CLAUSE 26.—(Annual value of property in London for purposes of Income Tax.)

HC Deb 23 June 1930 vol 240 cc823-911

Mr. MARJORIBANKS

I beg to move, in page 22, line 13, to leave out Subsection (1).

I venture with great respect to disagree with the statement of the Chancellor of the Exchequer that this matter had already been discussed, and that, therefore, we ought to be able to get through it quickly. On the contrary I assert that the matter was deliberately excluded from our discussions on the last day when the Bill was before the Committee, and that the Chancellor of the Exchequer then expressly said that he did not wish in any way to limit the discussion when it came on. The Amendment raises nearly all the numerous points which arise out of this change of procedure. There are on the Order Paper some Amendments, therefore, which could be discussed a little more shortly than would otherwise be the case if you, Mr. Chairman, had not kindly called my Amendment first. The third Amendment on the Paper is perhaps a small matter but is one of immense difficulty, and I would, with your permission, like to deal with it at some length separately.

The CHAIRMAN

The third Amendment on the Paper raises a subject which was dealt with on Clause 3.

Mr. MARJORIBANKS

If you will remember, we discussed the question on Clause 3 but never got an answer to our inquiries. I would like to deal with the matter separately now and to contend that the Chancellor of the Exchequer, in such reply as he gave on that earlier Clause, was not right. It is, therefore, not our fault if we wish to raise the question again.

The CHAIRMAN

Clause 3 has already been passed.

Mr. MARJORIBANKS

But in the Debate on Clause 3—

The CHAIRMAN

Clause 3 covers the matter that is dealt with in the third Amendment on the Paper. If the hon. Member is not satisfied he must deal with the matter later and at another stage, but not on this Clause.

Mr. MARJORIBANKS

The Chancellor of the Exchequer said that Clause 3 was governed by Clause 26. I presume it will be in order to refer to the matter on the question that Clause 26 stand part of the Bill. Let me deal with the Amendment that I have moved. This is a matter of very great importance. All these valuation Clauses are going to be of great lucrative value to the Chancellor of the Exchequer. I believe he said that the increased revenue in London alone would be £500,000. That is a very large revenue—and in spite of the fact that London has been re-assessed every five years. It calls attention to the immense revenue which will be raised throughout the country on the revaluation in places where there has not been continuous revaluation.

I wish to ask the Chancellor of the Exchequer whether he took into account this immense increase of revenue, of many millions, in estimating his revenue for next year? If he did not do so, he should tell the Committee now. The taxpayer has a right to know how he is going to be affected by this matter. It is quite against all justice that his pocket should be picked by the Chancellor of the Exchequer without his being aware of the matter. These Schedule A assessments will, of course, affect a very large number of people throughout the country, and a very much larger class of people than would be affected by the simple raising of the Income Tax by 6d. There is one aspect of the question which must appeal to hon. Members opposite. How will this change affect those old age pensioners who draw the original old age pension for which there is no means qualification? Many of them own their houses, and if the assessment goes up they may possibly be disqualified for their old age pensions. It is a point of detail but is one which ought to be considered.

I have said on a previous occasion that this will be a very lucrative set of Clauses to the Chancellor of the Exchequer, and that there are two main areas of grievance, the country grievance and the London grievance. We dealt exclusively with the provincial grievance the other day, and now we come to London. At the outset I wish to state the fact that London really has set the pace to the whole of England with regard to local and Imperial taxation. I stated the other day that the local taxation authorities and the local rating authorities had more or less come together in many parts of the country and had recognised in principle that a house, every property, should be assessed once for all purposes—that a house should be assessed at the same value for all purposes, so that the multiplicity of values, often absolutely fictitious, should not confuse a taxpayer and raise grievances in his mind.

I would like to refer to the debate on the Rating and Valuation Act of 1925. Some considerable reading is required to discover what was the policy of the Government at that time with regard to a single valuation. My right hon. Friend the late Minister of Health used these words in introducing the Rating and Valuation Bill on 13th May, 1925: This ideal of a single valuation has been recommended for years past by Royal Commissions, by Committees, by associations of local authorities, by surveyors' institutions, and so forth. I find in the Report of the Royal Commission on Imperial and Local Taxation, which came out in 1901, the statement— 'A general desire has been expressed by most of the witnesses, and in a number of resolutions which have been forwarded to us by public bodies, that it is desirable to have one valuation authority and one system of arriving at valuations for the whole rating area over which common rates are raised; that upon such valuation all rates and taxes, both for local and Imperial purposes, should be charged and levied; and, further, that, if possible, provision should be made to obtain uniformity in valuation throughout the whole country.' 4.0 p.m.

That is a very specific and definite opinion by the Royal Commission which was set up to inquire into this matter. It may be interesting to read the opinion, also cited by my right hon. Friend, of one of the very greatest authorities in this country, Sir Henry Trustram Eve, who said in 1912: We are unanimous in thinking that we want one rateable value for rates and taxes, and we took a leading part under the Bill of 1904 in that direction. I, personally, was one of the deputation of three that went to see Mr. Long. We asked for that, and we pointed out in our memorandum. … that there were five rates and taxes which could have different totals presented to the ratepayers. … That situation now is, of course, simplified, thanks to the right hon. Gentleman the late Minister of Health. Sir Henry Trustram Eve went on: The answer of the Local Government Board was that they had nothing to do with Somerset House, and we ventured to say that we wanted to talk to the Cabinet."—[OFFICIAL REPORT, 13th May, 1925; col. 1884, Vol. 183.] and so on. It was evident that it was very unjust that there should be different valuations for the same property for different purposes. It seems to me to be absolutely unanswerable. This was the principle for so long adopted in the provinces between the local rating authorities and the local taxing authorities, but as long ago as 1869 the matter was crystalised in legislation for London, the largest and, I venture to say, the most progressive and most humane city in the world. By their Act of 1869 they provided a single valuation, and made the rating valuation conclusive for all purposes of Income Tax. That, of course, was a very great advance on what had taken place before. London was the pioneer, and it was hoped at the time that other parts of England would eventually follow. Under this Act there has grown up a very efficient organisation for the valuation of property. It has, of course, adapted the personnel and the machinery of the finest Courts of Law in order to assess the most valuable property in the world—the real property of the City of London. We have this fine machinery set up, and it is conclusive for all purposes. I think it has met with the approval of almost everyone in London, except, perhaps, some of the Somerset House and Income Tax officials, and even, perhaps, some of the local authorities. The rating authorities, the taxing authorities, the ratepayers and the taxpayers, at any rate, agree that it is simple, ordinary procedure which everybody can understand. The Londoner realised that once his house was valued for all purposes, that was its value. He has had this simple procedure and has not had the grievances of other citizens in the country.

Apart from the mere question of single as opposed to double valuation, I would like to point out the advantages which the citizen of London has with regard to appeal as compared with the disadvantages of other people in the country, and which the London people will also have if the Clause secures the approval of this Committee. First, of course, if he is dissatisfied, he goes to the assessment committee. He may appeal to that committee under Section 32 of the Act both on law and on fact. He may then enter an appeal on law or fact to the quarter sessions, which, I should think, was the very finest tribunal set up for this purpose, which may receive evidence and consider the matter judically, according to the rules of evidence in Courts of this country. Therefore, there are two appeals on law and on fact under the present procedure, and if a person is dissatisfied, he can appeal to the highest Court of the land by special case or certiorari. That gives him a very elaborate, a very efficient system of appeal which he can take up to two Courts. He can have it tried by a Judge in the best possible way, and, of course, apart from anything else, the decision of the Court is a final one in the sense that it is conclusive for all purposes. The appeal is an appeal in respect of rates, and it is an appeal in respect of taxes.

Let us compare this procedure with the procedure if this Clause passes into law. A citizen will have, of course, this procedure for rating purposes, which will continue, but for Income Tax purposes he will have quite a different procedure. He will have the expense of an alternative appeal. If he wants to appeal, he must appeal to two courts—first to that for rates, and then to the Income Tax authorities for the purpose of Income Tax. He will be able to appeal to the general commissioners of Income Tax on law and on fact, and he can appeal on difficult questions of law to the court, but he has only one appeal, and that is to the general commissioners. I would be far from criticising the character of the general commissioners of Income Tax. If the Committee wish to see the finest flower the commissioners can produce, here is the hon. Member for East Fulham (Sir K. Vaughan-Morgan). I do not know whether the Income Tax Commissioners produce so fine a flower from every bush, but one is inclined to think that so splendid an example may be, perhaps, rare. The Committee will have an opportunity, no doubt, of hearing his opinion upon this matter. If this Clause is passed, his responsibilities and, perhaps, his powers will be considerably increased. I do not know whether he will welcome that or not; perhaps he will not.

I would like to consider the advantages of an ordinary Court of Law as compared with the court of the general commissioners of Income Tax. We believe in civilised jurisprudence in this country. The beginning of jurisprudence comes about in this way. A judge is appointed to sit under a coco or palm tree, and he is usually chosen because he has a special knowledge of the subject matter upon which he has to give a decision. That is a very simple way of doing justice. When you come to a more complicated jurisprudence in a more complicated society, of course you do not employ a palm tree judge, but you appoint a judge who is learned in the law, who has no prejudices, who requires facts to be proved. That is the very essence of civilised jurisprudence. Here we have a reversion to the primitive form of justice which I have tried to describe. You may go to the general commissioners, who are to determine the question to the best of their judgment, and are entitled to avail themselves of their personal knowledge of the value of property in the district, and of the nature and history of the property in question. In fact, the judge is to be the expert witness. My hon. Friend says "No," but I am quoting from a standard authority on Income Tax law, and, in fact, I have been told that the general commissioners have been chosen because of their special knowledge. Let the hon. Gentleman contradict that if he can. There you get a really retrograde movement. You are ousted from the jurisdiction of the courts and of the judge, who is prepared to consider evidence, and you substitute for him an expert tribunal. That, surely, is a reversion to primitive times. There is the grievance as regards the appeal to a single tribunal, which does not hear evidence in the same way as a Court of Law, but as a committee of experts. Finally, instead of the economy under the present system of one appeal, you now have two appeals. The poor, wretched owner of property in this country has to appeal to one court for one purpose and to another court for another purpose, and supposing they differ, what feelings of injustice will arise in his mind! Supposing the quarter sessions decided that his property was worth £100 for rateable value, and the general commissioners of Income Tax found it was worth twice that amount. With what feelings of grievance and disgust would the ratepayer of the City of London regard the right hon. Gentleman opposite who introduced this retrograde change!

There is another matter. I forgot to mention the fact that the general commissioners may call in an expert, whose valuation is absolutely conclusive, and, therefore, the right of appeal is gone. My right hon. Friend will bear me out with regard to that particular matter. There is the famous case of Stocks v. Sulley, which was absolutely conclusive. Apart from this matter, we find that under the procedure which has been set up under the Act of 1869, courts have to consider the deductions and allowances to be made, and this system has worked so well, that it was quite unnecessary to move Amendments to the Finance Act from time to time. It was elastic and efficient, and the decisions were known to be fair and proper. But now, of course, we shall be bound by the strict rules of the Finance Act, 1923. With regard to deductions, we are bound by Section 28 (2) of the Finance Act, 1923. I will not weary the Committee with reading out the whole of that long Sub-section, but it ties down the taxing authorities to certain crystallised deductions and allowances. Instead of having an elastic tribunal, which is able to adapt itself to the particular circumstances of the case, we have a rule-of-thumb applied under the Finance Act, 1923, and that is, of course, a great disadvantage.

The Chancellor of the Exchequer says that this proposal will make for uniformity, but as a matter of fact there is no uniformity whatever arising out of this change. Uniformity was necessary for the purpose of the Act of my right hon. Friend the ex-Minister of Health last year. There it was essential, but you have your uniformity for rates, and why should you tie down London to the exact method of raising taxes which is applied in the provinces when you have a much more efficient method in London? You have your rating uniformity. Why bring London back to the methods which were applied in mid-Victorian times? It seems an unnecessary, retrograde, and reactionary step. The uniformity is of course merely illusory.

I would have raised this whole matter on Clause 23, but the Chancellor of the Exchequer very kindly said that he would allow it to be fully discussed on this Clause. What I would have said on Clause 23 is this. When I look at the First Schedule, which is to provide the machinery for setting up the new officials and the new method throughout the country, I see that there is no application to London of this system which is to produce uniformity. That seems a little surprising, and it is even more surprising when one goes into the matter and finds that, in the past, it has been the assessors of taxes in the country, appointed by the general commissioners, in whose hands the assessment and valuation of property generally has been placed, but in London, up to now, I think it is the surveyors of taxes, or at any rate Somerset House officials, who have been the valuing authorities for Income Tax purposes. That did not matter formerly because they had to take their valuations directly and conclusively from the rating authorities, but now the rating authorities' decisions are not to be conclusive. One would imagine then that there would be set up an enormous new independent officialdom to deal with the valuation of the most complex, the richest, the most changing real property in the world. But not at all. We find no provision whatever. What are we to think?

The only conclusion which comes to one's mind is that the surveyors of taxes are to continue to be the authorities on this matter, and that the whole thing is going to be in the hands of Somerset House. Many of us have good reason for thinking that Somerset House officials have wished to get the valuation of property into their hands for many years and now at last they have succeeded. I hope, therefore, that either the Chancellor of the Exchequer or the Financial Secretary will state if the valuation of the whole of London is to be put in the hands of these taxing officials. By taxing officials I do not mean the general commissioners or anybody so important as that; I mean the Somerset House officials. This change seems to contain so many disadvantages and so few advantages that one seeks to find a reason why this progressive Government should be taking such a turn for reaction. Why are they going back to the standard of mid-Victorian times? Why are they destroying the pioneer work which has been done and the new precedents which have been created? One has already had an answer in general terms from the Chancellor of the Exchequer, who has told us that he is going to raise considerable revenue by the proposal. If the only purpose of the change is the raising of revenue, the right hon. Gentleman ought to say so definitely. If it is necessary to eliminate the public right of appeal, to change a simple system into a complex system, to oust the jurisdiction of the Courts, and establish a system of droit administratif in order to raise revenue, let the right hon. Gentleman face it, but I have yet to hear any other convincing arguments with regard to this matter.

I think there is hardly any advantage in the proposal except as regards a matter of the merest detail, and I think the right hon. Gentleman is employing an immense piece of artillery to crush a fly. The only possible advantage which seems to come to anybody out of this proposal is that it will deal with the point that under the present system the gross value of a house must be taken conclusively, as its value for Income Tax purposes even though the rent paid is higher. That matter, however, could be very simply dealt with and has already been dealt with in a provisional way in draft recommendations put forward by the Westminster local authority for an Act of Parliament, and any hon. Members who wish to refer to those recommendations can do so. That proposal was to make provision which would render this rule non-effective. Of course it is a tiny amendment of the law which could be carried out in a different way from this proposal. I think I have raised all the points which I wish to bring before the right hon. Gentleman except the point in regard to Excise Duty, and I wish to give formal notice to the Chancellor of the Exchequer that if I do not deal with that now I shall go into it later on.

The CHAIRMAN

If the hon. Member is referring to the Amendment on the Paper in his name—in page 22, line 15, at the end to insert: except with regard to duties on any excise licence charged by reference to the annual value. —I must point out to him that that matter was settled on Clause 3 and cannot be discussed on this Clause.

Mr. MARJORIBANKS

May I point out that the Chancellor of the Exchequer himself said——

The CHAIRMAN

I am not concerned with what the Chancellor of the Exchequer said. If the matter has been settled on Clause 3 it cannot be discussed on this Clause.

Mr. MARJORIBANKS

Very well. The Chancellor of the Exchequer will have to listen to me upon it later. To recapitulate shortly my grievances regarding this very drastic change in the law governing the valuation of property for Income Tax purposes in London, I say that it is retrograde and reactionary, that it does no good except to raise revenue for the Crown, that it limits the power of proper deductions for expenses and, above all, it sets the clock back to 1868. As far as the ratepayers of London are concerned I think it will be one more nail in the coffin of the right hon. Gentleman's Government.

Sir KENYON VAUGHAN-MORGAN

I wish to thank my hon. Friend the Member for Eastbourne (Mr. Marjoribanks) for his references to the general commissioners of Income Tax in the course of his very interesting review of the present system of valuation in London, but I should like to reassure him on one or two points and to explain that the general commissioners do not, as far as. I know, deserve either the encomiums or the reverse of encomiums which are commonly associated with the description of "expert witnesses." We sit as practical people, discussing and judging practical questions in a practical way. So far from being elements in the machine of taxation, from the point of view of Somerset House, we really act as a buffer between the Revenue and the taxpayer. It is our function to see that the scales are held fairly between the two sides and it is a function which, I think, we succeed in performing satisfactorily. I disagree profoundly with my hon. Friend the Member for Eastbourne in regard to the merits of the existing Act and procedure and consequently also in regard to the suggested advantage of his Amendment. I think the Clauses of the Finance Bill in this matter represent an improvement and not a reactionary or retrograde step. I am glad to be relieved of the 1869 Act and those other mid-Victorian enactments for which my hon. Friend has so much admiration. As a general commissioner I sit for a district which includes parts inside and parts outside the Metropolitan area, and, consequently, I have, within that limited purview, a view of both sides of the question of the operation both of the single valuation and of the separate valuation systems, and I am a convinced adherent of the principle of the separate valuation.

The hon. Member for Eastbourne based his plea to a large extent on the importance of conformity or uniformity. With that idea I entirely agree. The Act of 1869 was presented, recommended, advocated, and generally supported on the ground that it provided uniformity. It may have done so in 1869, but it certainly does not do so now. When the ex-Minister of Health introduced his Rating and Valuation Act in 1925 arguments were used similar to those put forward by my hon. Friend in moving this Amendment, but we ought to refresh our memories with some recent history in dealing with this matter. In the course of the Committee stage of that Measure the policy of the then Government was reversed. The 1925 Measure, as originally introduced, proposed to apply to London the system of the rest of the country, but during the Committee stage the Measure was entirely changed in this respect. In the course of subsequent debates in Committee stage I ventured to plead with the ex-Minister of Health that London should be allowed to come back into the Bill with a view to getting the advantage of the separate valuation which was conferred on the rest of the country. That is the point of view which I have always taken up on this matter. As long as we could have uniformity on the principle of the Act of 1869 that would be another matter, but if the country is not to have it, or anything corresponding to it, I think the time is ripe for relieving London of its disadvantages. That was the course of the debates in 1925. At that time there was a large measure of unanimity in the London boroughs as well as in the London County Council on the matter. They wished London to be included in the amended Measure at that time.

At a later stage, when London was finally excluded, as the right hon. Gentleman the Member for West Woolwich (Sir K. Wood) knows it was on the understanding that a separate Measure would be introduced. At a later stage still the Metropolitan Boroughs Standing Joint Committee and the London County Council came to an agreement—not with entire unanimity, because I do not think the City of Westminster agreed, but apart from them with general unanimity—that questions outstanding between them should be referred to the Minister of Health for his adjudication. One of the questions to be definitely settled was whether London should retain its single valuation system or go over to the separate valuation system. Well that question has now been settled, not, it is true, by the ex-Minister of Health, but in accordance with the views of the present Chancellor of the Exchequer, and there is now embodied in the Finance Bill provisions which will give London the benefit, as I consider it, of the separate valuation system. It may be urged that a Finance Bill is hardly the place in which to make a legislative change of that kind. I agree that it is not the ideal place, and although I agree in principle with the proposal I can, I think, quite properly demur to a general acceptance of the idea that the Finance Bill is the right place in which to make changes of this kind. I agree also with my hon. Friend who moved the Amendment as to the great importance of the question of statutory allowances and deductions.

My hon. Friend challenged the necessity for that strict measure of uniformity in valuation between London and districts outside, to which I attach so much importance. I can give an example or two as to why it is necessary for London to have the same system as the rest of the country. If you take the Metropolitan Water Board, the sums levied by that Board are levied on areas which extend outside the Metropolitan area, and consequently for those precepts to have a fair operation on the ratepayers, it is essential that the basis of valuation should be uniform throughout the whole area. The same applies to the services for the maintenance of the Metropolitan Police. In regard to the Metropolitan Water Board, it has been contended on behalf of London citizens that under the present system, or, if not the present system, under the system obtaining prior to the Rating and Valuation Act of 1925, London was losing or bearing a higher charge than properly its share by an amount estimated at about £100,000 per annum. At any rate, whether or not that figure be exact to-day, it is sufficient to show the immense importance of uniformity and the grave danger of injustice which must result from any difference in system as between areas so closely contiguous and at the same time and necessarily included in the same area for certain purposes of rating and taxation. Parliament having determined in 1925 in favour of separate valuation for the rest of the country, it is important that we should have separate valuation for London.

I have for some time past regarded the methods of the Act of 1869 as unsatisfactory in operation for some of the reasons to which I have referred. It represents also an unhappy kind of compromise. We have to arrive as well as we may at some general line as between the valuation for rates and the valuation for taxes. Rates are, of course, a charge levied on the occupier, and a tax is a charge levied on the owner. It may be that the rent obtained for a hereditament is identical with the valuation for rates assessed under the ordinary system, but, on the other hand, it may not, and whereas nowadays the Chancellor of the Exchequer estimates that the Exchequer loses something like £500,000 a year, in times past that figure has been put a good deal higher.

In endevouring to arrive at this compromise method of valuation or the compromise figure, you may easily do one of two things. You may either put up the assessment for rates of your occupier at a higher figure than he ought to pay, or you may put the Schedule A Income Tax assessment for the owner at a figure below that which he ought to pay. After all, I do not see why income from property, after making all proper allowances for the special charges to which that form of property is subjected, should be charged any less or any differently from income from any other source, and since this old Act of 1869 was first enacted nearly 60 years have elapsed, and things have very much altered. The old Income Tax has been multiplied by eight or even by nine, and the old occupiers' tax, called the Inhabited House Duty, no longer obtains. It was very small, but it was a charge on that form of property which has now been done away with.

