§ Mr. FENBY
I beg to move, at the end of the Question, to add the wordsBut deplore that the Government do not propose to bring forward measures for the relief of the burden of local rates, by which expenditure in many districts has risen to almost unbearable dimensions, and which now so impedes the revival of our industrial and agricultural prosperity; and for the reduction of rating upon improvements by placing a fair share of the burden upon the monopoly values in the urban districts which have been created by these communities.I move this Amendment on behalf of my hon. Friends whose names are attached to it, and also on behalf of the party with which I have the honour to be associated. If Members of parties on both sides of the House, whether they represent urban or rural constituencies, will look carefully at the terms of the Amendment, this proposal must command their sympathy, if not their enthusiastic support. All sections of the community are agreed that the burden of rates is affecting the individual and the community very seriously indeed. I do not care whether you consult the Federation of British Industries, the Chambers of Commerce, the Trade Union Organisations, or where you go to ask for an opinion the one invariable answer that you get is that the limit of capacity of industry and of the individual to meet the ever-growing burden of the rates has been reached. The right hon. Gentleman knows this very well; in fact, he has 450 given lip service to the necessity for reform. More than that, he made a promise, when in a previous Conservative Government he occupied the position which he occupies to-day, that this matter would be dealt with. In fact, in the King's Speech of 13th February, 1923, we find this:"The anomalies and inequalities of the present system of local taxation have long called for reform, and my Ministers are examining the whole question. It is hoped that it may be found practicable to deal with the subject on a comprehensive basis, and, in particular, to remove some of the burdens which press on the agricultural industry."—[OFFICIAL REPORT, 13th February; 1923, col. 7, Vol. 160.]When the right hon. Gentleman was moving the Second Reading of the Agricultural Rates Bill, on the 4th June, 1923, he specifically referred to that paragraph in the King's Speech in February, 1923, and there was a clear indication that while the Agricultureal Rates Bill, the Second Reading of which he was moving, was more or less of a temporary Measure and had a time limit, the King's Speech of that Parliament did definitely say that the Ministers were considering this matter and would bring forward proposals to deal with it permanently.
Not only does the right hon. Gentleman know of the problem, but he also knows that he has promised to deal with it. Instead of improving the situation, he is making it worse. A question was put yesterday to the right hon. Gentleman with regard to an Act of Parliament with which he was very intimately concerned, namely, the Rating and Valuation Act. He was asked, I believe by an hon. Member on the other side of the House, whether he was prepared to make a grant to municipal authorities towards the expenses of working the Rating and Valuation Act which he had got from this House. What did be say? He had no sympathy with the proposal at all. Yet that particular Measure is responsible for an increase in the local rates in the particular county administrative area in which I happen to reside. It is true that we can do with a good many things. We have only one school dentist for the elementary schools in a very large county administrative area. We would like two, and it is essential that we should have two; but, because of the rates, the second does not come along. There are other matters concern- 451 ing health and education with which we should like to deal, but we have to hold our hands. The Act of Parliament dealing with rating and valuation, for which the right hon. Gentleman's Government were responsible, is the only item in the Budget of that country administrative authority which increases the rates or the half year.
Let us take another Measure from the same Department, namely, the Housing (Rural Workers) Act. So far as that will do anything to improve the housing of agricultural labourers, it has my hearty support. The Government promised a certain amount, but, if the Act is to become operative, an equal amount has to be found out of the local rate. There is another burden. We have heard a great deal about what the Government are going to do with regard to land reform, and we have had speeches from the Prime Minister downwards about a new vision. We have a new Small Holdings Act on the Statute Book, and yet 25 per cent. of the annual cost of equipping small holdings is to come upon the local rates. Go where you will, the right hon. Gentleman and his Government know that there is a real need for bringing in to improve the incidence of local rating. Yet, although it was mentioned in the King's Speech in 1923 and although the right hon. Gentleman used as an argument why he was only introducing the Agricultural Rates Bill as a temporary Measure, the fact that he intended to carry out the promise of reform in the King's Speech, he is doing absolutely nothing except to make it worse by the Acts of Parliament he is bringing in placing further burdens on the rating areas.
There is general agreement all round that we have reached the limit so far as the rating capacity is concerned. I think it is necessary to draw a distinction between rates and taxes. When you come to rates, it does not matter whether you are making a profit or a loss, you have still the same amount to pay, and, what is worse still, if it be agriculture, it is not the big man who is hit the hardest but the little man. If it be a question of developing an estate for the purpose of settling little men upon the land, then we have, as I was 452 reading only the other day, cases such as that which was put in this House with regard to the evils of the present assessment and rating system, where near London 660 acres of land, assessed at about £150, had been acquired, and where, when the land had been equipped and improvements made for little men to settle upon it, the assessment was increased to something like £330. These are things of which we all know and of which the Government know, and yet they do absolutely nothing. While I want to address myself more particularly to the agricultural point, I would like the House to remember that we are not dividing the city from the country in the Amendment which we are putting forward. We know that, whether a man comes from an urban area or a rural area, he is not here representing specifically the rural or urban interests, but the general well-being and improvement of the whole of the community, whatever may be the nature of the particular class and community he represents.
When we come to an urban area, we find the same principle—that the little man is again hit the hardest in regard to rating. I believe, on very good authority, that the person with an income between £100 and £200 a year is paying something like 9.6 per cent. of his income in rates, while the man with a larger income gets off very much more easily as far as the percentage that he pays in local rates is concerned. Let us look at the total rate levied per head of population for a few years. In 1900 it was £1 6s. lid. per head of the population; in 1910 it was £1 15s. 4d.; in 1915, £1 19s. 6d.; in 1920, £2 16s. 4d.; and in 1924, £3 14s. 71d. per head of the population of this country. As I have said, there is general agreement, in the House and outside, that this is an evil that is growing, and yet nothing is being done to deal with it. I noticed that a prominent industrialist, speaking a short time ago, said that industry was burdened, if not crippled, by costs being continually added in the shape of rates over which they had no control whatever, and on the question of doing business or not, either at home or abroad, they were absolutely dependent one way or the other on whether the rates went up or down.
453 We suggest that the time has come when, if a man makes a little improvement to his property—puts in a new front door, or a new window, or perhaps gives either or both a little paint —we should get away from the present system of increasing his rates simply because he improves the property he happens to own. This principle is not new. What have the great progressive municipalities of this country done? They have passed resolutions again and again that there should be a reform in the rating system of this country by doing something to relieve improvements of increased rates, and to get on to a more equitable basis altogether. And it is not only the great municipalities. If you go to other countries, particularly the more progressive agricultural countries, what do you find? In Western Canada, in New Zealand, in Western Australia, here and there they are doing away with this evil system to which we still cling. If a man makes an improvement here, he has to pay, not only the cost of the improvement, but something more towards the local rates. Again, take the question of roads. I read in the Minister's speech what he promises to do for agriculture and the rural ratepayer. I wonder how he squares that with the action of his colleague who came over and took such a very large proportion of the Road Fund last year and put it to other purposes. That has been absolutely and directly responsible for an increase in rates.
§ Mr. FENBY
I will deal with that point later; it is a very ingenious interruption. What, however, I would like the hon. Member to deny is this, that money was taken for other purposes than the one for which it was collected, and for which it was promised it should be used. That is the point I am making, and my hon. Friend will not succeed in drawing me on to quite another subject.
§ Mr. FENBY
I will deal with that. What I want my hon. Friend to remember is that that fact alone has had a good deal to do with putting many rural areas in a very awkward position indeed. I read in the "Yorkshire Post" only yesterday the report of a meeting in one of the county administrative areas in Lincolnshire dealing with highways, and this is germane, I think, to the point I have just made with regard to the millions that have been taken from the Road Fund. With regard to road improvements which that county area wished to carry out, they went to the Ministry of Transport to see if they could get something like a generous contribution from the Ministry towards their proposals, and the report states thatSir Henry Maybury, in reply to an application for more generous treatment, said definitely that the Ministry would not be prepared to contribute more than 50 per cent., and even this amount could not be guaranteed for a period of years.That county alone is finding itself, as regards the cost of its programme of improvement of local roads, in a very awkward and serious position. To deal with another matter, I believe the Chancellor of the Exchequer answered a question yesterday as to whether, in view of the increased cost of the police in certain areas due to the unfortunate industrial trouble of last year, he would be likely to give some relief to local rates in those areas, and, as I listened to the chancellor's answer, it did not seem to me to be very warm or sympathetic towards the question. In the particular area which I have the honour to represent in this House, I find that the North Bierley Board of Guardians held a meeting this week, and the clerk stated thatIn ascertaining the amount required for the Guardians' purposes, the precepts had to be obtained as the result of the product of a penny rate, which in the Union yielded £3,329. The total estimate required for the year was £87,000, which represented a rate of 2s. 3d. in the pound, as compared with 2s, 1d. last year"—an increase of 2d. in the pound. He went on to say—and this is the point to which I want to draw the attention of the Minister, in view of the answer given by the Chancellor of the Exchequer yesterdayThe extra expenditure in out-relief consequent upon the coal dispute, etc., amounted to £34,500, which represented a rate of 10½d. in the pound, which was greater than the 455 total expenditure in connection with the Union during 1914.That is an example in my own area of how, without any control and without any help from the Government, areas such as the one which I have the honour to represent are being absolutely crippled by circumstances over which they have no control whatever, and which are really national matters. I think the time has come for the Government, knowing the facts and having made promises to deal with the subject in 1927, should, with their powerful majority, take steps to see that their promises are honoured. Then with regard to rural roads, which I think account for something like two-thirds of the total rates in rural districts, I know it is true, as suggested by my hon. Friend the Member for Devizes (Mr. Hurd), that they have set aside £1,250,000 for improvements and £1,400,000 for maintenance of such roads during this year, but what I want to stress again is that that is a very poor return indeed against the raid that was made on the Road Fund by the Chancellor of the Exchequer to which I have referred.
Coming to agriculture, we are placed in this position. I know the agriculturist, on his buildings and on his land, gets a considerable measure of relief. I do not want in any way to hide that fact. But what is the position now? A farmer from the North who was in the precincts of the House last night said that so great was the burden, even under these conditions, that the rates he pays on his cultivated land are something like 5s. per acre. Here, again, the very serious fact that rating authorities are faced with is the question of railway assessments. We read, at the annual meetings, of the flourishing financial position of the railway companies. They have up to now contributed a very large amount to the local rates, in the aggregate something like £7,500,000 year. But here again this farmer, with part of his land in one parish and part in another, finds a difference of 4d. a £ in the rating. He has been endeavouring to find out the reason, and he is told that in the parish in which it is 4d. more than the other, it is because there is no railway running through it. When you come to consider all these things, and the point of view of the 456 urban ratepayer and that of the rural ratepayer, I hope the Minister will give a very definite promise to bring in legislation to deal with this very pressing evil. It does not matter what industry you dead with, whether shipbuilding, agriculture, cotton or wool, there is a unanimous demand for a reduction in the rates. The Government have every opportunity of dealing with the matter.
I will not say I have much hope that the Government will very warmly welcome this reform, but I notice that they are taking a hint now and again from the party with which I am associated, and which I do not intend to leave. It may be suggested that we are small and insignificant, but it is rather significant, when dealing with the leasehold system, that this is the corner to which the Government look for suggestions. Theirs is a very half-hearted, puny Measure, but they are making a move in that direction. It is the little man who usually does the most improvement, and it is the little man who is continually penalised. The Government will be driven by force of circumstances to come to this quarter and take another leaf out of the programme of the Liberal party. We who live in the rural areas have to pay our share of rates and taxes. We have none of the great advantages you find in urban aeas even with regard to lighting, and sometimes even with regard to water. We pay an undue share to the rates for what are purely national services which ought to be a national charge. When it comes to a great matter like the Electricity Act, not a single member of the newly, appointed Board has any specific relation or interest in the rural side of the development of electricity. Yet if there is any charge upon the Exchequer, as undoubtedly there will be, for the operation of the Electricity Act, the rural ratepayer will have to pay his share. He is prepared to pay a fair and just share, but he is concerned that he should not be neglected as he has been hitherto. Not a single man can be said to claim a special knowledge and to be an actual' representative of he rural interest, vet it is time in view of the taxation that rural areas pay, that they had light and power provided for their farms. More than that, something should be done for the application of electricity to the improvement of costs.
§ Mr. GEORGE THORNE
I beg to second the Amendment.
My hon. Friend has spoken so fully and so effectively on the whole subject that I do not desire to repeat what he has said. My remarks will be very few, but I desire most earnestly to stress the terms of our Amendment as to the expenditure in many districts having risen to almost unbearable dimensions, and now impeding seriously the revival of our industrial and agricultural prosperity. There cannot be any real issue as to the facts. The burden is great and increasing. The whole country, and particularly great industrial areas, one of which I represent, have in recent years and months suffered a series of shocks. What the locust of the Great War has left, the canker worm of unemployment has eaten, and what the canker worm of unemployment has left, the caterpillar of the miners' lock-out has eaten. I want to point out—and this is the object of the illustration—that we are burdened with successive and continually increasing burdens which are utterly beyond the powers of our localities to meet, and that in some way or other, if our localities are to progress, and if our industry is to improve, something must be done. Therefore, we not only stress the facts but we deplore the further fact that the Government in the third year of this Parliament have not foreshadowed any definite means of dealing with so important a subject. I know that some of my friends never expected that this Government would deal with the subject, but I have had hopes—if the Minister of Health will forgive me for saying so—because of the personality of the Minister of Health and because his municipal activities have not only extorted the admiration of his own fellow citizens but also those of near neighbours, of which I claim to be one. We have, therefore, naturally looked to him as the exponent of the Government to face the problems under which our municipalities are suffering very severely. In the early part of this week we all joined most gladly in congratulating the right hon. Gentleman and his brother on the unveiling of the statue of his distinguished father. By this Amendment we are giving the right hon. Gentleman an opportunity to unveil himself.
458 So far as the Government proposals in this behalf are concerned, we are in an impenetrable mist. I have come up from the country this morning through a rather severe fog, but the fog in the country is nothing compared with the fog which enshrouds the Government in regard to this matter. While deploring the failure of the Government, I am still hoping. I want something to be done for our country, and it does not matter very much by what party it is done, so long as it is done. I, like my hon. Friend the Member for East Bradford (Mr. Fenby), am not going to leave the party to which I belong, but a party is a means to an end, and if the Government now in power will do the work that we want done, I will most heartily cooperate with them, as I have done on other occasions, in getting things done. It is a sad thing that in the third year of this Parliament we have no practical proposal for meeting what the right hon. Gentleman must realise is a great anxiety and burden.
The increase of Poor Law burdens is such that unless some relief can be granted the effect upon our localities will be grievous indeed, and it surprises me that under these circumstances with all the responsibility resting upon the Government, the only practical proposals that have been thrown out to the country come from the two Opposition parties, and not from the Government. Surely, the Government have a responsibility on their shoulders, and they ought to disclose what they are prepared to do. We have indicated what we think ought to be done by different Government Departments. We have had the pluck to do it and have run risk in doing it. Why have not the Government done something? In some way or another, and especially this year, they ought to have done so in the interests of the country. We want to see as far as it is possible by a proper taxation of site values, relief of the improvements which have been put upon the land. We want to see our municipalities have greatly enlarged powers over and above those they possess at the present time so that when going outside our borders, either alone or in conjunction with other municipalities, we may together improve our countryside by developing roads, avenues and other amenities, and by pro- 459 viding employment and happiness; but we want bb see that done in such a way that when the public expends its money for the welfare of the community the increased value which comes to the land as a result of it shall go to the community which produces the increased value, and not to a private individual who has done nothing to secure it.
I, for one, desire to know from the right hon. Gentleman whether in these circumstances he shares with us the views that we have expressed or, if he thinks they are mistaken, whether he has better views that he can present on behalf of the Government. So far as we have seen nothing. The only indication as affecting industry is the suggestion that we are to have same proposal affecting the rights of combination. What this country wants is a revival of trade and not a crippling of trade unions. We want something clone to give our manufacturers and merchants a chance, and we look to the Government to do it. With perfect sincerity and with an earnest desire to get our countryside and our towns relieved from their burdens, we look to the right hon. Gentleman as one specially qualified for this task. I appeal to him in the name of my party that we may hear from him whether the Government have any proposals and what those proposals are, so that we may go back to our constituents, and especially to our industrial constituents, and tell them that there is from this Government some hope of relief and betterment of the conditions of the people.
§ Mr. HERBERT WILLIAMS
About 60 years ago an American gentleman wrote a book. The surname of that gentleman is somewhat suggestive of the surname of the very distinguished right hon. Gentleman who represents Carnarvon Boroughs (Mr. Lloyd George). Because, I suppose, of the similarity of the surname, the right hon. Gentleman has always shown sympathetic interest in the proposals of Mr. Henry George. Mr. Henry George wrote a book the title of which was, if I remember aright, "Progress and Poverty." He, like many other people, had a specific that was going to solve all ills. It rather reminds one of the advertisements we see in the 460 Press just now of something which is an effective cure for influenza, and is also good for tuberculosis and cancer. From time to time, not the whole of the Liberal party, but a section of the Liberal party, and occasionally a section of the Socialist party, are brought back once again to this patent medicine which, I think, was imported, as a great many inferior patent medicines are imported, from the United States of America. Mr. Henry George called his proposal by the name of the Single Tax. He was a very optimistic person. He was going to replace all forms of taxation by one single solitary tax imposed on land values. There are now not many to do him honour. The right hon. Gentleman and any hon. and gallant Gentleman in the Potteries can always be regarded as faithful allies of Mr. Henry George.
