. I am sure they will congratulate him when he consummates their desires and finally passes over the Budget to them. I was not in the House on the night when this new proposal was made known, but I understand the right hon. Member for Wells (Sir R. Sanders) was the person who extricated the confession from the Chancellor of the Exchequer. I have always looked upon the Member for Wells as summing up all that innocent complacency of landlordism which always gets its own way. When we least expected it, out came this concession to the most dangerous and powerful vested interest in this country.

I want to say, in the most friendly way, that if the idea behind this special concession to the landowners is that it is doing something to assist agriculture, I think it is a futile, and a dishonest statement to make, to say that it is encouraging agriculture at all. It is only a few months ago that we handed over subsidies for beet growing. In 1923 we handed over to the landowners great concessions with regard to agricultural rates. In 1896 we reduced the agricultural rates by one-half, and in 1923 we reduced them again down to a quarter. I see, according to an answer given by the Chancellor of the Exchequer, that in the year 1922–23 we paid out by way of Government grants to make up the requirements for local rates £1,503,000, and then, after the passing of the Agricultural Rates Act of 1924, the grant from the Treasury to make up the payments for the agricultural rates of that year amounted to £4,725,000. The poor depressed landowner gets off with a quarter of his rates, and the general taxpayer of the country is asked to make up the rates.

Lord ERSKINE

If the hon. Member will allow me to interrupt him, does he not believe that the farmers get very large benefits?

Mr. MacLAREN

I do not envy the man who gets what is left from the table after dinner is over. I was dealing with the concessions made in regard to agricultural rates and the concessions that are always made to landowners. [An HON. MEMBER: "What about the tenant?"] We always hear about the tenant, because it is always the tenant who is put forward. When you introduced the Corn Production Bill it was for the benefit of the tenants, and what happened? No sooner was that Act passed than the landowners of this country went to the farmers and compelled them in many cases either to give up farms altogether or to buy them at increased values. [HON. MEMBERS: "No!"] I am merely quoting the facts from the statements in the "Estate Gazette." I am only quoting statements in Government White Papers. Why, as a result of the Corn Production Act, we found the landowners and the agriculture owners of that kind reaping the benefit in increased values and forcing many farmers to buy farms at increased value, and in 1923 we had to pass the Agricultural Credits Act to help the farmers to pay off the debts that were hanging over them as a result of these purchases. One could spend many hours going over and reiterating the many concessions made to landowners, all on the plea that it is to benefit the tenant in agriculture.

When the Agricultural Rates Act was in Committee in 1923 I moved that if the Committee were anxious to assist agriculture, instead of relieving the rates on the land they should relieve the rates that are levied on the farmers' buildings, but I was ruled out of order. In hon. Gentlemen on the other side are very anxious to help the farmers and agriculture in this country, let them relieve the taxation on the industry of the farmer who is using the land. When I looked at the Chancellor of the Exchequer and when I listened to the speeches that have been made this afternoon, it came to my mind that there was no man in this country who knows this point better than the Chancellor of the Exchequer. When I was a young lad in Glasgow I used to read his speeches on this very question, and for many months after I went about Scotland with his famous Dundee land speech in my pocket from which I learned a great deal. There is no man in this House who has made more pronouncements on this very point, namely, that the only way to benefit agriculture—and I am using his exact words—is to take the rates and taxes levied on the users of the land off the users' improvements and levy those rates and taxes on the capitalised monopoly values of the soil of the country.

Mr. CHURCHILL

That is not an exact quotation.

Mr. MacLAREN

It is the sense. It is more than exact, because it is a re-expression of the actual spirit of it. I will make this confession, that it is not as eloquent as his remark was, but it is the meaning of the whole of his speeches at Dundee and Manchester.

Mr. CHURCHILL

That speech was devoted to an argument designed to show that it was desirable to rate urban land upon its true economic value

Mr. MacLAREN

I wish the Chancellor of the Exchequer would make that con- fession now instead of the one he is trying to put through in this new Clause. I was merely saying that the Chancellor of the Exchequer knows his case very well, and that it must be something in the nature of reiteration for us to produce this argument now. The Chancellor has made this gift to the Members behind him. The Landowners' Union have been demanding for years that certain concessions ought to be made on the Death Duties, and then they have got behind them the so-called Farmers' Union and have been making them lisp the same demand, that something ought to be done by way of reducing the Death Duties and the rates and taxes on agriculture. I wonder if the Committee will mind if I read this little quotation from a resolution passed by Danish agricultural people a few years ago. I hope the Committee will listen to these words, because they rather set off the contrast between the condition of mind in this country and in Denmark. This resolution was passed in 1902 at a conference of agricultural workers of Denmark, and they said in it: Our occupation and progress cannot be virtually supported by any help from the State or from any other class in the community. We can only prosper if the law fully recognises that the smallholders and all other classes of the community have equal rights. I would like British farmers and everyone just to take these last few words to heart: The smallholders, therefore, do not ask any favours by way of taxation in Denmark. All we demand is the freedom to use our land free from the imposts of tariffs and other forms of taxation. That was in a country which is setting an example to the whole of Europe in the development of agriculture. But here in England, under an antiquated system of agriculture, you have the landlords—whether it be the old form of landlordism, which is no better than the new, or the new form of landlordism—keeping agriculture hopelessly in their deadly grip, and then super-imposed on that you have your iniquitous system of taxing and rating the improvements of the farmer and holding up the development of land in this country. Those are the real causes of the degradation of agriculture in this country, and, although I am not at all enthusiastic over Death Duties in this way, or in that or the other way, if there is going to be a concession made with regard to Death. Duties, and a concession of the character of that in this new Clause, it might have been given to people who really toil and work and do something for their existence rather than to those who merely-send agents to collect rents and keep a good eye on the rising value of future rents. Landowning, as we know it in England, as long as it stands and enjoys the privileges which it now enjoys, is bound, sooner or later, to bring this country to utter disruption. As the right hon. Member for Shettleston (Mr. Wheatley) has truly said, week after week, we increase in the numbers of our unemployed, while outside our own country the international market is closing down against us. Every country is becoming self-contained. We are no longer the manufacturer of the world. At home, we have a million and a half unemployed walking our streets, and I see no alternative before this country other than that of opening up the entire resources of England and Scotland, opening up the land of this country, in order to give healthy employment in this country to these men, rather than allowing than to become degenerate upon doles from the Employment Exchange.

I want to appeal to the Chancellor of the Exchequer. I have enjoyed his sparring across the Table as much as any man; I admire his ability, and I have relished many of the phrases which he has used and many of his similes; but I realise that outside this House there is the tragedy of our unemployed people walking the streets and constantly looking for relief, looking for some outlet that will take them off the streets and give them some healthy occupation, if for nothing else than to produce their own food. Here we have this magnificent land of England lying idle to-day; thousands of acres under water and thousands of acres going to grass of an inferior character. Is it not an indictment of modern civilisation that in this country, with the magnificent people we have, our people should be driven to traversing the streets under the shadow of poverty, fear and degradation, whilst the most magnificent land in Europe, perhaps, the land of England, is lying in such a damnable condition as we find it to-day?

I appeal to the Chancellor of the Exchequer and to many hon. Members on the opposite side of the House, who are just as much concerned about this question as any hon. Member on this side, that surely the time has come for something bigger, something more imaginative and something that will give our people hope that there is in this country opportunity for the people, and that instead of driving them on to the streets they will be given a chance by the opening up of this magnificent heritage of ours, the land of England. Are you going to do it by this tinkering, niggling method of giving relief in regard to Death Duties. Surely, the Chancellor of the Exchequer will not contest this point, that the idea behind the concession of Death Duties is to give every encouragement possible to the users of agricultural land. Surely the idea behind all the concessions we have been making to agriculture is to help agriculture along.