With regard to procedure, my hon. Friend thinks that the Income Tax payer will suffer from not having the opportunity of an appeal such as the occupier now has in regard to rates, and there I must say that I disagree with him, because I think he has a better opportunity. I think that the simple form of applying to the Income Tax Commissioners is better than any system of complicated appeal which he now has, because he has always got his appeal on points of law. The basis of assessment for rates is the fair annual rental value of the hereditament, taking one year with another and comparing one property with another. The basis for Schedule A assessment is the income derived. Under the Act of 1869 that is where the compromise comes in, where you have to get at a figure between the two which satisfies both parties to the compromise. Rates, of course, are paid by the occupier on a, dual basis, having due regard to his ability to pay, but at the same time account must be taken of benefits received.

Sir KINGSLEY WOOD

Does the hon. Member mean compromise between the parties?

Sir K. VAUGHAN-MORGAN

I mean the compromise that has constantly to be arrived at in the Metropolitan area in carrying out the procedure under the Act of 1869. There is the danger of the occupier having his rateable value pushed up in order to meet the actual income derived from the property, or the owner of the property escapes some of the tax which he properly should pay. I have referred to the essential difference between the incidence of rates and taxes and the basis on which the valuation should be arrived at for the purposes of rates and taxes. The two things are entirely different.

Earl WINTERTON

I am sorry to interrupt the hon. Gentleman in his very interesting exposition of this Clause, but I would ask him to say whether, speaking with the great knowledge and experience that he has of administration in London, there have actually been cases of injustice to the class of persons he has mentioned, to the ratepayer on the one hand or the taxpayer on the other—the owner or the occupier.

Sir K. VAUGHAN-MORGAN

The Noble Lord asks whether cases of injustice have been brought to my notice which have adversely affected the occupier, who, of course, pays the rates, or the owner of the property, who should pay the taxes. I can give him a good many cases, which have been put before me—I can give him a whole list—which go to support the general contention that the Exchequer loses something which is estimated at not less than £500,000 a year, though I should have put it at a higher figure, under the present system; and that loss to the Exchequer, which may be the gain of certain property owners, is sporadic. It does not apply to every property owner, but only to some; some are fortunate and some unfortunate. The only difficulty which I foresee under the separate valuation system is that of the owner-occupier, but he has, as I know from experience, a very simple and ready remedy by going to the Income Tax Commissioners and putting his case before them. I have dealt with lots of such cases.

I have before me the objections, adduced by the city of Westminster, or rather by the late town clerk of the city of Westminster, who has always adopted a very determined attitude on this question. He it was who was largely instrumental in the change of view taken by the Standing Joint Committee of Metropolitan Boroughs in the course of the negotiations subsequent to the Committee stage of the Bill of 1925. In a circular which I have before me, the city of Westminster raises certain objections. It describes the Act of 1869, the procedure, and so on, and then it deals with appeals, and really I cannot see, on the face of it, that the taxpayers have any less appeal now than before. Then it deals with the loss of revenue and refers to the "outline" proposals which my hon. Friend mentioned. If Westminster favours those "outline" proposals, it is surely an admission that there is something imperfect in the present system, which has always been held up by Westminster as the ideal.

The proposals were that where the rent reserved actually exceeds the Schedule A valuation, the difference should be paid, I think it was, under Schedule D, but that would apply only to the valuation year of the quinquennium. No provision was made for dealing with anything of that kind which might occur between. No; I am wrong. That was the recommendation of the Royal Commission of 1920. The "outline" proposal is that the actual amount should be taken as the gross, but that, although it is an advance in the direction that I favour, is an admission that the existing system is far from perfect. But the disadvantage of that is that it only deals with the valuation at one moment, namely, the beginning of the valuation period, and therefore it is insufficient and is just as apt to be harsh in one direction, or unfair to the Revenue, as the existing arrangement.

Another point in the Westminster scheme is that separate valuation would be costly, but I am advised that it would not. The figure which is mentioned is £15,000, but of course no one wants to waste that amount. In relation, however, to the advantage which would result, namely, a relief of the ratepayer who is assessed too high in order to meet Schedule A, and to the unfairness to the Revenue if the Schedule A assessment is not the amount actually reserved for rent, some expenditure may be justified in remedying an error of this kind.

Sir K. WOOD

Is it not a fact that that £15,000 would come from the Chancellor of the Exchequer?

Sir K. VAUGHAN-MORGAN

The paper which I have before me does not indicate the source of this money. The amount is mentioned in a resolution sent to me saying that the expenditure on a revaluation of London amounting to £15,000 would be a waste of public money. One does not want to waste £15,000, but that is not material to the relief which a successful application of a separate valuation for London would grant to the ratepayer, and the greater measure of fairness which would result as between one form of property and another, and one set of property owners and another. I disagree with my hon. Friend the Member for Eastbourne; I do not agree with his arguments or his conclusions, and I hope that he will not press his Amendment. If he does, I shall not find myself in the Lobby supporting him.

Sir LAMING WORTHINGTON - EVANS

The debate has shown how interesting this question is. It has shown also that it is not a party question, for I find myself, in speaking in opposition to my hon. Friend the Member for East Fulham (Sir K. Vaughan-Morgan), deeply grateful to my hon. Friend the Member for Eastbourne (Mr. Marjori banks) for the excellent speech with which he moved this Amendment. I do not suggest that my hon. Friend the Member for East Fulham has not every right to address the Committee upon this subject, upon which he knows so much; my only surprise is that he expresses a view which seems so misguided. He talks of London having the benefit of a second costly valuation, and he quoted as a general opinion that the London boroughs were in favour of it. I notice, however, that the Standing Committee of the Metropolitan Boroughs expressed quite a different opinion in 1924. In speaking of the valuation that had taken place under the 1869 Act, they said that the system had worked well for over half a century, and they showed no desire whatever—then, at any rate—for the second valuation. This Amendment is to leave out Sub-section (1), which is in effect to repeal the provisions in the Act of 1869, which make what I may call the ratepayers' valuation conclusive upon Treasury, so that it is also binding from the taxpayers' point of view. The taxpayer and the ratepayer under the Act have one valuation and not two, and that is an immense advantage.

I happen to be the owner-occupier of a house in London. A quinquennial valuation is going on now, and upon that my assessment for rates will be fixed. I have now to go to the expense of instructing a surveyor to watch my interests, and to see that some exuberant spirit does not put the value of the house unduly high, or, at any rate, does not put it up beyond that of my neighbours. If this Clause goes through, I shall later on in the year be forced to do exactly the same thing because the Inland Revenue will come along and make a valuation on their own account. I shall then have to try and get that checked by professional people to see that I am not assessed for Schedule A unduly high. When my hon. Friend says that the expense of this double valuation is to be £15,000, I wonder to whose expense he is referring.

Sir K. VAUGHAN-MORGAN

The figure given to me is represented to be the public expense.

Sir L. WORTHINGTON-EVANS

I imagine then that it is additional public expense for calling in qualified surveyors and others, who will go about London making a valuation. I cannot believe that £15,000 will anything like cover the expense of a Metropolitan valuation. It would require a large increase in staff and a great increase of professional employment. I was not thinking so much of the public expense, however; I was thinking of the individual's expense, because each individual who is assessed in the Metropolitan area for taxes will have to check his valuation, and, even if it costs only two guineas or four guineas to be properly advised, the multiplication of these few guineas by the number of assessments will bring the figure to infinitely more than £15,000. If anyone had told me that it would mean a charge on the taxpayer of an additional £150,000, I should have thought that he was much nearer.

Sir K. VAUGHAN-MORGAN

A great deal of the information is provided by the right hon. Gentleman as owner-occupier.

Sir L. WORTHINGTON-EVANS

That is the chief trouble. The average layman is not a valuer and knows little about the value of property. It is true that he gets a form sent to him which he has to fill up. I have just tried to fill up one for the quinquennial valuation in London, but for the life of me I do not know whether the information which I have given will produce a valuation with which I shall be satisfied. I have given the information honestly, but I do not know what the result of it is going to be. I do not so much mind if I am treated the same as my neighbours, but I should hate to know that my neighbours are assessed lower than myself. So I have to get a professional man, whose business it is to know these things, to find out whether I am properly assessed. I want, as one of the representatives for Westminster, to answer my hon. Friend who attacked the Westminster scheme.

Sir K. VAUGHAN-MORGAN

I was not attacking it, but only correcting it.

Sir L. WORTHINGTON-EVANS

Sir John Hunt, who was Town Clerk and Chief of the Assessment Committee of Westminster, was without doubt a great authority on this question, and he clearly expressed a strong view diametrically opposed to that of my hon. Friend. That is the view which I want to put before the Committee. My hon. Friend, in moving this Amendment, called attention to the difference that will be made in future in regard to appeals. Let me summarise this position. At present, the one valuation does for both rates and taxes. If there is an objection to that valuation, there is an appeal to the assessment committee, and then to quarter sessions, and, on a point of law, a case can be stated for the High Court. The subject, therefore, is really protected in the best possible way. In future, that appeal will still be open as regards the assessment upon which rates are paid, but, as regards the assessment upon which taxes are paid, there will be no such appeal. The only appeal will be to the Commissioners of Taxes.

Sir K. VAUGHAN-MORGAN

That is on a point of fact. There is an appeal upon a point of law.

Sir L. WORTHINGTON-EVANS

I am not sure whether there is an appeal on a point of law. There is an appeal, as far as I know, to the Commissioners of Taxes only. My hon. Friend the Member for East Fulham said that the basis of valuation ought to be uniform. It ought to be uniform, and there would be a complaint about it not being uniform if it were at any time an under-valuation. He was challenged to give cases, if he could, where an under-valuation was alleged. I have the result, which was given by Sir John Hunt, of the alleged under-valuations which caused a loss to the Imperial Revenue. In those which refer to Westminster it is certain that there is no intentional under-assessment—not that Westminster is an easy place to value; I should think that it is an exceptionally difficult place to value, but, if there had been under-valuation there, the inspectors of taxes, who have the right to appeal, would have appealed, and we should have found the assessments that have been made upset on a grand scale.

5.0 p.m.

In Westminster, there are 37,000 assessments, and against these 164 objections were made by the inspectors of taxes. The results of these 164 appeals were that 13 of them were withdrawn by the inspectors; in 50 cases, the gross values were increased by the assessment committee; and in 101 cases the overseer's figures were confirmed by the committee, or reduced on cross-objection by the taxpayers. Out of 37,000 assessments therefore, there were only these very few appeals, and not one-third of them were in any degree successful. The inspectors of taxes appealed at quarter sessions in four cases out, of the 164; they were all cases where the gross values, as finally determined by the assessment committee, were less than the rent, and all these appeals were settled out of court at sums below the rents, and in two cases very much below. There is a case, however, where the actual rent is below the assessment. That shows the need for an Amendment, and Sir John Hunt proposed a method. My hon. Friend referred to it, and claimed that it was an admission that the present system was not good. It was not an admission of anything of the sort, unless it could be shown that any other system would be better. On the contrary, we believe this system to be the best. There is a case where the rents are higher than the assessment, and in such instances it would be quite easy for the amount of the rent to be accepted in lieu of the assessment; nor would there be a difficulty if a change of rent occurred in the middle of the quinquennium, because the assessment could also be changed; with such elasticity the whole evil could well be met.

I only wish to deal briefly with this question, not because it is not an important one, but because there are a large number of hon. Members and friends of mine who wish to take part in the debate; and finally I would say this: It rests with the Government to show cause why this Act of 1869, which, according to the Metropolitan Boroughs Standing Joint Committee, has worked well for more than half a century, should be repealed and a new system introduced. The onus of proof is upon the Government, and not upon us who have moved the Amendment. It is for the Government to make the case and for us to answer it; but the Government have been singularly silent up to now. They have allowed three speeches to be made from this side of the House. [Interruption.] I had hoped the Chancellor of the Exchequer would speak second, so that I could follow him; but I am not going to make any complaint on that score. It is for the Government to show cause why the present practice, which has worked admirably for 50 years, should be altered. To say that there is a case where the rent is higher than the assessment is only to say that that particular case needs amendment. The whole system ought not to be scrapped because there may be a blot here and there. It would be right and proper to remove blots, but not right or proper to scrap the whole system.

The FINANCIAL SECRETARY to the TREASURY (Mr. Pethick-Lawrence)

Before the right hon. Gentleman the Member for St. George's, Westminster, leaves, I would like to say that both the Chancellor, who has had to go away to a very important engagement, and myself have been waiting here to speak, but it was represented to us on behalf of the Opposition, that it would be better to allow the debate to take the course it has taken. That is the only reason why we have not intervened before. I am sure the right hon. Gentleman will accept the explanation. In point of fact, I feel that my hon. and gallant Friend the Member for East Fulham (Sir K. Vaughan-Morgan) has put an exceedingly able case in favour of the Clause and, with his expert knowledge, he has presented the case far better than I could. I quite agree that at first sight, and without any knowledge of this matter, it would appear a simplification to have one valuation instead of two, but when the system is examined it is found that it does not work as fairly as the dual system. That fact is really patent not merely to Members on this side of the House, but also to hon. Members opposite, because during the last Parliament the Government had the opportunity of carrying this simplified system in their Local Government Act. They could have said that the system which had worked in London since 1869 should be adopted not merely for London but for the whole country, but they deliberately rejected that system, and we are entitled to assume that they had good reasons for doing so.

Sir K. WOOD

Perhaps the hon. Gentleman will allow me to say that the system of single valuation was introduced by the late Government; it was submitted on the Second Reading of the Rating and Valuation Bill.

Mr. PETHICK-LAWRENCE

I think that makes the case stronger. I had forgotten that the late Government, in their first draft of the Bill, proposed to embody this system, and for the precise reason that I have suggested, that at first sight it seemed a simpler method of dealing with the situation. But later the House rejected that method, showing that on mature consideration it was found not really so satisfactory as the dual system. The first reason why this apparently simpler system is not really as equitable and as satisfactory is that the objectives of the rating valuation and of the taxation valuation are not identical. They are similar; a great deal of the ground is the same in two cases; but, in fact there is a discrepancy, and though in some cases that discrepancy may be small, in other cases it is considerable. As the hon. and gallant Member for East Fulham quite clearly pointed out, in one case you are endeavouring to place a tax upon the income received—or, if not the money received, at any rate the equivalent income received—and in the other case you are dealing partly with the amenities provided by the rates. Under the single valuation both the taxation and the rating authorities are hampered to some extent.

Our case in introducing this Clause is a very much stronger one than the case of the House of Commons during the last Parliament in rejecting the proposals put forward by the late Government, because had the proposals originally embodied in the late Government's Bill been carried, at least it could be pleaded on behalf of them that they would establish uniformity. If we were to retain the present system of valuation in London, we should be stereotyping the reverse of uniformity. The House of Commons, in rejecting the proposals of the late Government, took the view that in spite of the lack of uniformity it was better to have the dual system in the provinces. In introducing this Clause we are establishing uniformity between London and the provinces; but, of course, I am not saying that merely for the sake of uniformity the Chancellor of the Exchequer would go to the trouble of bringing in this Clause. The valuations for the purposes of taxation revenue are to some extent hampered by the endeavour to make them identical with the valuations for rating purposes, and there is a distinct loss of revenue to the Exchequer, which my right hon. Friend, on the advice of those who give him information, has put at something like £500,000.

Hon. Members opposite may think that is an under-estimate, but certainly no one will deny that there is a substantial sum involved, and that it is desirable that the money should be available for the revenue. This change ought not to be made, however, if the proposal were an unjust one; but we maintain that it is essentially just. The proposal is to make the valuation in London uniform with that which takes place in other parts of the country and not to give an unfair privilege to the receivers of income from property in London such as is not enjoyed by owners of property elsewhere in the country. It is unreasonable that those who receive income from property outside London should have, in effect, to bear a higher burden than similar persons within the Metropolitan area; but if it be correct——

Mr. ARTHUR MICHAEL SAMUEL

If! Is it correct?

Mr. PETHICK-LAWRENCE

Yes. If it be true, and I do not think anyone has denied that it is true, that there is a loss of revenue owing to the present method of valuation——

Earl WINTERTON

The hon. Gentleman has made a vague reference to a loss of revenue. He has said, "If it be true" that there is a loss of revenue. That is a vague statement from the Financial Secretary. We should like to know what the position is. I am open to conviction.

Mr. SAMUEL

Are we to understand that the London property owner or the London taxpayer is paying less than he should pay?

Mr. MARJORIBANKS

Is the hon. Member aware that the revenue officer has always had a right of appeal under the 1869 Act, and if there is any justification for the contention that property was undervalued why did not the officer exercise his right of appeal?

Mr. PETHICK-LAWRENCE

I think the answer to that question and to the Noble Lord has already been given, partly by the Chancellor of the Exchequer, partly by my hon. and gallant Friend the Member for East Fulham, and partly by myself in this very speech. The Noble Lord seemed to think that I was trying to ride off on the word "if." That is not my case at all. I said that it was estimated by those in a position to know that at least £500,000 is lost to the revenue in this way, and it is lost owing to the fact that these properties are undervalued in the sense that the full income received in respect of the properties does not pay its full share of tax. I do not think that can be denied, and if I said, "If that is so," I did not mean it to be assumed that that was not so. My point was that, assuming that that is so, broadly speaking, some property owners in London—not all—are given privileges which other property owners in other parts of the country do not receive, and I say that is unjust. I think I have given the reasons why the Government desire this change. I have shown that it is an equitable change, fair as between different classes of property owners, that the revenue loses improperly under the present system, and that the party opposite, when they were invited by their own Government to carry out uniformity in the opposite direction, definitely and deliberately refused to do so. I think the case for carrying the Clause in its present form is quite unanswerable.

Sir K. WOOD

I have before me a volume which contains a report of the proceedings on the previous Rating and Valuation Bill of 1925 when it went through Committee, and I would like to point out that a great deal of our time was occupied by a discussion on the very subject which we are now considering. It is interesting to read the criticisms which were made from the Government benches on that occasion and to note the length of the discussions which took place on the Finance Bill. I was a member of the Government at that time; my right hon. Friend the Member for Edgbaston (Mr. Chamberlain) was the Minister of Health, and he had the task of piloting that Bill through the House. The question of London and whether the present practice should be observed, or whether a new one should be introduced dealing with valuation, occupied a very considerable amount of time, although the problem was not considered from a party point of view.

The passage of my right hon. Friend's proposal at that time did not take place without adequate discussion, and I do not think hon. Members opposite can say that, at the present moment, we are not devoting our time to the discussion of a very vital matter affecting London, and a question which has raised controversy in many other parts of the country. On the last occasion when the late Government dealt with this matter my right hon. Friend the Member for Edgbaston undertook to bring in a separate Bill, and, if that course had been adopted and a fresh Bill had been brought in, we should have had all the privileges afforded by a Committee stage and a Report stage. In these circumstances, I do not think anyone can complain about the amount of discussion which is taking place when this subject is being dealt with in a single Clause, because this vital matter should be adequately discussed.

The first observation I want to make is about the proposals of the late Government, which were alluded to very fairly by the Financial Secretary. The original proposal which was made by my right hon. Friend the Member for Edgbaston in the Rating and Valuation Bill of 1925 was to bring about a single valuation through out the country, and during the later stages of that Measure there was a considerable amount of discussion in many parts of the House on this very question. That will show that, at any rate, the Government in those days were prepared to listen to criticism. Our original proposal was that of a single valuation for the whole country. The most curious part of the speech of the Financial Secretary this afternoon has been that, while he is proposing to alter the system of valuation, and to depart from the single valuation; he has not been able to quote a single authority, either governmental or municipal, in favour of his proposal. It is certainly very astonishing that in introducing a proposal which upsets a system which has been in operation for over 50 years, he is doing so in the teeth of every recommendation of every commission appointed by any Government, and any recommendation which has ever been made by local authorities. The proposals of the Government go in the teeth of every one of those recommendations. Therefore, the right hon. Gentleman is taking a very serious step and incurring considerable responsibility.

I will take, for example, the very important recommendation of the Royal Commission on Imperial and Local Taxation. The recommendations of that committee are surely relevant to this discussion, and the Financial Secretary ought to pay some regard to them I think we should be informed, not in vague and general phrases, but precisely why it is that the Government are refusing to accept any of the recommendations of that important commission. What do they say? They say: A general desire his been expressed by most of the witnesses, and in a number of resolutions which have been forwarded to us by public bodies, that it is desirable to have one valuation authority, and one system of arriving at valuations for the whole rating area over which common rates are raised. That is the unanimous recommendation of the Royal Commission on Imperial and Local Taxation, and they have made that recommendation, not simply on their own responsibility and initiative, but because there is a general desire among the witnesses who appeared before them, and expressed in the resolutions which they have received from public bodies, to have one valuation authority.

Sir K. VAUGHAN-MORGAN

What is the date of that report?

Sir K. WOOD

It is a recommendation made by the Royal Commission on Imperial and Local Taxation in 1901. I do not think the Financial Secretary will challenge those recommendations in respect of the year in which they were made, because that Commission was expressly set up to deal with questions of this kind.

Mr. MILLS

We are now dealing with this question nearly 30 years after that date.