§ Colonel WEDGWOOD
Who have both offered to debate his theories with you in your constituency in the hope that you will learn to understand.
§ Mr. WILLIAMS
I do not see any particular need on this foggy day to travel to Reading. We have an ample opportunity for debate where we are. With profound respect for our constituents, I think we have perhaps a more distinguished audience present to-day than we should get in our constitutencies.
§ Mr. WILLIAMS
I am satified that if I were honoured by a visit from my right hon. and gallant Friend he would, with his attractive personality, draw a greater audience than I should be able to draw with my humble efforts. It is curious why these two gentlemen remain faithful to the memory of this distinguished American. If this was something which had never been tried, it might be worth discussing. I have a recollection of a very keen agitation in which I took some part long before I came into this Huse, in 1909, when we discussed certain proposals not entirely dissimilar from those being placed before the House by means of this Amendment. Before you can tax these site values—and I suppose it is a tax on site values we are seeking—it is unfortunately necessary to value. I am not an expert on land valuation, but a great many people who were experts 461 spent many weary months' sitting for many weary hours on this matter discussing the problems, and in the end they produced a scheme which was so entirely unworkable that from the time it came into operation until the time when it was abandoned by its own authors four years ago it produced for more expense than revenue. I am frankly surprised that that scheme should be revived. It is not only that we lost some money, but what we have found difficult to stand has been the real detriment to housing progress in. this country which has resulted from that measure. It is common knowledge that the appalling slump which occurred in house building from 1910 to 1914 was largely caused by that measure. We know that the accumulated shortage of houses during those years was something in the neighbourhood of 200,000. If we had that number of houses it would be possible to say that the housing problem in this country, so far as mere numbers were concerned, was a solved problem. I for one hope that neither this House nor any successor of it will come back to a scheme which has proved so unsatisfactory when it has been tried.
In the days when it was first put forward by Henry George, it was put forward as the Single Tax. All other forms of taxation were to be abolished and the Land Tax was to be the sole income from taxation. The national budget was then somewhere in the neighbourhood of £60,000,000 to £70,000,000, while local rates were £30,000,000 to 40,000,000, or a total burden of rates and taxes of about £100,000,000, which was roughly equal to the total income then derived from land. To-day the total income from land in this country is probably in the neighbourhood of £130,000,000. We have fairly accurate information as to the aggregate income in respect of agricultural land, because Schedule A of the Income Tax figures furnishes us with that information. With regard to urban land values, the Income Tax figures only allow us to make a guess and that only on an assumption of what is the ratio of land values contained in the figures can we make an estimate. But as a round figure, probably 130,000,000 is not far out. Last year the taxable income of the United Kingdom in its present form was about £690,000,000. In addition, local rates are raised in England, Wales 462 and Scotland. I do not know about Northern Ireland. The figure is approximately £160,000,000. In all, therefore, there is a revenue raised on rates and taxes of about £850,000,000. Therefore, in these days we can no longer talk of this problem as the single tax because it raises so small an amount of the total burden. I personally do not think it necessary to say more in attacking the general idea than to point to the disastrous results which occurred when a scheme was started on these lines in 1909.
With regard to the incidence of local rating, the hon. Member for Wolverhampton (Mr. G. Thorne) has pointed to the very great burdens which are falling on our industries through local rates. The disadvantage of that burden is that it is an element in the cost of production. Income Tax is not so in the same sense, because it is taken out of the surplus which accrues, whereas the local rates have got to be paid in any event. Therefore local rates afflict industry to a very great extent. I frankly wish that some autocrat would come along and prevent every municipality, and indeed every Chancellor of the Exchequer from finding new sources of revenue, and thus force us to the task of affecting the economies that ought to be effected.
§ Mr. WILLIAMS
I am laying that down as a general principle. That extension would not add to the tax burden of the people of this country. Although it would be out of Order to argue what is the incidence of a carefully selected tariff, I am quite prepared to do that if occasion arises. It is a little difficult to get up-to-date statistics as to the burden of local rates, because adequate information is not available to members of the public until some considerable time after the close of the year to which the figures relate. Fortunately, now, in the Financial Statement published every year a rough estimate, presumably not very far out, is given as to the estimated revenue receivable by local authorities in the form of rates. We can in that way make an approximate estimate. We have got to bear in mind, in making comparative statements between 1913 as the last pre- 463 war year and the present time, that there has been a substantial increase in the population. My figures relate to England and Wales only. In the middle of 1913 the population of this country was just over 26,500,000. In the middle of 1926 the population of England and Wales was just under 39,250,000, so that there has been a very substantial increase in population that should be taken into account in making comparisons between the present day expenditure and pre-war expenditure.
We have also to take into account the change in the value of money. Without going into precise statistics, the thing can be put quite simply in this way: Local rates per head are to-day not quite double what they were in 1913; that is to say, the aggregate of local rates is not quite double the burden of 1913. The aggregate of taxation is, roughly, four times as great as it was in 1913. But if we deduct from taxation that part which is exclusively the War burden—the increase in the National Debt, increased provision for sinking fund, War pensions and certain other incidentals which are definitely explained as arising out of the War—the position with regard to national taxation and local taxation is, roughly, the same, namely, each of them per head is nearly double what it was in 1913. That would appear to indicate that the State has been as economical, or as extravagant, according to which way you regard it, as the local authorities.
But when you go a little further back, the picture is not quite like that. The grants which are now made by the State to the local authorities are on a very much more generous scale than in 1913. For example, nearly the whole burden of the increased pay of the police is borne by the Exchequer; practically none of it falls upon the local authorities. With regard to education, as a result of the 1918 Act, the grants in aid to the local authorities are far more generous than were the grants in 1913. Then there is the very generous assistance which local authorities now get from the Road Fund. That has been of material aid in relieving the burden of local expenditure. Roughly speaking, the assistance to local rates which is now received in the form of Exchequer contributions is not twice 464 what it was in pre-War days, but is more than three times as great. If the rate 01 contribution from the State to the local authorities was in the same proportion and on the same scale as in 1913, it would be found that local rates had gone up to a far greater extent than twice, and that national expenditure had not gone up to the same extent.
If these figures and my assumptions are correct, they would indicate that, on the part of local authorities, there has been a greater measure of extravagance than on the part of the Exchequer. I am inclined to suggest—it is not a very popular thing to do, and I am certain that some of my Town Councillors will criticise me, but one cannot help their troubles, and one must speak what one believes to be true—that municipalities are not exercising that care in the expenditure of public money that they ought to exercise. There has grown up a feeling that when you want more money for some service the thing to do is to go to the Exchequer and try to extract the money from them, and to earn local popularity by explaining to the people the great improvement you are making in some local service and to throw the responsibility of finding the money on the Exchequer. I hold that that is all wrong. More and more we want to ensure in national and local finance that all elected persons have an increased responsibility for what is done. We are very much too inclined in our speeches here and outside to advocate fine things, without drawing sufficient attention to the burden they involve and to the fact that the people will have to pay.
I wish that many of the local authorities, not only the municipal authorities, but the poor law anthorities, would be much more careful in their expenditure. We all must know that certain poor law authorities have indulged in the grossest extravagance in recent years. They have used the fact that trade has been bad and unemployment great to build up a system of relief which has demoralised the people themselves, and that, instead of relieving unemployment, has frequently aggravated it. I had an interesting experience the other day. I was asked to visit a certain part of West Ham by a friend for the purpose of inspecting certain transport difficulties which it is hoped to overcome by a 465 grant from the Road Fund. I took the opportunity of asking how they were getting on under the new Board of Guardians. They said, "It is doing very well. One curious thing is that there is no popular indignation against the very substantial cuts that are being made. We have noticed a very curious thing. We employ a great many girls in our factories, and these girls recently have been coming to us and asking Can you possibly find a job for father?' The reason they have been asking that is, that under the old administration father was getting relief from the guardians despite the fact that a substantial number of members of his family were at work and a substantial income was coming into the house. When account of that was taken by the new board and father's allowance for the pleasant things of life came to an end, and father desired assistance from his children, the children decided to go to their employers and to ascertain whether their employers could find father a job."
That seems to indicate that people are just as human in West Ham as anywhere else. There is amongst all of us a desire, which most of us suceed in beating down, to live a life of comfortable ease without working. I am certain that that is a bad way and that we are all happier when we are at work. We know perfectly well that the great mass of those who have been out of work in recent years have been out of work very much against their will. But if a man has found a difficulty in getting work and then things have been made too easy for him, the period of demoralisation has set in. Many of the difficulties of local authorities arise from the fact that this demoralisation has been spread and that money has been poured out without justification. Now we have a proposal which will make it easier for some of these bodies to go on, a proposal which will quite clearly limit the revenue of the Exchequer, because in the long run the income which would be available for national taxation will be diminished by the effect of this new taxation.
§ Major CRAWFURD
Will the hon. Gentleman explain how the proposal now before the House will do that?
§ Mr. WILLIAMS
Certainly. If you impose a site value tax, which is a capital tax, the people concerned will draw upon their capital resources to meet it; their earning power will tend to diminish, therefore the amount of income they will possess will be reduced, and the yield of all taxes dependent upon income, which mainly go into the Exchequer, will in the long run be reduced. Quite clearly any form of taxation of that kind will transfer revenue from the State to the local authority. How much that will be it is impossible to calculate.
§ Mr. WILLIAMS
All it will do in that particular direction, but it is by no means all. Some of the other things that it will do I indicated earlier. You would aggravate the housing problem, hold up every kind of development, and you would make people feel that if they undertook any enterprise, someone would come along and demand a share of the proceeds. You would restrict enterprise and development. For these reasons I hope that the House will reject the Amendment.
§ Mr. T. GRIFFITHS
I wish to support the Amendment. I do not want to follow the argument of the last speaker because, probably, one of my hon. Friends will deal later with the question of land values. The Mover of the Amendment has pointed out that hon. Members, both on this side and on the other side of the House, are in agreement that something should be done to deal with the burning question of local rates. Not only are Members on both sides of the House in agreement on this point, but if the Minister of Health follows the resolutions which are being passed by county councils, urban district councils, town councils, boards of guardians and even by employers' associations all over the country, he will find that this question calls for immediate attention. During the week before last, I attended the annual meeting of the Steel Board in South Wales. The chair was occupied by Sir J. C. Davies, who is one of the directors of Messrs. Baldwins Limited. I occupied the vice-chair on behalf of the representatives of the men and one of the chief questions discussed at that meeting was the question of local rates. Sir J. C. Davies in the course of his 467 remarks—addressipg, I believe, some of the Labour members who are members of local authorities—pointed out that one of the chief obstacles to the resumption of work in some of the steel and tin-plate works in South Wales was the question of local rates. I think he gave figures showing that there had been imported into this country during the last year something like 500,000 tone of steel and although he admitted that some of this steel was being imported at a price which was 10s. or 15s. per ton lower than we could produce it at in this country, he said that thousands of tons of this steel could have been produced in South Wales if the local rates, which are included in the costs of production were reduced.
I suppose many Members of the House do not understand the tin-plate trade. I should like to point out to the Minister of Health that the production of tin plates in South Wales is something like 18,000,000 tons per year, and one penny per box on the 18,000,000 boxes very often decides whether or not a contract can be obtained by the South Wales manufacturers against the American or some other manufacturers. The effect of local rates is far greater than one penny per box. In 1914 the effect of the local rates, taking it generally, in South Wales was about 1 per cent. To-day it is 6, 7 or 8 per cent. I give as an illustration the case of my own district. In 1914 the local rates were 8s. in the R. I received a demand note some time before Christmas showing that the present rate is 26s. in the £. The hon. Member who has just spoken referred to the rates being double what they were in 1914, but there is a case where rates have become more than three times what they were in 1914. As the rates were increasing during the period of the War, we had inflation and we were turning out Treasury notes like hand-bills so that we could meet it. If prices went up, money was inflated, and we were getting Treasury notes to meet it, but to-day we have a gold standard, and we have to meet these heavy rates on the basis of the gold standard.
Another very important point is the difference between the imposition of local rates and the imposition of an Imperial or national tax. I think, of the two evils, the Imperial tax is preferable, because it compels those to pay who are 468 best able to pay, instead of placing the burden on local rates. An Imperial tax is a tax on profits and dividends, sometimes on income, but the local tax is a tax on production. Therefore, local taxation is a far greater burden on industry than Imperial taxation. As I pointed out to Sir J. C. Davies, Messrs. Baldwins Limited have paid no dividends for the last three or four years, and, therefore, they have paid no Imperial or national taxation. But whether they are making profits and dividends or whether the works are running at a loss, they are compelled to pay local rates. If the Government want to checkmate unemployment in the country, this question must be tackled at once, because it is throttling every industry in the country. I know of works in South Wales which are idle and which could have been started had it not been for the burden of the local rates, because the employers would prefer to keep the works going, even it they only covered the costs of production, in order to retain their men and their customers instead of closing down. I appeal to the Minister of Health, in view of the demand from Sir J. C. Davies, to which I have alluded, and in view of the resolutions and decisions of local authorities, to tackle this question immediately in order to set the wheels of industry going and help forward a solution of the unemployment problem.
§ Sir ROBERT SANDERS
I am sure no one on this side of the House will complain of the action of the hon. Members opposite in bringing forward this subject for debate. I am also sure that no one will complain of the speeches that they have made, and we were all particularly pleased to hear that they remain faithful to the party which they adorn, so that at all events we may boast of two constant nymphs upon those benches. This, of course, is no new question, and my very earliest recollections in this House are of it being brought forward from the Conservative benches when we were in opposition. I am not sure that for some years we obtained very much support for it from the Liberal party that was then in power, but I remember that the last year before the War, when an Amendment to the Address very much on these lines, without the tag at the end, was introduced from the Conservative benches, we received a promise from 469 the then Chancellor of the Exchequer, the present Leader of the Liberal party, that the matter was going to be dealt with at once, on which understanding Sir John Spear, who moved the Amendment, asked leave to withdraw it. The War came, and I do not blame the right hon. Gentleman that that promise was never carried out. The hon. Gentlemen who moved and seconded this Amendment are now bringing it forward in different circumstances, and those of us who supported it then are always glad that this subject should be kept in the limelight. The hon. Members who moved and seconded the Amendment dwelt at great length upon, the fact that the rates have increased and that they are an intolerable burden. There, I am certain, they were speaking in consonance with the views of every hon. Member here, in whatever quarter of the House. We all admit the grievance. It is unnecessary to establish it, for everybody agrees that the rates have increased, are increasing, and ought to be diminished, but it, is when we come down to brass tacks and to doing something to put right a grievance which we all admit that there may be differences of opinion.
I want to deal with the matter purely from a practical point of view, because no one realises more fully than I do the weight of this thing to which hon. Members have referred, and no one would be more ready than I to support any Measure for setting that grievance right that would not make worse trouble than it would cure. Let us look at the matter, therefore, from a practical point of view. What are the expenses which have increased so much? The expense of local government comes mainly under four headings, namely. Poor Law, roads, education, and public health. If anything is to be done to remedy the grievance of local taxation, it must be dealt with in one of three ways. Either we must get local economy, or we must get further grants from the Treasury, or we must find some new source of revenue for local authorities. Take the first remedy, local economy. My hon. Friend the Member for Reading (Mr. H. Williams), who, I think the House will agree, made such a useful and informing speech, dealt with the subject of Poor Law and pointed out, rightly, I think, that there is in many districts—and 470 here I speak mainly of the urban areas, because I think in the rural areas, or at all events in the really rural areas, the Poor Law is economically and on the whole efficiently administered, but in the urban and semi-urban areas—there is a suspicion, or more than a suspicion, that a great deal more efficient management would produce very desirable results in the administration of the Poor Law. When it comes to dealing with this question locally and in this House, can we rely on hon. and right hon. Gentlemen opposite to support us in trying to get more economy in the administration of the Poor Law? If so, they will he dealing in by far the most practical manner with this problem.
Then turn to the next branch, namely, roads. I very much doubt whether it would pay to starve them. If you did, they would get worse and worse, and you would have to reconstruct them from the very beginning, and really, in the long run, I do not think it is economy to let your roads get into a very bad condition. With regard to education, that is a very thorny subject. I am not here to say it might not be possible to introduce further economies in the education charges, but all that I can say is that, having been a member of a county council for a great many years, and having for a certain part of that time been on the education committee, I realise to the very full how extremely difficult it is, not only to cut your education rate down, but to keep your education rate from increasing progressively. I can only tell hon. Members opposite, if they have any means that they can show by which the charges for education can be, not even made lower, but kept from increasing progressively, they will be doing a, great service to the House and to the country if they will not bottle it up but will divulge it at once and let us know all about it. Then there are the public health services, and, on the whole, I am inclined to think the money that is spent upon them is well spent, and that it would be very difficult to get any appreciable reduction in that respect. That is the first way in which we can get some remedy, by cutting down the cost of local administration and cutting down these various items of expenditure, and I am quite sure that if hon. Members opposite can render any assistance, either locally or in this House, 471 in that matter, they will be doing a great public service.