My point is that we on these benches will do all we can to assist any body of men in this House who will give any touch of imagination to the agriculturists of this country to open up the marvellous opportunities of our own land for labour; but we do think that the opportunity is being missed. It is all very well to come here and talk and argue with one another and make flippant speeches, and to think when we go home that we have done a good day's work. We have not done our duty when we have done that. We are sent to this House to give the nation a lead on these matters and to do something to solve this great problem. Therefore, I appeal to the Committee to realise the seriousness of the position and to rise to its opportunities. The Chancellor of the Exchequer's reasons for his concession are nonsensical, infinitesimal, and tantalising to the hungry people outside. I appeal to the Committee, viewing the situation outside, viewing the enormous opportunities in this country to give employment to the masses of our people, that they should urge the Government to do something of real worth and value, and open up the resources of this country by removing the deadly hand of monopoly. If they do that, they will gain the eternal gratitude of the people of this country, and if they do not, well, what will be the consequences? I hope that what I am about to say will not be considered an irrelevant digression. [Laughter.] It is all very well for hon. Members to laugh. I correlate everything that I hear in this House with the fundamental right of every human being to the use of this earth.

The CHAIRMAN

I gathered that the hon. Member was speaking in regard to the giving of greater concessions to agriculture. Now I understand that he wishes to put forward some entirely new scheme, which has nothing to do with the scheme we are discussing.

Mr. MacLAREN

The moment I do that I will agree that I am getting out of order. When I was laughed at for my earnest appeal in regard to this matter, I was merely saying that every economic problem which is obsessing this House and causing so many hours' debate—it may be a queer state of mind on my part, but I am prepared to accept it—brings me to this point, that I always correlate it with the fundamental rights of human beings to get at the opportunities embedded in the soil and to make them freer men than they are to-day. If we do not do something bigger than we are proposing to do this afternoon, if we do not more seriously tackle the problem of agriculture and the opening up of the land for use, something that will commend itself more than the proposition that is made this afternoon, the Home Secretary may worry as he likes about Bolshevism and about preventing people from coming here from foreign countries to propagate revolutionary ideas, but the poverty and the degradation in our midst will do more to arouse the people against the Constitution than all the armies that ever came from Russia to propagate ideas from that country.

It is because I am correlating all these things at the back of my mind and, perhaps, putting them crudely to the Committee, that I am making this appeal for something bigger than anything proposed in this Clause, because this Clause is nothing more nor less than the continuing of the old dreary steps and the old process of safeguarding the interests of the landowners, and keeping the rook-bottom constitution of the Tory party intact.

Mr. HARNEY

I had not the pleasure of being here when this proposal was made. It is an eleventh hour proposal, though I believe it was made at one o'clock in the morning. As I understand it, it comes to this. First of all, you are to value an estate in the ordinary way. Then you are to ascertain the agricultural value, and you are only to bring the excess value under the increased Death Duties. It is very curious that, when the Chancellor of the Exchequer entertained us so much in his Budget speech by the variety and the nicety of his balance, he entirely omitted to take this into account. It has completely upset the balance and put him out.

As I understood it, his balance was this. He said, "I am going to set off what I have taken from the Super-tax by an equivalent increase in the Death Duties. It is £10,000,000 in each case. That adjustment has been so well worked out that it will strike more or less the same people." To use his own graphic phrase, "It will take from the living hand and add the same amount to the dead hand." But when one examines it one finds that the living hand from which the burden would be taken will be the hand that has at least £2,000 a year, and the dead hand that would be added to would be the hand that had £12,000, that is, £600 a year. That was the idea as he opened it. Now comes this proposal, and we are told that even those who otherwise would be subject to Death Duties for the purpose of this adjustment, are to be relieved if they answer the description of agricultural landowners.

I hope the Chancellor of the Exchequer will bear with me if I try to reduce his proposal to something concrete and understandable. Suppose you have two gentlemen who die and each is worth £40,000. One of them has invested his £40,000 in an estate in the Surrey hills. The other has invested his £40,000 in a Manchester cotton mill. The successor of the gentleman who has invested his £40,000 in Surrey finds that the amount of Death Duty he has to pay is reduced by £2,000. The other gentleman whose predecessor invested in the cotton mill in Manchester finds that he has to pay the full increase in the Death Duties. Why is this particular favour given to the landowner? It is said that he has been very hardly hit and that farming ought to be encouraged as much as possible. As far as I can see, there is no encouragement given to the real producer of the soil. Is the person who gets this relief of a couple of thousand pounds going to do any more fencing, any more fertilising of the land, or going to give any reduction in rent? Is it suggested that there will be another bushel of wheat grown or another stone of potatoes turned out because of this concession? Then why should it be made? Why should there be this discrimination between two classes of property?

We are told that the poor tenant farmer is the one person who should have our sympathy. If you had the whole of the estate represented by the tenant farmer he would get no concession, but if it were represented by the freeholder he would get the concession. You give the concession not to the person who puts money into the land but to the person who takes money out of the land, that is, the landowner. I am at a complete loss to know what is the justification for this midnight oil. The Chancellor of the Exchequer endeavoured to give us some reason, but he gave us nothing, although there was a certain amount of by-play as to the past doings of himself and the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George). I have not yet heard from any side of the House any real reason why this concession should be given to a class who, admittedly, are not going to use it for the purpose of increasing production, and should be denied to a class who, if they got it, would use it for production. Is there anybody who says, or who can support it if he does say it, that the landowner who gets this concession of a couple of thousand pounds is going to use it to enable the farmers on his estate to produce more? [HON. MEMBERS: "Yes."] If so, in what way is he going to do it? To start with he is under no legal compulsion. Therefore what you do is that for the sake of agriculture you make a concession to a man who is under no legal obligation to apply the benefit of that concession to agriculture, and whose only obligation is at best a moral one, and you deny it to the person who would turn it to the benefit of agriculture, namely, the farmer. I shall vote against this Amendment.

Mr. N. MACLEAN

I intend to oppose this New Clause. I am one of those few who were in the House at an early hour in the morning when the Chancellor of the Exchequer sprang his surprise upon us by the statement that he was prepared to accept the Amendment down on the Paper in the name of several of his Friends on the benches behind him, and I think that he will remember, as will those who were in the House at the time, the storm which that announcement aroused on the benches on this side of the House. I am just as strong in protest now as I was then, having read the terms of the Clause which the Chancellor has put on the Paper.

The Chancellor, in that usual innocent manner of his, told the Committee first that he would accept the Amendment. Then he said that he would put forward a form of words on the Report stage in order to cover the point raised by his friends. He went on to say, when pressed in the Committee, that the Cabinet had discussed the matter, but he would not give us the form of words which he intended to place upon the Order Paper. The following morning the form of words which he could not give us at that early hour appeared on the Order Paper that was circulated to Members, which proves that there must have been either in his possession or in the possession of the Patronage Secretary, or of some Member of the Government the actual written form of the Amendment ready to be placed in the hands of the Clerk at the Table. [HON. MEMBERS: "NO!"] Evidently the Government Front Bench has changed its quarter. I am being informed now from the Front Bench below the Gangway that the words had not been written out, but I am only judging by what transpired, that at one o'clock in the morning though he had not the form of words to give to the House, which would give to hon. Members the information as to how he intended to get out of the difficulty, at 11 o'clock in the morning when the Order Papers were delivered to us this particular Motion was down, and it is from that point of view that I am submitting that either the right hon. Gentleman or some other Member of the Government must have had in his possession the form of words, or have received notice of the form of words which it was intended to put down.

Mr. CHURCHILL

The policy had been settled and the drafting of the Amendment was in progress, but at the time that this Amendment came on in the Committee the final drafting was not settled. It had been drafted in a rough form, but had not been finally settled, and when the Committee asked me to arrange for a discussion to-day, I sent the draftsman word late at night to complete the legal references necessary to put the draft in its complete form.

Mr. MACLEAN

I accept the explanation of the right hon. Gentleman, but I may point out that at that time we were taken by surprise, and in the few words which he addressed on the matter, the Chancellor himself—I do not say willingly—led us at any rate to take the view that he had not yet thought out the whole question, and consequently could not put down the exact form of words that would complete the concession which he desired to give to hon. Members behind him. I cannot see why this byplay has gone on between the right hon. Gentleman and his late leader and colleague, the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George). Both of them went round in the land campaign together. Both of them went round denouncing the landlords and calling them everything, they themselves being called everything by the landlords whom they were denouncing.