Sir K. WOOD

The point I want to emphasise is that that body, which was appointed by the Government, reported unanimously in favour of one valuation. A Departmental Committee on Imperial and Local Taxation was set up in 1921, and I would just like to quote a sentence from the evidence of a gentleman whose authority will not be questioned. It is the opinion of a distinguished surveyor speaking on behalf of the professional body to which he belonged. This is what Sir Henry Trustram Eve said on this point: We are unanimous in thinking that we want one rateable value for rates and taxes, and we took a leading part in the Bill of 1905. That was the opinion held when this matter was before Parliament in those days. Sir Henry Trustram Eve went on to say that he went to a former President of the Local Government Board, Mr. Long, and put before him this contention, and he also produced a memorandum in which he stated that there were five rates and taxes, which had different totals, which might be presented to the ratepayers. This gentleman told the Committee how much his association had pressed upon the Government of the day the desirability, in the public interest, of having one valuation. Every commission which has been appointed by this House, and a Departmental Committee, as well as an important body representing professional men who have had a great deal of experience of the working of this Act up and down the country as well as in London, are strongly of the opinion that there should be one valuation. It is a very astonishing thing that, with the exception of the vague general phrases offered to us by the Financial Secretary this afternoon, and the statement that at the present time there is a considerable loss of revenue, no reason has been given as to why the Government have rejected the recommendations of those who were appointed to inquire into this matter, and who from a professional paint of view have to know the most about it.

As far as my memory goes, I think it was largely as a result of the recommendations of those responsible bodies that the Government of 1925 introduced in their Bill the main principle of having one valuation. It does seem to me that there is a good deal of common sense and reason why that recommendation was made by the Royal Commission and the experts who gave evidence before that Commission. I think it is a very strong thing for the Government to go in the teeth of such strong evidence in favour of one valuation.

I desire to refer to the speech of my hon. and gallant Friend the Member for East Fulham (Sir K. Vaughan-Morgan). It is not the first time that he has spoken on this matter, and on occasion—I do not want to put it too high—even he has not spoken in the certain terms that he has used this afternoon. When my right hon. Friend the Member for Edgbaston introduced his Bill, and proposed one valuation for the country, bringing it into line with London, the various representatives of the local authorities in London met, as one would expect, and deliberated on the proposal; and what did they say? I only quote this in order to displace, if I can, the very effective and able speech of my hon. and gallant Friend the Member for East Fulham, which certainly does not represent the view, so far as London was concerned, that was expressed to my right hon. Friend the late Minister of Health. In January, 1924, when this proposal of a single valuation for London and for the whole country was in the Bill of the Conservative Government of that day, the Metropolitan Boroughs Standing Joint Committee met and considered whether that proposal was a wise one; and what evidence did they put before my right hon. Friend the late Minister of Health? Did they say, as ray hon. and gallant Friend the Member for East Fulham has said this afternoon, that it was a most unfair and unworkable proposal, bringing ruin in its train? They said exactly the contrary. They made a report, which they sent to the Government of that day, and in which they said: That system"— that is to say, the system which the present Government are endeavouring to upset so far as London is concerned— has worked well in London for over half a century. They did not content themselves with that, but they went on to say that they had every reason to be satisfied generally with the working of the Valuation (Metropolis) Act, 1869, though there were some minor amendments which they would like to see made. What greater tribute could there be to the system of a single valuation in London, what more considerable answer could there be to the statement of my hon. and gallant Friend, when the people who, at any rate, ought to have some knowledge and experience of the Act, said that it had worked well for 50 years, and that they had every reason to be satisfied with the working of this particular Act which my hon. and gallant Friend has condemned so severely? Therefore, it comes to this, that the Government——

Sir K. VAUGHAN-MORGAN

May I remind my right hon. Friend that the case for the Government's policy was put in different terms from those which he has quoted?

Sir K. WOOD

Certainly, it was put in different terms. There is no need for me now to criticise or go back on the whole matter, but, although it was put in different terms, their experience of the working of the Act in London, their testimony of 50 years to the principle of a single valuation, could not possibly be displaced. Therefore, to-day we find ourselves in this position that the Government are seeking to displace a system which the Standing Joint Committee supported; and I may say, for the benefit of those hon. Members who are not acquainted with it, that the Standing Joint Committee is in no sense a political body, but includes all kinds and types of people who serve London municipally. It is elected from men who have done excellent service for London on the borough councils. It is not a question of Socialist or Tory, or anything of that kind. The whole of these men came to the conclusion that this system was working splendidly, and yet this afternoon we find the Government advancing a proposal which is not only against the recommendations of the Royal Commission, which is not only against the recommendations of the surveyors of the country, but is actually directed against the experience and desires, as I understand them and as they are explained in this memorandum, of London itself.

Sir K. VAUGHAN-MORGAN

No.

Sir K. WOOD

My hon. and gallant Friend will have to make another speech to explain how he can possibly vary a very definite undertaking and declaration of that kind. There is no doubt that, from the point of view of London and the working of this particular Act, there has been little or no criticism which anyone could direct at its general principles. It is perfectly true that, as my right hon. Friend the Member for St. George's (Sir L. Worthington-Evans) said a little while ago, one might desire to see it amended here and there, but that is a criticism to which any system that has gone on for 50 years must be subject; but, taking it as a whole, you find that this system of a single valuation in London has been working to the satisfaction of the representatives of London, as they declared, at any rate, in 1924.

I have endeavoured to follow the speech of the Financial Secretary, and I do not think he will say that I am doing him an injustice when I say that the only reason which he has advanced, or, at any rate, the principal and main reason which he has advanced, for this change, is what he alleges is the loss of revenue to the country. I must observe that he has only supported that statement by some very vague reference to some very rough estimate. I gather—the hon. Gentleman must correct me if I am mis-stating the position or misinterpreting him—that his estimate of loss of revenue conies from Somerset House, a very strange quarter to give such an estimate. If it be the case, as Somerset House alleges, that under this system, which has been in operation for so many years, there has been a loss of revenue, I want to know what the Inland Revenue representatives have been doing all this time. The Financial Secretary will certainly not dispute that they have at any rate sufficient powers to bring cases of improper assessments or valuations or the like before a proper tribunal, and it is very astonishing that, after all these years, this statement should be made without any evidence beyond a vague allegation from the very people who have duties imposed upon them by Statute, and who have never at any time, so far as I know, asked any Government or any Minister to come to the House of Commons and suggest any method of giving them further powers for putting a matter of that kind right.

When this very grave charge is made concerning London, and when it is only supported by a vague allegation of this kind, we are entitled to ask why, if it be true, no steps have been taken by any Government, Conservative, Coalition or Labour, to arm the authorities with proper powers and to prevent this loss which they allege has been going on for so long a time. I must say, with every respect to the view which the Financial Secretary has put forward, that I cannot regard a statement of that kind as sufficient to displace the recommendations of every commission and every tribunal that has inquired into this matter, and to displace the general judgment of the representatives of London.

The matter is a serious one, and I put forward this argument on public grounds. I have no desire to aid anyone to avoid the payment of their proper dues; for selfish reasons alone one would not desire to do that, because it only means the imposition of more burdens upon people who do wish to fulfil their obligations; but a very serious alteration follows as a result of this new system which is being set up. Undoubtedly—and this is a point with which the Financial Secretary did not deal at all—the position of the taxpayer is very seriously affected so far as his rates are concerned. I could understand it if the Financial Secretary were coming forward with this proposal and preserving to the taxpayer some of the rights of appeal which he has at the present moment, or were bringing forward some fresh proposal which would put him in the same position in which he is at the present time. My hon. and gallant Friend the Member for East Fulham skated very quickly over that aspect of the matter. I have no doubt that he has great faith in the general commissioners of Income Tax, and quite naturally so, as he is one of them himself. Indeed, if I myself had to deal with my hon. and gallant Friend, I should feel the utmost confidence. But, after all, in this country we do desire to preserve the free access of our citizens, and particularly as regards questions of payment of taxes, to the courts.

It is perfectly true, as my hon. and gallant Friend has said, that, on a legal question, if you can get the general commissioners to state a case, you might then possibly be able to go to a Court of Law. My hon. and gallant Friend knows far more about this matter than I do; it is a long time since I had to deal with the practical side of this matter; but I think that every lawyer in the House knows the difficulty of getting a case stated, and the dangers, from the point of view of the citizen, of a case stated. As far as I can recollect, you have to rely upon the tribunal itself as to how that case can be stated, and the alteration of a phrase or the addition of a sentence or two by the tribunal, whose decision itself is attacked, may make all the difference, when you go to a judicial tribunal, as to what particular matter you have to argue and what the result will be. Therefore, I do not regard it as at all satisfactory, or as being at all a security to the taxpayer, that he can by some means or another get a legal decision on a matter arising before the general commissioners. In any event, he certainly loses his right, which he possesses at the present time, of going to the court on a question of fact, and that is a very serious loss. I speak as one who is in no way affected by any party side of this matter. I have heard the matter debated very often; I have sat through very many sittings, and have heard speeches upon it from all quarters of the House; but I must say that I feel bound to come to the conclusion, especially after reading the evidence given before the Royal Commission, and knowing what the individual citizen is losing, and how the whole of this case is based merely on an allegation of loss of revenue, that this is a retrograde step so far as London is concerned, and I shall vote against it.

Major NATHAN

The right hon. Gentleman speaks with unrivalled authority upon the whole question of rating in London, and I cannot presume to follow him throughout his speech, but, as a London Member, I feel myself under an obligation to draw attention to some very remarkable features with regard to this Clause. Not the least remarkable is that it should have been, so to speak, by accident slipped into the Finance Bill as a sort of unconsidered trifle, a Clause which in a few lines would revolutionise the whole system of valuation for rating and taxation in London. The fact that it has operated for upwards of 60 years is no reason why it should not be altered, but it is a reason why it should not be slipped into a Bill which deals with very different matters and has a very different purpose, and it is a reason why the fullest possible explanation should be given why this proposal is placed before us. Another remarkable feature is that the Financial Secretary has informed us that the real objective is to gain for the Revenue tax which it is believed is now being lost. But this is introduced merely as an administrative Clause. The hon. Gentleman has said it is in effect a taxing Clause, but when the Chancellor of the Exchequer opened his Budget he said nothing about a further tax. He introduced no Financial Resolution. I am not suggesting that it was technically necessary to do so, but far from drawing attention to the fact that the main object was to obtain more tax, he said there would be a new assessment of all property in Great Britain for Income Tax Schedule A. This will come into force next year and will include the Metropolis. In the Metropolis valuations for Schedule A are linked up and dependent on the valuations made for purposes of rating. I propose to alter this and to provide for a separate valuation for Schedule A as distinct from the rating valuation."—[OFFICIAL REPORT, 14th April, 1930: col. 2675, Vol. 237.] There is nothing there about gaining revenue which has been lost, but merely a reference to a search after uniformity. The Financial Secretary rather indicated the view that the result of the change that is proposed would be that tax would be paid upon the actual rent received, and in that way loss of revenue would be avoided. It would be a profound misunderstanding of the legal position to believe that a valuation made for Income Tax purposes is anything but an artificial valuation, and it is just as little likely to be the actual rent received by the landlord as the present valuation. It simply means duplicating the machinery.

Reference has been made to the effect of the adoption of this Clause as re- gards appeals. In these days, when government is necessarily and properly coming more and more into the hands of experts, one of the chief functions of the House of Commons is to protect the citizen against the encroachments of the executive. I look with the gravest suspicion upon any proposal whereby the executive will bar the road to the courts to the citizens of the country, and I believe this Clause, intentionally or otherwise, but inevitably, will have the effect of preventing the subject from having that recourse to the courts which has been his safeguard through so many generations. For that reason alone, I should find myself unable to support it. Then the Financial Secretary has said he welcomes this proposal as being a step in the direction of uniformity. Why this worship of uniformity? And, it uniformity, why not uniformity of the provinces with the tried system of London, instead of an alteration of the system of London to bring it into line with the new proposals for the provinces? Uniformity is all very well in its proper place, but there is no uniformity between things which are not themselves uniform, and there is no uniformity between this great aggregation of 6,000,000 or 7,000,000 of thickly congested, highly industrialised population and the relatively scattered communities outside. Uniformity is a misleading slogan in reference to this proposal.

The proposal for single valuation, not for London alone but for the whole of the country, has constantly occupied the mind of Parliament. Any number of Government Bills have been introduced during the last 60 years for the express purpose of securing a single valuation. Bills were introduced in 1867, 1869, 1876, 1877, 1878, 1879 and 1904. They all failed except that of 1869, which applies to London. When its useful effect had been discovered, attempts were made to bring the rest of the country into line, but they failed for the rather curious reason indicated by the hon. Member for East Fulham (Sir K. Vaughan-Morgan). There is really a sort of rivalry going on in London, a clash between the Inland Revenue authorities and the rating authorities, and in London in particular we are experiencing once again in this controversy painful evidence of the long-drawn disputes and quarrels between the county council and the borough councils. The standing committee of Municipal Borough Councils has expressed its opinion in no uncertain terms. But it is not left with the joint standing committee. In the report of the Royal Commission on Imperial and Local Taxation in 1899 Mr. Gomme, the statistical officer, afterwards Sir Laurence Gomme, the distinguished clerk to the London County Council, states: The Metropolis Valuation Act, 1869, had the effect of bringing up the assessments of the Metropolis to a much higher standard than that existing in the rest of the country. The Commissioners in their Report say: Other witnesses, although advising the amendment of the Act in certain details, have recommended that its general principles should be extended to the rest of the country. In paragraph 117 they use these words: The advantages of these provisions have been recognised by various witnesses who, as already stated, have recommended their extension to other parts of the country. 6.0. p.m.

In paragraph 120, referring to the attempts made to improve the system of valuation, they point out that the defects in the system of valuation referred to in the report have been recognised for a number of years and various Acts of Parliament have been passed, and they refer to the Metropolis Valuation Act, 1869, which they say embodied a number of suggestions which have been made in various Bills brought into Parliament, the most important of which have already been referred to in the paragraphs to which I have directed attention. They say in paragraph 157: We entirely concur in the suggestions which have been so frequently made that it is desirable to have only one valuation in each area on which rates and taxes for all purposes should be raised. Such a system would minimise expense, trouble and inconvenience and would further result in uniformity in the valuation of the same classes of property throughout the same area. Their very first recommendation was that there should be only one valuation authority in each county, and the valuation list of that authority should be the basis upon which rates and taxes for all purposes should be raised. There is nothing there about difficulties in working, nothing about loss of Income Tax and nothing about the advantages of separate valua- tion. The report counted amongst its signatories one who then signed himself C. A. Cripps, better known to us under the name of Lord Parmoor, a member of the present Cabinet. The proposal for a single valuation therefore has, or had, the support of a member of His Majesty's present Government, and I now ask the Financial Secretary to direct his attention to paragraph 444 of the Report of the Royal Commission on Income Tax which was signed in 1920. They say: We may refer to the expediency of having one valuation for national and local purposes in England and Wales outside the Metropolis. We find the system works well in the Metropolis, and, though we have not taken evidence that will justify us in making a definite recommendation, we think the proposals for a general valuation for the purpose referred to should receive serious and sympathetic consideration. But the Government, instead of giving serious and sympathetic consideration to the report of this powerful Commission, of which the present President of the Board of Trade was a member and signed the report, take a course exactly contrary to that recommended. The Financial Secretary may say, "Ah! but what about the tax which may be lost?" Provision is made for the collection of that tax, first, by the dictates of common sense, and, secondly, by the recommendations made by the Royal Commission on Income Tax and also by the Standing Joint Committee of the Metropolitan borough councils. In a case where tax is assessed on a less amount than the rent actually received—and I am sure the Financial Secretary will deal with this point—the Royal Commission suggest, as I think common sense dictates, that the excess rent should be chargeable on the owner under Case 6 of Schedule D. If that course were adopted—again, a course to which his right hon. colleague the President of the Board of Trade has subscribed—you would not have tax paid on an artificial valuation, but upon the actual rent received.

I have only one other document to, which I desire to direct the attention of the Committee. I have referred to the report of the Royal Commission on Imperial Taxation of which the Lord President of the Council was a member, to the report of the Royal Commission on Income Tax of which the President of the Board of Trade was a member, and I have searched the records of the Royal Commission on Local Government and the committee which sat recently upon the Government of London, in neither of which can I find any reference to this subject. But in the debate upon the Rating and Valuation Bill, introduced by the late Government, for Second Reading on 13th May, 1925, I have found a speech which was made on behalf of the then Opposition and now the Government Party by the present President of the Board of Education. Speaking upon the Bill, which was introduced by the then Minister of Health, he said: It is good that the valuation will now be under the control of the most effective and the most democratically chosen authorities of the country. It is good that the valuation for local purposes will be linked up with national taxation, and that the Income Tax Commissioners will help to make the assessment"— and I direct the attention of the Financial Secretary to these words which were used by his colleague the President of the Board of Education: which is to be used for local and taxing purposes alike."—[OFFICIAL REPORT, 13th May, 1925; col. 1893, Vol. 183.] I challenge the hon. Gentleman to point to a single authority during the last 60 years, whether it be a Resolution of this House, the report of any Royal Commission or Departmental Committee, or the resolution of any professional body, in favour of the course which the Chancellor of the Exchequer is now proposing.

Mr. ATKINSON

The case in support of this Amendment can be put in a nutshell. The valuation of land and property is required for two purposes—one, rating; the other, revenue. But for both these purposes the same value has to be arrived at. The Financial Secretary said that the immediate objective was not the same. I challenge that statement absolutely. The valuation may be different, but the immediate objective, the ascertainment of value, is precisely the same in rating law and in revenue law. It is expressed in practically identical language. You have to arrive at the sum which the property is worth to be let by the year, the rent a tenant might reasonably be expected to pay. In both cases the simple question of tax which you are trying to ascertain is precisely the same. The first observation one makes is, surely the tendency of modern times ought to be towards simplicity, and not away from it. When you want to ascertain a simple fact, namely, a fair valuation, surely common sense would say that there should be one procedure for ascertaining that value, whatever purpose is going to be made of the value. After all, the value cannot change because of the purpose to which you may put the figure you have ascertained.

Under the Act which you are seeking to repeal, you have a procedure which has been worked for 60 years for ascertaining that simple question of fact, the value fixed by the overseers, with appeals to special sessions and to general sessions which can be made by the surveyor of taxes in the same way as by the person taxed. If the result is not satisfactory, if it is such that to-day's values are not fair, anyone can blame the surveyor. It simply means that he has not exercised the legal rights given to him by the Act. The Act provides for quinquennial valuations, and in that respect it provides what the Financial Secretary is trying to do. If the method there laid down is not satisfactory, and experience has shown that it does not give fair value, change the method by all means, but you must change it for both purposes. Have one method instead of two.

What will be the result from the point of view of the taxpayer? You are going to say to him, if the Clause is passed, that for rating purposes he shall fight the question of the value of his land under the Act of 1869. He might take his assessment to special sessions or to general sessions and he might establish that the figure he had was fair, but when he had done that, the fight would be only half complete. You have to deal with the Revenue authorities. If they are valuing your property too high, you will have to fight the matter all over again with the surveyor of taxes, not before any legal tribunal but before a special tribunal, or, in other words, the general commissioners—a very different tribunal, armed with the power—which I expect, if we knew the truth, was the whole reason for this Clause—that if an appeal against assessment in Schedule A or Schedule B arises as to annual value, the general commissioners may direct the appellant to cause the valuation to be made by a person of skill, and may require the same to be valued on oath and the annual valuation determined in accordance with that valuation.

If you appeal to the commissioners, you are faced with this fact. The general commissioners may say, "Well, you shall have a valuation made by Mr. A.B. and the valuation Mr. A.B. determines ends the case.' That is a very harsh weapon. In other words, he is taken from a court of justice and his case is determnied by a valuer who has not been agreed to by him, as would be the case in other arbitrations. Valuers are human, and general commissioners, I suppose, are human. The valuers, I suppose, may think, "Well, if we put on too low values, we shall never get nominated again for this job." At any rate, it is a very unsatisfactory weapon to leave in the hands of a tribunal, and one which the ordinary appellant does not like at all. It takes him right away from courts of justice determined on evidence of valuers and witnesses who can be cross-examined, to someone nominated by the tribunal, and he has no method of cross-examining or of saying that the valuation is wrong or that they have overlooked this, that or the other fact. You are bound by that decision and may have to pay the cost of valuation if it is higher than the figure which you feel it should be.

The ordinary landowner or houseowner is being faced with a dual fight. He has to fight one authority before one tribunal, and even if he wins and gets his appeal established, it is no help to him for he has to fight over again. That is entirely unscientific. If you are going to make a change at all, it ought to be made throughout the country in the direction of London, and not changed in London in the direction of the rest of the country. It is a simple question of fact as to what a property is worth let per year. It is not a difficult thing to ascertain. If the tribunal which you have has not ascertained the figure fairly, and the appeal tribunal and general sessions in practice do not arrive at a fair result, change your method and procedure for both purposes. If it is not a sound system, why retain it at all? There ought to be one method—and one method only—in arriving at this simple annual value of property and land, a value which can be used for all purposes. Value cannot change because of the purposes for which it is going to be used. As a result of this dual authority two valuation lists may contain different values. If they are to arrive approximately at the same result, all this extra expenditure will have been wasted. If they are to arrive at different results, your authorities will be working on two different valuation lists. One must be unfair either to the taxpayer or to the authority.