Then there is another way of dealing with the matter, and that is by increased Government grants. I should like to know what is the attitude of the hon. Members who have brought forward the Motion on that question. My own experience is that an Opposition always presses for further grants to local expenditure, but that the Government which has to find the money finds very great difficulty in yielding to that pressure. Sometimes, of course, the pressure comes from the supporters of the Government, and if on any occasion we find an opportunity of pressing the Government to give us further grants for local expenditure, I can only hope that we shall be able to rely on the support of hon. Members opposite, but previous experience does not make me very sanguine of that desirable result. I had something to do with the Agricultural Rates Bill when that was before the House of Commons a year or two ago. That question has been brought into the present Amendment. Hon. Members have rather stressed the grievance of the rates as affecting agriculture. There was a very tangible case in which they had the opportunity of doing something to relieve that grievance as far as agriculture is concerned; and yet, when I come to look at past records, I find that of the three Members whose names are at the head of this Amendment, two of them—the hon. Member for South Shields (Mr. Harney) and the hon. Member for East Wolverhampton (Mr. G. Thorne)—voted against the Second Reading of that Bill, and the hon. Member for East Wolverhampton also voted against the Third Reading. I do not think the hon. Member for East Bradford (Mr. Fenby), who introduced the Amendment, was then in the House, but when the Report stage of the Rates Bill came up, the hon. Member was in the House, and both he and the hon. Member for East Wolverhampton voted against the rating provisions. That shows that we do not get very much support from that quarter when we try to remove those grievances.
Reference has been made to the Road Fund. It is quite true that the Road Fund was raided by the Chancellor of the Exchequer, and a great many of us 472 looked with considerable apprehension upon that raid. But it is also the fact that that raid has not resulted in any reduction whatever towards the grant for the maintenance of roads, and it is the maintenance grants which affect the burden on the ratepayers. What has resulted is that there is less expenditure on those grandiose new roads, which I am not sure will yield any substantial relief to the ratepayer. As far as the ratepayer is concerned, there is no diminution in the help towards the county rates, and there is the very great gain of the substantial grants made for the relief of the rural districts.
I turn to the last part of this question, and that is that if you are not going to support extra Government grants, are you going to find a new source of income which will take the place of the present burden on the rates? That has been one of those will-o'-the-wisps of the Liberal party, and the Labour party, too, for a very long time past. There, again, I want to get down to practical suggestions. Is there anyone here who can speak with any sort of authority on behalf of the Liberal party? I would like to ask this question: In these proposals that are being made now for a tax or rate upon what they call land values, is it proposed to put a tax upon existing ground rents? I do not know if I can have an answer to that question. Is it proposed, in spite of contracts as they stand at present, to put a rate or tax upon ground rents which are already established?
§ Sir R. SANDERS
I was not speaking of royalties. I cannot find any answer to this question in the Green Book, which I have read with seam care. I want to see what the practical proposals are. Is it, or is it not, proposed to interfere with existing contracts to that extent? I think it is important to make that clear to the public. If it is proposed to interfere with them, then you are putting a tax on a security which is a very favourite one indeed for the advance of money by various societies on mortgages. You are going a great deal further than merely taxing a series of landlords. You are diminishing the security of a great many very responsible corporations in the country.
§ Major CRAWFURD
Does the right hon. Gentleman not realise that if the assumption he makes be true to the extent that you are adding to the burden on ground rents, for instance, you are relieving the burden on buildings, which are also the subject of mortgages?
§ Sir R. SANDERS
Certainly; but that is not the point with which I was dealing. I want to know whether it is proposed to interfere with existing contracts, or not?
§ Major CRAWFURD
Yes. If the right hon. Member wants to have a pleasant argument, for the sake of this argument, we will say, yes. But I want to point out, that the deduction he makes from that answer is a false one.
§ Sir R. SANDERS
May I take it that the hon. and gallant Gentleman speaks for the Liberal party in assuring me that it is proposed to put a burden on existing ground rents?
§ Sir R. SANDERS
Then I am entitled to point out that it does have an effect upon everyone who has advanced money upon those securities. It, of course, diminishes the security of all people who advance that money, and when the proposal is considered in the country, that ought to be fairly and squarely put before those corporations who have advanced money in such a way. You are doing an unfair thing, because the man who establishes the ground rent establishes it for a great number of years, and during those years he has no opportunity of altering it, and one of the conditions on which the ground rent is fixed is that all the burdens of local taxation shall fall on the lessee. So that you are breaking a contract in making any such provision in future. If that be your intention, it ought to be fairly and squarely announced. You are by so doing interfering, undoubtedly, with all future developments of building land, and there I should really have thought the Liberal party would have gone on the maxim "Once bitten, twice shy." My hon. Friend below the Gangway has referred to the Land Taxes in the Budget of 1910. It cannot, I think, be denied that those taxes are very largely responsible for the present shortage of houses. We have the evidence of the Tudor Walters Com- 474 mission, a Commission presided over by a Liberal. They said:The evidence given was that those duties had arrested the development of building estates, led to the diminution or withdrawal of financial facilities, and retarded investment in house property.You have tried that once and have found that it resulted in a disastrous shortage of houses, expensive Government measures being necessary to put things right. Surely, having burnt your fingers so badly once, you had better leave the subject alone for the future. It is not too much to say that the experiment in the taxation of land values made in that Budget was the biggest financial failure of our time. Although I have considerable sympathy with the Motion, considerable sympathy with the grievance of those who complain of high rates, I consider that the remedy proposed at the end of the Motion is no remedy. If that is all the Liberal party have to offer us we cannot thank them for much, and I shall certainly not support the Motion.
§ Mr. BRIANT
I do not Intend to deal with this subject from any other point of view than that which is confined to the question of urban areas. Everyone here is familiar, and so I need not stress the point, with the dangers of the heavy burdens of rates, not only as affecting industry, but as affecting housing. I was rather glad that the Rent Restriction Act gave a landlord power to add any increase in rates to the amount of the rent, because, at least, that brought home to a great many people, who were strangely ignorant of it, the fact that, whether they like it or not, it is the tenant who pays the rates, and the sooner that was understood the better. The housing problem is not one of the cost of houses alone; it is very largely a question of rates too. However cheaply the houses may be erected, at whatever price the land is secured, the addition of heavy rates makes it extraordinarily difficult for the working classes to pay for houses fit for them to live in. We have heard a good deal of the extravagance of local bodies, and also about Exchequer grants, and I want to give the House some practical figures. Whatever extravagance may exist is much exaggerated; making every allowance for some extravagance, the disparity in rates is enormous. In Hendon, not far from London, the rates are Ss. 4d. in the pound, and in Leyton 475 they are 22s. 4d. The wildest imagination of the most hardened Tory could not assert that that disparity is due to extravagance. Take the case of Lambeth, with which I am most familiar. I think even the present Minister of Health and his predecessors in that office would admit that, as a whole, the administration has been economical. I was chairman of the board of guardians there for years, and although I was surcharged on occasions, I always took that with great equanimity, knowing perfectly well that it would be removed before long; and I never had any complaints, except from a very few people who always regard it as extravagance to give adequate out-relief, whereas it is the only real form of economy.
If I am asked why rates are high, I say that the real reason is that industrial areas necessarily incur heavy charges. It is not the fault of the administration or of the people who reside there, hut of the necessities of the case. I regret very much that the classes are, more and more, living in separate parts of districts, almost, one might say, in separate cities. It was much better when the classes were more mixed together. The consequence of the present system is that the destruction of the poor is brought about by their poverty. The more the working classes are congregated in industrial areas the higher must be the rates there, because they are the class who, when there is a disturbance of trade and unemployment, must in many eases apply for relief, and that through no fault of their own. The conditions of life in those places necessitate larger sums being spent on health, and they are areas in which the general claims must be made on a higher scale than in those where the population has some capital in the background and can exist for some time, at any rate, without assistance. It is not the fault of the people or of the areas, it is due to the necessities of the case, and I cannot believe anyone would suggest that these areas, already over-pressed, should be further loaded with burdens which are not their own but which should be borne by the whole of the community.
At this moment we are in the City of Westminster. My own constituency, 476 across the river, is the only one that can be seen from the terrace of the House of Commons; and Members see the best part of it. I wish some of them could see other parts which are not quite so ornamental. Some years ago the City of Westminster decided on improvements, which were very badly needed. Certain areas were full of slums, and they decided to pull them down. They did not rehouse the people whom they thus dishoused. No; they put up handsome and very expensive fiats. What was the effect? The people who formerly lived in those areas moved across the water into Lambeth, Southwark and Battersea, where the already congested populations were made more congested and the rates, already high on account of the poverty, were increased. Westminster enjoyed the double advantage of getting rid of its poor and enormously enhancing its rateable value. That is what has happened in many parts of London and, indeed, of England. Can anyone defend that system which is incorporated in our laws? I do not grumble because landlords, or anybody else, take advantage of that system. Like most other people, they take advantage of the laws which exist. Further, I would point out the anomalies of the position. If a man is 69 he comes on the rates if he is out of work, and it is held that the rates ought to support him. If he is 70, the State says, "He is our charge." What logical difference is there between the two If he is unemployed and not insured, he comes on the rates. If he is unemployed and is insured, the State immediately pays part of the cost of maintaining him. The whole system is full of anomalies and injustices, and somehow or other we must deal with the situation.
Even as regards site values, I think very few people can really defend the present situation. Large sums of money are being expended on the construction of arterial roads, which are valuable and useful to the whole community. What is the effect already? When the arterial road is made a man who has agricultural land adjoining it which was formerly worth a mere song will get, sometimes, 500 or 600 per cent. increase on the original value of that land, not because he has laid out money on the land. or expended a single day's labour upon it, but because the community have spent money on a much-needed improvement. Can anyone defend 477 that? The construction of tubes is being financed by the State under a credit system. Immediately a tube is built the landlords of the district obtain an enormous increase in the value of their land. Again he has done nothing. In the case of housing, the London County Council is erecting an enormous town in the South of London and, in the area near at hand, the land is springing up in value by five or six hundred per cent. although the owner has done nothing for it. I am not blaming the landowner any more than I am blaming the wealthy Socialist, who says he is very sorry for the system that made him rich but he cannot get rid of it. No one, however, can defend the system as righteous.
Nor am I on the side of those who say we have somehow to reduce very much our local expenditure. I agree that local expenditure is abnormally high through unemployment, but the normal local expenditure ought in many cases to be increased. It is not a fact that we spend too much on health, for we do not spend enough. The fact is that our local authorities are so afraid of the rates that they dare not spend money which they know is needed. The Minister of Health is in contact with the various medical officers of health in the different districts, and I am sure there is not one who is not in favour of greater expenditure because it is essential for the comfort, health and well-being of the people. The reason they cannot do it is because of the rates, because they cannot further overburden districts already overburdened by this great charge of rates on their shoulders. You can only reduce the rates by placing some burden of the rates upon those who are doing nothing to contribute to the wealth of the nation but are filling their pockets through some railway or through some housing necessity. I do not think anyone can dispute that it is fair that some amount of rates should be diverted to the owner of the site, who is enhancing his own position to an enormous extent. It is as if the State or the community were to find an enormous gold mine, spend a large amount of money in developing it, and then say to somebody, "Now we have spent all this money in developing it, you can go and fill your pockets with it." We have done even worse than that, for we say, "You can sit in your armchair and we will do it for you."
478 This is not a Socialist scheme, but was supported by even so good a Conservative as Lord Balfour of Burleigh many years ago and many other leading Conservatives have also supported it. It is common justice. Unless this House will tackle this question, one of two things must happen. The already poor districts are so overburdened that either they will go into a state of bankruptcy or else the poor will suffer in a way that the community ought not to let them suffer. I know the two hon. Members on the Front Bench have experience in these matters and have real sympathy and I hope that they will apply the brains and the intellect of the Government to the solution of these questions. It would be greatly to the benefit of the community if they could divert the enthusiasm and the attention of the Government from matters that could very well remain as they are, like the reform of the trade unions, and get on with that job which is so urgently needed by the people of this country. I have pleasure in supporting the Amendment and, though I am not enthusiastic in thinking it will be passed by the House, I have some enthusiasm at the back of my mind which leads me to believe that the Minister will give us a sympathetic hearing and may give us some sympathetic promise for the future.
§ 1.0 p.m.
§ The MINISTER of HEALTH (Mr. Neville Chamberlain)
There has been a very laudable effort in the speeches to which we have listened to find some new material with which to dress out the very threadbare garment of this old question, which has been so often debated in this House that one would suppose there was nothing to be said about it on either side. I was disappointed at the lack of imagination of the Liberal party, which claims to produce all the original ideas and aspirations expressed from this side, at being unable to find anything newer than necessitous areas, which have been debated no less than five times last Session. One may think that it is due to the fact that the field from which they draw their ideas diminishes every day and, even among the survivors of their small band, it is difficult to find any subject on which they are united. Even this particular subject has induced two sections of the party to put down Amendments to the Address which are in differ- 479 ent terms and I am left wondering whether what we are discussing to-day is supposed to represent the views of the Liberal party as a whole or whether it is not rather a shameless but successful piece of poaching on the particular ground of the hon. Member for West Middlesbrough (Mr. T. Thomson) who, for once, is not here.
The speech of the hon. Member for East Bradford (Mr. Fenby), who introduced the subject, indicated to me pretty thoroughly that he is more concerned with the first than with the second part of the Amendment. He claimed to speak particularly on behalf of agriculture and he wished, as he said, to draw the attention of the House to the agricultural point in the Amendment. But there is no agricultural point in the Amendment. On the contrary, if you look at the latter part of it, it will be seen that the only remedy which is suggested in the Amendment for the difficulties of local authorities burdened with heavy rates is to apply in urban districts and that agricultural districts are entirely excluded. The fact that he should have lost sight of that does not surprise me, for the rest of his speech showed a singular lack of memory as to the efforts that have been made by the present Government to fulfil their promises in the past and as to their relief to rating in agricultural districts. The facts are that in 1923 they passed the Agricultural Rates Act which was made permanent by the Rating and Valuation Act and last year no less a sum than £3,165,000 was given to the agricultural districts under that Act out of the national resources. That, I should have thought, was a fairly substantial contribution towards the relief of the rates, although the hon. Member continually repeated that the Government did nothing.
I was even more surprised at his extraordinary statements about the Road Fund. He stated that the Chancellor of the Exchequer by his raid, as he called it, upon the Road Fund had put the agricultural districts in a very awkward position. Apparently he is under the impression that the amount of money which has been spent upon roads has been diminished by reason of the arrangements made lay the Chancellor of the Exchequer in connection with the Road Fund. I must re- 480 mind him, and any other hon. Members, if there be any, who have not the facts in their minds, that, notwithstanding the raid, an additional £1,400,000 has been assigned this year to the maintenance of rural roads. The total sum to be given in grants from the Road Fund this year is £17,300,000 as against £16,700,000 last year. As a matter of fact, so far from rural districts being put into a worse position, actually they are going to receive considerably more money than they received last year. [An HON. MEMBER: "How many more cars are on the road?"] I do not see the object of that observation. The argument I was dealing with is that the action of the Government has put the rural districts in a more awkward position by taking away a portion of the proceeds of the Road Fund for other purposes, and I am pointing out that more money has been spent in this connection this year than last year.
I think it will be generally agreed that the burden of the increase in rates is weighing very heavily on industry. It has been repeatedly pointed out and emphasised by the hon. Member for Pontypool (Mr. Griffith) that this burden falls upon industry whether it is making a profit or not, whereas taxation for Imperial purposes is a tax on profits. Under these circumstances how is this difficulty going to be remedied by the Amendment? The remedy suggested by the hon. Member for Pontypool is that you should make a tranference of the burdens of local rating to Imperial taxation and make some rearrangement between local and Imperial finances. I understand that point of view, but I cannot understand how anyone can think that the proposal contained in the latter part of the Amendment is going to solve this particular problem, more especially the rating of site values when put forward in such an indefinite form as it is in this Amendment. I think everybody must realise that what is proposed in this Amendment is a very serious and in some respects a fundamental change in the whale basis and the whole principle upon which our system of rating is based. Our system of rating is based upon two things, ability to pay and the benefit from the expenditure which is being paid for. This proposal does neither of those two things, but it does something else, it taxes the 481 benefit which an individual derives from circumstances brought about not by himself but by the community.
§ Colonel WEDGWOOD
Surely, if the expenditure of the ratepayers' money raises land values, the increased value should be taxed for the benefit of the community?
§ Mr. CHAMBERLAIN
What is now proposed is merely a redistribution of local burdens by putting a new local tax upon site values. That is a big change, and it is really a tax on capital. Let me point out that two valuations would be required, and that is something that will not increase economy or effect a reduction of local expenditure. In the second place I. should like to ask how is the proposal of hon. Members opposite going to be justified on equitable grounds? The hon. Member for East Wolverhampton (Mr. G. Thorne) says that the community ought to have the benefit, but why should such a tax be confined to land? Why should it not be applied to other articles where the action of the community has caused a rise in value? Very often the profit a shopkeeper snakes upon an article depends upon the character of the neighbourhood and that character may change. That change is not due to anything done by the shopkeeper but to circumstances altogether outside his control, and it may make all the difference to the amount of the shopkeeper's profit or the amount of loss he may suffer.
Why is land alone picked out as being the complete measure of the benefits given to individuals by the community? would remind the hon. Member for Wolverhampton that there are very large areas in the neighbourhood of Wolverhampton and Birmingham, or any other large town, where the value of the land adjoining is governed by the fact that they are adjacent to the large towns. Yet any benefit which might be got by taxing the increased value of that land would go not to the inhabitants of the large town but to, the adjoining community which might be another authority altogether. Therefore, that is not giving the benefit of this tax to those whet ft is intended receive it, but to a different body altogether We have here a most difficult problem the genuineness of which 482 I do not think anybody will dispute. We have this fact that much of our local taxation does not deal with services or things peculiar to the locality bat deals with conditions to some extent outside the control of the particular local authority, and which in their incidence cannot be said to be equally fair and just as between one locality and another. I think everybody will agree with that.