Mr. LANSBURY

And singing the "Land Song."

Mr. MACLEAN

I do not know that the Chancellor sang it, but he gave effect to the terms of the song in the speeches which he delivered. If he could not sing tunefully he spoke tunefully, and he persuaded the multitude to vote in favour of his land campaign. The point which I want to put is this: Not only were the two right hon. Gentlemen associated in that campaign, but they were associated in something else that happened in this House. That morning, early, when the Chancellor announced that he was going to accept the Amendment on the Paper, the right hon. Gentleman the Member for Carnarvon Boroughs rose and said that the concession which the Chancellor was making was establishing a new precedent, was giving something back to the landlords in the shape of remission of taxation. The Chancellor of the Exchequer said rightly that this was not a new precedent. I agree. The Chancellor of the Exchequer and the Member for Carnarvon Boroughs were members of a Cabinet which gave something back to the landlords, which abolished the land taxes that they had already put upon the landlords of this country in 1910. Both of them were in that Cabinet, and not only were both of them in the Cabinet, but both of them handed back to the landlords the amount of the taxation that had been paid by them since the introduction of the Land Budget in 1910. Here the Government are not offering to hand back to those people the duties which have been paid already on the land. That would have been the precedent right up to an exact parallel. But the principle is the same, and it is because I oppose the principle when applied by the Government of which the Member for Carnarvon Boroughs was Prime Minister, and also when applied by his late associate the Chancellor of the Exchequer, that I am opposing this now.

The Chancellor of the Exchequr has become exceedingly friendly with all the interests which he previously denounced and to which, he led people outside the country to believe, he was hostile so far as politics and his interest in politics were concerned. Now he hands those people a concession, a paltry concession he calls it. [HON. MEMBERS: "No!"] He admitted that it was not a great concession, and because it is not a great concession he was hopeful that the Committee would allow it to go through. But it is not the size of the concession, whether it be £500,000 or £5,000,000, which matters. It is not the actual sum which concerns me at the moment. The pernicious principle is involved in this Budget in which time after time he assured the Committee that he had no money with which to give concessions to the poor people of this country, that he could not take anything off tea, he could not give anything away on sugar, and that he could not take any thing off entertainments duties. Neither the necessaries of life of the poor of this country nor the trivial pleasures of the poor of this country could be assisted in any way, but when a gang of landlords through their representatives in this House come pleading for assistance and put up their poor mouths, he says: "Certainly, I have the money already laid in the stocking for you. Here is the £500,000."

I submit that the people outside must be growing tired of all this pretence. They must be growing tired of the pretence of hon. and right hon. Members opposite that they are here representing the people. They are representing the vested interests in this country, and so long as I remain a member of this House and they are in power, I am going to protest in the name of the people whom I represent against those things. Reference has been made to the condition of the country, and from the benches below the Gangway on the other side many Government supporters have spoken about Members on these benches advocating not taxation of land, not concessions to landlords, but nationalisation. The right hon. Member for Carnarvon Boroughs was asked, was that the alternative which he had to offer to the giving of relief to agriculture along the lines submitted by the Chancellor of the Exchequer. I want to tell you frankly that we are not concerned with what methods are employed to get the land back to the people of this country, to get it out of the hands of those who are using the land not in the interests of the people, and not for the purpose of assisting the people of this country, but for their own selfish aggrandisement and for sporting purposes.

Sporting value! What better value can you get from land than the fact that you have human beings growing on it who will be a source of revenue to the country in future? Unfortunately what hon. Members opposite are doing is that they are giving assisted passages to these people to go to Africa, Australia or Canada. They allow the land to go out of cultivation and those people to go abroad, and then they come to this House and wail pitifully that this country cannot meet foreign competition, and that it is evidently going out of the race for the markets of the world. How can you expect this country to make headway in the world when you are doing everything you can merely to assist those who are sucking like vampires the life blood of the country? How can you expect the country to progress when you are crushing it through your ignorance, your stupidity and your wrongful methods of conducting industry? You call yourselves captains of industry, but you are wrecking industry and not conducting it. If a captain of a ship put his vessel on the rocks in the way in which you are putting this country on the rocks he would be—

The CHAIRMAN

The hon. Member is going far beyond the terms of the Amendment.

Mr. MACLEAN

I am certain that they cannot get their barque back to harbour. [HON. MEMBERS: "You are on the rocks!"] A lot of you are on the rocks after Ascot. I submit that this Amendment is simply mocking the people outside. It is mocking those who are looking for work and who are anxious to work. Go to any place which advertises a situation for only one man or woman, and you will see long queues of people waiting from an early hour to interview those who are responsible for giving the situation, wanting work while you are draining this country and doing everything you can by your stupidity and ignorance of what is good for the country to ruin it. As long as I am in this House or can speak on a platform outside, I will direct the attention of the people to this. You can call it agitation or Bolshevism, or anything you like, but I will do everything I can to arouse the passions of the people of the country outside, as well as their intelligence, to take you people down from the position which you occupy to-day.

Mr. WALLHEAD

It appears to me that the landlords are about the only people who can get any substantial relief from taxation, and they are the last people who ought to get it, because if there is one class more than another that has failed in its duty it is the landlord class. They are the people who have had the control of agriculture from time immemorial. It has been their boast that they have neglected merchanting and manufacturing because of their interest in agriculture, and at the end of their custodianship, after centuries, agriculture is becoming worse year by year, the agricultural population is dwindling, returns from the land are dwindling, and we are feeding far fewer people per acre than any other country in the world. On a previous occasion a tax was put on the landlords of the country by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George). He imposed a halfpenny land tax. Afterwards he took it off. The right hon. Gentleman has complained this afternoon about this remission, but he gave one himself. Then we saw the spectacle of the aristocracy of this country standing like beggars in the gate, holding out their hats and begging for the return of the halfpennies that they had paid the previous year. I agree with the last speaker. This remission is a disgrace, in view of the condition of the masses of the people. We have stood here pleading for some consideration for the poverty-stricken masses, who can get little or no relief. We have pleaded for remissions of the Sugar Duty, and other taxes on food, but the Chancellor of the Exchequer has talked about broadening the basis of taxation. Here he narrows it. He broadens it at one end and narrows it at the other. He broadens it for the workers and contracts it for the landlords.

The landlords have cursed this country in more ways than one. It is their policy that is responsible for our slums. It is their grab and greed that are responsible for the appalling condition of our towns. It is the landlord class that has cursed the mining industry with the exaction of royalties. If there had been some remission of the charges on mining, that would have helped the mining industry. Wherever the landlord class gets its hand on a thing it keeps it there. We intend to expose this policy as far as we can. While we have more than a million unemployed, and the number is being added to day by day, while land is derelict and there is no work for the unemployed on it, while reclamation and other schemes in connection with the land are held up, the landlords, thrice damned, are the people to whom the Chancellor of the Exchequer offers remission of taxation. If the Committee were wise it would throw this Clause back at the Chancellor of the Exchequer, and would insist that the landlord class should pay its fair share of taxation in the way it has not done hitherto. It is all very well for hon. Members to talk of what the landlord loses on agricultural land. What about the increased value of urban land?

The CHAIRMAN

The Clause deals only with Death Duties on agricultural land.

Mr. WALLHEAD

There is no need to take the charge off agricultural land, because the landlord as a rule has recouped himself from the town values which have been created without any effort on his part. There was an announcement in the Press that the town of Bootle, which was bought a few years ago by the Earl of Derby for £30,000, is now worth millions. There is an estate here in London—

The CHAIRMAN

Such cases are not affected by this Amendment. The case might be appropriate on the Second or Third Reading.

Mr. WALLHEAD

I will conclude by saying that I will assist the hon. Member for Govan (Mr. N. Maclean) in exposing this rank class legislation in the interests of the rich, Park Lane legislation, as against the slums and back alleys of our towns.