What will be the feeling created in the mind of the owner of the land or house? He will always think that he is being unfairly treated, that this authority or that authority is attributing to him for land or buildings a higher value than the other authority. They both cannot be right. It will tend to create a good deal of dissatisfaction in that way, and it will strengthen the demand for some form of uniformity, because everybody who looks at the matter scientifically, or wants to ascertain the value in a fair and impartial way, must surely feel that the right way to deal with it is to have one valuation arrived at in a way which will be satisfactory to everybody. Let us have one method, and one method only. Do not let us create procedure of this sort which, if it makes any change at all, will create two valuation lists which must differ one from the other. If the lists differ, you inevitably create a feeling that one list must be wrong. I submit that it is sound and scientific to retain one method only.

Mr. PETHICK-LAWRENCE

We have had 2½ hours' discussion, and I would appeal to the Committee to come to a decision.

Major ELLIOT

We are here discussing the revaluation of almost a kingdom, affecting 4,500,000 people, over £76,000,000 of gross value under Schedule A, and 857,000 assessments. Therefore, 2½ hours is not an unreasonable length of time to devote to such a subject.

Captain Sir WILLIAM BRASS

Another thing which we are doing is trying to repeal an Act of Parliament which has been in existence 61 years.

Mr. RAMSBOTHAM

The hon. and gallant Member for North-East Bethnal Green (Major Nathan) asked why this Clause had been inserted, and expressed surprise at its insertion. He did not need to express surprise. It has been inserted solely for the purpose of getting money. Judging by the rest of this Bill, the Government are prepared to insert any Clause, however incongruous, for that purpose. The Financial Secretary has the spirit of acquisitiveness which permeates his Department. Can he give us any evidence why valuations which are fair for rating are unfair for Income Tax? I understand that the Inland Revenue officer can always, if he chooses, be a party to appeals on rating questions, and can express his dissatisfaction with assessments, if he so chooses. I do not ask for the information to be given immediately, but perhaps the Financial Secretary can let us know later how many occasions in the last year or the last two or three years the Inland Revenue officer has appealed against an assessment in London, and has expressed his dissatisfaction. If he has not appealed, ex hypothesi he is satisfied with the assessment. If he has appealed, it would be interesting to have the details and to know how often he has appealed, and with what results.

The hon. and gallant Member for North-East Bethnal Green said that apart from the question of raising £500,000 there could be no justification for altering a system which has worked perfectly well in London and which, on the face of it, is a businesslike system, a common-sense system and easier of administration and which, apart from financial considerations, no one would dream of altering. It would have been left unaltered except for the purpose of raising the wind—raising the revenue. The country would much prefer to have the London system rather than vice versa. The question of the expense may not be very important, but £15,000 has been mentioned. In view of the figures given by the hon. and gallant Member for Kelvingrove (Major Elliot), I doubt whether the change can be made at a cost of £15,000. Perhaps the Financial Secretary will be able to tell us how many additional officials will be necessary; how many valuers will be required to do the valuation. Unemployment cannot be cured merely by appointing fresh valuers. I should like the Financial Secretary to tell us whether valuation for Income Tax is higher than the valuation for rates, and if so, what is the explanation. Why does he expect to get another £500,000 from this change because, theoretically, the valuation for one, if carefully done and not appealed against by the Inland Revenue officer, should be identical with the other?

Sir ASSHETON POWNALL

I have a special interest in this question, an interest greater than that of any other hon. Member, not because I am the largest landowner in London—I wish I were—but because I represent the largest constituency in the whole of London. Therefore, my constituents are more affected than the constituents of any other London Member or of any other hon. Member. That is why, in response to the appeal of the Financial Secretary, I can promise him that my arguments shall be as few as my 77,000 constituents are numerous. No real justification has been made for putting this extra infliction upon householders in London. We all know the difficulties that arise in filling up the very complicated forms in connection with Income Tax. For years past we have had one form in London every five years from the rating authority, and we are now threatened with a second form every five years. That may seem in itself a small matter, but throughout the whole of London it means that 1,000,000 forms will be issued every five years to the ratepayers of London. That is a very big administrative task for those who have to deal with the forms, and it means considerable expense. I do not think we have been given any figures in regard to the administrative cost, but there must be very considerable administrative machinery to be set up in London to deal with the sending out of the forms and to deal with them when they come in, and also to deal with the appeals. From that point of view the Financial, Secretary has not made out a very good case. He says that an additional £500,000 will be obtained. Is that a gross or a net sum? Does it include the cost of the administrative machinery, or is it £500,000 after the administrative machinery has been set up? It might cost tens of thousands of pounds to collect the £500,000.

Years ago I served as a member of a borough council and I know the amount of time that was given by my colleagues of the council in connection with their duties arising out of the valuation. It is news for me to know that that work has not been properly done. I do not say that in every case it was a fair valuation, for there must be differences of opinion, but are we to sweep away the whole of that system or set up alongside it another system, with the possibility that the borough council may say that £100 is a fair valuation for a certain property and the Inland Revenue may put the figure at £120, with the result that the borough council valuer next year may put the figure at £120? If this sort of thing is to go on every time, with two authorities each putting up their valuation against the householder, it will mean that at intervals of two or three years the unfortunate householder will find himself hit, and he will be hit for the rest of his life in respect of any property that he owns. That is not a reasonable suggestion. I do not think that the case has been made out sufficiently for a change in the existing system. If there are cases where property which ought to be valued at £1,000 has only been valued at £500, and the Inland Revenue has lost money, we ought to be told of such cases, which would strengthen the case put forward by the Financial Secretary; but unless much better argument can be made than has been made, I shall be justified in voting against the Clause.

M. A. M. SAMUEL

I should like to put two or three Treasury questions. The Chancellor of the Exchequer and the Financial Secretary have justified themselves on the ground that they are not getting the revenue that they ought to get. We have been told that it will cost £15,000 for this extra valuation. How can they justify that estimate of £15,000? Let us take the average salary of the competent men who deal with valuation. In this case it is proposed practically to revalue a nation. The administrative county of London contains a population as large as that of Canada, with tens of thousands of houses, and we are told that the cost for the revaluation will be £15,000. That would mean 15 officials without any expenditure allowed for overhead or charges other than salaries. I do not want to be rough in my expressions of opinion, but I must say that I do not believe it. I do not believe that it can be done for any such sum. I do not think that sum represents one-tenth or one-twentieth of the expense involved. I hope that my hon. Friend will press the point and ask the Financial Secretary to prove that the cost will be only £15,000. I am not doubting his word, but I do not believe in the accuracy of the calculation.

Apart from the expense, there is the question of worrying and harassing the taxpayer, and then there will be the appeals. Moreover, there is the insinuation in this Clause that all the competent, honourable and devoted men who work on the various municipal corporations and assessment committees, who have done this public work of assessment, have all along been assessing unfairly. Supposing that I live in a property which is assessed at £200, are we to understand that those who have assessed me in Marylebone have been incompetent to do the work and have under-assessed me and put me in a, position of unfair privilege as against my fellow-taxpayers? I do not believe it. I believe that the competent people on the borough councils are quite able to do the assessments, and I am not prepared, without better proof than has been given, to accept the idea that the assessments have been inaccurate and unjust and all in favour of the taxpayer.

Mr. PETHICK-LAWRENCE

I will answer the hon. Member for Farnham (Mr. A. M. Samuel) at once. It is estimated that the cost will be £15,000 for each valuation, and that the additional revenue will be £500,000 each year.

Sir A. POWNALL

Does that include the cost of the appeals?

Mr. PETHICK-LAWRENCE

Yes.

Major ELLIOT

I had hoped that the Financial Secretary might have dealt at greater length with the very powerful case which has been advanced by hon. and right hon. Members on this side. He has answered at once the points raised by his predecessor in office, but if explanations can only be elicited by an ex-Financial Secretary of the Treasury, debate will be seriously limited. I wish to deal with the one particular point on which the Financial Secretary based a great deal of his case. He said that this double valuation was found to be necessary, and he defended it as an end in itself, as a good thing and as a procedure which should be followed. Let me point out that in the northern part of the United Kingdom the double valuation does not apply, but the Financial Secretary does not propose to sweep away the single valuation as regards Scotland.

Mr. SHERWOOD

Having regard to the fact that Englishmen are not allowed to intervene on Scottish matters, is it in order for a Scottish Member to intervene on English matters?

The DEPUTY - CHAIRMAN (Mr. Dunnico)

I have frequently ruled that hon. Members do not sit in this House as Englishmen, Scotsmen, Welshmen or Irishmen, but as Members of Parliament.

Mr. CHARLES WILLIAMS

Are we to understand from your Ruling that English Members have a perfect right to intervene in Scottish debates and that Scottish Members have a right to intervene in English debates?

The DEPUTY-CHAIRMAN

The hon. Member, if he has any doubts on that matter, may dispel them.

Major ELLIOT

May I point out to the hon. Member for Wakefield (Mr. Sherwood) that we are dealing with questions of general revenue, which is contributed to by those north of the Tweed as well as by those south of the Tweed. The Financial Secretary has defended the double valuation as a good thing in itself, and in doing so went counter to many of the committees and commissions which have considered this matter. They have said that it is not necessary, and surely it is not outside his knowledge that in Scotland it is not necessary and that the one valuation there is accepted for both purposes. It has worked perfectly satisfactorily. If the local authority appoints the Inland Revenue officer for the purpose of local valuation then the valuation is accepted by the Inland Revenue for the purposes of Inland Revenue. It is a statutory acceptance. It is not proposed to sweep away the single valuation in Scotland as in the case of London. When the Financial Secretary said that the double valuation has great merits and that the single valuation creates great injustices I became somewhat apprehensive that the northern part of the kingdom may be being treated unfarily at the moment. Obviously, it will affect Scotland very closely, because a similar Amendment will have to be in- troduced in regard to Scotland. We shall oppose it. Anyone who has had any experience of the working of the admirable system in Scotland, where the relations are good and where annual valuations are carried out by which violent bumps and slumps are avoided, consider that we are ahead of the system which prevails in England.

The Government propose to sweep away a good system and replace it by a bad one. That requires a certain amount of answer. The case made out by the Financial Secretary was traversed by many hon. Members on this side of the Committee and by hon. Members of the Liberal party, but the Financial Secretary has given us no reply. He has given us his own case but has not attempted to answer the case which has been made out from this side of the Committee. There is the precedent in this Bill of the single valuation being left in the case of Scotland, although it is proposed to sweep it away in the case of London. In Scotland the same officer carries out the single valuation and it is most acceptable both to the Inland Revenue authorities and to local authorities. It is a statutory duty to accept that valuation. Although it is optional on local authorities to appoint the Inland Revenue officer as their valuer it is nevertheless interesting to find that more than 50 per cent. have chosen to appoint him. The system is working well, and it forms a very valuable analogy to the system in London which it is proposed to sweep away. The revaluation of this enormous block of property represented by Schedule A valuations of London deserves a close and careful examination. It affects £76,000,000 revenue, 857,000 assessments, and a population of 4,500,000. If the financial affairs of Scotland were dealt with in any such brief and perfunctory manner I am certain that Scottish Members would demand the presence not merely of the Chancellor of the Exchequer but of the whole Treasury bench, and would expect not an appeal for the closing of the debate but for a full and exhaustive analysis of the revenue proposals, which they would not allow to be dismissed without very careful examination.

Mr. PETHICK-LAWRENCE

rose in his place, and claimed to move, "That the Question be now put."

Question put, "That the Question be now put."

The Committee proceeded to a Division.

Mr. MARJORIBANKS (seated and covered)

On a point of Order. May I ask whether you were aware that the Chancellor of the Exchequer said that he would give us the fullest and frankest discussion on this matter and place no limit upon it whatever? If

you had been aware of this, may I ask whether you would have allowed the discussion to be closed?

The DEPUTY-CHAIRMAN

The Chair is not affected by an alleged pledge given by any hon. Member. I have to use my discretion, as to whether reasonable discussion has taken place, and I have done so in this case.

The Committee divided: Ayes, 256; Noes, 166.

Division No. 383.]	AYES.	[6.38 p.m.
Adamson, Rt. Hon. W. (Fife, West)	Gill, T. H.	Lowth, Thomas
Adamson, W. M. (Staff., Cannock)	Gillett, George M.	Lunn, William
Addison, Rt. Hon. Dr. Christopher	Glassey, A. E.	Macdonald, Gordon (Ince)
Aitchison, Rt. Hon. Craigie M.	Gossling, A. G.	MacDonald, Rt. Hon. J. R. (Seaham)
Alexander, Rt. Hon. A. V. (Hillsbro')	Gould, F.	McElwee, A.
Ammon, Charles George	Gray, Milner	McKinlay, A.
Arnott, John	Greenwood, Rt. Hon. A. (Colne)	MacLaren, Andrew
Aske, Sir Robert	Grenfell, D. R. (Glamorgan)	Maclean, Sir Donald (Cornwall, N.)
Attlee, Clement Richard	Griffith, F. Kingsley (Middlesbro' W.)	MacNeill-Weir, L.
Ayles, Walter	Griffiths, T. (Monmouth, Pontypool)	Macpherson, Rt. Hon. James J.
Baker, John (Wolverhampton, Bilston)	Groves, Thomas E.	McShane, John James
Baldwin, Oliver (Dudley)	Grundy, Thomas W.	Malone, C. L'Estrange (N'thampton)
Barnes, Alfred John	Hall, F. (York, W. R., Normanton)	Mansfield, W.
Barr, James	Hall, G. H. (Merthyr Tydvil)	March, S.
Batey, Joseph	Hall, Capt. W. P. (Portsmouth, C.)	Marcus, M.
Bellamy, Albert	Hardie, George D.	Marley, J.
Benn, Rt. Hon. Wedgwood	Harris, Percy A.	Marshall, Fred
Bennett, Capt. Sir E. N. (Cardiff C.)	Hartshorn, Rt. Hon. Vernon	Mathers, George
Bennett, William (Battersea, South)	Hastings, Dr. Somerville	Matters, L. W.
Benson, G.	Haycock, A. W.	Messer, Fred
Bentham, Dr. Ethel	Hayes, John Henry	Middleton, G,
Bevan, Aneurin (Ebbw Vale)	Henderson, Right Hon. A. (Burnley)	Millar, J. D.
Blindell, James	Henderson, Arthur, Junr. (Cardiff, S.)	Mills, J. E.
Bondfield, Rt. Hon. Margaret	Henderson, Thomas (Glasgow)	Milner, Major J.
Bowen, J. W.	Henderson, W. W. (Middx., Enfield)	Montague, Frederick
Bowerman, Rt. Hon. Charles W.	Herriotts, J.	Morgan, Dr. H. B.
Brockway, A. Fenner	Hirst, G. H. (York W. R. Wentworth)	Morley, Ralph
Bromfield, William	Hirst, W. (Bradford, South)	Morris, Rhys Hopkins
Brooke, W.	Hoffman, P. C.	Morris-Jones, Dr. J. H. (Denbigh)
Brothers, M.	Hopkin, Daniel	Morrison, Herbert (Hackney, South)
Brown, C. W. E. (Notts, Mansfield)	Hore-Belisha, Leslie	Mort, D. L.
Brown, Ernest (Leith)	Horrabin, J. F.	Moses, J. J. H.
Brown, Rt. Hon. J. (South Ayrshire)	Hudson, James H. (Huddersfield)	Mosley, Lady C. (Stoke-on-Trent)
Burgess, F. G.	Hunter, Dr. Joseph	Mosley, Sir Oswald (Smethwick)
Caine, Derwent Hall-	Hutchison, Maj.-Gen. Sir R.	Muff, G.
Cameron, A. G.	Jenkins, W. (Glamorgan, Neath)	Muggeridge, H. T.
Cape, Thomas	John, William (Rhondda, West)	Murnin, Hugh
Carter, W. (St. Pancras, S. W.)	Jones, F. Llewellyn- (Flint)	Nathan, Major H. L.
Charleton, H. C.	Jones, Henry Haydn (Merioneth)	Naylor, T. E.
Chater, Daniel	Jones, J. J. (West Ham, Silvertown)	Newman, Sir R. H. S. D. L. (Exeter)
Cluse, W. S.	Jones, Rt. Hon. Leif (Camborne)	Noel Baker, P. J.
Clynes, Rt. Hon. John R.	Jones, Morgan (Caerphilly)	Oldfield, J. R.
Cocks, Frederick Seymour	Jowett, Rt. Hon. F. W.	Oliver, George Harold (Ilkeston)
Compton, Joseph	Jowitt, Rt. Hon. Sir W. A.	Owen, H. F. (Hereford)
Cove, William G.	Kelly, W. T.	Palin, John Henry
Daggar, George	Kennedy, Thomas	Paling, Wilfrid
Dallas, George	Kenworthy, Lt.-Com. Hon. Joseph M.	Parkinson, John Allen (Wigan)
Dalton, Hugh	Lambert, Rt. Hon. George (S. Molton)	Pethick-Lawrence, F. W.
Davies, E. C. (Montgomery)	Lang, Gordon	Phillips, Dr. Marion
Day, Harry	Lansbury, Rt. Hon. George	Pole, Major D. G.
Denman, Hon. R. D.	Lathan, G.	Potts, John S.
Dickson, T.	Law, A, (Rosendale)	Price, M. P.
Duncan, Charles	Lawrence, Susan	Pybus, Percy John
Ede, James Chuter	Lawther, W. (Barnard Castle)	Ramsay, T. B. Wilson
Edmunds, J. E.	Leach, W.	Rathbone, Eleanor
Edwards, E. (Morpeth)	Lee, Frank (Derby, N. E.)	Raynes, W. R,
Egan, W. H.	Lee, Jennie (Lanark, Northern)	Richards, R.
Elmley, Viscount	Lees, J.	Richardson, R. (Houghton-le-Spring)
Foot, Isaac	Lewis, T. (Southampton)	Riley, F. F. (Stockton-on-Tees)
Freeman, Peter	Lindley, Fred W.	Ritson, J.
Gardner, B. W. (West Ham, Upton)	Logan, David Gilbert	Roberts, Rt. Hon. F. O. (W. Bromwich)
Gardner, J. P. (Hammersmith, N.)	Longbottom, A. W.	Romeril, H. G.
Gibbins, Joseph	Longden, F.	Rosbotham, D. S. T.
Gibson, H. M. (Lancs, Mossley)	Lovat-Fraser, J. A.	Rowson, Guy
Russell, Richard John (Eddisbury)	Smith, Tom (Pontefract)	Walters, Rt. Hon. Sir J. Tudor
Salter, Dr. Alfred	Smith, W. R. (Norwich)	Watkins, F. C.
Samuel Rt. Hon. Sir H. (Darwen)	Snell, Harry	Watts-Morgan, Lt.-Col. D. (Rhondda)
Sanders, W. S.	Snowden, Rt. Hon. Philip	Wedgwood, Rt. Hon. Josiah
Sawyer, G. F.	Snowden, Thomas (Accrington)	Welsh, James (Paisley)
Scrymgeour, E.	Sorensen, R.	Welsh, James C. (Coatbridge)
Scurr, John	Stamford, Thomas W.	West, F. R.
Sexton, James	Strachey, E. J. St. Loe	White, H. G.
Shaw, Rt. Hon. Thomas (Preston)	Strauss, G. R.	Whiteley, Wilfrid (Birm., Ladywood)
Shepherd, Arthur Lewis	Sutton, J. E.	Williams, Dr. J. H. (Llanelly)
Sherwood, G. H.	Taylor, R. A. (Lincoln)	Williams, T. (York, Don Valley)
Shield, George William	Thomas, Rt. Hon. J. H. (Derby)	Wilson, C. H. (Sheffield, Attercliffe)
Shiels, Dr. Drummond	Thorne, W. (West Ham, Plaistow)	Wilson, J. (Oldham)
Shillaker, J. F.	Thurtle, Ernest	Wilson, R. J. (Jarrow)
Short, Alfred (Wednesbury)	Tinker, John Joseph	Winterton, G. E. (Leicester, Loughb'gh)
Simmons, C. J.	Toole, Joseph	Wise, E. F.
Simon, E. D. (Manch'ter, Withington)	Trevelyan, Rt. Hon. Sir Charles	Wood, Major McKenzie (Banff)
Sinclair, Sir A. (Caithness)	Vaughan, D. J.	Young, R. S. (Islington, North)
Sinkinson, George	Viant, S. P.
Smith, Alfred (Sunderland)	Walkden, A. G.	TELLERS FOR THE AYES.-
Smith, Ben (Bermondsey, Rotherhithe)	Walker, J.	Mr. Charles Edwards and Mr. William Whiteley.
Smith, Frank (Nuneaton)	Wallace, H. W.
Smith, H. B. Lees (Keighley)	Wellhead, Richard C.
NOES.
Acland-Troyte, Lieut.-Colonel	Edmondson, Major A. J.	Moore, Sir Newton J. (Richmond)
Albery, Irving James	Elliot, Major Walter E.	Morrison, W. S. (Glos., Cirencester)
Allen, Sir J. Sandeman (Liverp'l., W.)	Erskine, Lord (Somerset, Weston-s.-M.)	Newton, Sir D. G. C. (Cambridge)
Amery, Rt. Hon. Leopold C. M. S.	Everard, W. Lindsay	Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld)
Ashley, Lt.-Col. Rt. Hon. Wilfrid W.	Falle, Sir Bertram G.	Ormsby-Gore, Rt. Hon. William
Astor, Viscountess	Ferguson, Sir John	Peake, Capt. Osbert
Atholl, Duchess of	Fermoy, Lord	Percy, Lord Eustace (Hastings)
Atkinson, C.	Fielden E. B.	Peto, Sir Basil E. (Devon, Barnstaple)
Balfour, George (Hampstead)	Forestier-Walker, Sir L.	Pilditch, Sir Philip
Balfour, Captain H. H. (I. of Thanet)	Fremantle, Lieut.-Colonel Francis E.	Pownall, Sir Assheton
Balniel, Lord	Galbraith, J. F. W.	Ramsbotham, H.
Beamish, Rear-Admiral T. P. H.	Ganzoni, Sir John	Reid, David D. (County Down)
Beaumont, M. W.	Gilmour, Lt.-Col. Rt. Hon. Sir John	Remer, John R.
Berry, Sir George	Gower, Sir Robert	Rentoul, Sir Gervais S.
Betterton, Sir Henry B.	Grace, John	Reynolds, Col. Sir James
Bevan, S. J. (Holborn)	Graham, Fergus (Cumberland, N.)	Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Birchall, Major Sir John Dearman	Grattan-Doyle, Sir N.	Roberts, Sir Samuel (Ecclesall)
Bird, Ernest Roy	Greene, W. P. Crawford	Ruggles-Brise, Lieut.-Colonel E. A.
Bourne, Captain Robert Croft	Grenfell, Edward C. (City of London)	Russell, Alexander West (Tynemouth)
Bowater, Col. Sir T. Vansittart	Gretton, Colonel Rt. Hon. John	Salmon, Major I.
Bowyer, Captain Sir George E. W.	Gritten, W. G. Howard	Samuel, A. M. (Surrey, Farnham)
Boyce, H. L.	Guinness, Rt. Hon. Walter E.	Samuel, Samuel (W'dsworth, Putney)
Bracken, B.	Gunston, Captain D. W.	Sandeman, Sir N. Stewart
Brass, Captain Sir William	Hackinq, Rt. Hon. Douglas H.	Savery, S. S.
Briscoe, Richard George	Hall, Lieut.-Col. Sir F. (Dulwich)	Smith, R. W. (Aberd'n & Kinc'dine, C.)
Brown, Brig.-Gen. H. C. (Berks, Newb'y)	Hammersley, S. S.	Smith-Carington, Neville W.
Buckingham, Sir H.	Hannon, Patrick Joseph Henry	Smithers, Waldron
Burton, Colonel H. W.	Harvey, Major S. E. (Devon, Totnes)	Somerville, A. A. (Windsor)
Butler, R. A.	Hennessy, Major Sir G. R. J.	Spender-Clay, Colonel H.
Cadogan, Major Hon. Edward	Herbert, Sir Dennis (Hertford)	Stanley, Lord (Fylde)
Carver, Major W. H.	Hills, Major Rt. Hon. John Waller	Stanley, Maj. Hon. O. (W'morland)
Castle Stewart, Earl of	Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.	Steel-Maitland, Rt. Hon. Sir Arthur
Cayzer, Sir C. (Chester, City)	Hope, Sir Harry (Forfar)	Stuart, Hon. J. (Moray and Nairn)
Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.)	Horne, Rt. Hon. Sir Robert S.	Sueter, Rear-Admiral M. F.
Chamberlain, Rt. Hn. Sir J. A. (Birm., W.)	Howard-Bury, Colonel C. K.	Thomas, Major L. B. (King's Norton)
Chamberlain, Rt. Hon. N. (Edgbaston)	Iveagh, Countess of	Thomson, Sir F.
Churchill, Rt. Hon. Winston Spencer	Jones, Sir G. W. H. (Stoke New'gton)	Tinne, J. A.
Cobb, Sir Cyril	Kindersley, Major G. M.	Titchfield, Major the Marquess of
Cockerill, Brig.-General Sir George	King, Commodore Rt. Hon. Henry D.	Turton, Robert Hugh
Colfox, Major William Philip	Knox, Sir Alfred	Vaughan-Morgan, Sir Kenyon
Courthope, Colonel Sir G. L.	Lamb, Sir J. Q.	Ward, Lieut.-Col. Sir A. Lambert
Cranborne, Viscount	Lane Fox, Col. Rt. Hon. George R.	Wardlaw-Milne, J. S.
Croft, Brigadier-General Sir H.	Leighton, Major B. E. P.	Warrender, Sir Victor
Crookshank, Capt. H. C.	Llewellin, Major J. J.	Wayland, Sir William A.
Croom-Johnson, R. P.	Locker-Lampson, Rt. Hon. Godfrey	Wells, Sydney R.
Culverwell, C. T. (Bristol, West)	Long, Major Eric	Williams, Charles (Devon, Torquay)
Cunliffe-Lister, Rt. Hon. Sir Philip	Lymington, Viscount	Windsor-Clive, Lieut.-Colonel George
Dalkeith, Earl of	Macdonald, Capt. P. D. (I. of W.)	Winterton, Rt. Hon. Earl
Dalrymple-White, Lt.-Col. Sir Godfrey	Maitland, A. (Kent, Faversham)	Withers, Sir John James
Davidson, Major-General Sir J. H.	Makins, Brigadier-General E.	Wolmer, Rt. Hon. Viscount
Davies, Dr. Vernon	Marjoribanks, E. C.	Womersley, W. J.
Davies, Maj. Geo. F.(Somerset, Yeovil)	Mason, Colonel Glyn K.	Wood, Rt. Hon. Sir Kingsley
Davison, Sir W. H. (Kensington, S.)	Meller, R. J.	Worthington-Evans, Rt. Hon. Sir L.
Dixon, Captain Rt. Hon. Herbert	Merriman, Sir F. Boyd
Duckworth, G. A. V.	Mitchell, Sir W. Lane (Streatham)	TELLERS FOR THE NOES.-
Dugdale, Capt. T. L.	Mond, Hon. Henry	Captain Margesson and Captain Wallace.
Eden, Captain Anthony	Monsell, Eyres, Com. Rt. Hon. Sir B.