We perhaps too readily forget how very much of our social and other services fall upon the shoulders of the taxpayers rather than the ratepayers, and in times like these when owing to the coal stoppage last year, the local burdens are particularly heavy, these inequalities tend to press upon us with a special force. Do not let us forget in considering this temporary passing difficulty that there is a permanent problem at the back of it, and it is one which sooner or later has got to be faced. It is perfectly obvious that the proposal of hon. Members opposite would not really touch that problem. The income which would be produced by any such proposal, if it is going to be justifiable and fair, after you have got over all the administrative difficulties would not be large enough to make any substantial difference, nor is there any guarantee that it would go to the right quarter. There is nothing to show that relief would be given where relief is most needed.
What is really wanted in my view is a new arrangement of national and local taxation, one which would have the effect of spreading over a wider area some part of the burdens, which in my opinion are now frequently concentrated too much upon local spots. It is a task of very great complexity and difficulty to find a practical working system that will adjust the relations between local and national taxation, and the one thing which I think all of us should try and keep in our minds in attempting to find a solution is that we must not do anything which will tend to diminish local initiative, local independence, and self-respect, and that we should therefore do our best to avoid any system which will mean an increase in the amount of control and the amount of interference which will be necessary from Whitehall. If that be admitted as a proper solution, then. I think it. Follows that in any rearrangement of expenditure 483 subventions froth the Exchequer must not be related to local expenditure but must be based upon other considerations. It must, be based upon more general considerations, and must take into account the needs and the capacity to find the money of the various localities. It must not mean that a locality simply by raising expenditure will attract to itself a larger proportion from the national resources.
I have, myself, always tried to indicate to the House what my own views were upon this very difficult problem. It seems to me that there must be three stages if we are to deal with it on sound and permanent lines. Seeing that an essential feature is capacity to pay, the first necessity is that you should have some sort of uniformity of valuation throughout the country, because rates which are based upon different systems of valuation cannot properly be compared with one another. We have taken the first step in passing the Rating and Valuation Act to introduce some measure of uniformity throughout the country. The second step, I believe, is to be found in the concentration of financial control in any area in one authority. I believe that, until you get the various services concentrated in one authority and under one responsibility, until you cease to have that anomalous distinction between similar services carried on by different bodies, one of which receives a subvention from the Exchequer, and the other of which does not, you will never get an equitable system of redistribution. The reform of the Poor Law system, under which this concentration will take place, and under which one authority will be able to keep under its own control and within its own purview the whole financial aspect of public expenditure in that area, seems to me to be the second step. The third to follow on, or it might even accompany it, would consist in the actual formula for the adjustment of the relations between national and local expenditure.
In the various Debates which took place last year upon this subject, I indicated my views with, I think, progressive definition, and it is possible, now flint the announcement has been made of our hopes to introduce a measure of Poor Law reform in the Autumn, to speak with greater precision. I do not say that it will be possible between now and then 484 to define the financial arrangements which will cover the whole field of service and which will be satisfactory to all concerned. What I do say is that we shall spend our time in exploring still fnrther ideas to which we have already given prolonged consideration, that we shall take the opportunity of consulting upon our proposals the local authorities concerned, and that, if and when we are able to produce a complete scheme, then, I think, we may say that we shall have advanced towards solving the problem of the necessitous areas which has troubled and baffled so many Governments in the past.
§ Mr. LLOYD GEORGE
The right hon. Gentleman the Minister of Health has done very inadequate justice to the proposals which are embodied in this Amendment, and, later on, I propose to call attention to his very flimsy treatment, if I may say so, of a very important remedy which has been adopted by a very large number of our own Dominions, and which is in actual working practice, I think, in most of the Federal States of the United States of America. In these great communities, the very suggestion which he scoffs at now, is working and working admirably and with very useful results to trade and industry. It is relieving the burden upon improvements; instead of discouraging industry it is helpful to industry. When he laid it down as a proposition that the present basis of our rating system was capacity to pay and benefits received, surely he could not have made a study of the system at all. It has nothing to do with capacity to pay. A. man with a very large income in a particular area may be contributing only £15 or £20 to the rates, whereas another man, who can barely pay his way, and who as a matter of fact may for the time being be losing money upon his business, may be contributing £100 or even £1,000 a year. What relation has that to capacity to pay? The benefits received are identical in both cases. As a matter of fact, the benefits received may be entirely on the part of the man paying about £10 or £20 a year. The other man may be living in another area altogether. They may even both be shareholders living far away from that particular area, and they have to bear the burden. The right hon. Gentleman has not even got the principle 485 upon which our rating system has been based, and which I submit a thoroughly wrong one.
With regard to the gravity of the problem, there can be no doubt at all. The burden of rates in our industrial districts is paralysing industry. The right hon. Gentleman deprecated calling attention to particular instances, because, he says, the basis of valuation is not identical in different districts; but within limits it is substantially the same—you would not make a difference of a shilling by equalising the methods of assessment unless you changed the whole basis. For instance, at Gateshead the rates are 25s. 9d. in the & at Jarrow, a great shipbuilding area, 19s. 11d.; Hartlepool, another shipbuilding area, 18s. 8d.; at Middles-brough, 19s. 8d.; at Merthyr Tydvil, 27s. 2d., and at Llanelly, 21s. The worst of this is that the industries which are most hardly hit are the industries which are also bearing the heaviest burden of rates—iron and steel, shipbuilding and coal; so it makes it very difficult for the industries that are vital to the life of this country, and it makes it almost impossible for them to recover. I see that the Manchester Chamber of Commerce say that the rates there have very often the effect of practically wiping out the margin of profit. We are trading on very narrow margins, because the competition against us is getting keener and keener. With regard to textiles, according to the Chamber of Commerce in Manchester, a farthing a yard represents the whole margin of profit, and the increase in the rates has more than wiped that out in many cases.
That is a very serious problem, and you do not meet it, as I shall point out, by the principles which have been laid down by the right hon. Gentleman, not in the least—or rather, I will not say net in the least, but not sufficiently. I agree that there is something to be said for one of these principles Which the right hon. Gentleman meet laid down, but it is quite in sufficient to meet it, and I do hope, now that the right hon. Gentleman has got, involuntarily, little more time for refleetion—because I can well believe that he is naturally very disappointed, and we share his disappointment, that he has not been allowed at any rate to grapple with one part of the problem this year—he has a whole year to study this problem, and, judging by his speech, a year will not be 486 a day too much. What is the evil at the present moment? I have had to deal with matters of this kind at a time when the rates were not comparable with what they are at the present moment. They are double and treble.
The right hon. Gentleman referred to my hon. Friend the Member for West Middlesbrough (Mr. T. Thomson), than whom there is not a greater student of this problem. I very much regret that, owing to ill-health, he is net in a position to take part in this discussion; otherwise, he would have made a real contribution to it. In this House he pointed to the fact that in Middlesbrough the rates, that were in 1913 1s. per ton of steel, are now 7s. per ton of steel. Is it any marvel that the steel industry is passing away to other countries when you find that the local rates art seven times what they were in 1913, as an ingredient in the production of steel? It is no use talking about Protection; the first thing is to put our own house in order at home. There are many cases of the same kind. Shipyards are paying about three times as much as they were paying before in rates, and they are paying more in respect of fewer ships which are turned out, which means that the burden of rates per ship is considerably more than three times what it was in 1913. Every-one knows that the competition in shipbuilding is becoming extraordinarily acute in Europe. The French have built about 900,000 tons more ships than they had in 1913; the Italians are developing a great shipbuilding industry; Rotterdam is becoming a serious competitor Of this country, not so much for building as for repairs; and in all these countries the rates are very much lower than they are in this country—at least, the rates which are contributed by the industries. I do trust the right hon. Gentleman will be able to give us better hope that he Will be able to assist industry to relieve itself Of this burden.
There it great difference, as the right hon. Gentleman points out, between taxation in this country and rating. It a much greater difference than he imagines. In the case of taxation, substantially, you pay according to your capacity. I do not say it is a perfect system, but in the main you do that. In rating yon day, not according to your capacity, but very often accord- 487 ing to the measure of your obligations. A man who has a huge yard or a mill, where the obligations are enormous upon him to find, not merely rates and taxes, but to find wages week by week, and the cost of materials—according to the measure of his obligations, he pays. That is not fair. The right hon. Gentleman may say that we propose no remedy. I think we do, and I shall point it out. My hon. Friend the Member for East Bradford (Mr. Fenby) quoted some figures that were worked out by Mr. E. D. Simon, a late Lord Mayor of Manchester, showing that, where your income was between £2 and £4 a week, 9.4 per cent, of that income went in rates, but that, if your income is £10,000 a year, you only pay about 1.3 per cent. That is not payment according to capacity, or anything comparable with it.
There have been many suggestions for dealing with this problem, and I do not pretend that all possible solutions are in corporated in this Amendment; we are calling attention to one. Many a time there has been the suggestion that you should have a local Income Tax. When I was Chancellor of the Exchequer, I looked into that very closely. It is a method which is adopted in Germany, and I am not sure that it is not also used in other countries. In Germany, however, it is particularly the method. In the United States of America the Income Tax used to be local; at any rate it used to be a State tax, and to that extent I mean local as against national. I certainly came to the conclusion, however, as Chancellor of the Exchequer, that that would be almost impossible, because the income which is made in an area is not enjoyed in that particular area. Therefore, you may have a man drawing a large income, let us say, from Middlesbrough, and living, perhaps, somewhere outside, and, if you make him pay upon the basis of his income, he is making his income in the industrial area, but may be spending it in London. Therefore, it is not a fair method of assessing the capacity to pay, and it is not a fair method of levying contributions. Most of the South Wales companies, I believe, are represented by shareholders who live in London, and their boards of directors are in London. Under that system, the local Income Tax 488 would be levied in London; the money made in South Wales would be spent in London, and South Wales, where none of these gentlemen reside, would not receive a penny piece out of the income which was created there. Therefore, we came to the conclusion that it would be an unfair system. Another reason is that you might have a very rich man living in a particular area, whose income would be so large that really he would be paying the whole of the taxes, while in the next parish there might be no rich person at all, and the rates we be very little. I do not think we could work a local Income Tax in this country; at least, that is the conclusion I came to, after a good deal of investigation, at the time when I was Chancellor of the Exchequer.
But the right hon. Gentleman has not really done justice to the suggestion that is put forward here that you should make all property bear equally and equitably its share of the contribution. The first proposition I think he would accept, that a good many of these services ought to be made national. Take, if you like, roads. I went into an agricultural constituency the other day and they told me "The roads here have been torn up by people who are passing through our county from Bradford and Leeds on the way to the East Coast. They do not stay here. They do not even have a meal here. They are contributing nothing the wealth of the county. They are tearing up the roads. Hundreds of thousands pass in the course of the year contributing nothing towards local expenditure. That is grossly unfair. We ought to have a system such as you have in France where certain roads are declared to be national. They are becoming more and more national roads since motor traffic was introduced, because you can cover huge distances in the course of a few hours and pass from one area to another.
The right hon. Gentleman was not quite fair to my hon. Friend in what he said about the Chancellor of the Exchequer's action. He always gets into mischief in every direction. Here he has been doing something that he certainly ought not to have done. It is all very well for the right hon. Gentleman to say he gave £1,400,000 to rural roads, but he carried away with felonious intent £7,000,000 of money which belonged to the Road Fund. Not satisfied with that he takes one- 489 third of the whole of that revenue. That revenue was created and allocated and earmarked for the purpose of roads. The motorists of the country accepted it as a perfectly fair tax. They said they were perfectly prepared to be taxed heavily, not that it was their option, but it is a good thing to have a tax that someone is willing to pay. They contributed this sum and the money was to be expended upon roads, and it is essential that it should be done. What does the Chancellor of the Exchequer do? First of all he does not spend it on roads. I have a suspicion that he has conveyed a hint to the Ministry of Transport that they must not spend too much upon roads, because I can see the way they are dawdling in completing new roads in different parts of the country. Things that ought to have been done a year ago the Chancellor is spreading over until the last trump so that he should not pay. So he takes £7,000,000 from the Fund that ought to go entirely to roads, he takes a third of the revenue and then says, "Am I not giving back £1,400,000 to someone else?" This sum ought to be expended upon the making of new roads, for the purpose of relieving traffic, for the purpose of maintaining the roads which have been torn up by through traffic, because now you have through traffic in roads as you have on the railways, and therefore I regret very much that the right hon. Gentleman should have burdened himself, in addition to the burdens he has in his own office, with defending the Chancellor of the Exchequer. He will find it a job that is beyond his capacity, so I advise him to stick to rates and not to robbery.
I come now to the specific Amendment. What does it mean? That men in a given area shall contribute according to the real value of, their property. That is the case with the farmer. That is the case with the agricultural landowner. That is the case with regard to the shopkeeper. It is the case with the man who owns mills and quarries and collieries, and very often pays far more than the thing is worth, because assessment committees are not always very impartially manned. I dare say there will be an improvement under the right hon. Gentleman's Bill. What do I mean by that? I will give an illustration. I ask him in all fairness whether this is right. Take Newcastle-on-Tyne. There was land purchased for housing at a price of 17,500. I am assuming that 490 is a fair price. I am not challenging the price. Previous to the purchase the rates on the land were only £23. Is it fair that land that is worth £17,500 in the market should only be paying £23 in rates? Go to Govan. There are a great many grievances which crowd and concentrate into the area of Glasgow. Here in Glasgow the Corporation bought 49½ acres of land for £50,000. The annual value of that for rating purposes was £81. Is that fair? Is it just? Is it equitable? I could give many instances of the kind in Plymouth and in other places and the right hon. Gentleman could multiply those cases all over the country. Is it fair when you find all these places are being crushed by rates when the Glasgow shipyards cannot pay their way, when business is being driven out because they cannot compete on equal terms, that you should have land of this kind practically escaping altogether. The right hon. Gentleman did not really appreciate the point here. He said, "If you are going to do it you must do it all round." I quite agree, Take a shop. A shop may be on a corner, therefore it has its value. It is the community that creates it. But he knows perfectly well that if you have a shop of that kind which has a goodwill created by the community, that adds to the rental value, and the basis of the rate is what you get as rent in respect of that corner. It is not merely the man himself but the community that has created the special value, because it is in a neighbourhood where the traffic more or less concentrates. But he pays. Really the right hon. Gentleman must read the handbook on rating. A shilling book would have saved him from all that speech he delivered just now. What you want is perfectly fair treatment. If a shopkeeper had to pay upon the value that is created by the community—and he does pay—why should not the landlord do the same thing?
Then the right hon. Gentleman has not quite appreciated the point with regard to the rating of improvements. I do not care whether it is a, farmer, a millowner or a shopkeeper or an ordinary cottager. The moment there is any improvement effected down comes the tax collector and says, "How dare you improve that property? I fine you an extra £50 a year." That is not encouraging improvements. Take the case of the farmer. The 491 farmer who farms, badly or the landlord who allows his buildings to fall into, disrepair or whose buildings are inadequate has lower rates, but the moment a farmer begins to spend money upon his farm in drainage say, and who doubles the value of his fields, or if a man, for instance, plants an orchard and converts a field, that was worth only, a, pound an acre into a field worth £5 or £6 an acre, up go the rates straight away They do not wait for the apples to grow or give him an opportunity to take his produce to the market. UP go the rates immediately. The same applies in regard to buildings.
There can be no doubt that agriculture is suffering, beyond anything else, from lack of capital. It is the one industry that is not drawing capital from the public. Every other industry does so. Through the joint stock company law, money is pouring into textiles, collieries, shipbuilding and the distributive trades. One man may put in £10, another man £100, and so on; but the joint stock company has not in the least helped agriculture, and the whole of the burden, therefore, rests upon the shoulders of one man, who is quite unequal to the task. He is less equal to the task now than ever he was, because the burden of taxation is so much higher. Supposing you get a landlord who adds to his buildings, who brings his farming equipments up to modern scientific requirements. The moment he does that, down comes the rate collector and says, "You will have to pay upon this." The principle is a bad one, a thoroughly bad one.
I ask the right hon. Gentleman in the time which the Prime Minister has given—I now understand why he did it: I was disposed to criticise the Government, but it is the one thing, I think, they have been justified in—to use his leisure this Session in looking into the question and seeing whether it is not possible for him somehow, in the scheme which he is going to introduce in the course of the next year, to take into account the recasting of our rating system in such a way that it does not discourage improvements, does not penalise improvements or industry and does not punish the good landlord and endow the bad landlord. Do not give the bad one privilege and boon by paying half or three-quarters of his 492 rates, and punish the other. It is the land you are relieving, not, the buildings. The improvements which the landlord makes yen are not relieving at all by any of your schemes. Therefore, you punish him. I ask the right hon. Gentleman, in the course of the next 12 months, to give a little attention to this subject and to believe that when a number of Members of this House, whether they be small or many, make suggestions after thorough consideration, it is worth his while to consider them.
§ Sir HENRY CAUTLEY
The, right hon. Gentleman has dealt with the question of capacity to pay. It is true that, in one way, under our present rating system, the capacity to pay does not enter into the fixing of the rateable value. It is true that, if two people occupy similar premises, whether for residential or business purposes, the rateable value is the same, whether the occupier has £10,000 a year or £10 a year. That is the system under which our rateable values and assessments are arrived at. The sole question is, what is the rent that a tenant would pay for a particular hereditament or property that has to be assessed? The reason for that is, that it has been considered that rates were assessed for services rendered to the particular property or premises, and the only rough and, ready or equitable system of arriving at the value of those services was to ascertain the rent o[...] rental value of the particular premises.
