NEW CLAUSE.—(Payment of estate duty in the form of real property.) (Hansard, 7 July 1930)

§ Mr. WISE

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

The purpose of the Amendment is to enable the heirs of real property, at their option, to pay Estate Duty in land or in other forms of real property. The reason for the Clause will be very familiar to hon. Members of the House who are in close touch with the problems of the agricultural industry. It is common ground between all parties of this House that at the present moment agriculture is suffering from a shortage of working capital. It is common ground also at this moment that land owning, as compared with other forms of business, if I may use that phrase, is not a very profitable occupation or profession. It is common ground also that for a variety of reasons—the general depression of the agricultural industry, and, I think I am prepared to admit, the effect of taxation over a period of years, taxation imposed by the parties opposite, or continued by them, over a series of Budgets—the landowning class have been left impoverished. 198 They have turned to their land in a great number of cases long after they had lost or ceased to possess the working capital necessary to work the land.

There have been many cases brought to the attention of the public in the last few years in which landowners, finding themselves bound to pay a considerable sum in Estate Duty, have been unable to meet that liability except at the expense of the working of their estate from the agricultural point of view. They have been faced with alternatives. The landowner, left with land but without much for working capital, has had to choose between the awkward alternatives of raising a mortgage, and so impoverishing himself for the rest of his ownership in working the land, or of selling it to the farmers in order to retain them in their occupation of the land, and in that case it is the farmers who are impoverished because they utilise for purchasing purposes capital which ought to be used for agricultural purposes; or else—this, on the whole, is the worst way out—of selling it to speculators or persons whose only purpose is to use the land for non-agricultural purposes, or to get rid of it as quickly as possible by selling it and breaking it up as an agricultural entity or disfiguring it in other ways.

I do not want there to be any mistake as to my motive in moving this new Clause. I do not do it out of any love for landowners, as such. Its purpose is to meet the case where they are unable to perform the task of financing agriculture and running their estates economically, which is the only justification of their continuation as landowners. I confess, and I do not suppose that it will surprise the Committee, that I share the view of many hon. Members opposite who approach this problem of land ownership from other than a party standpoint—men like certain professors at Oxford, the present Viceroy of India and others—that the only possible solution of the problem of land ownership in this country is, as rapidly as possible, to transfer land from private to public ownership, not only in the interests of the community as a whole but in the interests of the landowners. So long as land remains in private ownership, there is no advantage—[Interruption]—I should be glad if the right hon. Gentleman on the Front Opposition Bench 199 would cease interruption—in making it impossible for the landlords to do their job, or making it impossible for them to get out.

The new Clause proposes to make it compulsory on the Commissioners of Inland Revenue to accept payment of Estate Duty in land when offered to them. By a Clause in the Finance Act of 1910 they were given the option to do that, but it appears that of thirty million acres of land that have become liable to Estate Duty since that time, up to a few weeks ago—[Interruption]—they have accepted in payment something like 1 acre, 2 roods and 2 poles of land, so that that part of the Finance Act has not worked. This new Clause proposes that when land is offered the Commissioners shall be compelled to take it, not necessarily the particular land offered, but land from the estate. Obviously, they must be allowed to choose the land which is worthy to be accepted from the point of view of economic advantage and from the point of view of the efficient and proper division of the estate. I propose also that where it is necessary to get the best economic value out of the estate, or because the whole estate may be usfeul for public purposes, if it is proposed to have payment in land they shall have the right, if they can establish their case on arbitration, to take the whole estate at the value at which it has been assessed for Estate Duty.

It may be objected on behalf of the Government that this would land the Exchequer in considerable loss of revenue. I have examined the figures carefully, as far as I could from the report of the Commissioners, and, as far as I can tell—the report is not very clear or detailed on the point—the total value of agricultural land that might possibly come within the operation of the Clause would amount to not more than £3,000,000 or £4,000,000 per year, and most of this land could be used for adding to the Crown lands. The Crown Lands Commissioners have, I believe, £3,000,000 or £4,000,000 available for the purchase of agricultural farming land at this moment, which they cannot use except for this purpose, and the immediate loss to the revenue would not be an appreciable sum. Moreover, it would provide land available at once for purposes of 200 afforestation, for small holdings and a number of other purposes. It would throw upon the Inland Revenue the responsibility of finding some use for the land but with the demand for small holdings and for afforestation no serious difficulty would arise. I admit that this is a step towards the nationalisation of land, and if it helps out agricultural landlords who are anxious to rid themselves of the burden of landownership and cannot do so, it does it in a manner which safeguards the public interests and carries us along a road upon which I am convinced we are bound to go.

§ Mr. P. SNOWDEN

I am afraid that, if hon. Members are to catch their last trains, I shall have to confine my reply to a few sentences. This proposal raises a very big question, and I do not think it can be settled by the method proposed in the new Clause. As a matter of fact, it would not alter the existing law, and what the Government want is money. If they are paid in land, they would have to sell it in order to get money. Many other points might be raised on this new Clause, but, in view of the lateness of the hour, I will only say this: The new Clause raises a large question, and I cannot accept it in the form in which it is on the Paper, but I will promise to give the matter further consideration during the next 12 months and see if the system can be changed so as to facilitate the public acquisition of land more rapidly than is possible under the present law.