Question put accordingly, "That the words proposed to be left out stand part of the Clause."

The Committee divided: Ayes, 233; Noes, 191.

Division No. 384.]	AYES.	[6.50 p.m.
Adamson, Rt. Hon. W. (Fife, West)	Hayes, John Henry	Phillips, Dr. Marion
Adamson, W. M. (Staff., Cannock)	Henderson, Right Hon. A. (Burnley)	Pole, Major D. G.
Addison, Rt. Hon. Dr. Christopher	Henderson, Arthur, Junr. (Cardiff, S.)	Potts, John S.
Aitchison, Rt. Hon. Craigie M.	Henderson, Thomas (Glasgow)	Price, M. P.
Alexander, Rt. Hon. A. V. (Hillsbro')	Henderson, W. W. (Middx., Enfield)	Pybus, Percy John
Ammon, Charles George	Herriotts, J.	Rathbone, Eleanor
Arnott, John	Hirst, G. H. (York W. R. Wentworth)	Raynes, W. R.
Attlee, Clement Richard	Hirst, W. (Bradford, South)	Richards, R.
Ayles, Walter	Hoffman, P. C.	Richardson, R. (Houghton-le-Spring)
Baker, John (Wolverhampton, Bilston)	Hopkin, Daniel	Riley, F. F. (Stockton-on-Tees)
Baldwin, Oliver (Dudley)	Horrabin, J. F.	Ritson, J.
Barnes, Alfred John	Hudson, James H. (Huddersfield)	Roberts, Rt. Hon. F. O. (W. Bromwich)
Barr, James	Jenkins, W. (Glamorgan, Neath)	Romeril, H. G.
Batey, Joseph	John, William (Rhondda, West)	Rosbotham, D. S, T.
Bellamy, Albert	Jones, J. J. (West Ham, Silvertown)	Rowson, Guy
Benn, Rt. Hon. Wedgwood	Jones, Morgan (Caerphilly)	Salter, Dr. Alfred
Bennett, Capt. Sir E. N. (Cardiff C.)	Jowett, Rt. Hon. F. W.	Sanders, W. S.
Bennett, William (Battersea, South)	Jowitt, Rt. Hon. Sir W. A.	Sawyer, G. F.
Benson, G.	Kelly, W. T.	Scrymgeour, E.
Bentham, Dr. Ethel	Kennedy, Thomas	Scurr, John
Bevan, Aneurin (Ebbw Vale)	Kenworthy, Lt.-Com. Hon. Joseph M.	Sexton, James
Bondfield, Rt. Hon. Margaret	Lang, Gordon	Shaw, Rt. Hon. Thomas (Preston)
Bowen, J. W.	Lansbury, Rt. Hon. George	Shepherd, Arthur Lewis
Bowerman, Rt. Hon. Charles W.	Lathan, G.	Sherwood, G. H.
Brockway, A. Fenner	Law, A. (Rossendale)	Shield, George William
Bromfield, William	Lawrence, Susan	Shiels, Dr. Drummond
Brooke, W.	Lawther, W. (Barnard Castle)	Shillaker, J. F.
Brothers, M.	Leach, W.	Short, Alfred (Wednesbury)
Brown, C. W. E. (Notts, Mansfield)	Lee, Frank (Derby, N. E.)	Simmons, C. J.
Brown, Ernest (Leith)	Lee, Jennie (Lanark, Northern)	Sinkinson, George
Brown, Rt. Hon. J. (South Ayrshire)	Lees, J.	Smith, Alfred (Sunderland)
Burgess, F. G.	Lewis, T. (Southampton)	Smith, Ben (Bermondsey, Rotherhithe)
Caine, Derwent Hall-	Lindley, Fred W.	Smith, Frank (Nuneaton)
Cameron, A. G.	Logan, David Gilbert	Smith, H. B. Lees (Keighley)
Cape, Thomas	Longbottom, A. W.	Smith, Tom (Pontefract)
Carter, W. (St. Pancras, S. W.)	Longden, F.	Smith, W. R. (Norwich)
Charleton, H. C.	Lovat-Fraser, J. A.	Snell, Harry
Chater, Daniel	Lowth, Thomas	Snowden, Rt. Hon. Philip
Church, Major A. G.	Lunn, William	Snowden, Thomas (Accrington)
Cluse, W. S.	Macdonald, Gordon (Ince)	Sorensen, R.
Clynes, Rt. Hon. John R.	MacDonald, Rt. Hon. J. R. (Seaham)	Stamford, Thomas W.
Cocks, Frederick Seymour	McElwee, A.	Strachey, E. J. St. Loe
Compton, Joseph	McKinlay, A.	Strauss, G. R.
Cove, William G.	MacLaren, Andrew	Sutton, J. E.
Daggar, George	Maclean, Nell (Glasgow, Govan)	Taylor, R. A. (Lincoln)
Dallas, George	MacNeill-Weir, L.	Thomas, Rt. Hon. J. H. (Derby)
Dalton, Hugh	McShane, John James	Thorne, W. (West Ham, Plaistow)
Day, Harry	Malone, C. L'Estrange (N'thampton)	Thurtle, Ernest
Denman, Hon. R. D.	Mansfield, W.	Tinker, John Joseph
Dickson, T.	March, S.	Toole, Joseph
Duncan, Charles	Marcus, M.	Townend, A. E.
Ede, James Chuter	Marley, J.	Trevelyan, Rt. Hon. Sir Charles
Edmunds, J. E.	Marshall, Fred	Vaughan, D. J.
Edwards, E. (Morpeth)	Mathers, George	Viant, S. P.
Egan, W. H.	Matters, L. W.	Walkden, A. G.
Foot, Isaac	Messer, Fred	Walker, J.
Freeman, Peter	Middleton, G.	Wallace, H. W.
Gardner, B. W. (West Ham, Upton)	Mills, J. E.	Wallhead, Richard C.
Gardner, J. P. (Hammersmith, N.)	Milner, Major J.	Watkins, F. C.
Gibbins, Joseph	Montague, Frederick	Watson, W. M. (Dunfermline)
Gibson, H. M. (Lancs, Mossley)	Morgan, Dr. H. B.	Watts-Morgan, Lt.-Col. D. (Rhondda)
Gill, T. H.	Morley, Ralph	Wedgwood, Rt. Hon. Josiah
Gillett, George M.	Morrison, Herbert (Hackney, South)	Welsh, James (Paisley)
Gossling, A. G.	Mort, D. L.	Welsh, James C. (Coatbridge)
Gould, F.	Moses, J. J. H.	White, H. G.
Graham, Rt. Hon. Win. (Edin., Cent.)	Mosley, Lady C. (Stoke-on-Trent)	Whiteley, Wilfrid (Birm., Ladywood)
Greenwood, Rt. Hon. A. (Colne)	Mosley, Sir Oswald (Smethwick)	Williams, Dr. J. H. (Llanelly)
Grenfell, D. R. (Glamorgan)	Muff, G.	Williams, T. (York, Don Valley)
Griffiths, T. (Monmouth, Pontypool)	Muggeridge, H. T.	Wilson, C. H. (Sheffield, Attercliffe)
Groves, Thomas E.	Murnin, Hugh	Wilson, J. (Oldham)
Grundy, Thomas W.	Naylor, T. E.	Wilson, R. J. (Jarrow)
Hall, F. (York, W. R., Normanton)	Newman, Sir R. H. S. D. L. (Exeter)	Winterton, G. E. (Leicester, Loughb'gh)
Hall, G. H. (Merthyr Tydvil)	Noel Baker, P. J.	Wise, E. F.
Hall, Capt. W. P. (Portsmouth, C.)	Oldfield, J. R.	Wood, Major McKenzie (Banff)
Hardie, George D.	Oliver, George Harold (Ilkeston)	Young, R. S. (Islington, North)
Harris, Percy A.	Palin, John Henry
Hartshorn, Rt. Hon. Vernon	Paling, Wilfrid	TELLERS FOR THE AYES.-
Hastings, Dr. Somerville	Parkinson, John Allen (Wigan)	Mr. Charles Edwards and Mr. William Whiteley.
Haycock, A. W.	Pethick-Lawrence, F. W.
NOES.
Acland-Troyte, Lieut.-Colonel	Falle, Sir Bertram G.	Monsell, Eyres, Com. Rt. Hon. Sir B.
Albery, Irving James	Ferguson, Sir John	Moore, Sir Newton J. (Richmond)
Amery, Rt. Hon. Leopold C. M. S.	Fermoy, Lord.	Morris, Rhys Hopkins
Ashley, Lt.-Col. Rt. Hon. Wilfrid W.	Fielden E. B.	Morris-Jones, Dr. J. H. (Denbigh)
Aske, Sir Robert	Forestier-Walker, Sir L.	Morrison, W. S. (Glos., Cirencester)
Astor, Viscountess	Fremantle, Lieut-Colonel Francis E.	Nathan, Major H. L.
Atholl, Duchess of	Galbraith, J. F. W.	Newton, Sir D. G. C. (Cambridge)
Atkinson, C.	Ganzoni, Sir John	Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld)
Baldwin, Rt. Hon. Stanley (Bewdley)	Gilmour, Lt.-Col. Rt. Hon. Sir John	Oliver, P. M. (Man., Blackley)
Balfour, George (Hampstead)	Glassey, A. E.	Ormsby-Gore, Rt. Hon. William
Balfour, Captain H. H. (I. of Thanet)	Gower, Sir Robert	Owen, H. F. (Hereford)
Balniel, Lord	Grace, John	Peake, Capt. Osbert
Beamish, Rear-Admiral T. P. H.	Graham, Fergus (Cumberland, N.)	Percy, Lord Eustace (Hastings)
Beaumont, M. W.	Grattan-Doyle, Sir N.	Peto, Sir Basil E. (Devon, Barnstaple)
Berry, Sir George	Gray, Milner	Pilditch, Sir Philip
Bevan, S. J. (Holborn)	Greene, W. P. Crawford	Pownall, Sir Assheton
Birchall, Major Sir John Dearman	Grenfell, Edward C. (City of London)	Ramsay, T. B. Wilson
Bird, Ernest Roy	Gretton, Colonel Rt. Hon. John	Ramsbotham, H.
Birkett, W. Norman	Griffith, F. Kingsley (Middlesbro' W.)	Reid, David D. (County Down)
Blindell, James	Gritten, W. G. Howard	Remer, John R.
Bourne, Captain Robert Croft	Guinness, Rt. Hon. Walter E.	Rentoul, Sir Gervais S.
Bowater, Col. Sir T. Vansittart	Gunston, Captain D. W.	Reynolds, Col. Sir James
Bowyer, Captain Sir George E. W.	Hacking, Rt. Hon. Douglas H.	Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Boyce, H. L.	Hall, Lieut.-Col. Sir F. (Dulwich)	Roberts, Sir Samuel (Ecclesall)
Bracken, B.	Hammersley, S. S.	Ruggles-Brise, Lieut.-Colonel E. A.
Brass, Captain Sir William	Hannon, Patrick Joseph Henry	Russell, Alexander West (Tynemouth)
Briscoe, Richard George	Hartington, Marquess of	Russell, Richard John (Eddisbury)
Brown, Brig.-Gen. H. C. (Berks, Newb'y)	Harvey, Major S. E. (Devon, Totnes)	Salmon, Major I.
Buckingham, Sir H.	Hennessy, Major Sir G. R. J.	Samuel, A. M. (Surrey, Farnham)
Burgin, Dr. E. L.	Herbert, Sir Dennis (Hertford)	Samuel, Samuel (W'dsworth, Putney)
Burton, Colonel H. W.	Hills, Major Rt. Hon. John Waller	Sandeman, Sir N. Stewart
Butler, R. A.	Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.	Savery, S. S.
Cadogan, Major Hon. Edward	Hope, Sir Harry (Forfar)	Scott, James
Carver, Major W. H.	Hore-Belisha, Leslie	Shepperson, Sir Ernest Whittome
Castie Stewart, Earl of	Horne, Rt. Hon. Sir Robert S.	Sinclair, Sir A. (Caithness)
Cayzer, Sir C. (Chester, City)	Howard-Bury, Colonel C. K.	Smith, R. W. (Aberd'n & Kinc'dine, C.)
Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.)	Hunter, Dr. Joseph	Smith-Carington, Neville W.
Chamberlain, Rt. Hn. Sir J. A. (Birm., W.)	Hutchison, Maj.-Gen. Sir R.	Smithers, Waldron
Chamberlain, Rt. Hon. N. (Edgbaston)	Iveagh, Countess of	Somerville, A. A. (Windsor)
Churchill, Rt. Hon. Winston Spencer	Jones, F. Llewellyn- (Flint)	Stanley, Maj. Hon. O. (W'morland)
Cockerill, Brig.-General Sir George	Jones, Sir G. W. H. (Stoke New'gton)	Steel-Maitland, Rt. Hon. Sir Arthur
Colfox, Major William Philip	Jones, Henry Haydn (Merioneth)	Stuart, Hon. J. (Moray and Nairn)
Courthope, Colonel Sir G. L.	Jones, Rt. Hon. Leif (Camborne)	Sueter, Rear-Admiral M. F.
Cranborne, Viscount	Kindersley, Major G. M.	Thomas, Major L. B. (King's Norton)
Croft, Brigadier General Sir H.	King, Commodore Rt. Hon. Henry D.	Thomson, Sir F.
Crookshank, Capt. H. C.	Knox, Sir Alfred	Tinne, J. A.
Croom-Johnson, R. P.	Lamb, Sir J. Q.	Titchfield, Major the Marquess of
Culverwell, C. T. (Bristol, West)	Lambert, Rt. Hon. George (S. Molton)	Turton, Robert Hugh
Cunliffe-Lister, Rt. Hon. Sir Philip	Lane Fox, Col. Rt. Hon. George R.	Walters, Rt. Hon. Sir J. Tudor
Dalkeith, Earl of	Leighton, Major B. E. P.	Ward, Lieut-Col. Sir A. Lambert
Dalrymple-White. Lt.-Col. Sir Godfrey	Liewellin, Major J. J.	Wardlaw-Milne, J. S.
Davidson, Major-General Sir J. H.	Locker-Lampson, Rt. Hon. Godfrey	Wayland, Sir William A.
Davies, Dr. Vernon	Long, Major Eric	Wells, Sydney R.
Davies, E. C. (Montgomery)	Macdonald, Capt. P. D. (I. of W.)	Williams, Com. C. (Devon. Torquay)
Davies, Maj. Geo. F. (Somerset, Yeovil)	Macpherson, Rt. Hon. James I.	Windsor-Clive, Lieut.-Colonel George
Davison, Sir W. H. (Kensington, S.)	Maitland, A. (Kent, Faversham)	Winterton, Rt. Hon. Earl
Dixon, Captain Rt. Hon. Herbert	Makins, Brigadier-General E.	Withers, Sir John James
Duckworth, G. A. V.	Margesson, Captain H. D.	Wolmer, Rt. Hon. Viscount
Dugdale, Capt. T. L.	Marjoribanks, E. C.	Womersley, W. J.
Eden, Captain Anthony	Mason, Colonel Glyn K.	Wood, Rt. Hon. Sir Kingsley
Edmondson, Major A. J.	Meller, R. J.	Worthington-Evans, Rt. Hon. Sir L.
Elliot, Major Walter E.	Merriman, Sir F. Boyd
Elmley, Viscount	Millar, J. D.	TELLERS FOR THE NOES.—
Erskine, Lord (Somerset, Weston-s.-M.)	Mitchell, Sir W. Lane (Streatham)	Captain Wallace and Sir Victor Warrender.
Everard, W. Lindsay	Mond, Hon. Henry

Mr. CHURCHILL

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

7.0 p.m.

I am very anxious that the course of our discussion shall be as smooth as possible and that the time available shall be employed in as fruitful a manner as we can conceive and, therefore in view of the progress that has been made this afternoon, or rather the little progress, I would ask the Financial Secretary, in the absence of the Chancellor of the Exchequer, whether he can make any further statement as to the wishes of the Government in regard to our proceedings to-night. I would point out how very clearly our objective is marked out for us by the Order Paper. We are dealing now with this immensely important Clause dealing with London valuation. I am entitled to say that the debate has not been conducted solely on party lines. The representatives of 13,000,000 of electors have all expressed growing anxiety at the character of this Clause, and the Government majority in the last Division has borne the deep dint of an increasing amount of Parliamentary misgiving. Unquestionably, the discussion of this Clause must be protracted. After that, we have a Clause which I frankly admit is of less consequence and less fertile in points of principle, dealing mainly with machinery but still important machinery which it is our duty to see is bright and clean and well oiled and efficiently adapted.