§ Sir H. CAUTLEY
Yes; it has gone back to the days of Queen Elizabeth. Every Commission or Committee that has sat, and every person who has really applied his mind to improving this system, have ultimately been driven, apart from a few whose views have not been accepted, to the conclusion that up to the present we have found no better system. I was impressed by the speech made by the hon. Member for Pontypool (Mr. Griffiths)—his views have been borne out a great deal by the right hon. Member for Carnarvon Boroughs—where he pointed out that the tinplate trade in Wales was being ruined by the amount of rates, put upon it. He told us that in his, particular district the rates had gone up from 8s. to 20s. in the pound, and that 493 that was killing the industry in which he was interested. He did not tell us where it was. I do not know whether it was in Bedwelty or in some other place where there has been extraordinary uneconomic administration of the rates. Of what do these rates consist? They consist of public health services, sanitation and other things confined to that particular locality, possibly tramways, water, roads and services that are confined to the benefit of that particular district, including Poor Law administration, which from the days of Elizabeth have always been a local charge. It has always been considered that a particular parish should look after its own poor.
Although I know the difficulties in which in recent times many of these industrial districts have found themselves owing to bad trade and the blows that industry has suffered, I ask myself why particular assistance should be given from the State to these particular places more than to any other. Is that not, in effect, asking for subsidies for those particular industries and, if so, why should they have that particular subsidy? I cannot see any reason for transferring to the taxpayers the burden of the rates of a particular locality when the services provided by those rates are enjoyed entirely by the industries and inhabitants of that particular place. If you are going to give a subsidy to one place, why is not another place to have a similar subsidy? And if you do that, are you not in effect transferring the whole of the local burdens from the localities to the Imperial taxpayer In other words, are you not going to make rates purely an Income Tax? If you do that—for which there might possibly be something to be said—how are you going to secure economy of administration and economy of expenditure if you call on the taxpayer for the money and leave it to the localities to spend it? In my view the present system does not work so unfairly as is suggested. The values are not fixed. They are open to review every year, and if you do find in any particular industrial place that the industry peculiar to that place has permanently suffered, has permanently had a lower basis, and that the profits cannot be earned the assessment of those particular industries falls, the local tax or local rates become less on that in- 494 dustry, the charge on that industry's production becomes less, and so does the industry in its turn yield its burden and get back its trade in that way. The troubles under which it suffers are nothing like the size that has been stated here.
I was rather impressed by what the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) said about the Road Fund. I wish he had made that speech when I moved the Resolution last year in this House that the Road Fund should be kept entirely for roads. To that extent I agree with him, but I should like to say that the injustice which he says the Chancellor of the Exchequer has committed is nothing like so great as he says. All he did was to repay out of the Road Fund some advances made by the Treasury to the Road Fund when it started. On the yearly tax provided by the motor car users he has said: "On these motor car users who drive their private cars, I think there is a luxury value that ought to be taxed. We estimated a fair share of that luxury value to the richer and more luxurious value of the population who drive these cars for the national purpose. Some is provided by Income Tax, but on those cars used for industrial purposes we will leave the whole proceeds of the tax on those cars entirely to the Road Fund." When the House decided that some of this luxury value was to be taken out of the tax and the basis on which the Road Tax originally subscribed might be varied, I venture to say the Chancellor of the Exchequer has behaved very well to our roads and not taken too excessive an amount. I myself, speaking as one more interested in our agricultural rates, have in this House on several occasions pointed out how the agricultural and rural districts have been particularly hard hit by, in my view, having to pay in rates what in a great measure, so far as the rural districts are concerned, are national charges. I have always thought that the plan by which a portion of the local charges that might be contributed to national services is now made by grants from the Exchequer hag not worked—
§ Notice having been taken that 40 Members were not present, Rouse counted, and 40 Members being present—
§ Sir H. CAUTLEY
Perhaps I may say that it was rather useless for the hon. Member who interrupted me to have called a count. I was saying that so far as interests in rural districts are concerned we can see nothing in this Amendment that is likely to benefit us in the slightest. There is undoubtedly, and I think it weighs with greater stress on the rural districts than in urban districts, there is undoubtedly this fact which is worthy of the greatest consideration, that is that the proportion of the local services which are charges as local services in the rates in country districts are in a large measure, in my view, national services, and that the grants we get for those national services from the Exchequer which is the present method of trying to adjust the balance between national and local services, is not really very fair in rural districts. Owing to the constant diminution of the population in agricultural villages and counties, owing to the irresistible attraction of the town areas for the country people, we find that in the great services of education, the police and public health, we are bringing up and are educating numbers of persons who go to form the inhabitants of the town. That is all for the good of the great commercial and industrial districts. We find that on our roads we are having very heavy charges paid by local inhabitants for damage done, by motor vehicles particularly, that run from the big industrial centres, come into our districts, and do not even stop there for a moment. These charges for local roads have become excessive.
I am deeply grateful for what the present Government have done in helping us, so far as our rates and assessments are concerned, in the last two years, to bring about something like equality between country and town. I recognise what the Minister of Health said about our local rates. We have had the rates 496 reduced to one quarter on agricultural land, which has put occupiers in our rural districts on an equality and has made the burden of rates more in accord with the earnings from land and the earnings of professional people and others who live in the rural districts. But in the services that are of a national character, the injustice still remains. If that is so, it rather follows that the grants have been obtained by the local districts out of the National Exchequer are a little greater. For my part, although I feel as strongly-as anyone the burden of excessive rates on industry in all parts of the country, the only remedy I can see is, first, greater economy in administration amongst local authorities, and, secondly, that Parliament should rather devote itself to finding some method of deciding which are national burdens, and some more efficient way of providing relief to our local districts from the national Exchequer for these purely local services, whether in urban districts or in oval districts.
I cannot see any possible remedy in the Amendment. The Amendment suggests that by our present system we are clogging enterprise, because we are taxing improvements. I have never been able to see, as long as we have our present system of rating properties according to their rental value as being a rough-and-ready but fair means of ascertaining the value of services to a particular occupier, why that system should not apply to an improvement just as much as to an old house or old business premises. If I build a house, the tenant who goes into it gets the benefit of the local services, for which rates are payable. Why should he not pay, on the system that we have in force? If instead of building a new house I add to an existing house and improve that house, the assessment of the new part is calculated ca exactly the same footing as if it had been a new house or an old house. The question is, what is the rent that the tenant pays? Why should not a man who has an improved hereditament, an improved property, who is getting the benefit of the improved service of this house, say, just as does the man who is assessed in the same way on a new house or an old house? As long as we have the present system, it is equally fair for the improvement as for the new or the old property, and there is no more clog to enterprise in the one case than in the other.
497 The only remaining suggestion is that so far as urban districts are concerned, we are to put a rate on monopoly value, that is on the land. I have never been able quite to understand that, in so far as it is sought to put a tax on the ground rent or any part of the interest on land. If you are to rate the ground rent, you are rating the property twice over. I do not believe you could devise any system that would work fairly. If on the other hand you are going to put a rate or assessment on the capital value of the land, I do not believe that the value of the land in the whole country, certainly not in the rural districts, would provide the funds that are necessary. If you are to rate the going to put the assessment partly on the land and partly on the rest of the property, if you mean, as has been pointed out already, two valuations, that is a valuation that it would be impossible to carry out with any fairness. The right hon. Member for Carnarvon Boroughs spoke of an apparently grave injustice of land worth £17,000 in Newcastle producing only £23 a year. If you are going to have your rate on capital value, I should agree with him entirely, but that ought to apply to all rateable land in the whole country. if you have the existing system, what benefit would this £17,000 worth of land receive from the police, the tramways or any of the other services which go to make up local rates. You cannot have two systems working together; you must apply the same to all property. Rate the capital value of your house and land if you like; put the whole rate on to the capital value; but I cannot see how you can select one class of property and rate that on the capital value, while you rate other property on an income basis as we do at present. I regard the remedy suggested in the Amendment as impracticable and unworkable. While I recognise the difficulties under which all localities are suffering and under which all ratepayers and all businesses are suffering, I cannot see any practical remedy in the Amendment, and I shall vote against it.
§ Mr. A. V. ALEXANDER
The hon. and learned Member who has just sat down always addresses the House with a good deal of knowledge of the, matter which is before us to-day, but he does not seem to learn very much more as the years go by, and he is telling us to-day exactly what he has told us in every Debate on 498 local rating during the time I have been in tile House. There is nothing new in the argument which he has put before us. He will not expect us on this side to agree with his conclusions as to the rating of improvements. No doubt his deeply embedded Tory principles have made him arrive at those conclusions—or, perhaps, it is because he represents the agricultural interests. But we on this side of the House take quite the opposite point of view, and cannot accept what he has put forward. I do not wish to argue in detail the questions which he has put to us, except to say that, pending a complete change in ownership—in the nature of the ownership—of the land of the country, we on this side would welcome any change in the rating system which would give the local authority greater freedom in obtaining revenue for the manifold duties laid upon it, often not by its own wish, but by the dictates of Parliament. At present, local authorities are unable to meet these charges because of the restricted area from which they draw their revenue, and to us it seems there is no better way of remedying the situation than by spreading the area from which the revenue is collected as widely as possible.
Take, for example, the City of Sheffield, which I represent. There you find a tremendous amount of business and industry. We have passed through a period of extraordinary depression; at the same time we have had to meet very heavy rating charges. Yet on the outskirts of the city there is any amount of land belonging to wealthy landowners, which is put into the market for building purposes as the city desires to spread. The owners take tremendous prices for the land, which is rated at a very low figure, whereas they ought to contribute, in proportion to the price which they take from the community for the land, their fair share to the local burden of rates. That is the area from which we believe local authorities could obtain much of the additional revenue which is necessary to meet the increasing needs of urban communities. Is it not exceedingly unfair that a city like Sheffield, where, to suit the general needs of the country, we had to import an additional population of 20,000 to 30,000 people for the manufacture of munitions to meet a national emergency, should 499 now be in this position? Is it right that when the Wax is over, when there, is no further need for this production from our area and there is no means of evacuating the, surplus population, we should have to meet the additional poor law relief charges, while people who draw dividends from companies, who live in places like Eastbourne, Hastings and Brighton, and who took an unfair share of war wealth during the period when munitions were being manufactured, axe escaping the incidence of this additional local taxation and are paying on an altogether different basis from that which applies to the areas where depression exists? From that point of view, I welcome what the hon. and learned Member said with regard to the need for the recognition by the Government on a more generous scale of what is a national service. There is no hesitation about what we say on this side of the House on that point. The relief of unemployment and, in any case, of destitution ought to be a national charge. I thought the Minister of Health referred to the position of the necessitous areas in a rather light and airy fashion. I am sure the right hon. Gentleman becomes rather tired of the importunities of the necessitous areas.
§ The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Sir Kingsley Wood)
No more tired than the Government of which the hon. Gentleman was a member.
§ Mr. ALEXANDER
Does the hon. Gentleman take into account the length of time the Labour Government were in office, or their capacity, in regard to strength of numbers in the House, to carry out the Measures which they desired? However, there is no need to argue that matter now. I was disappointed at the right hon. Gentleman's attitude on the matter, but I welcome the fact that he is going to consider some readjustment. I think he said that there would be a unification of the method of assessment and valuation, and that he was then going on to arrange for central control of local finance and co-ordination of local bodies, and that he hoped, by this means, to reach a position where he could produce a formula—I take it for national grants to meet specific local needs. The unification of assessment is to be welcomed, and the co-ordination of the man- 500 agement of local business sounds very well. But I have not noticed that in the discussions on the draft which the Minister of Health circulated in the country there have been any paeans of praise. In fact there have been many objections. Take, for example, the position of local authorities who have an ever-widening range of duties to perform, and who would be asked to undertake the control of finance, not only in connection with their present duties, but also in connection with the poor law. They would have to administer, through a standing committee, or by some other means, the present poor law. That means that it would be almost impossible to get men of the capacity and with time to perform the onerous duties which local representatives would have to undertake. The more you widen the area of their responsibilities and increase the duties, the more difficult it is to obtain the proper type of representative. There is great danger in getting away from the principle of setting up ad hoc bodies to deal with specific services. Is the right hon. Gentleman able to effect this co-ordination, and whit is the trade of the country going to do in the meantime? We have been handling this point for the last few years about the increase in the burdens on the productive costs of industry. The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) cited land taxation as being one means of helping in the matter, but I do not think we can regard him as being very serious, in view of the fact that he repealed land taxation awing his period of office as Prime Minister. Still, he made a. strong case to-day for the relief of the burden of rates upon in dustry.
What are we going to do in the meantime? In Sheffield, as the hon. Member representing the Ministry of Health knows very well, we have had to be importuning his Department again this week with a view to meeting the pressing immediate needs for the relief of the poor in Sheffield and for the relief of many people who would not be on Poor Law relief at all but for another part of the Government's policy, for we have to relieve in Sheffield to-day well over 4,000 able-bodied men every week who have been merely transferred to Poor Law relief from the Employment Exchanges. How is the difficulty going 501 to be helped by this long process, of discussion? Cannot the Department tell us to-day that they are going to do something at any, rate, to help us tide over the period of disoussion that, as the Minister of Health, has indicated, will take place, and give us some assistance now? I believe that temporary expedients ought never to be relied upon for any great length of time, because the longer temporary expedients which are put into operation carry on, the less chance there is of getting a sane and sound reform. Nevertheless, in areas like my own, we should welcome, as a means to an end for the next few months, some amendment in the restrictive conditions which the Government have placed upon the Unemployment Grants Committee, which is known as the St. Davids Committee.
We want to relieve the local rates as far as we can, we want to see those who receive assistance from the public funds providing work for the assistance that they receive, and we want to have relief works put into operation, but it is very difficult to comply with both the conditions which the Government lay down. They lay down, first, that there must be abnormality of unemployment and, secondly, according to the communication made to us by the Prime Minister in December, 1925, the work to be performed must be an accelleration for the next five years. It is a very difficult thing honestly to say, with regard to relief works, that they satisfy both conditions. We can satisfy you as to the abnormality of unemployment, but when it comes to saying that, unless we get the Government grants, we are quite certain that this work will never be done, it is another matter. But there is plenty of work which we could undertake, and which, I believe, other cities similarly placed could undertake also, which would be anticipated by two or three years if the grants were now forthcoming from the St. Davids Committee on that basis, and while that is not filling the bill from a national point of view, it would, at any rate, enable the necessitous areas to get rid of a part of their immediate burden, while the right hon. Gentleman's Department was dealing with these discussions for amending the Poor Law and co-ordinating the control, of local finances, with a 502 view to producing the reforms which the Minister of Health said he would lay before this House in due course.
I hope this Debate will not come to a close without some indication being given to the House as to whether the Government have considered or are considering at the present time, in view of the abnormality of unemployment arising from the events of 1926, the instructions which were given to the St. Davids Committee at the end of 1925. If you could say that you were going to make it easier, in view of the temporary difficulties, for those unemployment relief grants to be obtained, it would be very much to the benefit, not only of the Poor Law authorities, but of the local rates, though I would remind the hon. Member opposite of what he 's probably very well aware, namely, that the relief works of that kind already undertaken will mean a very serious charge upon the local rates for many years to come. If we are prepared to undertake works of that kind now, we ought to have the most sympathetic consideration possible with regard to assistance from the Unemployment Grants Committee. I would only say, in conclusion, that none of us think that that is going to meet the real case about. which we are thinking in supporting this Amendment. We want to see this matter really tackled, and I agree entirely with what the hon. and learned Member for East Grinstead (Sir H. Cautley) said as to the need for adjustment as between what are national and local services. There have been all kinds of inquiries, from the. Kemp Committee in 1914 onwards, I ut nothing very satisfactory seems to have evolved out of them. I hope that the fact that this is an Amendment submitted by the Liberal party, which seems to be almost conspicuous by its absence at the present moment, or the fact that it is taken upon a Friday, will not prevent the Government, even though they do not accept the Amendment, from giving immediate and urgent attention to the need for reform in this direction, and, if they find it necessary, though they cannot accept the principle of the taxation of land values by localities, which I would thoroughly accept myself, they may find sow other means of the local authorities being able to raise revenue from a. wider area to meet the increasing commitments placed upon them by the Government.
The terms of the Amendment are so widely drawn that I think it might include everything from the Stone Age down to the present time, but I do not propose to try to follow many of the arguments which have been put forward from the opposite benches. I would, however, call attention to one of the fallacies expounded by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), who was complaining that people who traversed certain counties contributed nothing to the rates. I submit that if they traversed those counties, they did it in some sort of vehicle, and although they were not spending their money in the shops and villages through which they passed, they were paying taxation in the form of charges upon the vehicles which they were using, and benefiting the country to the tune of some £17,000,000 a year. I think the right hon. Gentleman said that the Chancellor of the Exchequer was guilty of felonious intent. I am not here to defend the Chancellor of the Exchequer. If he is guilty of that conduct, he is, perhaps, putting into operation something he learned when he was a colleague of the right hon. Gentleman. I can only conclude that his action is a liberal application of Liberal principles.