Mr. HARDIE

I am glad to see that the Chancellor of the Exchequer is present and in his full pontificals. When discussing the question of the landowner, we are apt to forget all that has been done for him. The one thing that I do not like about the Chancellor of the Exchequer is that, while he made a great flare about his Budget, he waited until the small hours of one morning in order to push into next day's business this inoffensive-looking Clause, which is designed to hand back something to his friends the landlords. Turning to the past, we find that a reduction was made in agricultural rates in 1923, and, in addition, in 1923–24, the grants from the Treasury amounted to £4,725,230. If it be true that land will secure a Higher rent because of this relief, then we may say that the grant of more than £4,000,000 in 1923–24 was a present of no less than £60,000,000 on capitalisation. Here is where we have to get right down to understanding what is meant by this innocent-looking Clause, especially in these days, when we have to listen to speech after speech as to what might be done to relieve industry If you want to relieve industry you have to begin at the base of industry, and the base of all industry is land. If you begin by giving relief to that which is the base, you are bound to increase the difficulties from which we are suffering at the present time. Mr. F. D. Acland, who was formerly a Member of this House, said in a speech on the Agricultural Rents Bill in 1923: I have never disguised the fact that I was going to support this Bill, partly because I was a landowner. I think that a great deal of the benefit will go immediately to the tenant, and ultimately will pass to the landlord."—[OFFICIAL REPORT, 11th July, 1923; col. 1522, Vol. 166.] He was quite certain that while you may at the beginning give some small concession to a tenant, that concession ultimately passes to the landlord. We know that from sad experience. Side by side with the gifts from the Treasury there is the constant increase in the value of agricultural land because of transport developments, just as in cities land values are increased because of improvements made by the citizens' money. The taxation of motors and the maintenance of roads tend to increase the value of the land, and all this added value is giving increased power to the landlord, and inducing him to demand higher prices. Let me cite the case of the Holywell Rural District Council. It is not an exaggerated case, but a fair example. The Chairman of the Housing Committee, Mr. John Petrie, stated that in his area they had been asked to pay £150 for two acres and over £600 for one acre of land, and other landowners had refused to sell at all.

The CHAIRMAN

This Clause deals only with agricultural land.

Mr. HARDIE

It was agricultural land that these people wanted to propose for building purposes.

The CHAIRMAN

If the land has more than agricultural value, it does not come within the scope of the Clause.

Mr. HARDIE

We know that the Chancellor of the Exchequer, when he spoke on this subject, but not as a member of the Tory party, advocated the very reverse of what he is trying to do now. The Tory party promised to do something for industry. It is allowing a Chancellor of the Exchequer who has just come into the party to start on the course of giving advantages to men who have never by their own effort created any of the value that they enjoy. While we have the unemployed man in the street, While hon. Members opposite claim to have the votes of working men, while they talk glibly on platforms of what they are going to do, and while they come here and joke during the day in order to push serious business on to the small hours of the night, we shall take care that the country realises the fraud the party has proved, because, while it has done nothing for the unemployed, it has put more into the hands of the landlord.

8.0 P.M.

Mr. LANSBURY

I do not intend to keep hon. Members who are waiting for their dinner very many minutes, but I think it desirable to say something on this surrender to the land-lords and to congratulate the right hon. baronet the Member for Wells (Sir E. Sanders) on his success in wheedling this concession out of the Chancellor and the Government. I do not think a real old-fashioned Tory Chancellor would have conceded it quite as easily as the right hon. Gentleman has done, but, as has been said many times, the right hon. Gentleman has to justify his position, and the pervert is always more zealous than one who has been a long time working for a particular cause. Although it is said this particular concession is a very little one, yet when we have asked for anything, whether large or small, we have always been told that the Budget is so nicely balanced that it must be taken as a whole and that no part of it must be altered. What the right hon. Gentleman and the Government are doing here is assisting those whose ancestors have been rooted on the necks of the British people for centuries, while they are neglecting a class of people on whom this £500,000 ought to be spent if the Government have it to spend. I refer to the people who die leaving very small properties, perhaps of £200 or £300. It is not a matter of the duty which they have to pay, but of the trouble and difficulty which they experience in putting through the necessary papers. There are thousands of poor people left with very small amounts who have this difficulty.

Mr. CHURCHILL

How much have they to pay?

Mr. LANSBURY

It is not a matter of how much they have to pay. Let the right hon. Gentleman go and live in Epping Town which he represents and he will have a continual stream of people—at any rate, one or two every month—asking him to help in filling up papers and going through all the formalities of making returns necessary in connection with this small amount of duty. I admit it is small.

Mr. CHURCHILL

One per cent.

Mr. LANSBURY

If it is £1 out of £100 that is just as bad as £10 taken from a person who is getting £1,000. There are some people to whom £1,000 does not mean as much as £1 means to a poor widow. That is a point easily realised by anyone who has any relationship with poor people. I am against this proposal because it is another triumph for the Tory and Liberal landlords in this country, the worst vested interest—the most ancient anyhow—in the country. Where are you going to draw the line between agricultural land and land for building purposes? This point also can be demonstrated in the right hon. Gentleman's own constituency. On the new Southend road there has been a huge expenditure of public money, and I question if anyone in this Committee or any land valuer could assess the land values that have been created there or put a value on that land at the present moment. A man may die and leave a considerable quantity of land which in the ensuing year would appreciate in value in the same manner and yet the duties would only be paid on the agricultural value. No one would be able to say beforehand that a road of this kind was going to be built and it would not be treated as anything other than agricultural land.

I have in mind a landlord in the East End of London who paid Death Duties on a certain piece of land on the amount of £2,500. A little while later the land was wanted for building purposes and he asked the local authorities £6,500 for that piece of land. I think that is downright swindling and a robbery of the public. If any of us were to carry out such practices in private life we should be considered as thieves. I call that blackmailing the population, and I told the gentleman concerned, in writing, exactly what I thought of him. I never go behind people's backs to say what I think of them. I do not see that in this proposal you are going to obviate that kind of thing. In these days agricultural values change into urban values very rapidly and without any effort on the part of the landlord. Someone may build a factory just after the death of a landlord or something of that nature may happen, and it may be that in the course of a year the people who have inherited land will have got out of even the paltry responsibility which they now have to bear. I think this is another proof that no matter who the workers send here the classes are able to hold their power over us. Here we have a handful of men representative of a small but very powerful community in our midst, and they are able, not by numbers, to gain

this concession. I believe that hon. Members opposite who represent industrial areas do not in their hearts agree with this proposal, but so powerful is the landed interest that it is able to take the Government by the throat and shake this concession out of them. This is another instance of helping to make England: a paradise for the rich, a hell for the poor, a quotation which the right hon. Gentleman will, no doubt, remember.

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

The Committee divided: Ayes, 256; Noes, 158.