We might well have asked that the discussion should come to an end with Part II. I think we can most certainly arrange to gratify the right hon. Gentleman upon Part II at a very reasonable hour to-night, but he has, like a hard taskmaster—though he has not pressed us so hard so far, and I am most anxious to keep the debate in that good-tempered character which it has hitherto borne—asked us to accord him Clause 28. That raises enormous questions with very large sums of money to be taken from the direct taxpayer, and, of course, we must consider that Clause together with other Clauses affecting Estate Duties. The right hon. Gentleman would be well advised to let us know that he will not press matters beyond Clause 28 to-night, because then the Committee will be able to space out the limited time before twelve o'clock or quarter past in the manner which would assure the most useful and effective debate; otherwise, we might easily find ourselves in for another long nocturnal wrangle.

There is another reason to which I must call the attention of the Chancellor of the Exchequer before he replies. As he has been informed by my hon. Friend the Member for Watford (Sir D. Herbert), a very grave flaw has been detected in the drafting structure of the Bill, and we have to submit a point of Order and procedure to the Chair when the time comes which unquestionably will affect the whole group of Clauses from Clause 29 to Clause 33, inclusive. My hon. Friend was well advised in submitting this matter in good time to the Chancellor of the Exchequer and also to your colleague in the Chair, and we have for a considerable number of weeks been studying this point with the highest authorities to which we can have access and have no doubt whatever of the strength——

The DEPUTY-CHAIRMAN

We cannot go into the point of Order at this stage. While information that it is going to be raised is quite in order, the right hon. Gentleman must not go further.

Mr. CHURCHILL

I will not go further than to say that we have the utmost confidence in the strength—though it is not for me to say in the validity—of our arguments. It would be a very great pity if the matter came to be discussed at nine or ten o'clock to-morrow morning after a prolonged and harassing all-night sitting. It would be far better to get Clause 28 to-night, which I believe you can do if we now begin to space out our time to the best advantage and to curtail ruthlessly our discussions, and then start on Wednesday afternoon with this very grave constitutional issue which is to be raised before we discuss the five Clauses dealing with the private company. I have risen early to make this Motion, because, if one leaves it later, there is so little time to be saved, and it would not be possible, with the best will in the world, to compress discussion within those limits.

The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden)

The agreeable and persuasive manner with which I conduct discussions and proceedings in Committee has evidently affected the right hon. Gentleman. I also appreciate his desire to save time, and upon that we can harmoniously co-operate. The right hon. Gentleman has suggested that I should attempt to get to the end of Clause 28. That will not give us very much progress on this Bill. As I said at the opening of the Committee stage this afternoon, I quite realise that Clause 29 is a very important Clause, and I may perhaps say that I shall not oppose any Amendments to the Clause which do not strike at the object and the structure of the Clause. It is largely a matter for lawyers rather than for laymen, and the legal luminaries in the House, I have no doubt, will be able to make their suggestions which will add to the effectiveness of the Clause. I do not want to enter upon a discussion on that Clause before it comes. I have made my offer to the right hon. Gentleman with this com- promise. He says that the hon. Member for Watford (Sir D. Herbert) is going to raise a point of Order. I thank him for having given me notice of his intention, but the importance of the point of Order, so far as I can judge, is not so great as the right hon. Gentleman has assumed. Now the first Amendment on the Paper is one to postpone Clause 29. The point of Order need not take us very long, nor need the proposal to postpone Clause 29. If the right hon. Gentleman will agree to take those two points after disposing of Clause 28, then I am quite willing not to keep the House any longer.

Mr. SMITHERS

Does the right hon. Gentleman propose to accept the Amendment to take Clause 33 first?

Mr. SNOWDEN

Certainly not.

Mr. CHURCHILL

We think we should stop at Clause 28 to-night and raise this big point of Order and the new principles involved in the group of Clauses beginning with Clause 29 when we come back on Wednesday. I am sure that is the reasonable and practical course to take. The right hon. Gentleman is not very far from adopting this course, and I shall not say a word to incline him to turn his thumb down or to cast a harshness over our proceedings. We can, I believe, have useful debates up to a quarter past 12 or midnight and finish up Clause 28, and then address ourselves on Wednesday to those principles and those highly technical matters which arise on Clause 29. I cannot make any bargain affecting another day. There is no doubt that if the right hon. Gentleman pursues his endeavours to meet the wishes and views of the Opposition and continues the course of accepting Amendments which do not ruin the principles he has in view, namely, the prevention of improper evasion, and accepts a large number of Amendments which do not upset his principles and prevent business in general being affected by these provisions, such an attitude would abridge discussion. If we separate at the end of Clause 28 to-night, we shall arrive at the discussion of our business on Wednesday without any feeling of rancour or ill-usage from his conduct of our debate this evening.

Sir HERBERT SAMUEL

Perhaps I might say just a word in order to promote this conciliatory attitude which prevails. I do not know whether it is the fact announced on the tape this afternoon that the Treasury has received a windfall in Estate Duties of £4,250,000 that is the cause why the Chancellor of the Exchequer is so conciliatory in his dealings with the Opposition this afternoon. Whatever the reason may be, we are happy to find the two larger parties coming to an agreement on the course of business. When they disagree, it is my hon. Friends on these benches who suffer with the rest of the Committee. I think it is obviously reasonable that Clause 29 should be taken on a fresh day. In daylight the legal luminaries will, perhaps, shine even brighter than they would at night, and it will certainly be easier to follow their arguments on this very technical subject. As regards the extremely narrow point at which the Committee has arrived I think we could come to an arrangement by splitting the difference. The Amendment to postpone Clause 29 is an Amendment of a very useful character if it is intended to occupy a considerable amount of time, but it is not, in itself, an Amendment of very great value; and if hon. Gentlemen above the Gangway agree not to move that Amendment, perhaps the Chancellor of the Exchequer will agree that the point of Order should be taken at the outset of Wednesday's debate?

Mr. CHURCHILL

I think there is a great deal of force in the suggestion of the right hon. Gentleman the Member for Darwen (Sir H. Samuel). If our point of Order when raised on Wednesday next were to succeed it would have the effect, probably, of leading to the temporary withdrawal of these Clauses in order that they might be amended by the Government before being discussed. In these circumstances, if we finish with Clause 28 to-night, I certainly think we should be well advised not to move for the postponement of Clause 29, but to proceed at once on Wednesday, after the point of Order has been disposed of, to deal with the Amendments either by a general discussion on one Amendment or, in the ordinary way, and in strict accordance with the terms of each Amendment. I am most anxious to have as easy a passage in the Committee as is possible in conformity with our duty of examining this complicated Measure carefully.

Mr. SMITHERS

As the Amendment to postpone Clause 29 until after consideration of Clause 33 stands in my name, I may be allowed to say that I am anxious to help the business of the Committee and I repudiate entirely what the right hon. Gentleman the Member for Darwen (Sir H. Samuel) said about this Amendment. It was put down in a perfectly sincere desire to arrive at a definition of these five Clauses before discussing them. I understand from my friends who are acquainted with drafting that Clause 33, which is the definition Clause, is in its right place in the Bill, but it would be more convenient to discuss it before discussing Clauses 29 to 32. However, if it will facilitate business and bring about a slight rapprochement between the Chancellor of the Exchequer and his predecessor, I am quite willing to agree to the course proposed.

Mr. P. SNOWDEN

I am pleased that the hon. Member has fallen in with the suggestion of the right hon. Gentleman and I am quite agreeable to accept that suggestion also provided that it involves no sacrifice on my part.

Mr. CHURCHILL

In that case, I beg to ask leave to withdraw the Motion.

Motion, by leave, withdrawn.

The DEPUTY-CHAIRMAN

Sir William Brass.

Mr. MARJORIBANKS

On a point of Order. May I ask if the Amendment on the Paper—in page 22, line 23, at the end, to insert the words: Provided that, notwithstanding anything in this section or any repeal effected by this Act, any taxpayer aggrieved with the annual value of his property as ascertained for the purpose of the Income Tax Acts shall be entitled to all rights of appeal against such annual value as though the provisions of the Valuation (Metropolis) Act, 1869, were still in force. is out of order?

The DEPUTY-CHAIRMAN

It is not selected.

Sir W. BRASS

I beg to move, in page 22, line 32, at the end to add the words: (3) Notwithstanding anything in this section or any repeal effected by this Act, any rule which, under the provisions of the Valuation (Metropolis) Act, 1969, has had effect in the administrative county of London relating to the allowances for empties in the valuation for the purpose of Income Tax of houses let in separate suites, or in relation to the running cost of lifts in such houses, shall continue to have effect in the said county in the like cases and manner and with the like consequences as if all the provisions of that Act had continued in force. There is a considerable feeling of uneasiness in London, especially in the City of London, in connection with Clause 26. The Chancellor of the Exchequer and the Financial Secretary have based their arguments for the Clause almost exclusively on their desire to get an extra £500,000 of revenue, but we have not heard how it is expected to get that revenue. What is disturbing some people in the City is the question of whether, in seeking to get this amount by splitting the valuation and giving us two instead of one, the allowances for empties and for lifts and so forth will be affected. It is feared that these allowances will not be the same under the two valuations as they are at the present time. That is the uneasiness felt by my friends who have asked me to move this Amendment. The third Schedule to the Act of 1869—which is in effect being repealed by Clause 26—contains these words: The maximum rate of deductions prescribed in this Schedule shall not apply to houses or buildings let in separate tenements but the rate of deduction in such cases shall be determined as in classes 9, 10 and 11. Regarding those classes, these words appear in the margin: To be determined in each case according to the circumstances and the general principles of Law. But the same thing does not appear in the Finance Act of 1923, which I understand deals with the allowances which will become effective if this Clause is passed. I wish the Committee to understand the necessity for having these allowances for empties and lifts and so on as laid down in the Amendment because, in the City and in other parts of London as well, there are certain large tenement buildings let out as offices. These buildings are assessed quinquennially, and allowances are made for empties which may appear during the period of the quinquennium. If the valuation for Schedule A purposes is going to be made on the absolute rent which is being received for the various offices every year, then it would appear that a new valuation far the Schedule A part under the Bill would have to be made every year unless the ordinary allowances are going to be given for empties as at the present time. If I can get an undertaking from the Chancellor of the Exchequer that things are not going to be altered and that the practice in this respect is going to remain exactly as it is to-day then, of course, there is no reason for the Amendment.

Mr. P. SNOWDEN

I can very briefly, and without hesitation give the hon. and gallant Gentleman that assurance. All allowances under the existing Income Tax laws will be continued, such as repairs, empties, and so forth, as they exist under the present law. The only thing which the Clause does is to empower a special assessment for Income Tax, but it does not alter the allowances which can be made for local rating purposes, and it does not interfere with the allowances under the general Income Tax law.

Mr. SMITHERS

As my name is attached to this Amendment, perhaps I may be allowed to thank the right hon. Gentleman for his assurance.

Sir W. BRASS

In view of the statement by the Chancellor of the Exchequer, I beg to ask leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Major ELLIOT

Surely on the question, "That the Clause stands part of the Bill," we shall have some reply from the right hon. Gentleman to the cogent arguments which have been advanced with regard to the question of the single valuation. We were promised a very full discussion and a very full reply on that matter by the Chancellor of the Exchequer and I should like in particular to know the right hon. Gentleman's mind as to whether his adoption of the double valuation for London has been forced upon him by the necessities of the time and whether he agrees with so much of the opinion which has been given in reports of Commissions and of departmental committees and elsewhere as to the desirability of having a single valuation. The ex-Parliamentary Secretary to the Ministry of Health pointed out that in the first draft of the Rating and Valuation Bill it was suggested that a single valuation should take place and that the procedure in the provinces should be assimilated to that in London. It is now proposed to assimilate the procedure in London to that in the provinces, and this undoubtedly goes counter to a great many recommendations which have been made on the matter. Is the Chancellor of the Exchequer doing this because of the necessities of the times?

In Scotland, single valuation still remains, and it is not proposed to abolish it in this Bill. Whether it is a question of doing so in any future Bill, I cannot say, but we should like to be assured on that, because if the general principle is being laid down by the Chancellor of the Exchequer that double valuation is preferable to single valuation, it will obviously spread all over the Kingdom, but if he is merely dealing with an emergency in an emergency way, it is possible that the system in the North may not be disturbed and that we may subsequently come to the single valuation covering the whole of England including London. If there are any difficulties which have been found in working it, we should like to know, because these difficulties were not made clear by the Financial Secretary to the Treasury, and the actual fact that it was suggested that a considerable amount—I think, £500,000—of extra revenue was involved seems to indicate that the power of appeal possessed by the Inland Revenue had not been fully used.

The other point, which was made by the right hon. Member for St. George's (Sir L. Worthington-Evans), was that the clerk to the Westminster City Council had made a very careful examination of the problem of double and single valuation and had most emphatically recommended that the single valuation should be maintained: and, speaking doubtless on that occasion as the representative for Westminster, the right hon. Gentleman was anxious to have some answer made to that case. For all these reasons, it would be of interest to have some statement made covering the points raised, and we should be greatly obliged to the Chancellor of the Exchequer if he would give us the benefit of his views on the subject.

Mr. P. SNOWDEN

I regret that I was not able to be present during the discussion on this Clause, but I had a very important committee meeting which it was essential that I should attend. I did hear the hon. Member for Eastbourne (Mr. Marjoribanks) move the first and, I think, the most important Amendment, and he and the hon. and gallant Member for Kelvingrove (Major Elliot) put a number of definite questions. Both of them asked whether, in proposing this change, I was actuated solely, as the hon. and gallant Member put it, by the necessities of the time, or, as the hon. Member for Eastbourne put it, to secure increased revenue. These are very necessitous times for a Chancellor of the Exchequer, and the possibility of an increased revenue is not one that he can altogether ignore. The Committee is well aware that it is estimated that by the change proposed we may receive an additional revenue from London under Schedule A of about £500,000 a year, but that figure is only the measure of the annual loss that the revenue has been suffering for a considerable number of years past, owing to the fact, as was pointed out in the previous discussion upon this matter, that the assessments for rating purposes in London do not as a general rule approximate to the annual income value of the property.

The hon. Member for Eastbourne put the pitiable case of the old age pensioner, but I do not suppose that there are many persons qualified to receive an old age pension under the non-contributory scheme who will be affected by any changes in the Income Tax law.

Major ELLIOT

Is it not the case that there is the possibility of an increased valuation of their property bringing them out of the means qualification?

Mr. SNOWDEN

There are, or there will be under this Clause when it becomes law, separate valuations for local rating purposes and for Income Tax purposes, and no change in the Income Tax assessment could possibly affect the liability of a person with such limited means as an old age pensioner and could not in the least affect his eligibility for an old age pension. Both hon. Members have referred to the recommendation of the Royal Commission in favour of a single valuation for both purposes, but I do not think the Commission—I have not their recommendations before me—recommended that it should be the one valuation system which is now in operation. I was in the House of Commons when this matter was discussed on the Rating and Valuation Bill in 1925. We had a very long and a very well informed discussion on the question, and after that full discussion the House of Commons decided against the single valuation.

The hon. and gallant Member for Kelvingrove was rather afraid that the alterations proposed in this Clause might be followed by a similar proposal applied to Scotland. I do not think he need have any fear of that. Scotland, in this respect as in a great many other respects, has a much more admirable system than we have had in this country, and the hon. and gallant Member knows that the inspectors of taxes take a very effective part in the fixing of assessments in Scotland. There is nothing at all in our minds about the extension of a similar provision to Scotland.

I need not go over the old ground, which has been traversed until it is almost bare, as to the reasons which have induced me to put this Clause in the Bill this year. I have not done it merely from a desire to get what I think is a just contribution from the owners of property under Schedule A, but because, on the whole, I think it is an improvement. It is not fair that we should have the two systems, because under the system which exists in London at the present time the property owners in London are, out of all question, put in a more favourable position than property owners in the provinces. They are not paying the same proportion of Income Tax upon the annual value of their property as property owners in the provinces are paying, and that, of course, makes it unjust to——

Mr. LEIF JONES

Would not the proper thing be to get one valuation made which is an accurate valuation? There cannot be two values at the same time of the same property.

Mr. SNOWDEN

Yes, but the right hon. Gentleman knows that there are very great difficulties in doing that which would, at the same time, secure a valuation which would be satisfactory to the revenue authorities, because the purpose of the assessment is different in the case of rating and in the case of Income Tax. It does not matter what the rateable value is for local rating purposes, because what they lose upon the low assessment value they gain by a higher poundage in the rates. The main reason why we want this Clause is that it is impossible, here in London, to get justice as between the taxpayers under the system which exists now. You could not very well apply to the provinces the one system of assessment which exists in London at the present time. It would upset the whole arrangement which has worked so well for a large number of years.

The point has been made, I dare say, that it is a bit of a nuisance to a property owner to have to fill in two forms for the same property, but we have had no expression of any grievance from the provinces in regard to that matter. We are assimilating the two methods. We cannot apply to the provinces what exists at the present time in London, because the assessment for rating purposes would dominate, and therefore it would be very much lower than it ought to be for Income Tax purposes. I do not think there is any other way by which we could, here in London, get property assessed for Income Tax purposes upon a fair and equitable basis. I believe the system in the provinces has been in operation since 1842, and that the London system was adopted about 25 years later. Therefore, if antiquity be an argument that appeals to hon. Members opposite, that is an additional reason for supporting this Clause.

Mr. LEIF JONES

Antiquity in itself makes no particular appeal to me, but the right hon. Gentleman has really very much disappointed me in what he has said. I thoroughly sympathise with him in his desire to see that property owners in London pay their proper proportion of Income Tax, and I should be glad to support the Government in achieving that purpose, but I have not so far been able to bring myself to support them in this Clause. It is really going right back on what I have been preaching throughout my political life. The right hon. Gentleman says that there has been no complaint from the provinces, but I can assure him that I have been preaching the single assessment for all purposes throughout the country, and I have always instanced London and Scotland as examples of it. I do not understand how the same property can have two values at the same time. There should be a continuous valuation for all properties in London, so that the rating authorities and the Chancellor of the Exchequer may put upon them the proper share of national and local burdens, but you cannot have two values at once on one property although you may make different deductions from them. The fact that the right hon. Gentleman has reason to complain that property owners are getting off paying their fair proportion of Income Tax is a complaint against the rating authority. There may be a reason for altering the system by which assessments are made, but nothing has been said in this debate to justify what seems to be a reactionary thing in going back to the old system which in the rest of the country we have been trying to alter.

The Chancellor of the Exchequer would do better to withdraw this Clause and reconsider the matter. I want to help him to get at the people who are not paying their fair share of Income Tax, but to have two valuations and all the bother involved in making them is not a solution of the problem. It will save time if the right hon. Gentleman will withdraw the Clause until next year, when I hope to assist him to pass another Budget, with a view to reconsidering the matter. I am confident that the real solution of the rating and taxation difficulty is to have a single valuation of all the property in the country to which the rating authority, the Income Tax authority, or any other rating authority may apply their formulæ, whatever they may be. The basis of rating and taxation should always be the same, namely, the value of the property at the time when the taxation or rating is made. That is the logical thing, and I can see no real objection to it except the desire to get hold of the property owners in London who undoubtedly at present are escaping their fair share of taxation.

Mr. P. SNOWDEN

May I put one question to the right hon. Gentleman. Supposing we had a single valuation. In London at the present time, the Revenue authorities have really no effective powers at all. In the right hon. Gentleman's system which is he going to put in the dominating position, the rat- ing authority or the inspector of taxes? Or can he imagine any scheme which will put them on terms of equality in fixing a valuation?

Mr. LEIF JONES

I do not know that I am called upon to say what the exact system should be, but surely the right hon. Gentleman is not going to tell me that it is not possible to arrive at the fair value of property in the open market, which he wants to get. What he is saying is that the rating authorities in London are not doing their duty in regard to property. If that is so, we should deal with the rating authorities, and not ignore them and have another valuation.

Major ELLIOT

We have just given the Chancellor of the Exchequer the instance which he desires, the instance of Scotland, where we have a single valuation which is accepted as fair by the Revenue authorities. We could not do better than to pay the Chancellor of the Exchequer's expenses of a visit to Edinburgh, where we should be glad to give him hospitality, to see the system at work, so that he can consider whether it is not possible to have this system, which works very well, instead of asking us to have a hypothetical system which may not work so well.

Sir PHILIP PILDITCH

I cannot understand why the Chancellor of the Exchequer assumed that the valuations made by the local rating authorities are inaccurate for the purposes of Income Tax. That seems to be the basis of his argument, because he expects to get something more from a second valuation of property in London under the new system. The Chancellor asked my right hon. Friend the Member for Camborne (Mr. Leif Jones) which of the parties he would put in the position of having the right to make the valuation, but the Chancellor must be aware that the revenue authorities have the right of audience when the rating committee fix the gross value and the rateable value. The Surveyor of Taxes has a right to be present and to influence the fixing of the gross value. I can tell the Chancellor that the reason we have had the present system in London is that in London we have assessments every five years, when the whole thing is brought up to the mark, and it is seen that the rating of the different districts is brought into line with each other. The Chancellor may not be aware that for many years there has been a system in London of seeing that the various authorities are working on the same lines, and dealing with their valuations in a fair way as between one district and another. That has been carried out by the London County Council for many years, and I was for many years chairman of the committee of the council which performed that duty, and I hope that it was effectively performed.