There are three things which may help to reduce this overwhelming burden of rates, which we all admit. The one is increased grants from the Exchequer. Those of us who have had experience on county councils and district councils know that there is a tendency, whenever you are getting a grant from the Imperial Exchequer, to be less careful in expenditure than when you know that the whole amount is coming from the rates. This 50–50 principle, which was and is still applied to the education grants, has led to many extravagances, which would never have obtained if the full 100 per cent. had to be collected from the ratepayers. I will only give you one example. There are schools in London for teaching foreign languages, and our council schools are used for that purpose, and many of the people attending those schools go through a whole session and pay a fee of 10s. for instruction in French, German, Italian, Spanish, or other languages, but they are in such affluent circumstances that they are enabled to 504 drive up to those schools in their own motor cars. [An HON. MEMBER: "Why not?"] Because I submit that the burden of rates upon the people of London is so irksome and so great that every economy ought to be practised, and if my hon. Friend opposite were an unfortunate ratepayer in London he would probably feel just as much as I do. The second suggestion was that there should be new sources of revenue. I am not going to suggest new sources of revenue, because I think, if any Member of this House has in his mind new sources of revenue, it is his duty to send the suggestion to the Chancellor of the Exchequer.
I come to the third suggestion, and that is local economy. Again, I say, those of us who have served many years on local authorities know that many economies might be practised, but it would ill become me to criticise unfairly my present colleagues, and my late colleague. It would be an ill bird that fouled its own nest. What do we suffer from? We suffer from enthusiasm, like that of the right hon. and gallant Gentleman the Member for New castle-under-Lyme (Colonel Wedgwood). We suffer from the educational enthusiast We suffer from the enthusiast who wants to own all the land. We suffer from the enthusiast who believes in municipal trading. Let me give an example of the evils which flow from the enthusiasm of those Members who want to own the land. To-day in London there are large plots and large areas of land belonging to the central authority and to the local authorities, and they have learnt to their cost, as every landowner has learnt to his cost, that it is not a very profitable thing to own land. There seems to be an idea, particularly amongst those people who have no investments in land, that to own land is a source of great wealth. It is a positive fact that of all the improvements undertaken by the London County Council since their coming into existence in 1889, and by their predecessors the Metropolitan Board of Works, there is only one public improvement carried out by them which showed a profit, and that was Northumberland Avenue. As regards Kingsway and Aldwyeh, I declare to this House that if the county council had said, "We will give this land away on condition that you erect premises within the 505 next three years," the ratepayers of London would have been millions in pocket.
Let me give an illustration of the way money is lost by municipal authorities who indulge in acquiring land. Most Members of this House probably know that site in the Strand known as Bush House, on either side of which there are vacant plots of land. The county council say that is worth £40,000 a year ground rent. The council have owned that land since 1897–30 years. If it is worth £40,000 ground rent, they have lost that for 30 years, which is equal to a sum of £1,200,000. But it is worse than that, because if it was worth £40,000 ground rent, it would certainly be covered three, four or five times at a rack rental, and so it would have been rated at £130,000 or more. Rates in London are nowhere less than 11s. in the & but so that hon. Members shall not be indulging in mental gymnastics, let us call it 10s. Therefore, you have lost £75,000 a year in rates for 30 years, and you have lost the Income Tax on the ground rent and the rack rent. Those two sites alone have cost London not less than £3,000,000. That is true more or less of the whole of the land in Aldwych and Kingsway, and it is true of nearly every public improvement. There is no land owner in this country who would not be hopelessly insolvent in a few Years if he tried to deal with land like the public authorities. The public authorities have the public purse.
I suggest that if the Government could take any action, one of the ways of relieving the burdens of rates would be to say to the local authorities, "You are supposed to get rid of your surplus land within a certain period, and we insist upon your doing it." That money does not belong to the individual council; it belongs to the ratepayers. The Government might afford some protection to the overburdened people by insisting upon the local authorities getting rid of their surplus land, and in that way encourage buildings, increase the revenue of rates and, taxes, and reduce the local burden. I am sorry my ten minutes are up We on these back benches get ten minutes about once a year. [An HON. MEMBER: "Make the best. of it!"] We make the best of it. You make, worst of it, 506 and I am afraid, from your exhibition of intelligence in connection with land values, you know very little. In concluding my remarks, I do hope that those who are really concerned about the burden of rates and taxes will try to induce their local authorities to get rid of all their surplus land, just as if they were manufacturers they would get rid of surplus material, because they would regard it as dead money, as is this property of local authorities.
§ Major CRAWFURD
I am not quite clear in my mind as to the conclusion to which we were directed by the last speech, but I would thank the hon. Member for having, as I believe, supported the case which we are putting forward by citing the instance of land held by the London County Council in Kingsway. The hon. Member had better sit somewhere between above and below the Gangway on this side. His argument was that because this land, which was of very great value—I understand £40,000 a year ground rent, and, perhaps, three or four times that amount of rack rent—had not been brought into use, not only had many people not been employed who would otherwise have been employed, but there had been a consistent and, perhaps, growing loss to the rates.
That is our case. That is one of the bases on which our case is built. Although the hon. Members are not here, I would like to refer to two speeches made to-day from the other side of the House. The hon. Member for Reading (Mr. Williams), very careful, as always, in his selection of facts, produced what seemed to be a conclusive argument against a certain proposal, which, however, was not the proposal we are making. When he says the proposal in this Amendment is the same as that in the Budget of 1909, he only shows that he is not acquainted with recent and contemporary political history. The proposal in this Amendment is confined entirely to the suggestion that local rating should include the rating of what 'are called site values, and perhaps the hon. Member representing the Government will bear that in mind when he replies. The hon. Member for Reading, although joining in the regret that production should be taxed as heavily as it i5 by means of the incidence of rates, apparently was content: to increase the taxation of consumption, which seems to be exactly the same thing.
507 However, I pass to the right hon. Gentleman the Member for Went (Sir R. Sanders), a former Minister of Agriculture. He put a question which I took it upon myself to answer, and it seemed to him that the deductions he drew from my answer were a conclusive argument against the proposal we are making He said, "Would yon impose your rate upon existing ground rents?" The reason he put that question was that if we said "No," his reply was to be "You will get no values from that source; and if we said "Yes," the reply ready was, "Then you are breaking existing contracts." Everybody who has spent five minutes studying this question of land values knows perfectly well that existing contracts are an obstacle to reform. We know perfectly well that if you wish to carry out other reforms in the land laws existing contracts, because they are for such long periods, are an obstacle to the proper reform of the law. Nobody denies that, and nobody is ignorant of it. I go further, and I say in regard to any alteration in the direction we are seeking that I, at any rate, think the alteration should be gradual enough not to make a sudden difference in the fortunes of 'individuals by upsetting arrangements made under the existing law and practice. I thin that also would be conceded from our side. Because there is a difficulty in carrying out the details of a proposal, it is not to 'be argued that the principle is wrong.
Let me take another case by way of illustration. I understand the Government are considering—not the Department at present represented on the Treasury Bench, but another Department which ought to be represented there to-day, the Treasury—the;desirability of imposing a tax upon motor spirit instead of a licence duty upon Motor vehicles. We all know the difficulties. There are difficulties in Making any change, but the fact that there are difficulties is no reason for ignoring what is true in principle; and I am going to say that we have the authority of the Government themselves behind the change that we are proposing. I will come to that in a moment; but meanwhile I wish to say that the Minister of Health who, I regret, is not now in his place began his speech by twitting the Party to which I am attached, first of all on its size. That is common form, whether 508 it is good form or bad form I Will not say, but it is a very well-worn joke, which has served its purpose very well, and no doubt will go on serving that purpose until the next election. While hon. Members on both sides of the House have made adequate use of this joke, and I have enjoyed it many times, perhaps I may be allowed, in parenthesis, to make a reference to it. We admit that there are not many of us, but the position we occupy in the House has one advantage, that it gives us a bird's-eye view of the Assembly, and when I look at the Treasury Bench, when it is full, I see as its greatest ornament, its main prop, the Chancellor of the Exchequer, who began life—well, I do not know how he began life, but for a considerable period—
§ Major CRAWFURD
I will leave for another occasion the analysis of that particular form of humour. The right hen Gentleman the Minister for health, besides twitting us on our physical dimensions, also twitted us because, as he said, we showed a great lack of imagination in the Amendment we have put down; and I gather from noises which are audible that that has the approval of his colleagues. Before the right hon. Gentleman had finished his speech, however, I think he had justified up to the hilt our action in bringing forward this Amendment, because he himself said that he too had been considering for a considerable time the urgency of this problem. If I may read between the lines of his speech, I think both he and his colleague have been grievously disappointed that the reforms in the Poor Law Which they have been projecting have been postponed to a later period than they had hoped. I think we have done the right thing, and the right hon. Gentleman himself has admitted by his words that we have done the right thing, in bringing this subject forward. I think it is a subject Which he himself would already have dealt with if, through one exigency or another, the Government had not been compelled to postpone it.
Now I am going to quote in support of our argument for the rating of Site values the hon. Member who going to reply. Last year, when the hon. and 509 gallant Member for Oxford City (Captain Bourne) was piloting the Allotments Bill through this House, this principle was enshrined in that Measure, because, if I remember rightly, any improvements made upon the allotments which were to be created under that Bill were to be exempted from rating for three years. If they were to be exempted from rating because they were improvements, why should not exemptions of another kind be made for other improvements? During the Committee stage of the Rating and Valuation Bill, a proposal, a very valuable proposal, had been 'brought forward for the unrating or derating of machinery—fortunately, it was carried into law—and I remember that the hon. Member, in urging this reform, used language which my right hon. Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood) Must be sick and tired of using, which he has used in every hall and schoolroom in the country. He said, "What happened? As long as a manufacturer makes no improvements in his factory, does not march with the times, does nothing to make himself better fitted to meet foreign competition, the rate collector leaves him alone; but the moment he improves his 'factory by putting in modern machinery, or in other ways does something to keep himself and his workpeople up-to-date, along comes the rate collector and says, 'We Want some of that.'" Because of that, the Government, very rightly, carried their proposal, which abolished the rating of machinery. Surely, if it is a right principle as applied to machinery, it is a right principle as applied to other improvements too. All we are saying is that if you impose a rate upon that value, which, as the hon. Member on the other aide said, was lying dormant for years to the detriment of the community in which it was, then you automatically lessen the burden on those improvements already heavily rated.
§ Major TASKER
The hon. Member misunderstood me. I was advocating a sale, in order that the ratepayers might receive a remission.
§ Major CRAWFURD
I understood what the hon. Member was advocating, but I was pointing out that, while his facts were right, his deduction was mis- 510 leading and fallacious. I am drawing the right deduction.
§ Major TASKER
May I remind my hon. Friend that, if my deductions are wrong, there are quite a lot of people in this country who pay me large sums of Money for giving my conclusions.
§ Major CRAWFURD
There are many classes of people in this country who derive large incomes, and give very inadequate returns. It is not for me to say that. All I am going to say is that the Government in their own legislation have created a precedent which we are asking them to follow and extend. Is it not true that the hon. Members themselves on the Front Bench said upstairs two years ago, that as you make improvements so you are rated and taxed? We are asking that the person who makes the improvements should be encouraged. When we are asked, as the Minister himself asked, "How can you see When you collect the money that it goes to the right quarter How can you be sure that the value, created by Birmingham or Wolverhampton, for instance, will not go to somebody outside Who has nothing to 'do with the value?" We say that it is a question of detail and of adjustment once you have got the money rated and drawn from the proper sources.
I want to turn to the other side of the question and to reply to a question put by the right hon. Member for Wells (Sir R. Sanders). He asked in effect: "What are you proposing to do? Either you must have economy, or you must have more Government grants, or you must have some new source of income." I suggest that we are proposing a new source of income and I say quite deliberately that, for my part, I Want more Government grants made and used for local purposes. The hon. Member for Reading (Mr. H. Williams) talked this rooming about the extravagance of the local administration. It may be that local administration is in some respects extravagant; I am not going to argue that question. All I say is that, if local administration is extravagant and if there is to be more money from Imperial and national re sources, then the control must to some extent go with those increased grants. 511 To some extent I traverse what the right hon. Gentleman himself said in his speech to-day. It is quite clear that those who provide the money must to some extent have control.
I do put in a very serious plea for the kind of district I represent in this House. I represent West Walthamstow, which is in the area of the West Ham Board of Guardians and which is suffering from a very high level of rates. The rates in Walthamstow are 25s. 3d., while in other parts of the country the level is down as low as 8s. or 9s. Figures can be quoted on this matter by the hour, but I want hon. Members and the Minister to realise what is behind the figures which are so constantly quoted. What is it that happens in a place like that? I meet it every hour of my life. I have large numbers of people who come to me for help. I am not grumbling at what has been done by the Commissioners who have taken the place of the West Ham Board of Guardians. I agree that in many ways the West Ham Board of Guardians were stupid. I have nothing to do with whether their actions were legal, but they were silly. They brought themselves into conflict with a Government authority and left the people they professed to be concerned about in a worse state than before. In order to get rid of that state of affairs the Government brought forward a Bill to replace the West Ham Board of Guardians. I found myself compelled to vote against it because I know perfectly well that you can replace the West Ham Board of Guardians or any other board of guardians in a similar area, but by doing that you do not get rid of the root troubles which are the cause of what is going on.
It has been admitted that the case for necessitous areas is a strong one. Think for a moment of an area of that kind. Every local service has to be provided in an area of that kind to the fullest possible extent. I mean that all the children there have to be taught in national elementary schools and there are none to go to private schools. Therefore, the payment of money for education is as high as it can be for the population. It is exactly the same with the health services, with the police, and with the street services; it is more than the average for the poor law services. 512 People come to me because their relief has been cut down and I get this kind of case. There may be in the family a father perhaps who is out of work because a factory, which produces a product familiar to every Member of the House when he goes into the streets of London, in removing from that area because it can no longer pay its way at the present level of rates. There may be two daughters who are out of work because the right hon. Gentlemen's colleague, who sits for Hendon where the rates are 8s. 4d. as compared with 25s. 3d. in walthamstow, has passed a Safeguarding of Industries Act which has the effect of destroying a part of the trade of the City of London. The two girls who used to be employed in an office are out, of work. They do not live at Hendon or in London. They have nothing whatever to do with the decisions that threw them out of work. They live in Waltham-stow and all the burden of the poverty and unemployment rests there.
This is going on in thousands of cases and, as long as you leave that state of affairs unremedied, there are whole areas in. the north and north-east of London which are gradually being depressed to a lower standard of life. It is particularly the business of this Government to remedy that at the earliest possible moment. Hon. Members opposite are enjoying a large majority of the House. How did they get it? I am not going to say for a moment that, as between the three parties, the greatest number of people in this country did not prefer the party opposite. It did, and that is why they are there. I am going to say that any hon. Member opposite, who is honest with himself, will agree that the majority they enjoy was swelled and the support they got was strengthened because the people of this country were alarmed at certain things which existed or which they thought existed. Everybody will admit that. It was the state of alarm existing at the last General Election that swelled the majority on the benches opposite. In Other words when people are frightened, they vote Conservative, and that state of mind is expressed by the old, but very true saying, "Better the ills we know than those we wot not of." If the conditions I have described drive people to despair, then they vote Socialist.
513 Hon. Members on this side of the House will I am sure agree with me when I state that the Labour party has derived much support from the bad social conditions prevailing during the last four or five years, and I think that condition is best described by a frame of mind which considers that "Anything is better than what we have got." May I say that when the electors get rid of their fright and despair, then will come the time of the Liberal party. Meanwhile I want to point out that if hon. Members opposite wish to promote Socialism, ail they need to do is to continue to disregard these things which everyone agrees we are badly in need of at the present moment. For these reasons I have every confidence in supporting this Amendment.
§ Sir JOSEPH NALL
If the proposals put forward by this Amendment were the measure of happiness which hon. Members desire to exist in this country, then indeed we should be a miserable race. I am glad to hear that when people are frightened, they vote Conservative, because if there be one principle which should be applied to our public life to-day it is that of "safety first." I would like to refer to what was said by the hon. Member for East Islington (Major Tasker) when he referred to the surplus lands to be found in the hands of local authorities. If any hon. Member of this House will take the trouble to make some investigation into the question of surplus lands in the hands of local authorities, he will at once see how absurd is all the fuss and arguments which have been brought forward by the party opposite on this point. As a matter of fact in every part of the country local authorities are unable to dispose of their surplus land, and in Bill after Bill promoted by municipality you will find a Clause to extend the time in which they are absolutely obliged to sell their surplus land.
If that is the case with local authorities it must be the case with other private owners, and therefore a situation inevitably arises in which when a loss occurs an additional burden is put upon the unfortunate ratepayers. There is a curious contradiction between this principle and its application. Time after time a principle and its application have formed the subject of a discussion in this House on the initiative of the parties opposite. To-day we are supposed to be 514 discussing the burden of local rates and how they may be reduced, and yet almost every single speech from the other side of the House has been to suggest how they may be increased. The whole claim is more money. Where can we get it? How can we, without increasing the present rates, draw or extort a greater local revenue from our unfortunate ratepayers in order to have more money to squander through the public purse? That is the burden of the tales of the parties opposite whenever this question of local rating comes up.
Even on the question of grants-in-aid of unemployment relief works the same thing arises. I wonder how many hoe. Members who talk at length upon this question of grants-in-aid for unemployment relief works have ever calculated which is the most expensive to the local people themselves. If you will go into the figures and find out how many man-days have been provided proportionate to the money expended and what has been the cost per man-day you will find always that in addition to the expenditure by the State the cost per man-day to the local ratepayer is a good deal more than the Poor Law cost of the Guardians who have looked after the unemployed. Therefore, on the lower claim of ordinary financial adjustment you will find in ease after case that the relief of unemployment by expedited public works under a system of grants-in-aid has cost the local ratepayers a good deal more than the guardians' relief which it is sought to avoid.