Division No. 165.]	AYES.	[8.8 p.m.
Acland-Troyte, Lieut.-Colonel	Cope, Major William	Harrison, G. J. C.
Agg-Gardner, Rt. Hon. Sir James T.	Couper, J. B.	Hartington, Marquess of
Ainsworth, Major Charles	Courtauld, Major J. S.	Haslam, Henry C.
Alexander, Sir Wm. (Glasgow, Cent'l)	Courthope, Lieut.-Col. Sir George L.	Hawke, John Anthony
Allen, J. Sandeman (L'pool, W. Derby)	Cowan, Sir Wm. Henry (Islington, N.)	Headlam, Lieut.-Colonel C. M.
Applin, Colonel R. V. K.	Craig, Ernest (Chester, Crewe)	Henderson, Capt. R. R. (Oxf'd, Henley)
Ashley, Lt.-Col. Rt. Hon. Wilfrid W.	Craik, Rt. Hon. Sir Henry	Henderson, Lieut.-Col. V. L. (Bootle)
Ashmead-Bartlett, E.	Crookshank, Cpt. H.(Lindsey, Gainsbro)	Heneage, Lieut.-Col. Arthur P.
Atkinson, C.	Cunliffe, Joseph Herbert	Henn, Sir Sydney H.
Balfour, George (Hampstead)	Curtis-Bennett, Sir Henry	Hennessy, Major J. R. G.
Barnett, Major Sir Richard	Curzon, Captain Viscount	Herbert, Dennis (Hertford, Watford)
Barnston, Major Sir Harry	Dalkeith, Earl of	Herbert, S.(York, N. R., Scar. & Wh'by)
Bellairs, Commander Carlyon W.	Dalziel, Sir Davison	Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.
Benn, Sir A. S. (Plymouth, Drake)	Davidson, Major-General Sir John H.	Hogg, Rt. Hon. Sir D.(St. Marylebone)
Bennett, A. J.	Davies, A. V. (Lancaster, Royton)	Holbrook, Sir Arthur Richard
Berry, Sir George	Davies, Sir Thomas (Cirencester)	Hope, Capt. A. O. J. (Warw'k, Nun.)
Betterton, Henry B.	Dean, Arthur Wellesley	Hope, Sir Harry (Forfar)
Birchall, Major J. Dearman	Dixey, A. C.	Hopkins, J. W. W.
Bird, E. R. (Yorks, W. R., Skipton)	Drewe, C.	Hopkinson, A. (Lancaster, Mossley)
Bird, Sir R. B. (Wolverhampton, W.)	Eden, Captain Anthony	Howard, Captain Hon. Donald
Blades, Sir George Rowland	Edmondson, Major A. J.	Hudson, Capt. A. U. M. (Hackney, N.)
Boothby, R. J. G.	Elliot, Captain Walter E.	Hume, Sir G. H.
Bourne, Captain Robert Croft	Ellis, R. G.	Huntingfield, Lord
Brass, Captain W.	Elveden, Viscount	Hurst, Gerald B.
Brassey, Sir Leonard	England, Colonel A.	Hutchison, G. A. Clark (Midl'n & P'bl's)
Bridgeman, Rt. Hon. William Clive	Erskine, Lord (Somerset, Weston-s-M.)	Iliffe, Sir Edward M.
Briscoe, Richard George	Everard, W. Lindsay	Inskip, Sir Thomas Walker H.
Brittain, Sir Harry	Falle, Sir Bertram G.	Jackson, Lieut.-Colonel Hon. F. S.
Brocklebank, C. E. R.	Fanshawe, Commander G. D.	Jacob, A. E.
Brown, Brig.-Gen. H. C. (Berks, Newb'y)	Fermoy, Lord	Jones, G. W. H. (Stoke Newington)
Buckingham, Sir H.	Fielden, E. B.	Kennedy, A. R. (Preston).
Bull, Rt. Hon. Sir William James	Finburgh, S.	Kidd, J. (Linlithgow)
Bullock, Captain M.	Fleming, D. P.	Kindersley, Major Guy M.
Burman, J. B.	Ford, P. J.	King, Captain Henry Douglas
Butler, Sir Geoffrey	Foxcroft, Captain C. T.	Lamb, J. Q.
Cadogan, Major Hon. Edward	Fraser, Captain Ian	Lister, Cunliffe-, Rt. Hon. Sir Philip
Campbell, E. T.	Fremantle, Lt.-Col. Francis E.	Little, Dr. E. Graham
Cassels, J. D.	Galbraith, J. F. W.	Lloyd, Cyril E. (Dudley)
Cautley, Sir Henry S.	Ganzoni, Sir John	Locker-Lampson, G. (Wood Green)
Cayzer, Sir C. (Chester, City)	Gee, Captain R.	Loder, J. de V.
Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.)	Gilmour, Lt.-Col. Rt. Hon. Sir John	Lumley, L. R.
Cecil, Rt. Hon. Lord H. (Ox. Univ.)	Glyn, Major R. G. C.	Lynn, Sir Robert J.
Chadwick, Sir Robert Burton	Goff, Sir Park	Macdonald, Capt. P. D. (I. of W.)
Chapman, Sir S.	Gower, Sir Robert	McDonnell, Colonel Hon. Angus
Charteris, Brigadier-General J.	Grace, John	Macintyre, Ian
Chilcott, Sir Warden	Greene, W. P. Crawford	Macmillan, Captain H.
Christie, J. A.	Gretton, Colonel John	Macnaghten, Hon. Sir Malcolm
Churchill, Rt. Hon. Winston Spencer	Grotrian, H. Brent	MacRobert, Alexander M.
Clarry, Reginald George	Guest, Capt. Rt. Hon. F. E. (Bristol, N.)	Makins, Brigadier-General E.
Clayton, G. C.	Guinness, Rt. Hon. Walter E.	Manningham-Buller, Sir Mervyn
Cobb, Sir Cyril	Gunston, Captain D. W.	Margesson, Capt. D.
Cochrane, Commander Hon. A. D.	Hacking, Captain Douglas H.	Marriott, Sir J. A. R.
Colfox, Major Wm. Phillips	Hammersley, S. S.	Merriman, F. B.
Conway, Sir W. Martin	Hanbury, C.	Meyer, Sir Frank
Cooper, A. Duff	Harland, A.	Milne, J. S. Wardlaw-
Mitchell, Sir W. Lane (Streatham)	Rentoul, G. S.	Thomson, F. C. (Aberdeen, South)
Moles, Thomas	Rhys, Hon. C. A. U.	Thomson, Sir W. Mitchell-(Croyeton, S.)
Moore-Brabazon, Lieut.-Col. J. T. C.	Roberts, Samuel (Hereford, Hereford)	Tinne, J. A.
Moreing, Captain A. H.	Russell, Alexander West (Tynemouth)	Turton, Edmund Russborough
Morrison, H. (Wilts, Salisbury)	Salmon, Major I.	Vaughan-Morgan, Col. K. P.
Morrison-Bell, Sir Arthur Clive	Samuel, A. M. (Surrey, Farnham)	Waddington, R.
Murchison C. K.	Samuel, Samuel (W'dsworth, Putney)	Ward, Lt.-Col. A. L.(Kingston-on-Hull)
Nail Lieut.-Colonel Sir Joseph	Sandeman, A. Stewart	Warner, Brigadier-General W. W.
Nelson Sir Frank	Sanders, Sir Robert A.	Waterhouse, Captain Charles
Neville, R. J.	Sandon, Lord	Watson, Sir F. (Pudsey and Otley)
Newman, Sir R. H. S. D. L. (Exeter)	Sassoon, Sir Philip Albert Gustave D.	Watts, Dr. T.
Newton, Sir D. G. C. (Cambridge)	Shaw, Lt.-Col. A. D. Mcl. (Renfrew, W)	Wells, S. R.
Nicholson, O. (Westminster)	Shaw, Capt. W. W. (Wilts, Westb'y)	Williams, Com. C. (Devon, Torquay)
Nicholson, Col. Rt. Hn. W. G.(Ptrsf'ld.)	Shepperson, E. W.	Williams, Herbert G. (Reading)
Nield, Rt. Hon. Sir Herbert	Simms, Dr. John M. (Co. Down)	Wilson, Sir C. H. (Leeds, Central)
Oakley, T.	Skelton, A. N.	Wilson, R. R. (Stafford, Lichfield)
Oman, Sir Charles William C.	Slaney, Major P. Kenyon	Windsor-Clive, Lieut.-Colonel George
Penny, Frederick George	Smith, R. W. (Aberd'n & Kinc'dine, C.)	Winterton, Rt. Hon. Earl
Percy, Lord Eustace (Hastings)	Smith-Carington, Neville W.	Wise, Sir Fredric
Peto, Basil E. (Devon, Barnstaple)	Somerville, A. A. (Windsor)	Womersley, W. J.
Peto, G. (Somerset, Frome)	Sprot, Sir Alexander	Wood, B. C. (Somerset, Bridgwater)
Pielou, D. P.	Stanley, Col. Hon. G. F.(Will'sden, E.)	Wood, Rt. Hon. E. (York, W. R., Ripon)
Pilditch, Sir Philip	Stanley, Lord (Fylde)	Wood, E. (Chest'r, Stalyb'ge & Hyde)
Pownall, Lieut.-Colonel Assheton	Stanley, Hon. O. F. G.(Westm'eland)	Wood, Sir Kingsley (Woolwich, W.).
Radford, E. A.	Storry Deans, R.	Wood, Sir S. Hill- (High Peak)
Ramsden, E.	Stott, Lieut.-Colonel W. H.	Woodcock, Colonel H. C.
Rawlinson, Rt. Hon. John Fredk. Peel	Stuart, Hon. J. (Moray and Nairn)	Worthington-Evans, Rt. Hon. Sir L.
Rawson, Alfred Cooper	Styles, Captain H. Walter
Rees, Sir Beddoe	Sueter, Rear-Admiral Murray Fraser	TELLERS FOR THE AYES.—
Reid, Capt. A. S. C. (Warrington)	Sugden, Sir Wilfrid	Commander B. Eyres Monsell and
Reid, D. D. (County Down)	Tasker, Major R. Inigo	Colonel Gibbs.
Remer, J. R.	Thompson, Luke (Sunderland)
NOES.
Adamson, Rt. Hon. W. (Fife, West)	Groves, T.	Owen, Major G.
Adamson, W. M. (Staff., Cannock)	Grundy, T. W.	Palin, John Henry
Alexander, A. V. (Sheffield, Hillsbro')	Guest, J. (York, Hemsworth)	Paling, W.
Amman, Charles George	Guest, Dr. L. Haden (Southwark, N.)	Pethick-Lawrence, F. W.
Attlee, Clement Richard	Hall, F. (York, W. R., Normanton)	Ponsonby, Arthur
Baker, J. (Wolverhampton, Bliston)	Hall, G. H. (Merthyr Tydvil)	Potts, John S.
Baker, Walter	Hamilton, Sir R. (Orkney & Shetland)	Richardson, R. (Houghton-le-Spring)
Barker, G. (Monmouth, Abertillery)	Hardie, George D.	Riley, Ben
Barr, J.	Harris, Percy A.	Ritson, J.
Batey, Joseph	Hartshorn, Rt. Hon. Vernon	Robertson, J. (Lanark, Bothwell)
Beckett, John (Gateshead)	Hastings, Sir Patrick	Robinson, W. C. (Yorks, W. R., Elland)
Benn, Captain Wedgwood (Leith)	Hayday, Arthur	Rose, Frank H.
Bowerman, Rt. Hon. Charles W.	Hayes, John Henry	Saklatvala, Shapurji
Briant, Frank	Henderson, Rt. Hon. A. (Burnley)	Salter, Dr. Alfred
Broad, F. A.	Henderson, T. (Glasgow)	Scrymgeour, E.
Bromfield, William	Hirst, G. H.	Scum, John
Bromley, J.	Hirst, W. (Bradford, South)	Sexton, James
Buchanan, G.	Hudson, J. H. (Huddersfield)	Shiels, Dr. Drummond
Cape, Thomas	Hutchison, Sir Robert (Montrose)	Short, Alfred (Wednesbury)
Charleton, H. C.	John, William (Rhondda, West)	Sinclair, Major Sir A. (Caithness)
Clowes, S.	Johnston, Thomas (Dundee)	Sitch, Charles H.
Cluse, W. S.	Jones, Henry Haydn (Merioneth)	Slesser, Sir Henry H.
Clynes, Rt. Hon. John R.	Jones, J. J. (West Ham, Slivertown)	Smillie, Robert
Collins, Sir Godfrey (Greenock)	Jones, Morgan (Caerphilly)	Smith, Ben (Bermondsey, Rotherhithe)
Compton, Joseph	Jones, T. I. Mardy (Pontypridd)	Smith, H. B. Lees (Keighley)
Connolly, M.	Kelly, W. T.	Smith, Rennie (Penistone)
Cowan, D. M. (Scottish Universities)	Kennedy, T.	Snell, Harry
Crawfurd, H. E.	Kenyon, Barnet	Snowden, Rt. Hon. Philip
Dalton, Hugh	Kirkwood, D.	Spencer, George A. (Broxtowe)
Davies, Rhys John (Westhoughton)	Lansbury, George	Stamford, T. W.
Day, Colonel Harry	Lawson, John James	Stephen, Campbell
Duckworth, John	Lindley, F. W.	Sutton, J. E.
Duncan, C.	Livingstone, A. M.	Thomas, Rt. Hon. James H. (Derby)
Dunnico, H.	Lowth, T.	Thomson, Trevelyan (Middlesbro. W)
Edwards, C. (Monmouth, Bedwellty)	Lunn, William	Thorne, G. R. (Wolverhampton, E.)
Edwards, John H. (Accrington)	MacDonald, Rt. Hon. J. R.(Aberavon)	Thorne, W. (West Ham, Plaistow)
Evans, Capt. Ernest (Welsh Univer.)	Mackinder, W.	Thurtle, E.
Fenby, T. D.	MacLaren, Andrew	Tinker, John Joseph
Forrest, W.	Maclean, Nell (Glasgow, Govan)	Trevelyan, Rt. Hon. C. P.
George, Rt. Hon. David Lloyd	March, S.	Varley, Frank B.
Gibbins, Joseph	Maxton, James	Viant, S. P.
Gillett, George M.	Mitchell, E. Rosslyn (Paisley)	Wallhead, Richard C.
Gosling, Harry	Mond, Rt. Hon. Sir Alfred	Walsh, Rt. Hon. Stephen
Graham, D. M. (Lanark, Hamilton)	Montague, Frederick	Warne, G. H.
Graham, Rt. Hon. Wm. (Edin., Cent.)	Morris, R. H.	Watson, W. M. (Dnnfermline)
Greenall, T.	Morrison, R. C. (Tottenham, N.)	Watts-Morgan, Lt.-Col. D. (Rhondda)
Greenwood, A. (Nelson and Colne)	Murnin, H.	Webb, Rt. Hon. Sidney
Grenfell, D. R. (Glamorgan)	Naylor, T. E.	Wedgwood, Rt. Hon. Josiah
Griffiths, T. (Monmouth, Pontypool)	Oliver, George Harold	Welsh, J. C.