The Chancellor expects to get £500,000 from this change. I wonder if he has made any estimate of the cost of this second valuation. There are occasions when large properties have to be valued and the cost of doing it effectively is considerable, and I cannot conceive that when he goes into the question of the net return which he expects to get from this change of the law, he will find that, unless the cost of the valuation is taken up in the general expenses of the Treasury, this £500,000 will come home to him. I hope that the Chancellor may be inclined even now to reconsider a decision to alter a system which has worked with great satisfaction and with a reasonable amount of certainty in the valuation of London properties, rather than press forward this change which involves the setting up of two separate rating authorities for the same purpose, and must result in variations in valuations which will be very difficult to put right.

Major NATHAN

The Chancellor of the Exchequer referred to various commissions and committees that discussed this matter. When speaking to an Amendment earlier this afternoon, I quoted the recommendations of the Royal Commission on Local Taxation, the Royal Commission on Income Tax, and the speech of the present President of the Board of Education when speaking for the Labour party, which was then in Opposition, in the discussion on the Second Reading of the Rating and Valuation Act of 1925. I challenged the Financial Secretary to point to a single authority over the last 60 years, whether Government Department, Royal Commission, committee or professional institution, which gave expression of authoritative opinion in favour of separate valuation. The Financial Secretary was unable to answer, and I have no doubt that if the Chancellor had heard the challenge, he would have informed the Committee if he could answer it.

Mr. P. SNOWDEN

Certainly, the House of Commons itself.

Major NATHAN

For a period of 60 years this matter has been discussed in the House of Commons time after time, with the object of getting a single valuation, and one of the difficulties has been what the right hon. Gentleman mentioned just now as being really the crux of the whole situation; that was a sort of conflict between the Inland Revenue officials on the one hand and the rating authorities on the other. The right hon. Gentleman says that the House of Commons has expressed an opinion in favour of separate valuations. Surely he must be mistaken, because on the last occasion when the matter was discussed, when the Rating and Valuation Act of 1925 was before the House of Commons, Parliament expressly reserved London, and, although they applied the system of double valuation to the provinces, they excluded London, with the result that the Act of 1869 was declared, as it still is, operative in relation to London. I wonder if the right hon. Gentleman has some other instance in his mind when this House expressed its opinion in favour of a single valuation for London? I challenged the Financial Secretary to point to an instance, and I now challenge the Chancellor to point to a single instance when this House or any other authority has declared in favour of anything but a single valuation for London.

Mr. P. SNOWDEN

The very fact that there are two systems in operation at the present time shows that this House has expressed its opinion in favour of two valuations.

8.0 p.m.

Major NATHAN

I say that this House has expressed its opinion positively and negatively in favour of a single valuation for London and nothing but a single valuation; and I would refer the right hon. Gentleman to the recommendations of committees and other professional bodies throughout the whole series of years. There seems to be a view that when a valuation is made, whether for rating purposes or taxation purposes, its figure represents precisely the income received, the money that passes. In fact, it is nothing of the sort. A valuation is merely an expression of opinion, and when the right hon. Gentleman says he is losing taxation what he really means is that he does not agree with the value placed by the rating authorities of London upon properties in London. It means neither more nor less than that. I say with my right hon. Friend the Member for Camborne (Mr. Leif Jones) that this is not the right way of meeting the difficulty in which the Chancellor finds himself. This matter has been explored before. The Royal Commission on Income Tax made a definite reference to it when it suggested as the obvious solution that a property owner should be called upon to pay tax upon that income which he in fact received, and that where the rent received by him is in excess of the amount of the valuation he should be assessed to income tax on the excess, under, I think, Case 6 of Schedule D of the Income Tax Act, 1918.

Sir W. BRASS

Will the hon. and gallant Member say what is to happen if the landlord gets less than the amount of the assessment?

Major NATHAN

The hon. and gallant Member was forestalling something I was going to say. The Chancellor of the Exchequer has assumed throughout that the assessment will always be less than the amount received by the landlord. In fact, it is not so in a number of instances, as the Chancellor himself, no doubt, knows. Is it to be understood that the Chancellor is proposing, when the amount of the assessment is higher than the rent received by the landlord, that the taxpayer shall pay upon that assessment, but that when it is less he is to have no advantage? That seems to me a very odd way of adjusting the position between the revenue and the taxpayer.

There are other and wider reasons why I find it impossible to support this Clause. It relates to property of a value of more than £50,000,000, and the number of assessments is not far short of 1,000,000. In its operation this Clause is bound to bring a great deal of inconvenience, annoyance, irritation and expense to the subject, whether as taxpayer or ratepayer. The Chancellor pointed out when opening his Budget that he has to depend for an increasing revenue upon a relatively very small number of taxpayers. Is there any object in pursuing a course which simply irritates and puts to expense this small body of taxpayers without effecting any real object and producing only, on the Chancellor's own showing, a sum of £500,000, with a net return of probably a great deal less? If there were any great object to be served, if any large amount of revenue were involved, it might be worth all the inconvenience and dislocation occasioned, but is it worth while to put the taxpayer to the annoyance and expense of filling up two sets of forms instead of one, employing two sets of people to represent his interests instead of one, appearing before two tribunals instead of one, only to be confronted in the end with two valuations which may be entirely different from each other?

I do really and seriously believe that one reason why the House of Commons is, perhaps, not held in the same estimation among the common people as it used to be is that when they consider the Bills that are placed before Parliament and read our debates, they find in them Clauses relating to matters of intrinsically little importance, and long, dreary debates upon matters quite out of relation to the real problems confronting our people at this time, and they say, "Stop this fooling." I say with the profoundest respect that I believe there is nothing which is affecting the mind of ordinary people more than the fact that the House of Commons is out of touch with the real problems of everyday life. The "man in the street" wants to know what we are doing about unemployment, the grave problem of India, and housing. He is interested in "bread-and-butter politics," and complains that we are talking of phantasies, of tidying-up legislation so as to make a particular scheme a little more symmetrical than it might otherwise be. Unless the House of Commons directs its attention to the real problems which are in men's minds it will lose much of its authority and its influence. People will not to-day have mere tidying up, they want us to get on with the real job, and I feel that this is a Clause which bears so little relation to the necessities of our time that I cannot support it.

Mr. ATKINSON

The Chancellor of the Exchequer asked whether there would be any objection to a method of assessment in which the dominating influence was the revenue rather than the rating authority. The Chancellor of the Exchequer has supplied the answer. He said the objection to the present method of valuing was that it was really dominated by the rating authority, and that a low rateable value did not matter because they made it up by an increased poundage in the rates. Let us put it the other way round. What would it matter to them if the valuation were increased because it was carried out by a stricter valuation authority? The result of that would only be a lower poundage in the rates.

Mr. P. SNOWDEN

Schedule A is only a part.

Mr. ATKINSON

But if it is a fair assumption that a system which brings about low valuation makes no difference to local authorities because they can get their money by a higher poundage, it is just as true to say that a system which brings about higher values would be compensated for by a lower poundage. I cannot see how a shake of the head will dispose of that. I should not have any objection to a method of assessment which was dominated by or originated by the taxation authorities so long as there was an appeal. What I am protesting against is the dual valuation, which will require a man who owns property to fight his battle twice with different authorities and before different tribunals. It is wrong for hon. Members opposite to keep reiterating that the object of the valuation in the two cases is different. The immediate object is the same, though the use which is made of the valuation is different. The object is to get at the fair annual rental value. When that is the simple object of each valuation it seems ridiculous to have two methods of arriving at precisely the same thing.

The other day I asked the Chancellor of the Exchequer what the effect was going to be upon the owner of a house or building which was let as flats or suites of offices. He has told us that there is going to be a new method of valuation here, in which the rules will be more rigidly applied. The rule for valuation is quite clear. You have to get at the fair annual value, and the rental is not the fair annual value. I would refer the Chancellor to No. 1 of the rules under Schedule A, and I will put the case of the owner of a building let out in suites of offices under leases for 21 years, granted at a time when rents were very low in 1916 and 1917, and where the annual value to-day would be at least twice the rentals received. Under this new system of valuation the revenue authority will assess that building on the true annual value basis, and the sum which that owner may be assessed for Income Tax may be twice that at which he is assessed to-day. The Income Tax payable may be increased by one-half, although the rents will remain as they were fixed by the leases.

The answer the Chancellor gave me the other day showed that I had not made myself clear. He said that the occupier was enjoying a building which was of greater value than the rent he is paying for it, and it was only fair that the assessment should be raised but the case I am putting is one where the owner is assessed and not the occupier, because the building is let out in tenements. In such a case, suddenly to change the method of valuation and introduce a more rigid application of these rules may do very grave injustice. The revenue authorities will undertake this valuation in the avowed hope of getting a greatly increased revenue. The whole tendency to-day ought to, be towards simplification instead of complication, and I strongly object to the introduction of two valuations in the place of one. Let us get one valuation which satisfies people and stick to it; if is not satisfactory, let us alter it.

Sir K. VAUGHAN-MORGAN

The hon. and learned Member for Altrincham (Mr. Atkinson) has suggested that in the case he has cited the owner would be called upon to pay tax on a larger basis. May I suggest to him that all the owner has to do is to represent his case to the Income Tax commissioners, who will deal with it, although I cannot imagine a case of that kind arising.

Mr. ATKINSON

In the case of assesments made under Rule 8, it is perfectly obvious that, if the premises are not let at the full annual value, the annual value must be ascertained, and obviously that contemplates the case I have put before the Committee.

Sir K. VAUGHAN-MORGAN

I have given the hon. and learned Member a piece of advice, and, if he finds himself in those particular circumstances, I hope he will take my advice. This is not a party question, and, as I find myself in disagreement with some of my hon. Friends, I would like to give a few reasons why I support the transfer of the City of London from a single to a separate valuation. In present circumstances, the Exchequer does not receive anything like its due demands, and the occupier is in danger of having his rateable value increased beyond its proper amount. The income received from property should pay tax on the appropriate rent, subject to proper allowances. The property owner is in a favourable position inside London, and his investments enjoy advantages over other people's investments.

Mr. LEIF JONES

What difference does it make to the ratepayer whether he pays 1s. on £50 or 6d. on £100? It surely makes no difference to him if the assessment is fair all round.

Sir K. VAUGHAN-MORGAN

That is precisely my point. The right hon. Gentleman is using an example, which many of us have given before in conflict with members of his own party when dealing with the effect of assessments in the country. The right hon. Gentleman's point is that the fair value is the annual value taking one year with another, and comparing one property with another. Supposing you have, as is frequently the case in London, a row of houses, some of which are let at different rentals. In order that the Exchequer should get a larger share from the point of view of taxes from the owner, why should the occupier have his rateable value placed higher than his neighhour? That is the difficulty which has to be met. As I stated earlier in the debate, one of the reasons why I am in favour of the separate valuation is that as an Income Tax payer I have seen the effects of the application of a single valuation in London, and a separate valuation outside, and I am in favour of a separate valuation because of the greater degree of justice which it gives to the ratepayer and to the occupier in regard to his assessments, and because it gives the owner-occupier the right of appeal to the Income Tax commissioners.

I very much object to any system which fails to provide the Exchequer with its fair proportion of revenue, and at the same time mulcts the ratepayer in a higher assessment than was otherwise the case. The two things are entirely different, and I cannot agree with those who hold that you should aim at applying a similar method in dealing with this question from the point of view of rates and taxes, because rates are based on the principle of benefits received while taxes are based on the principle of ability to pay. That is why a rebate is allowed when property is not occupied. That was the basis of rating under the Poor Law in the days of Queen Elizabeth when the squire was required to find a certain sum of money to support the poor. Since that time all these services have enormously increased, and you now have two forces at work in your rateable value; one is the ability to pay and the other benefits received. The valuation for rates is entirely subject to the amount payable to the owner of the property and the amount which he expects to derive from it.

The defects of the London system are due to the fact that it is an attempt, sufficiently successful in the past, to combine two different principles in one. It therefore has the defects and disadvantages of both. Conditions are different from what they were in the old days, and even at the time of the recommendations of the Royal Commission, to which the hon. and gallant Member for North-East Bethnal Green (Major Nathan) has referred. Income Tax in those days was relatively infinitesimal, and I suppose that the Exchequer could afford to overlook the difference. On the other hand, the revenue was not impelled, in the way that it necessarily is now, to raise valuations for the purpose of obtaining taxes at the expense of the ratepayer, who thereupon finds his assessment advanced beyond the comparable figure of his neighbour for a similar kind of accommodation and for similar benefits received. These are a few of the reasons which actuate me in favour of this Clause, and, consequently, in differing somewhat in view from many hon. Members around me, and in giving, in answer to some questions which have been put, my reasons for holding that view.

Sir W. BRASS

I am afraid that the remarks of my hon. and gallant Friend the Member for East Fulham (Sir K. Vaughan-Morgan) have not convinced me that this is a good Clause. I was very much surprised to hear the remark of the Chancellor of the Exchequer just now that the revenue authorities have no effective power over the valuation list. It seems to me extraordinary that for the past 60 years in the Metropolitan area we have had, under the Metropolis (Valuation) Act, 1869, these valuation committees, and that the poor revenue authorities, having been sitting with the other members of these committees all this time, have had no power and no say in the matter of valuation. Really, if it were not for the fact that the Chancellor of the Exchequer himself said that that was the case, I could hardly believe it possible that the representatives of the Treasury would be so meek and mild as to be willing to sit there and allow valuations to go through which they thought were far too low, so that the Treasury would not get the full amount which was its due.

What is going to happen when this Clause passes? We shall then, after 60 years, have a change-over to two valuations, and the property owners, small as well as large, all over London, will have to fill in two forms instead of one. Besides that, there will be two separate valuation committees for London, and that in itself will cost a great deal of money. If they do not have two separate committees, how does my hon. and gallant Friend the Member for East Fulham reconcile the fact that the revenue authorities at the present time have no power, unless the revenue authorities are going to have a committee of their own to decide all these matters? If the Treasury officials are not going to have their own valuation committee, I do not see how they are going to be able to dominate the position in the way that the Chancellor of the Exchequer would desire. The result will be a very large number of appeals——

Mr. P. SNOWDEN

The hon. and gallant Member has just given expression to a misunderstanding which I should like to dispel. He says that two forms will be sent out, one for rating purposes and one for Income Tax purposes, but I would point out that Clause 27 minimises that difficulty. The rating authorities will send their forms to the inspectors of taxes, and, if the particulars are sufficient to enable the inspector of taxes to make an assessment, he will make it without troubling the assessor to make a separate valuation.

Sir W. BRASS

I am much obliged to the right hon. Gentleman, but at the same time, even though only one form may be necessary, there will be two different appeals in the event of disagreement, the one in respect of the valuation for tax, and the other in respect of the valuation for rates. I do not understand how all these properties in the City and in other parts of London can really be undervalued as they are said to be, and how the introduction of two valuations instead of one is going to alter that. I understood, from the information which the Chancellor of the Exchequer kindly gave me just now, that the deductions for empties and other things which are made at the present time are going to be made in the future as they have been in the past, and that no difference will be made so far as allowances are concerned, because the allowances, as I understand it, will be agreed in common between the officials of the Treasury on the valuation committee and the representatives of the rating authority. Although, therefore, we are going to have two valuations for each property, I cannot see where the Chancellor of the Exchequer is going to get his £500,000 profit. For that reason I cannot understand why it is really necessary to put into the Finance Bill a Clause of this kind, which really deals with something that is quite different, and is, in fact, repealing an Act which has been in operation since 1869.

Mr. MARJORIBANKS

I would like to thank the Chancellor of the Exchequer for being present to reply on this occasion. I think it is very courteous of him, and I am sure that all who are interested in this subject will be very grateful for the information and answers that he has given, especially at this hour. For my part, however, I am not in the least satisfied with many of the replies that have been given by the right hon. Gentleman or by the Financial Secretary. I do not want to discuss the whole matter again from the beginning, but there is one question of principle which I must raise with the Chancellor of the Exchequer, because it is of very great importance. The only possible basis of justice for this revaluation in London is the fact that property may have been undervalued in the past. There may be the basis of expediency that we need more revenue, and the right hon. Gentleman practically confessed that that was the paramount reason in this matter. It is a reason which many on this side of the House would respect, but, nevertheless, the only basis of justice is that in the past this system, which has worked for the last 60 years without any complaint whatever from any substantial source, has resulted in property being undervalued. The Act wisely provided, however, that the revenue officials should be parties to the proceedings of the rating committees, and that they should have the same rights of appeal as anyone else. If they have not neglected their duties, and if they have exercised their right of appeal when necessary, I cannot see that property in London can have been undervalued, or that there is any basis on which the Chancellor of the Exchequer can argue that there has been undervaluation.

The only thing is that the revenue officials were handicapped, in appealing to the courts, to the extent that they were, of course, prejudiced by the preliminary assessment of the rating authority, whereas now they will be able to come forward with their own assessments. We are almost driven to the conclusion that the officials at Somerset House have devised this Clause as a means of raising further revenue, and of saying, in effect, that in their opinion the rating authorities have undervalued property in London for a very long time. I should, however, pay far greater respect to the rating authority, with the right of appeal to a court of justice, than I should to the tax-gatherer, in his simple faith in his own opinion, and he, after all, is prejudiced in this matter.

After all, this is a question in which we might receive a great deal and we might receive less. The Division on the first Amendment proved that there is a considerable body of opinion against this change in procedure in assessing for Schedule A. If the party to which I belong, and the party of the right hon. Gentleman, had been here in full force, the Chancellor of the Exchequer would have been faced with the embarrassing situation of being defeated. I think he should respect the opinion of the Committee. The proceedings on the Bill have now reached a friendly situation in which compromise is possible, and there was a compromise ready made for him. The fifth Amendment, which was not called, provides that, although there shall be a separate assessment by the Income Tax authorities, all the rights of appeal which existed before under the Valuation (Metropolis) Act, 1869, shall continue in force.

The CHAIRMAN

I hope the hon. Member is not going to argue the Amendment that was not called. That would be out of order. What he has to do now is to give reasons for or against the Clause as it stands.

Mr. MARJORIBANKS

I think I can argue exactly the same point and keep in order by being a little more indirect. The Clause would be more acceptable to me if the provisions with regard to the appeal under the Valuation (Metropolis) Act were still to be in force. Even if there were to be a separate assessment by Income Tax officials, if there was an independent appeal to the Courts this would be a far more justifiable Clause. I argued at considerable length the shortcomings and the antiquated jurisprudence lying behind an appeal to the General Commissioners as opposed to an appeal to Quarter Sessions. I pointed out the deficiencies of this appeal. My first objection was one of principle, that the General Commissioners, as well as being the judges, would in some respects be the witnesses. It provides that the tribunal itself shall take into consideration its own special knowledge on the matter. I do not see how that really can be right. The General Commissioners may be excellent people and they may have complete knowledge of their subject, but if they are prejudiced from the start and are employed to use their own special knowledge, without any rules of evidence, and to consider the dispute before them without having any regard to the evidence brought forward from one or other department, I cannot think that can be right, and that is the appeal that is now given to the General Commissioners. Some unfortunate taxpayer might be misled into demanding, as he can do by the Finance Act of 1923, the opinion of an expert valuer. I have done some of his work, and I know that the maxim about the expert witness has some justification. In fact, I have seldom seen an expert witness on a question of value not contradicted in everything he says. I have never known an expert witness not contradicted by another on the other side. If the taxpayer thinks he is going to get any justice by appealing to the valuation of an expert, he is very much mistaken. It would be infinitely better if, contrary to the provisions of this Clause, the taxpayer, though there might be a separate assessment, could go to the Courts and have the issue tried by a properly constituted Court and have evidence tendered by both sides.

There is another matter to which the Chancellor did not pay very much attention. He said it was hardly worth considering and it could not arise. That is the position of the Old Age Pensioner of the old time. I cannot see how he can sweep that aside. There will certainly be some cases of this kind, though we may count them on the fingers of our hands. The original Old Age Pensioner has a means qualification. Many of these men lived under the old régime under which a beneficent employer would perhaps give him a house to live in. If the assessment goes up, as it must, it would very likely give him a means disqualification which would debar him from his Old Age Pension. This Government especially could ill face the grievance which would arise even from one single case of this kind, and the right hon. Gentleman would be well advised at a later stage to consider the implication of the Old Age Pensioner, because it would be a monstrous injustice to debar a single person from an Old Age Pension after he had enjoyed one by such a provision, which the Chancellor himself says is merely to raise revenue.

I have kept my strongest point to the last. It is one which the Chancellor and the Financial Secretary have entirely failed to answer. I put it in a prominent place in my original argument. He said throughout that his whole object in introducing this change is to promote uniformity. He must see that there would be far less uniformity between London and the provinces when the Clause comes into effect than now. In the provinces the officials who assess real property for Schedule A are appointed independently by the general commissioners of Income Tax. They are not in any way to be confused with tax gatherers. Their duty is to protect the taxpayer, as much as to see that the proper revenue is raised. The assessors are appointed by them and in London it is apparently to be the tax gatherers, Somerset House officials, who are to assess real property. The very fact that the right hon. Gentleman says there is only going to be an increased expenditure of £15,000 proves that he must have the machinery at his back at present to bring about this change. How can you say you will have a uniform system when, in the country, certainly, the people who value real property are independent and are appointed by the general commissioners, whereas in London they are officials from Somerset House and collectors of taxes? I should be glad to think this is not true, but I can see nothing that shows that it is not true.