I want to, indicate, one or two suggestions into which I hope the Government will make some inquiry with a view to relieving the burden of local rates as distinct from the suggestions we have had for increasing that service. It is argued from time to time—fortunately we are not to occupy our time this Session in going into it—that the administration of the Poor Law should be handed over to the local authorities. I cannot imagine a step more likely to increase the burden upon local rates than to hand over the duties of the Poor Law guardians to the local authorities, for the simple reason that at present it is only the particular duties allotted to the boards of guardians which are affected by the bribery and corruption which goes on through the system of out-relief as at present prac- 515 ticed, whereas if it became the business of every municipality throughout the country, the whole orbit of local government would come within the influence and prejudice of this iniquitous system of wangling out-relief, and in town after town up and down the country where at present there are more or less sensibly constituted local authorities governing their localities we should have in their places bodies dominated by this most pernicious influence which is at present disturbing the work of the boards of guardians.
One of the things which is increasing the burden of local rates is the present practice of encouraging local authorities to overlap and compete with the boards of guardians in the genuine administration of what may properly be called public charity. Over the last few years it has become common form to decry boards of guardians and to assume that the Poor Law as it exists to-day is founded upon a wrong foundation, and ought to be swept away. I do not agree in any way with that view. There is no more noble form of public service than the conscientious performance of the duties of a member of a board of guardians. Boards of guardians are, in fact, trustees for the public for the purposes of administering public charity to those who, in most cases through no fault of their own, are obliged to seek that public assistance; and the so-called stigma of pauperism, which over the years has been applied to that process of the administration of public charity, is greatly to be regretted.
Arising from that stigma, or so-called stigma, of pauperism, instead of trying to remove it, instead of trying to get the general public to see the matter in its proper perspective, we have resorted to an expedient which is as expensive as, in many cases, it is ineffective. In order to relieve those who would normally seek the assistance of the boards of guardians, we try to relieve them from the stigma attaching thereto by getting them to go to the local authority, who, either by the provision of meals for necessitous school children, or by the issue of free grants of milk and so on for young babies, or by the many other forms of public, assistance and social welfare administered by local authorities, are, in fact, granting them at the public expense the same kind 516 of relief from public funds which they would otherwise have got from the board of guardians.
I say there is no disgrace in being relieved, when circumstances justify it, from public funds in the manner provided for in the Poor Law, and I say it is extravagant and often ineffective when, side by side with the Poor Law organisation, you have a parallel organisation maintained by the municipalities, maintaining a staff which duplicates the staff of the Poor Law guardians, and which, in addition to being a further burden upon the local rates, is also a burden upon the National Exchequer. If it is sound from an educational point of view to provide meals for necessitous children through the Education Vote, why not provide them with clothes and boots? Why not provide them, through the same machinery, with suitable dwellings?
There is no excuse, there is no justification, for regarding the feeding of necessitous school children, for instance, as an educational service. As a social service, as a public charity, of course it must be done, but why is it not done by the authority which is set up for that kind of purpose, namely, the board of guardians? What kind of liaison exists to see that parents who are in receipt of out-relief—which, if it is properly calculated, should provide for the maintenance of the children of those parents—do not overlap with the further free feeding of the same children through the machinery of the local education authority? What cooperation or co-ordination exists to see that all the various public charity or so-called social welfare services administered by the local authority do not overlap with the similar parallel services of the board of guardians? If we really want to relieve the burden of local rates there is a field for investigation in this way, that local authorities should be relieved of public charity services so that they can more properly and efficiently apply their energies to the real utilitarian business of local government. The administration of public charities should be properly revised and brought up to date under its more appropriate heading of Poor Law administration.
I do not expect an answer to these things just now. They involve questions of principle. I do not ask my right hon. Friend or the Under-Secretary to give me any reply on the question of principle 517 till they have had an opportunity of investigating the figures and the facts, but I urge upon hon. Friends who really wish to see the burden of local rates reduced to pursue some inquiries in their locality. I have seen from time to time an astounding and extraordinarily foolish overlapping even in medical health services. You get the medical officers of the staff of the local authority sending qualified people to the same houses in the same street, one group of medical men to look after children of school age and another group to look after children of the same family who are rather below or just over school age. Can there be a more ridiculously extravagant system of carrying on social service at the public expense? We have to face facts, unpleasant as they may be. We have to get a proper perspective of this question of public charities. I use the word in its best sense. There is no disgrace in receiving public charity where it is justified. There is every honour to the authority which properly administers things, but it is nothing but a mockery and a sham when we try to impose the stigma of pauperism upon those who draw charity from the guardians while we encourage, and indeed some branches of the Ministry of Health spend great time and energy in encouraging the receipt of similar charity from public authorities where they hope to avoid that same stigma.
On the question of site values, from the speeches we have heard to-day it is really impossible to know what hon. Members opposite are really asking for. Do they want to exempt all improvements from rates? Is the man who has a field on which he grows grass to be exempted from rates because he builds a house on it? Are the large sites occupied by the heavy industries, whose buildings are notoriously in many cases of no great capital value, to have their burden of local rates increased because they are to be taxed upon the site value of their premises rather than on the value of the hereditaments?
§ Sir J. NALL
Nothing of the kind The same people have to provide the same revenue. It has to be assessed on a different basis, and the heavy industries, in many cases located near or in the centre of big industrial towns. 518 where their values are supposed to be high, would actually have their burden of rates increased because they will have to pay on the new system of site value as against the real value. Hon. Members seem to assume that the land around or in a city is always increasing in value. There are sites in Manchester to-day which would not fetch and do not fetch anything like the price they changed hands at 30 or 40 years ago. Are the owners of sites which decrease in value to have no consideration?
§ Sir J. NALL
The buildings now on these sites, as the complete hereditament, are of the higher rateable value. From first to last, the speeches on this particular question from the other side show no sort of consistency. There is no clear policy. In other words, the whole thing is exactly typical of the political mentality of the party from which this Amendment emanates. I want to close on that note—that if we do wish to reduce the burden of local rates, we must look at these things in their proper perspective, and do our best, through the legislation which we may at some future date pass through this House, to place upon local authorities the single and clearly defined duty of governing their locality without the prejudice and the unfortunate influences which would arise if, imposed upon those duties, they become responsible for poor law duties.
§ Colonel WEDGWOOD
I am grateful to the Liberal party for introducing this Amendment, and thereby giving us an opportunity of discussing this subject. I regret, however, that the Liberal party have for the first time, definitely confined themselves to limiting this system of rating to urban areas. Fortunately, the speeches of the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) and the hon. Member for West Walthamstow (Major Crawfurd) were not confined to urban areas. They realised that if the principle is sound for urban areas, it is sound for rural areas. In this matter the Labour party by their resolution at Liverpool proposed that permission should be given to local authorities to 519 levy rates upon land values, whether urban or rural in character.
At heart, I am a Treasury man. I dislike the system of giving large grants to local authorities. I dislike it, as we all dislike it, because we know perfectly well that the people who provide the money ought to control the spending of it, and that you always get waste when you have people spending money who do not provide it. Everybody in this House is probably, at heart, anxious to see that the expenditure which is controlled locally is provided locally, but it is becoming very difficult for those of us who believe that the people should have the control of this local business to check this demand upon the public Treasury for grants-in-aid. It is becoming very difficult because it is obvious to everybody that the burden of the rates is really strangling industry at the present time, and preventing our industrial recovery.
The right hon. Member for Carnarvon Boroughs showed that on every ton of steel the rates amounted to 7s. Seven shillings a ton is the cost of rates upon the steel industry. In every other industry it is the same. The coal industry is being strangled in the same way by the rates. We know perfectly well that the people who escape rates are the owners of the royalties. The royalty-owner is escaping his contribution to the rates, and the burden is being thrown upon the struggling industry. We see in every direction that the present burden of rates is making recovery impossible. Let me give one example how we manage to get round the difficulty in Stoke-on-Trent. There, we desired to get the Michelin Tyre Company to establish their English works. Naturally, a great many places in the Midlands, and all over England, were competing for those works to be built in their areas. What did we do? We said to the Michelin Tyre Company: "We will give you free land and we will relieve you from the burden of rates for a period of years." On those conditions the Michelin Company are building at Stoke-on-Trent, and there will be 10,000 men employed there, relieving the burden of unemployment in Stoke-on-Trent. Not only did we provide free land for the company, but we also relieved them of the burden of rates. 520 That is, obviously, hard on the other ratepayers in that area and on those firms which are competing with the Michelin Company elsewhere. But so great is unemployment in that area that we had to make that sacrifice, and so we will relieve them from rates. How much better would it be if we could say to all manufacturers: "We will relieve you of this penalising taxation"? I have just come back from Macedonia. There we have a problem very similar to ours. Greece had, three years ago, 1,400,000 unemployed refugees dumped into the land. The problem was taken in hand by an Englishman—of course, it is always an Englishman who does these things. With English money—£10,000,000—he has solved the unemployment problem in Greece. The Greek Government again provided free land. The British public provided the capital; 1,400,000 unemployed had got work in three years. The Government not only provided free land but they also gave three years' relief from any form of taxation. What an Englishman with English money has done in Greece can be clone by Englishmen with English money in this country.
The right hon. Gentleman the Minister of Health has made more eloquent speeches in this House on this question than I have. His argument for the unrating of machinery was the finest argument put forward in this House. He knows that these rates are an overhead charge and because of the added cost of production we cannot compete in the markets of the world. He gave us to-day the objections to it, the difficulties of getting the value and of all the boundaries. Those are difficulties that have faced other countries. Let him remember that there are other British governed countries in the world, and let him see how they are getting round these difficulties. In South Africa the City of Johannesburg has transferred all rates off improvement values. In New Zealand all the electors are entitled to choose one of three methods of local rating, either as we have it here, or on a capital value, or on land values alone. It is all done by a poll of the inhabitants. Town after town has changed from our system, first to the system of capital valuation, and then to the system of land values alone. None has gone back. The same thing has been seen in America. There the 521 local taxation is on capital value, land plus building; but unemployment and housing shortage in New York led New York to make a change and they said that for a period of seven years all new houses should be rate free. The result was that they got the new houses. In Pennsylvania they tried another plan, the Pittsburg plan, and all the coal area has adopted a system of remitting half the tax on improvements. In the same way, although it was introduced as an experiment, that plan is spreading in America. In fact all over the Empire you find this system growing, the system of relieving improvements from taxation in order to cheapen production, and at the same time to levy the local taxation instead upon land values, so that it shall be more and more difficult to hold land idle and to force up the price. We want land cheaper and capital cheaper. If we are to get that, we must untax capital and tax land value, so that it no longer pays to hold up land for high prices.
Let me give one curious illustration from Palestine. I have also just come back from Palestine. There has grown up in Palestine the city of Tel-Aviv. It is a town of 43,000 inhabitants, entirely Jews, and has sprung up in five years. It is entirely governed by the Jewish community, and, I might add, they have a Labour majority. They came to the conclusion that the rating of land values was the right thing. They instituted a tax on unbuilt-on land, and they thought they would make it a 10 per cent. tax. If hon. Members work that out they will see that it is double the value of the property. It was passed because they thought it was a capital tax. It was a 10 per cent. annual tax, with the result that there is no pity so heavily taxed on land values as that city. That is going too far, of course. East London has a tax of a 1s. in the £. In Denmark they had to face the same problem, and the Socialist Government last year instituted a tax up to 7d. or 8d. in the £. There they have seized the opportunity of the terrible slump in trade and the unemployment to change their system of local taxation in the direction of relieving improvements and penalising everyone who keeps idle that part of nature which is essential to all production.
522 For these reasons I beg the Minister of Health to give some consideration to this problem. Let him collect from all our colonies information showing what is the position there. That would not be committing him to anything. Let him get the information so that Members can see how the rest of the Empire is meeting this problem. Let him consider whether it would not be wise to delegate far more powers to local authorities. I believe that sooner or later the Labour party, or any progressive party, must stand for greater decentralisation, indeed for Home Rule in taxation, and allow local authorities to raise their money as they like. Although they will make mistakes, it is only by making mistakes that they can learn the wisest way of raising local taxes.
§ Sir K. WOOD
The Amendment can best be described as rather foggy, because, as has been said, it deals only with one side of the problem, and omits any suggestion for dealing with rural areas. I must make one comment on the speech of the last speaker. A document has just been put into my hand dealing with the suggestion which the right hon. Gentleman made about America and New York. I see that the President of the Department of Taxes and Assessments of New York City points out that investigation by his Department revealed that the profits accruing to owners of tax-exempt houses were as high as 20 per cent., and that rates on tax-exempt houses were higher than on buildings which paid the taxes. Those views, expressed by public officials before a Commission, give rise to considerable anxiety as to the merits of the scheme which the right hon. Gentleman has just put before the House.
§ Colonel WEDGWOOD
May I point out that, while the hon. Gentleman's comment is justified, these tax-free houses are not controlled. Their rents can go up to the normal economic level.
§ Sir K. WOOD
Then we must have another remedy, in addition to the one which the right hon. Gentleman suggests. At any rate, I think the Debate has served one useful purpose in bringing attention once again to a problem which demands attention and which is in the belief of the Government, one of importance and urgency. It has been very well said that the effect of high rates may be often more directly detrimental to indus- 523 try than high national taxation as rates are not based upon profits earned but are levied without regard to the financial position of the firms concerned. The position has become even more acute owing to the disastrous consequences of the general strike and the coal stoppage. These have seriously affected many districts in which high rates have become a crushing burden. I need only quote the fact that the cost of Poor Law out-relief has jumped from £3,000,000 in 1918 to £15,000,000 in 1925–26, and undoubtedly an immense burden has been thrown on the ratepayers.
While there is an unusual measure of agreement both on the existence of the evil, and also on the necessity of finding some method or methods of dealing with the problem on considered and scientific lines, there has been a great diversity of View and a great diversion of opinion in the course of this Debate as to the remedy or remedies which should be applied. The Labour party whose view, I take it, was expressed by the only speaker from the Front Opposition Bench the hon. Member for Hillsbrough (Mr. A. V. Alexander) again put forward what is, at any rate, part of the Socialist solution, and that is the assumption by the nation of the full financial responsibility for the maintenance of the unemployed. I ventured to interrupt the hon. Member when he was speaking because I remembered that when the Labour party were in office this view was constantly urged upon them and the reply always made then was not that they were in office only and not in power, but that—as the Minister of Labour in that Government said in my presence—the State had not a bottomless purse and that it was not possible to find a reasonable formula which would be fair to all the authorities up and down the country. So far in fact from putting this particular principle into practice were the Labour party when they had the opportunity that they at all times resisted it.
To-day we have another suggestion, so far as the Liberal section of the House is concerned, and I think I am entitled, although I have been rather warned away by the hon. and gallant Member for West Walthamstow (Major Crawfurd), who does not want me to refer to the matter, 524 to call attention to a previous experiment which has been tried in this connection, and which is at any rate familiar to many of us. I do so because the author of the attempt, in the Finance Act of 1909–10, spent much of his speech this afternoon in inviting my right hon. Friend the Minister of Health to study this particular problem. I think it is material to see what happened when the previous experiment was made in connection with land values taxation. The House may remember that that particular experiment was inquired into, not by a committee of politicians, but by the very officials whose business it was to make the particular taxes workable, and they arrived at the conclusion that the duties were unworkable and could not be made workable without an immense addition to legislation. The matter was very well summed up by my right hon. Friend the present Foreign Secretary, who said:What are the facts? The taxes have yielded £1,300,000 in the course of the years they have been in force. There is duty assessed, but much of it assessed on the wrong basis, to the extent of another £500,000. That is a maximum yield of duty of something below the figure of £1,800,000. The cost of the valuation and collection, which was estimated by my right hon. Friend's (Mr. Asquith's) Government at £2,000,000 in all, has seen £5,000,000.That is the experiment of the right hon. Gentleman, who invited my right hon. Friend this afternoon to study a handbook on this question. My right hon. Friend the Foreign Secretary went on to say:We have spent £5,000,000 to obtain a valuation which is useless for every other purpose in life. What of the future? I am told that the possible yield may be about £600,000 a year, probably rather less, and the probable annual cost of collecting these duties, apart from other duties attached to the men employed in the Department, would be £400,000. You have an annual cost of collection of £400,000 and an annual revenue of £600,000. That is a net advantage to the whole body of ratepayers of £200,000, less, I should think, than Would be spent by the individual taxpayers in providing the information required by the Inland Revenue or in checking the calculations on which the Inland Revenue sought to assess you.That is the work of the right hon. Gentleman the Leader of the Liberal party, who invite my right hon. Friend to spend his time until the end of the year in studying this problem.
§ Major CRAWFURD
Surely, in justice, the hon. Gentleman will admit that there is nothing in common between taxes that he has quoted and the simple proposal for rating site values.