Westwood, J.	Williams, Dr. J. H. (Llanelly)	Young, Robert (Lancaster, Newton)
Wheatley, Rt. Hon. J.	Williams, T. (York, Don Valley)
Whiteley, W.	Wilson, C. H. (Sheffield, Attercliffe)	TELLERS FOR THE NOES.—
Williams, C. P. (Denbigh, Wrexham)	Wilson, R. J. (Jarrow)	Mr. Allen Parkinson and Mr. A. Barnes.
Williams, David (Swansea, East)	Windsor, Walter

The DEPUTY-CHAIRMAN (Captain FitzRoy)

The Amendment which I select is that standing in the name of the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George)—at the end of Subsection (1), to insert the words: Provided that the estate, farm, houses, farm buildings, cottages, fences, drains, and other works have been maintained according to the standard imposed by the requirements of good husbandry. I understand, however, that he does not wish to move it.

Motion made, and Question proposed, "That the Clause be added to the Bill."

Mr. N. MACLEAN

Why are you passing over the Amendment standing in my name and in that of some of my colleagues—in Sub-section (1), to leave out the words "commencement of this Act," and to insert instead thereof the words, "thirty-first day of March, nineteen hundred and thirty"?

The DEPUTY-CHAIRMAN

I did not select it.

Mr. MACLEAN

I think I am in order in saying, on the Question that the Clause be added to the Bill, what I would have said had I been able to move my Amendment. This proposal of the Government, coming as it has done at such a period, has come too suddenly upon the Government and upon this Committee for them to consider properly what ought to be done in the matter. Consequently, I put down an Amendment which had for its object the postponement of the operation of this proposal till 1930. I did so, because I was anxious that the Government should have an opportunity of studying the question in fairly decent calmness and with ample time to arrive at a conclusion as to whether or not this particular proposal would have the advantages which they have assured the Committee it was going to have. The purpose of the Clause is not to assist agriculture or any of the agricultural workers, but to assist a section of the landowning classes of this country. It is one of the purposes of this Government to give assistance only to their own particular friends. It has always been the record of a Tory Government to look after their friends well, both individually and collectively, and in this Clause they are looking after a section of their friends who are interested in holding or owning land.