Hon. Members opposite who represent London constituencies are in a difficulty in the matter. They have their instructions from headquarters. They have been silent, and we know that opinion is divided. You have to read the debates on the Rating and Valuation Act, 1925, to see how great is that difference. Not a single London Member has got up and expressed his opinion at all apart from occupants of the Front Bench. No doubt their constituents will have something to say with regard to this dereliction of their duty. The hon. Gentleman the Member for Limehouse the present Chancellor of the Duchy of Lancaster (Mr. Attlee) has not raised his voice on this occasion, nor has the voice of other hon. Members been raised in support of single valuation. If there is any representative of a London constituency present on the benches opposite, I ask him whether he cannot contribute to a useful discussion on this matter.

I ask the Chancellor of the Exchequer to answer me (a) whether it is to be the Surveyors of Taxes, who are officials of Somerset House, who are to carry out the valuation in London in future under the new Clause, (b) whether the position in the country is not, as it always has been, one of independent assessors appointed by general commissioners and whether they will not perform the same duty, and (c) whether he can call that uniformity. If he answers the questions and says that Somerset House is not to be responsible for this new valuation in the future, I shall desire to ask him who is to be appointed and what provision has been made in this Measure to set up certain machinery. After he has answered those questions, hon. Members will be enlightened. I am sorry for having spoken at such length, but the right hon. Gentleman has not really addressed himself to the difficulties of the situation. We all know that what he desires is to raise revenue, and I think that the country ought to know that responsibility rests upon him and upon his Government, and that when assessments come up next year it will not only be the limited class whom the Chancellor has chosen now for the purpose of imposing an increase of sixpence on the Income Tax who will be affected by this matter. Not only may people in that class be affected, but even the poorest of the poor, the old age pensioner under the original Act, may be affected.

Mr. SMITHERS

I desire to raise one or two points in connection with this Clause and to support the remarks made by the hon. and gallant Member for North-East Bethnal Green (Major Nathan) a little earlier in the debate on the question "That the Clause stand part of the Bill." I do not often find myself in agreement with a Liberal, but there are Liberals and Liberals, and on this occasion the hon. and gallant Member has made a point of great substance. He argued that Clause 26 should not have been included in the Finance Bill at all and that it would have been more properly placed in the Rating and Valuation Act. I protest against the inclusion in a Finance Bill of Clauses which are not strictly finance Clauses. The Chancellor of the Exchequer and some of the permanent officials on the administrative side of our Government take the opportunity under a Finance Bill, which is exempted business, to introduce proposals which are more likely to be passed into law than if they came in an ordinary Bill in regard to which discussion has to stop at eleven o'clock. They are putting in machinery and administrative proposals which have no right to be in a Finance Bill at all. The hon. and gallant Member for North-East Bethnal Green was correct when he said that the country outside were asking what were we doing in the House of Commons by not giving out attention to the great problem before the country but spending our time trying to pass into law such tightening up provisions as are included in this Clause.

Having said this against the right hon. Gentleman, I want to thank him for one thing in regard to which he has helped us. As ratepayers of the City of London, we called his attention to a unique position existing in the City. I suppose that nowhere else in the world, except perhaps possibly in New York, though I do not know whether it is a fact, are there such enormous blocks of buildings of such tremendous value as can be found in the City of London. Either private individuals or land and building companies hold these blocks of buildings and let them out in separate suites of offices of from two up to sometimes 20 or 30 rooms. The question was raised during a debate on an Amendment in the name of my hon. and gallant Friend the Member for Clitheroe (Sir W. Brass) that it seemed unfair that where some of the suites of offices in these buildings were unoccupied for a year or portion of a year they should be subject to valuation for Income Tax purposes. I am representing this position now, because I want to get the matter made clear, namely, that the Chancellor of the Exchequer stated that any previous Income Tax Acts which gave relief to "empties," as they are called, and to the running of lifts for the services of all the offices was still to be given as relief in the payment of Income Tax in respect of the income derived from those buildings. I can assure the Financial Secretary that I have done my best to give a true account of what the Chancellor of the Exchequer said. I believe that to have been the effect of it, and I want it to be placed on record that in the case of blocks of buildings where suites are unlet there shall be granted the same relief in respect of "empties" and lifts as hitherto.

The argument of my hon. and learned Friend the Member for Altrincham (Mr. Atkinson) in regard to separate valuations in London was unanswerable. He pointed out that you require valuation for two purposes, valuation for the purposes of rates and valuation for the purposes of taxes. The valuation is identical for both purposes. If the valuation is wrong, why not have a revaluation? But having got that revaluation, let it serve for the double purpose. I have heard it suggested that this Clause has been introduced—I wish to say at once that it is an unworthy suggestion—to try and give more employment in this work. I understand that the Chancellor of the Exchequer in his earlier days in the Civil Service was occupied in this particular Department. I suppose it is a case of the poacher turning gamekeeper. [HON. MEMBERS "Order!"] I say this with respect. Surely, every hon. Member must know that that expression is an ordinary expression. There is no offence intended, I can assure hon. Members. I will put it in another way. What I mean is, that, having been engaged in the Civil Service, he knows all about the work, and I have heard it suggested that this proposal has been brought in to try and increase work for that branch of the Civil Service. I cannot see the use of the Clause. I think that it will prove to be redundant work which might very well be left undone. It will mean an increase of expense to the taxpayer, and I shall not support this Clause in the Division Lobby.

Lieut.-Colonel HENEAGE

I should like to say a few words from the point of view not of a man who lives in London, but as one who sometimes has had to take a flat in London. My experience is this, that as soon as you begin touching the owners of houses, whether in regard to income or revaluation, they pass it on to the tenant. Immediately the landlord tries to alter the lease, possibly he has to give the tenant a certain amount of inducement to do so, but he suggests that the tenant should take on some of the burdens which the Chancellor of the Exchequer proposes to place upon the landlord. I am very much afraid that the Chancellor of the Exchequer will find that the burdens which, apparently, he is putting upon the landlord will be very quickly passed on to the smaller occupier and tenant. I see that going on now. On going through the streets I see a great increase in the notice boards of houses to let. That might at first sight seem to be a good thing, but when one comes to investigate the terms at which these houses are to be let then one can see the heavy weight of the Chancellor of the Exchequer not only on the landlord, but on the tenant.

Another effect of this Clause is that people who have an interest in property in London are proposing to clear out and take their capital with them. Sometimes they go abroad and sometimes they go to the Free State, where Income Tax and Super-tax are very much less than they are here. I am afraid that the Chancellor of the Exchequer will not get the money that he thinks he will get by these alterations. It sounds reasonable to make the valuation in London more or less on a par with that which prevails in the country, but from the experience that we have had in Lincolnshire with regard to revaluation I see a great many difficulties. It would be a good idea to postpone the revaluation in London for two or three years, in order to see the experience in the country districts and also to let the London valuers have the benefit of the experience of the country districts. The Chancellor of the Exchequer would be well advised even now

to postpone this Clause for two or three years.

Mr. A. M. SAMUEL

Will the Financial Secretary to the Treasury tell us how he gets the figure of £15,000 as the extra expense to be incurred for revaluing the vast number of houses in the administrative area of London, which has a population nearly as big as that of Canada? A sum of £15,000 means, say, 15 valuers, with nothing for office expenses. It may be that he will say that a great deal of the information is already in the hands of the municipalities, or at Somerset House, but I cannot believe—I am not doubting his personal word—that £15,000 can cover in any way the expenses for carrying out what is implied in this Clause. I hope that the Financial Secretary will take counsel with his staff, and tell us how he gets at the figure of £15,000.

Mr. PETHICK-LAWRENCE

The £15,000 is the additional cost over and above what is at present required to carry out the valuation.

Mr. SAMUEL

I understand that there are 700,000 or 800,000 properties to be revalued. It would almost take a lifetime for 15 men to do that work. There must be some mistake in calculation.

Question put, "That the Clause stand part of the Bill."

The Committee divided: Ayes, 249; Noes, 139.

Division No. 385.]	AYES.	[9.0 p.m.
Adamson, Rt. Hon. W. (Fife, West)	Brown, C. W. E. (Notts, Mansfield)	Elmley, Viscount
Adamson, W. M. (Staff., Cannock)	Brown, Ernest (Leith)	Freeman, Peter
Addison, Rt. Hon. Dr. Christopher	Brown, Rt. Hon. J. (South Ayrshire)	Gardner, B. W. (West Ham, Upton)
Aitchison, Rt. Hon. Craigie M.	Brown, W. J. (Wolverhampton, West)	Gardner, J. P. (Hammersmith, N.)
Alexander, Rt. Hon. A. V. (Hillsbro')	Burgess, F. G.	Gibbins, Joseph
Ammon, Charles George	Burgin, Dr. E. L.	Gibson, H. M. (Lancs. Mossley)
Arnott, John	Caine, Derwent Hall-	Gill, T. H.
Aske, Sir Robert	Cameron, A. G.	Gossling, A. G.
Attlee, Clement Richard	Cape, Thomas	Gould, F.
Ayles, Walter	Carter, W. (St. Pancras, S. W.)	Graham, Rt. Hon. Wm. (Edin., Cent.)
Baker, John (Wolverhampton, Bilston)	Charleton, H. C.	Granville, E.
Baldwin, Oliver (Dudley)	Chater, Daniel	Gray, Milner
Barnes, Alfred John	Church, Major A. G.	Grenfell, D. R. (Glamorgan)
Barr, James	Cluse, W. S.	Griffith, F. Kingsley (Middlesbro' W.)
Batey, Joseph	Clynes, Rt. Hon. John R.	Griffiths, T. (Monmouth, Pontypool)
Bellamy, Albert	Cocks, Frederick Seymour	Grundy, Thomas W.
Benn, Rt. Hon. Wedgwood	Compton, Joseph	Hall, F. (York, W. R., Normanton)
Bennett, Capt. Sir E. N. (Cardiff C.)	Cove, William G.	Hall, G. H. (Merthyr Tydvil)
Bennett, William (Battersea, South)	Daggar, George	Hall, Capt. W. P. (Portsmouth, C.)
Benson, G.	Dallas, George	Hardie, George D.
Bentham, Dr. Ethel	Dalton, Hugh	Harris, Percy A.
Birkett, W. Norman	Day, Harry	Hartshorn, Rt. Hon. Vernon
Blindell, James	Denman, Hon. R. D.	Hastings, Dr. Somerville
Bondfield, Rt. Hon. Margaret	Dickson, T.	Haycock, A. W.
Bowen, J. W.	Duncan, Charles	Hayday, Arthur
Bowerman, Rt. Hon. Charles W.	Ede, James Chuter	Hayes, John Henry
Brockway, A. Fenner	Edmunds, J. E.	Henderson, Arthur, Junr. (Cardiff, S.)
Bromfield, William	Edwards, C. (Monmouth, Bedwellty)	Henderson, Thomas (Glasgow)
Brooke, W.	Edwards, E. (Morpeth)	Henderson, W. W. (Middx., Enfield)
Brothers, M.	Egan, W. H.	Herriotts, J.
Hirst, G. H. (York W. R. Wentworth)	Middleton, G.	Short, Alfred (Wednesbury)
Hirst, W. (Bradford, South)	Mills, J. E.	Simmons, C. J.
Hoffman, P. C.	Milner, Major J.	Simon, E. D. (Manch'ter, Withington)
Hollins, A.	Montague, Frederick	Sinkinson, George
Hopkin, Daniel	Morgan, Dr. H. B.	Sitch, Charles H.
Horrabin, J. F.	Morley, Ralph	Smith, Frank (Nuneaton)
Hudson, James H. (Huddersfield)	Morris, Rhys Hopkins	Smith, H. B. Lees- (Keighley)
Hunter, Dr. Joseph	Morris-Jones, Dr. J. H. (Denbigh)	Smith, Tom (Pontefract)
Jenkins, W. (Glamorgan, Neath)	Morrison, Herbert (Hackney, South)	Smith, W. R. (Norwich)
John, William (Rhondda, West)	Mort, D. L.	Snell, Harry
Jones, F. Llewellyn- (Flint)	Moses, J. J. H.	Snowden, Rt. Hon. Philip
Jones, Henry Haydn (Merioneth)	Mosley, Lady C. (Stoke-on-Trent)	Snowden, Thomas (Accrington)
Jones, Morgan (Caerphilly)	Mosley, Sir Oswald (Smethwick)	Sorensen, R.
Jowett, Rt. Hon. F. W.	Muff, G.	Stamford, Thomas W.
Jowitt, Rt. Hon. Sir W. A.	Muggeridge, H. T.	Strauss, G. R.
Keily, W. T.	Murnin, Hugh	Sutton, J. E.
Kennedy, Thomas	Naylor, T. E.	Taylor, R. A. (Lincoln)
Kenworthy, Lt.-Com. Hon. Joseph M.	Newman, Sir R. H. S. D. L. (Exeter)	Thorne, W. (West Ham Plaistow)
Knight, Holford	Noel Baker, P. J.	Thurtle, Ernest
Lang, Gordon	Oldfield, J. R.	Tillett, Ben
Lathan, G.	Oliver, George Harold (Ilkeston)	Tinker, John Joseph
Law, A. (Rosendale)	Oliver, P. M. (Man., Blackley)	Toole, Joseph
Lawrence, Susan	Owen, Major G. (Carnarvon)	Tout, W. J.
Lawson, John James	Palin, John Henry	Townend, A. E.
Lawther, W. (Barnard Castle)	Paling, Wilfrid	Trevelyan, Rt. Hon. Sir Charles
Leach, W.	Palmer, E. T.	Vaughan, D. J.
Lee, Frank (Derby, N. E.)	Perry, S. F.	Viant, S. P.
Lee, Jennie (Lanark, Northern)	Pethick-Lawrence, F. W.	Walkden, A. G.
Lees, J.	Phillips, Dr. Marion	Walker, J.
Lewis, T. (Southampton)	Pole, Major D. G.	Wallace, H. W.
Lindley, Fred W.	Potts, John S.	Wallhead, Richard C.
Logan, David Gilbert	Price, M. P.	Walters, Rt. Hon. Sir J. Tudor
Longbottom, A. W.	Pybus, Percy John	Watkins, F. C.
Longden, F.	Raynes, W. R.	Watson, W. M. (Dunfermline)
Lowth, Thomas	Richards, R.	Watts-Morgan, Lt.-Col. D. (Rhondda)
Lunn, William	Richardson, R. (Houghton-le-Spring)	Welsh, James (Paisley)
Macdonald, Gordon (Ince)	Riley, Ben (Dewsbury)	Welsh, James C. (Coatbridge)
MacDonald, Malcolm (Bassetlaw)	Riley, F. F. (Stockton-on-Tees)	West, F. R.
McElwee, A.	Ritson, J.	White, H. G.
McEntee, V. L.	Roberts, Rt. Hon. F. O. (W. Bromwich)	Whiteley, Wilfrid (Birm., Ladywood)
McKinlay, A.	Romeril, H. G.	Whiteley, William (Blaydon)
MacLaren, Andrew	Rosbotham, D. S. T.	Wilkinson, Ellen C.
Maclean, Neil (Glasgow, Govan)	Rowson, Guy	Williams, Dr. J. H. (Llanelly)
MacNeill-Weir, L.	Russell, Richard John (Eddisbury)	Williams, T. (York, Don Valley)
McShane, John James	Salter, Dr. Alfred	Wilson C. H. (Sheffield, Attercliffe)
Malone, C. L'Estrange (N'thampton)	Sanders, W. S.	Wilson, J. (Oldham)
Mansfield, W.	Sawyer, G. F.	Wilson, R. J. (Jarrow)
March, S.	Scrymgeour, E.	Winterton, G. E. (Leicester, Loughb'gh)
Marcus, M.	Scurr, John	Wise, E. F.
Marley, J.	Sexton, James	Wood, Major McKenzie (Banff)
Marshall, Fred	Shaw, Rt. Hon. Thomas (Preston)	Young, R. S. (Islington, North)
Mathers, George	Shepherd, Arthur Lewis
Matters, L. W.	Shield, George William	TELLERS FOR THE AYES.—
Messer, Fred	Shillaker, J. F.	Mr. Allen Parkinson and Mr. Hayes.
NOES.
Acland-Troyte, Lieut.-Colonel	Davies, Dr. Vernon	Hannon, Patrick Joseph Henry
Astor, Viscountess	Davies, Maj. Geo. F. (Somerset, Yeovil)	Harvey, Major S. E. (Devon, Totnes)
Atholl, Duchess of	Davison, Sir W. H. (Kensington, S.)	Heneage, Lieut.-Colonel Arthur P.
Atkinson, C.	Dixey, A. C.	Hennessy, Major Sir G. R. J.
Balfour, George (Hampstead)	Dixon, Captain Rt. Hon. Herbert	Herbert, Sir Dennis (Hertford)
Balfour, Captain H. H. (I. of Thanet)	Eden, Captain Anthony	Hills, Major Rt. Hon. John Waller
Beamish, Rear-Admiral T. P. H.	Edmondson, Major A. J.	Hope, Sir Harry (Forfar)
Betterton, Sir Henry B.	Elliot, Major Walter E.	Hore-Belisha, Lesile
Birchall, Major Sir John Dearman	Everard, W. Lindsay	Hunter-Weston, Lt.-Gen. Sir Aylmer
Bird, Ernest Roy	Falle, Sir Bertram G.	Hutchison, Maj.-Gen. Sir R.
Bourne, Captain Robert Croft	Ferguson, Sir John	Iveagh, Countess of
Boyce, H. L.	Fielden E. B.	Jones, Sir G. W. H. (Stoke New'gton)
Brass, Captain Sir William	Fison, F. G. Clavering	Jones, Rt. Hon Leif (Camborne)
Brown, Col. D. C. (N'th'l d'., Hexham)	Forestler-Walker, Sir L.	Kindersley, Major G. M.
Butt, Sir Alfred	Fremantle, Lieut-Colonel Francis E.	King, Commodore Rt. Hon. Henry D.
Cadogan, Major Hon. Edward	Galbraith, J. F. W.	Knox, Sir Alfred
Carver, Major W. H.	Glassey, A. E.	Lamb, Sir J. Q.
Cazalet, Captain Victor A.	Gower, Sir Robert	Leighton, Major B. E. P.
Chamberlain, Rt. Hon. N. (Edgbaston)	Graham, Fergus (Cumberland, N.)	Llewellin, Major J. J.
Cobb, Sir Cyril	Grattan-Doyle. Sir N.	Locker-Lampson, Rt. Hon. Godfrey
Colfox, Major William Philip	Greene, W. P. Crawford	Long, Major Eric
Courtauld, Major J. S.	Grenfell, Edward C. (City of London)	Lymington, Viscount
Courthope, Colonel Sir G. L.	Gretton, Colonel Rt. Hon. John	McConnell, Sir Joseph
Crookshank, Capt. H, C.	Gritten, W. G. Howard	Maitland, A. (Kent, Faversham)
Croom-Johnson, R. P.	Gunston, Captain D. W.	Makins, Brigadier-General E.
Culverwell, C. T. (Bristol, West)	Hacking, Rt. Hon. Douglas H.	Margesson, Captain H. D.
Dalkeith, Earl of	Hall, Lieut.-Col. Sir F. (Dulwich)	Marjoribanks, E. C.
Dalrymple-White, Lt.-Col. Sir Godfrey	Hammersley, S. S.	Meller, R. J.

Merriman, Sir F. Boyd	Richardson, Sir P. W. (Sur'y, Ch'ts'y)	Stewart, W. J. (Belfast, South)
Millar, J. D.	Ross, Major Ronald D.	Stuart, Hon. J. (Moray and Nairn)
Mond, Hon. Henry	Ruggles-Brise, Lieut.-Colonel E. A.	Thomas, Major L. B. (King's Norton)
Monsell, Eyres, Com. Rt. Hon. Sir B.	Russell, Alexander West (Tynemouth)	Thomson, Sir F.
Moore, Sir Newton J. (Richmond)	Salmon, Major I.	Tinne, J. A.
Morden, Col. W. Grant	Samuel, A. M. (Surrey, Farnham)	Titchfield, Major the Marquess of
Morrison, W. S. (Glos., Cirencester)	Samuel, Samuel (W'dsworth, Putney)	Tryon, Rt. Hon. George Clement
Morrison-Bell, Sir Arthur Clive	Sandeman, Sir N. Stewart	Turton, Robert Hugh
Nathan, Major H. L.	Sassoon, Rt. Hon. Sir Philip A. G. D.	Wallace, Capt. D. E. (Hornsey)
O'Connor, T. J.	Scott, James	Ward, Lieut.-Col. Sir A. Lambert
Oman, Sir Charles William C.	Shepperson, Sir Ernest Whittome	Wardlaw-Milne, J. S.
Peake, Capt. Osbert	Skelton, A. N.	Wayland, Sir William A.
Penny, Sir George	Smith, Louis W. (Sheffield, Hallam)	Wells, Sydney R.
Percy, Lord Eustace (Hastings)	Smith, R. W. (Aberd'n & Kinc'dine, C.)	Windsor-Clive, Lieut.-Colonel George
Peto, Sir Basil E. (Devon, Barnstaple)	Smith-Carington, Neville W.	Womersley, W. J.
Pilditch, Sir Philip	Smithers, Waldron
Ramsay, T. B. Wilson	Somerville, A. A. (Windsor)	TELLERS FOR THE NOES.—
Rawson, Sir Cooper	Spender-Clay, Colonel H.	Captain Sir George Bowyer and Sir Victor Warrender.
Reid, David D. (County Down)	Stanley, Lord (Fylde)
Reynolds, Col. Sir James	Steel-Maitland, Rt. Hon. Sir Arthur

Question, "That the Clause, as amended, stand part of the Bill," put, and agreed to.