§ Sir K. WOOD
I have pointed out that it comes from the same stable, and at any rate most people in this country have some regard to that particular aspect of the situation. If I may put my point in another way, there are various plausible and persuasive gentlemen who travel up and down the country selling pills at local fairs, which are supposed to cure everything, from rheumatism to housemaid's knee, but there is one rule which these gentlemen always adopt, and that is never to go to the same village twice. Perhaps it might help the hon. and gallant Gentleman opposite to think that over during the next few minutes. The hon. Member for Hillsborough said, "It is true you have got your Rating and Valuation Act and that you spoke about your Poor Law Bill, which, we are told, is going to be brought in shortly, and you have also spoken on the question of the adjustment of local and national taxation, but," he said, "what are we to do in the interval?" I suggest that there are one or two things we can all do, having regard to the lessons of the past. It is estimated, and I think in a quarter that can be relied upon, that the effect of the General Strike and the coal stoppage has cost the ratepayers of this country from £20,000,000 to £30,000,000, apart from the huge loans that have been given in the mining areas. I think everyone can well learn this lesson, that the avoidance of strikes, stoppages and trade disputes, at any rate, is one path by which we might be able to obtain lower rates in this country. There is another aspect which, I think, also ought to be emphasised. Undoubtedly, apart from those bigger remedies, there is a great laxity of administration in many authorities up and down the country. It was only last year in the Ministry of Health Report that we called attention to this particular matter, and we then said:It is beyond question that in certain unions laxity of administration has led to substantial additions both in the numbers of recipients of relief and in the burden of cost placed upon the ratepayers. The scale of relief, which should be adequate to meet the needs of those to whom relief was granted, should not be such as to challenge 526 comparison with the earnings of the workers who are called upon directly or indirectly to contribute to relief so granted.I should have thought those intimately associated with the district of West Ham would have given a little more credit to the great reduction and transformation which have been accomplished so far as the rates are concerned.
§ Sir K. WOOD
We hear little in this House about the position of West Ham, but that is a striking example of what can be achieved by economical administration. I would like to repeat to the House a statement, not from one of the papers supporting the Government, but a paper which would appeal to the hon. Gentleman opposite. The article is headed,The Transformation." It says:Opinions may differ as to the propriety of appointing three unelected and unrepresentative finance experts to supersede the popularly elected West Ham Guardians, but everyone will gasp at the transformation they have produced. No 'little child' ever intervened in the domestic infelicities of its parents in melodrama with greater effect than have the Government Board of Guardians amid the bewildering tangle of West Ham finance. The deposed Committee of 56 borrowed at the rate of £700,000 a year; the superimposed committee of three have not vet asked for a loan. Instead, the burdens on the ratepayers have been lightened to the extent of £28,000, which amounts to 2d. in the £1 reduction on the rates for the half year.
§ Sir K. WOOD
That, I may tell the House, is a quotation from the "Daily News," and I submit that it points to one direction along which hon. Members might encourage their localities to proceed. I was very disappointed to hear that the hon. Member for West Walthamstow had not voted for the West Ham Bill.
There is another direction in which I think a great deal could be done. I regret that so very few people take interest in municipal elections. When I hear people grumbling about high rates, I often wonder whether they themselves carry out the elementary duty of going to the poll. It is a most regrettable fact that the percentage of voters at boards of guardians elections is well under 30 per 527 cent., and that in some cases the guardians are actually elected on a vote of 5 per cent. of the electorate. It is all the more regrettable because, in the present state of the law, limited companies, who pay a very considerable proportion of the rates, are unable to exercise the franchise. Very often, too, and this is a matter which has considerable bearing upon high rates, the elections are decided by persons who are making no contributions themselves towards the public funds but are in receipt of money from the rates. These are matters which call for attention in addition to the matters referred to this afternoon.
The Government's position in this matter is perfectly plain. We have put forward the only Sound and scientific plan which will bring about relief and remove inequalities admittedly existing in various parts of the country. We have got our Local Valuation Act on the
§ Statute Book; it is now being put into operation, and will I believe, be fully justified. We hope to bring our Poor Law proposals forward in the autumn, and I hope on another occasion to be able to demonstrate to the House how these will deal with "Poplarism" and bad administration up and down the country. Finally, as indicated by the Prime Minister, the Government are now examining the very difficult and complex question of the relation of local finance to the National Exchequer. I believe it is on those lines, rather than by the rough and unsatisfactory suggestion put forward in this Amendment, that we shall find the speediest remedy for a very difficult problem, and I therefore invite the House to reject the Amendment.
§ Question put, "That those words be there added."
§ The House divided: Ayes, 88; Noes, 244.529
|Division No. 2.]||AYES.||[4.0 p.m.|
|Adamson, W. M. (Staff., Cannock)||Griffiths, T. (Monmouth, Pontypool)||Salter, Dr. Alfred|
|Baker, Walter||Groves, T.||Scrymgeour, E.|
|Barker, G. (Monmouth, Abertillery)||Guest, Capt. Rt. Hon. F. E.(Bristol, N.)||Scurr, John|
|Barnes, A.||Guest, Haden (Southwark, N.)||Sinclair, Major Sir A. (Caithness)|
|Barr, J.||Hamilton, Sir R. (Orkney & Shetland)||Slesser, Sir Henry H.|
|Batey, Joseph||Hardle, George D.||Smith, Ben (Bermondsey, Rotherhithe)|
|Bondfield, Margaret||Hayday, Arthur||Smith, H. B. Lees (Keighley)|
|Briant, Frank||Henderson, T. (Glasgow)||Smith, Rennie (Penistone)|
|Broad, F. A.||Hirst, W. (Bradford, South)||Snell, Harry|
|Bromley, J.||Hore-Belisha, Leslie||Stephen, Campbell|
|Buchanan, G.||Hudson, J. H. (Huddersfield)||Taylor, R. A.|
|Cape, Thomas||Jones, J. J. (West Ham, Silvertown)||Thomas, Rt. Hon. James H. (Derby)|
|Charleton, H. C.||Kelly. W. T.||Thorne, G. R. (Wolverhampton, E.)|
|Cluse, W. S.||Kennedy, T.||Thorne, W. (West Ham, Plaistow)|
|Connolly, M.||Kenyon, Barnet||Thurtle, Ernest|
|Cove, W. G.||Lansbury, George||Trevelyan, Rt. Hon. C. P.|
|Crawfurd, H. E.||Lawrence, Susan||Viant, S. P|
|Dalton, Hugh||Lindley, F. W.||Wallhead, Richard C.|
|Davies, Evan (Ebbw Vale)||Lowth, T.||Wedgwood, Rt. Hon. Josiah|
|Day, Colonel Harry||MacDonald, Rt. Hon. J. R. (Aberavon)||Westwood, J.|
|Dennison, R.||MacLaren, Andrew||Whiteley, W.|
|Duncan, C.||Maclean, Neil (Glasgow, Govan)||Williams, T. (York, Don Valley)|
|Edwards, C. (Monmouth, Bedwellty)||March, S.||Wilson, C. H. (Sheffield, Attercliffe)|
|Edwards, J. Hugh (Accrington)||Morrison, R. C. (Tottenham, M.)||Wilson, H. J. (Jarrow)|
|Evans, Capt. Ernest (Welsh Univer.)||Mosley, Oswald||Windsor, Walter|
|Forrest, W.||Naylor, T. E.||Wright, W.|
|Garro-Jones, Captain G. M.||Owen, Major G.|
|Gardner, J. P.||Palin, John Henry||TELLERS FOR THE AYES.—|
|George, Rt. Hon. David Lloyd||Paling, W.||Sir Robert Hutchison and Mr. Fenby.|
|Gillett, George M.||Potts, John S.|
|Grenfell, D. R. (Glamorgan)||Richardson, R. (Houghton-le-Spring)|
|Acland-Troyte, Lieut.-Colonel||Banks, Reginald Mitchell||Boothby, R. J. G.|
|Albery, Irving James||Barclay-Harvey, C. M.||Bourne, Captain Robert Croft|
|Alexander, E. E. (Leyton)||Barnett, Major Sir Richard||Bowater, Col. Sir T. Vansittart|
|Alexander, Sir Wm. (Glasgow, Cent'l)||Barnston, Major Sir Harry||Bowyer, Captain G. E. W.|
|Applin, Colonel R. V. K.||Beckett, Sir Gervase (Leeds, N.)||Brass, Captain W.|
|Apsley, Lord||Bellairs, Commander Cariyon W.||Briscoe, Richard George|
|Ashley, Lt.-Col. Ht Hon. Wilfrid W.||Bentinck, Lord Henry Cavendish-||Brittain, Sir Harry|
|Astor, Maj. Hn. John J. (Kent, Dover)||Berry, Sir George||Brocklebank, C. E. R.|
|Atholl, Duchess of||Betterton, Henry B.||Brooke, Brigadier-General C. R. I.|
|Atkinson, C.||Birchall, Major J. Dearman||Broun-Lindsay, Major H.|
|Baldwin, Rt. Hon. Stanley||Blades, Sir George Rowland||Buckingham, Sir H.|
|Balniel, Lord||Blundell, F. N.||Bull, Rt. Hon. Sir William James|
|Bullock, Captain M.||Herbert. S. (York, N.R., Scar. & Wh'by)||Peto, Sir Basil E. (Devon, Barnstaple)|
|Burgoyne, Lieut.-Colonel Sir Alan||Hogg, Rt. Hon. Sir D. (St. Marylebone)||Peto, G. (Somerset, Frome)|
|Burton, Colonel H. W.||Hobler, Sir Gerald Fitzroy||Power, Sir John Cecil|
|Butt, Sir Alfred||Holland, Sir Arthur||Pownall, Lieut.-Colonel Sir Assheton|
|Cadogan, Major Hon. Edward||Holt, Captain H. P.||Radford, E. A.|
|Campbell, E. T.||Homan, C. W. J.||Ramsden, E.|
|Cassels, J. D.||Hope, Capt, A. O. J. (Warw'k, Nun.)||Reid, Capt. Cunningham (Warrington)|
|Cautley, Sir Henry S.||Hopkins, J. W. W.||Reid, D. D. (County Down)|
|Cayzer, Sir C. (Chester, City)||Howard-Bury, Lieut.-Colonel C. K.||Remnant, Sir James|
|Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.)||Hudson, Capt. A. U. M. (Hackney, N.)||Rhys, Hon. C. A. U.|
|Cecil, Rt. Hon. Sir Evelyn (Aston)||Hume, Sir G. H.||Roberts, Sir Samuel (Hereford)|
|Chadwick, Sir Robert Burton||Huntingfield, Lord||Russell, Alexander West (Tynemouth)|
|Chamberlain, Rt. Hon. N. (Ladywood)||Hurd, Percy A.||Rye, F. G.|
|Chilcott, Sir Warden||Hurst, Gerald B.||Salmon, Major I.|
|Christie, J. A.||Iliffe, Sir Edward M.||Samuel, A. M. (Surrey, Farnham)|
|Clarry, Reginald George||Inskip, Sir Thomas Walker H.||Sandeman, A. Stewart|
|Clayton, G. C.||Jackson, Sir H. (Wandsworth, Cen'l)||Sanderson, Sir Frank|
|Cobb, Sir Cyril||Jacob, A. E.||Sassoon, Sir Philip Albert Gustave D.|
|Cockerill, Brig.-General Sir G. K.||James, Lieut.-Colonel Hon. Cuthbert||Savery, S. S.|
|Conway, Sir w. Martin||Jones, G. W. H. (Stoke Newington)||Shaw, R. G. (Yorks, W. R., Sowerby)|
|Cope, Major William||Joynson-Hicks, Rt. Hon. Sir William||Shepperson, E. W.|
|Courtauld, Major J. S.||Kennedy, A. R. (Preston)||Simms, Dr. John M. (Co. Down)|
|Cowan, Sir Wm. Henry (Islington, N.)||Kidd, J. (Linlithgow)||Sinclair, Col. T. (Queen's Univ., Belfast)|
|Craig, Ernest (Chester, Crewe)||Kindersley, Major G. M.||Skelton, A. N.|
|Croft, Brigadier-General Sir H.||King, Captain Henry Douglas||Slaney, Major P. Kenyon|
|Crookshank, Col. C. de W. (Berwick)||Kinloch-Cooke, Sir Clement||Smith-Carington, Neville W.|
|Crookshank, Cpt. H.(Lindsey, Gainsbro)||Lamb, J. Q.||Smithers, Waldron|
|Cunliffe, Sir Herbert||Leigh, Sir John (Clapham)||Somerville, A. A. (Windsor)|
|Dalkeith, Earl of||Lister, Cunliffe, Rt. Hon. Sir Philip||Spender-Clay, Colonel H.|
|Dalziel, Sir Davison||Lloyd, Cyril E. (Dudley)||Sprot, Sir Alexander|
|Davidson, Major-General Sir J. H.||Locker-Lampson, G. (Wood Green)||Stanley, Col. Hon. G. F. (Will'sden, E.)|
|Davies, Maj. Geo. F. (Somerset, Yeovil)||Looker, Herbert William||Stanley, Lord (Fylde)|
|Davies, Dr. Vernon||Lord, Sir Walter Greaves-||Stanley. Hon. O. F. G. (Westm'eland)|
|Davison Sir W. H. (Kensington, S.)||Lougher, L.||Storry-Deans, R.|
|Dawson. Sir Philip||Lucas-Tooth, Sir Hugh Vere||Streatfeild, Captain S. R.|
|Dixey, A. C.||Lumley, L. R.||Strickland, Sir Gerald|
|Eden, Captain Anthony||Lynn, Sir R. J.||Stuart, Crichton-, Lord C.|
|Edmondson, Major A. J.||MacAndrew, Major Charles Glen||Tasker, Major R. Inigo|
|Elliot, Major Walter E.||Macdonald, R. (Glasgow, Cathcart)||Templeton, W. P.|
|Ellis, R. G.||McDonnell, Colonel Hon. Angus||Thompson, Luke (Sunderland)|
|Erskine, Lord (Somerset, Weston-s.-M.)||MacIntyre, Ian||Thomson, F. C. (Aberdeen, S.)|
|Everard, W. Lindsay||McLean, Major A.||Titchfield, Major the Marquess of|
|Fanshawe, Commander G. D.||Macmillan Captain H.||Tryon, Rt. Hon. George Clement|
|Fermoy, Lord||McNeill, Rt. Hon. Ronald John||Vaughan-Morgan, Col. K. P.|
|Finburgh, S.||MacRobert, Alexander M||Wallace, Captain D. E.|
|Forestler-Walker, Sir L.||Malone, Major P. B.||Ward, Lt.-Col. A. L. (Kingston-on-Hull)|
|Foster, Sir Harry S.||Margesson, Captain D.||Warner, Brigadier-General W. W.|
|Foxcroft, Captain C. T.||Marriott, Sir J. A. R.||Waterhouse, Captain Charles|
|Fremantle, Lieut.-Colonel Francis E.||Mason, Lieut.-Col. Glyn K.||Watson, Rt. Hon. W. (Carlisle)|
|Galbraith, J. F. W.||Meyer, Sir Frank||Wells. S. R.|
|Ganzoni, Sir John||Mitchell, S. (Lanark, Lanark)||Wheler, Major Sir Granville C. H.|
|Gates, Percy||Mitchell, Sir W. Lane (Streatham)||White, Lieut.-Col. Sir G. Dalrymple-|
|Gilmour, Lt.-Col. Rt. Hon. Sir John||Moore, Lieut.-Colonel T. C. R. (Ayr)||Williams, A. M. (Cornwall, Northern)|
|Gower, Sir Robert||Moore, Sir Newton J.||Williams, Com. C. (Devon, Torquay)|
|Grace, John||Moore-Brabazon, Lieut.-Col. J. T. C.||Williams, Herbert G. (Reading)|
|Grant, Sir J. A.||Moreing, Captain A. H.||Wilson, R. R. (Stafford, Lichfield)|
|Greene, W. P. Crawford||Morrison. H. (Wilts, Salisbury)||Windsor-Clive, Lieut.-Colonel George|
|Gretton, Colonel Rt. Hon. John||Morrison-Bell, Sir Arthur Clive||Wise, Sir Fredric|
|Grotrian, H. Brent||Murchison, Sir C. K.||Withers, John James|
|Guinness. Rt. Hon. Walter E.||Nail, Colonel Sir Joseph||Wolmer, Viscount|
|Gunston, Captain D.||Nelson, Sir Frank||Wood, E. (Chest'r, Stalyb'ge & Hyde)|
|Hacking,. Captain Douglas H.||Newman, sir R. H. S. D. L. (Exeter)||Wood, Sir H. K. (Woolwich, West)|
|Hall, Lieut.-Col. Sir F. (Dulwich)||Newton, Sir D. G. C. (Cambridge)||Wood, Sir S. Hill- (High Peak)|
|Hannon, Patrick Joseph Henry||Nield, Rt. Hon. Sir Herbert||Woodcock, Colonel H. C.|
|Harland, A.||Oakley, T.||Worthington-Evans, Rt. Hon. Sir L.|
|Harrison, G. J. C.||O'Connor, T. J. (Bedford, Luton)||Wragg, Herbert|
|Hawke, John Anthony||O'Neill, Major Rt. Hon. Hugh|
|Headlam, Lieut-Colonel C. M.||Ormsby-Gore, Rt. Hon. William||TELLERS FOR THE NOES.—|
|Henderson, Capt. R. R. (Oxford, Henley)||Pennefather, Sir John||Commander B. Eyres Monsell and|
|Hennessy, Major Sir G. R. J.||Penny, Frederick George||Colonel Gibbs.|
|Herbert, Dennis (Hertford, Watford)||Percy. Lord Eustace (Hastings)|
§ Main Question again proposed.
§ It being after Four of the Clock, the Debate stood adjourned.
§ Debate to be resumed upon Monday next (14th February).