I have already suggested, and I repeat the suggestion, that it would be wiser for the Government to withdraw the proposition contained in this Clause and to abandon the concession which they are intending to make. Otherwise, it is making it possible for those of us who sit on these benches to use the action of the Government as conclusive proof of the things we have said outside in the country, that this Government is not a Government of the people of Great Britain, but a class Government, representing only a class, and a very small class, and that all the legislation which they will make an effort to carry through, the legislation which they have already carried, and the legislation which they may in the future attempt to put through, is legislation of a class character, intended only to benefit those who are immediately concerned with the class which the Government represent. In everything they intend to do, these things will always be attempted to be carried through with the idea that they are assisting, not all the people, but only a section, and I submit that it is time that a number of us abandoned what seem now to be futile attempts to shape legislation in this House and to put into Bills which the Government may bring in Clauses which we think might make some amelioration possible in the lot of the people whom we mainly represent. That is now futile, and all our efforts, on these benches, at any rate, ought to be directed towards drawing the attention of the people of this country to the pretence of the Government, to the mockery of the people outside, to the helping of their own friends in all things and towards obstructing, if possible, to the last possible hour and the last minute of the last possible hour, any legislation which this class Government bring into this House.

Question put, "That the Clause be added to the Bill."

The Committee divided: Ayes, 228; Noes, 153.

Division No. 166.]	AYES.	[8.25 p.m.
Acland-Troyte, Lieut.-Colonel	Ford, P. J.	Nicholson, O. (Westminster)
Agg-Gardner, Rt. Hon. Sir James T.	Fraser, Captain Ian	Nield, Rt. Hon. Sir Herbert
Ainsworth, Major Charles	Fremantle, Lt.-Col. Francis E.	Oakley, T.
Alexander, Sir Wm. (Glasgow, Cent'l)	Galbraith, J. F. W.	O'Neill, Major Rt. Hon. Hugh
Allen, J. Sandeman (L'pool, W. Derby)	Ganzoni, Sir John	Oman, Sir Charles William C.
Applin, Colonel R. V. K.	Gee, Captain R.	Penny, Frederick George
Ashley, Lt.-Col. Rt. Hon. Wilfrid W.	Gilmour, Lt.-Col. Rt. Hon. Sir John	Percy, Lord Eustace (Hastings)
Ashmead-Bartlett, E.	Glyn, Major R. G. C.	Peto, G. (Somerset, Frome)
Atkinson, C.	Goff, Sir Park	Pleiou, D. P.
Balfour, George (Hampstead)	Gower, Sir Robert	Pilcher, G.
Barnett, Major Sir Richard	Grace, John	Pilditch, Sir Philip
Barnston, Major Sir Harry	Greene, W. P. Crawford	Pownall, Lieut.-Colonel Assheton
Benn, Sir A. S. (Plymouth, Drake)	Grotrian, H. Brent	Radford, E. A.
Berry, Sir George	Guest, Capt. Rt. Hon. F. E.(Bristol, N.)	Ramsden, E.
Betterton, Henry B.	Guinness, Rt. Hon. Walter E.	Rawlinson, Rt. Hon. John Fredk Peel
Birchall, Major J. Dearman	Gunston, Captain D. W.	Rawson, Alfred Cooper
Bird, E. R. (Yorks, W. R., Skipton)	Hacking, Captain Douglas H.	Rees, Sir Beddoe
Blades, Sir George Rowland	Hammersley, S. S.	Reid, Capt. A. S. C. (Warrington)
Boothby, R. J. G.	Hanbury, C.	Reid, D. D. (County Down)
Bourne, Captain Robert Croft	Harland, A.	Remer, J. R.
Brass, Captain W.	Harrison, G. J. C.	Rentoul, G. S.
Brassey, Sir Leonard	Hartington, Marquess of	Rhys, Hon. C. A. U.
Bridgeman, Rt. Hon. William Clive	Haslam, Henry C.	Roberts, Samuel (Hereford, Hereford)
Briscoe, Richard George	Hawke, John Anthony	Russell, Alexander West (Tynemouth)
Brittain, Sir Harry	Headlam, Lieut.-Colonel C. M.	Salmon, Major I.
Brocklebank, C. E. R.	Henderson, Capt. R. R.(Oxf'd, Henley)	Samuel, A. M. (Surrey, Farnham)
Brown, Brig.-Gen. H. C.(Berks, Newb'y)	Henderson, Lieut.-Col. V. L. (Bootle)	Samuel, Samuel (W'dsworth, Putney)
Buckingham, Sir H.	Heneage, Lieut.-Col. Arthur P.	Sandeman, A. Stewart
Bull, Rt. Hon. Sir William James	Henn, Sir Sydney H.	Sanders, Sir Robert A.
Bullock, Captain M.	Hennessy, Major J. R. G.	Sandon, Lord
Burman, J. B.	Herbert, Dennis (Hertford, Watford)	Sassoon, Sir Philip Albert Gustave D.
Butler, Sir Geoffrey	Hogg, Rt. Hon. Sir D. (St. Marylebone)	Shaw, Lt.-Col. A. D. Mcl. (Renfrew, W)
Cadogan, Major Hon. Edward	Holbrook, Sir Arthur Richard	Shaw, Capt. W. W. (Wilts, Westb'y)
Campbell, E. T.	Hope, Capt. A. O. J. (Warw'k, Nun.)	Shepperson, E. W.
Cassels, J. D.	Hopkins, J. W. W.	Simms, Dr. John M. (Co. Down)
Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.)	Howard, Captain Hon. Donald	Skelton, A. N.
Chadwick, Sir Robert Burton	Hudson, Capt. A. U. M. (Hackney, N.)	Slaney, Major P. Kenyon
Chapman, Sir S.	Hume, Sir G. H.	Smith, R. W. (Aberd'n & Kinc'dine, C.)
Charteris, Brigadier-General J.	Huntingfield, Lord	Smith-Carington, Neville W.
Chilcott, Sir Warden	Hurst, Gerald B.	Somerville, A. A. (Windsor)
Christie, J. A.	Iliffe, Sir Edward M.	Sprot, Sir Alexander
Churchill, Rt. Hon. Winston Spencer	Jacob, A. E.	Stanley, Col. Hon. G. F. (Will'sden, E.)
Clarry, Reginald George	Kennedy, A. R. (Preston)	Stanley, Hon. O. F. G.(Westm'eland)
Clayton, G. C.	Kidd, J. (Linlithgow)	Storry Deans, R.
Cobb, Sir Cyril	Kindersley, Major Guy M.	Stott, Lieut.-Colonel W. H.
Cochrane, Commander Hon. A. D.	King, Captain Henry Douglas	Stuart, Hon. J. (Moray and Nairn)
Colfox, Major Wm. Phillips	Lamb, J. Q.	Styles, Captain H. Walter
Cope, Major William	Lister, Cunliffe-, Rt. Hon. Sir Philip	Sugden, Sir Wilfrid
Couper, J. B.	Little, Dr. E. Graham	Tasker, Major R. Inigo
Courtauld, Major J. S.	Lloyd, Cyril E. (Dudley)	Thompson, Luke (Sunderland)
Courthope, Lieut.-Col. Sir George L.	Locker-Lampson, G. (Wood Green)	Thomson, F. C. (Aberdeen, South)
Cowan, Sir Wm. Henry (Islingtn. N.)	Loder, J. de V.	Thomson, Sir W. Mitchell-(Croydon, S.)
Craig, Ernest (Chester, Crewe)	Luce, Major-Gen. Sir Richard Harman	Tinne, J. A.
Crookshank, Cpt. H.(Lindsey, Gainsbro)	Lumley, L. R.	Turton, Edmund Russborough
Cunliffe, Joseph Herbert	Lynn, Sir Robert J.	Vaughan-Morgan, Col. K. P.
Curtis-Bennett, Sir Henry	Macdonald, Capt. P. D. (I. of W.)	Waddington, R.
Curzon, Captain Viscount	McDonnell, Colonel Hon. Angus	Waterhouse, Captain Charles
Dalkeith, Earl of	Macintyre, Ian	Watson, Sir F. (Pudsey and Off)
Dalziel, Sir Davison	Macmillan, Captain H.	Watts, Dr. T.
Davidson, Major-General Sir John H.	Macnaghten, Hon. Sir Malcolm	Wells, S. R.
Davies, A. V. (Lancaster, Royton)	MacRobert, Alexander M.	White, Lieut.-Colonel G. Dairymple
Davies, Sir Thomas (Cirencester)	Makins, Brigadier-General E.	Williams, Herbert G. (Reading)
Dean, Arthur Wellesley	Manningham-Buller, Sir Mervyn	Wilson, Sir C. H. (Leeds, Central)
Dixey, A. C.	Margesson, Captain D.	Wilson, R. R. (Stafford, Lichfield)
Drewe, C.	Merriman, F. B.	Windsor-Clive, Lieut.-Colonel George
Eden, Captain Anthony	Meyer, Sir Frank	Winterton, Rt. Hon. Earl
Edmondson, Major A. J.	Milne, J. S. Wardlaw-	Wise, Sir Fredric
Elliot, Captain Walter E.	Mitchell, Sir W. Lane (Streatham)	Womersley, W. J.
Ellis, R. G.	Moles, Thomas	Wood, B. C. (Somerset, Bridgwater)
Elveden, Viscount	Monsell, Eyres, Com. Rt. Hon. B. M.	Wood, Rt. Hon. E. (York, W.R., Ripon)
England, Colonel A.	Morrison, H. (Wilts, Salisbury)	Wood, E. (Chest'r, Stalyb'dge & Hyde)
Erskine, Lord (Somerset, Weston-s-M.)	Morrison-Bell, Sir Arthur Clive	Wood, Sir Kingsley (Woolwich, W.).
Everard, W. Lindsay	Murchison, C. K.	Woodcock, Colonel H. C.
Fanshawe, Commander G. D.	Nail, Lieut.-Colonel Sir Joseph	Worthington-Evans, Rt. Hon. Sir L.
Fermoy, Lord	Nelson, Sir Frank
Finburgh, S.	Newman, Sir R. H. S. D. L. (Exeter)	TELLERS FOR THE AYES.—
Fleming, D. P.	Newton, Sir D. G. C. (Cambridge)	Colonel Gibbs and Major
		Hennessy.

NOES.
Adamson, Rt. Hon. W. (Fife, West)	Ammon, Charles George	Barker, G. (Monmouth, Abertillery)
Adamson, W. M. (Staff., Cannock)	Attlee, Clement Richard	Barnes, A.
Alexander, A. V. (Sheffield, Hillsbro')	Baker, J. (Wolverhampton, Bilston)	Barr, J.

Batey, Joseph	Hastings, Sir Patrick	Saklatvala, Shapurji
Beckett, John (Gateshead)	Hayday, Arthur	Salter, Dr. Alfred
Benn, Captain Wedgwood (Leith)	Hayes, John Henry	Scrymgeour, E.
Bowerman, Rt. Hon. Charles W.	Henderson, Rt. Hon. A. (Burnley)	Scurr, John
Briant, Frank	Henderson, T. (Glasgow)	Sexton, James
Broad, F. A.	Hirst, G. H.	Shiels, Dr. Drummond
Bromfield, William	Hirst, W. (Bradford, South)	Short, Alfred (Wednesbury)
Bromley, J.	Hudson, J. H. (Huddersfield)	Sinclair, Major Sir A. (Caithness)
Buchanan, G.	Hutchison, Sir Robert (Montrose)	Sitch, Charles H.
Cape, Thomas	John, William (Rhondda, West)	Slesser, Sir Henry H.
Charleton, H. C.	Johnston, Thomas (Dundee)	Smillie, Robert
Clowes, S.	Jones, Henry Haydn (Merioneth)	Smith, Ben (Bermondsey, Rotherhithe)
Cluse, W. S.	Jones, J. J. (West Ham, Slivertown)	Smith, H. B. Lees (Keighley)
Clynes, Rt. Hon. John R.	Jones, Morgan (Caerphilly)	Smith, Rennie (Penistone)
Collins, Sir Godfrey (Greenock)	Jones, T. I. Mardy (Pontypridd)	Snell, Harry
Compton, Joseph	Kennedy, T.	Snowden, Rt. Hon. Philip
Connolly, M.	Kenyon, Barnet	Spencer, G. A. (Broxtowe)
Cowan, D. M. (Scottish Universities)	Kirkwood, D.	Stamford, T. W.
Crawfurd, H. E.	Lansbury, George	Stephen, Campbell
Dalton, Hugh	Lawson, John James	Sutton, J. E.
Davies, Sir Thomas (Cirencester)	Llndley, F. W.	Thomas, Rt. Hon. James H. (Derby)
Day, Colonel Harry	Livingstone, A. M.	Thomson, Trevelyan (Middlesbro. W.)
Duckworth, John	Lowth, T.	Thorne, G. R. (Wolverhampton, E.)
Duncan, C.	Lunn, William	Thurtle, E.
Dunnico, H.	MacDonald, Rt. Hon. J. R.(Aberavon)	Tinker, John Joseph
Edwards, C (Monmouth, Bedwellty)	Mackinder, W.	Trevelyan, Rt. Hon. C. P.
Edwards, John H. (Accrington)	MacLaren, Andrew	Varley, Frank B.
Evans, Capt. Ernest (Welsh Univer.)	Maclean, Nell (Glasgow, Govan)	Viant, S. P.
Fenby, T. D.	March, S.	Wallhead, Richard C.
Forrest, W.	Maxton, James	Walsh, Rt. Hon. Stephen
Gibbins, Joseph	Mitchell, E. Rosslyn (Paisley)	Watson, W. M. (Dunfermline)
Gillett, George M.	Montague, Frederick	Watts-Morgan, Lt.-Col. D. (Rhondda)
Gosling, Harry	Morris, R. H.	Webb, Rt. Hon. Sidney
Graham, D. M. (Lanark, Hamilton)	Morrison, R. C. (Tottenham, N.)	Wedgwood, Rt. Hon. Josiah
Graham, Rt. Hon. Wm. (Edin., Cent.)	Murnin, H.	Welsh, J. C.
Greenall, T.	Naylor, T. E.	Westwood, J.
Greenwood, A. (Nelson and Colne)	Oliver, George Harold	Wheatley, Rt. Hon. J.
Grenfell, D. R. (Glamorgan)	Owen, Major G.	Whiteley, W.
Griffiths, T. (Monmouth, Pontypool)	Palin, John Henry	Williams, C. P. (Denbigh, Wrexham)
Groves, T.	Paling, W.	Williams, David (Swansea, E.)
Grundy, T. W.	Pethick-Lawrence, F. W.	Williams, Dr. J. H. (Llanelly)
Guest, J. (York, Hemsworth)	Ponsonby, Arthur	Williams, T. (York, Don Valley)
Guest, Dr. L. Haden (Southwark, N.)	Potts, John S.	Wilson, C. H. (Sheffield, Attercliffe)
Hall, F. (York, W.R., Normanton)	Richardson, R. (Houghton-le-Spring)	Wilson, R. J. (Jarrow)
Hall, G. H. (Merthyr Tydvli)	Riley, Ben	Windsor, Walter
Hamilton, Sir R. (Orkney & Shetland)	Ritson, J.	Young, Robert (Lancaster, Newton)
Hardie, George D.	Robertson, J. (Lanark, Bothwell)
Harris, Percy A.	Robinson, W. C. (Yorks, W. R., Elland)	TELLERS FOR THE NOES.—
Hartshorn, Rt. Hon. Vernon	Rose, Frank H.	Mr. Allen Parkinson and Mr. Warne.