HC Deb 01 July 1931 vol 254 cc1403-28

I beg to move, in page 15, line 34, to leave out the words "comprising agricultural land," and to insert instead thereof the words: in respect of which a cultivation value is shown by the entries relating thereto. There are two further Amendments later on the Paper which are closely related to this Amendment. They are drafting Amendments


The hon. and learned Gentleman says that, coupled with this Amendment, are two further Amendments on the Paper which he says are drafting Amendments. In each of those further Amendments I see that the words "an amount" are to be substituted for the words "a sum." Would he be good enough to tell us what is the meaning of that alteration?


The words "a sum" are in Sub-section (1, a and b) of the Clause and relate to "four times the annual value," and "seven-eighths of the land value of the unit." It was thought more proper to have the words "an amount," because it is not a sum. It is an amount.

Amendment agreed to.

Further Amendment made: In page 15, line 36, leave out the words "a sum," and insert instead thereof the words "an amount."—[The Solicitor -General.]

Captain BOURNE

I beg to move, in page 15, line 36, to leave out the word "four," and to insert instead thereof the word "five."

The House will remember that this Clause was inserted in the Bill after various "alarums and excursions" during the Committee stage, as the result of a compromise arrived at, somewhat unwillingly, between hon. Members below the Gangway and the Chancellor of the Evchequer. In the original form in which hon. Members below the Gangway proposed their Amendment, it provided that the amount paid under Schedule A, according to the existing law, should be deducted from the amount of tax payable under the Government proposal. Their first attempt at such an Amendment was ruled out of order, and when their second attempt had also been ruled out of order, an Amendment was put down by the Chancellor of the Exchequer which works out in effect to this—that in computing the liability to tax an amount equal to four times the annual value of the unit for Income Tax purposes under Schedule A shall be deducted from the land value ascertained under Clause 8 of this Bill and that the tax should be levied on the balance, or on one-eighth of the land value of the unit.

One of the questions which I wish to put to the Solicitor-General is why the figure four should have been selected. I could understand it if he had put a reasonable capitalisation on the annual value, deducted that from the land value ascertained under this Bill, and charged the full tax on the balance. I do not know that that necessarily would have been a very good method. It has its drawbacks but it would, at least, have been intelligible. How are you going to arrive at four times the annual value? The annual value, after all, depends largely on the user. I take for example a site occupied by a well-designed cinema theatre, expensively built, filled with the latest luxuries and showing the latest films, which yields to the owners or lessees a very large income. The value in that case under Schedule A would be very high compared with the value of the land on which it is situated. On the contrary, a piece of land may be occupied by buildings which are coming towards the end of a long lease and on which at the moment there is not any very great value under Schedule A. The site may be valuable but under restrictions in the lease perhaps, neither the owner nor the lessee can make use of and develop that site, and in such a case four times the Schedule A value will be rather low compared with the site value. I fail to see either the justice or the policy of adopting four times the Schedule A value as the basis for this deduction.

10.0 p.m.

Obviously by doing so you are encouraging people to put on their land when this tax comes into operation the most expensive buildings and the tallest buildings that they are allowed to erect under local regulations. If my memory serves me aright, the hon. Member for Burslem (Mr. MacLaren) when discussing the position in New York, pointed out that the value of a skyscraper is approximately equal to the value of the site. I am not challenging his assumption, but obviously it would be to the interest of anybody who owns land in urban districts, once this peculiar proposal comes into operation, to erect upon that land the very highest building that the law or the by-laws of the particular city will permit. In London there is a limitation of something like 80 feet, but I have no doubt that, once this Measure becomes operative, heavy pressure will be put on the London County Council to extend that limit so that buildings can be erected which bear the highest possible proportion of value compared with the site. The more valuable are the buildings, obviously the greater the amount which will be deducted from the land value for the purposes of the tax, under this arrangement as to four times the Schedule A value, and the smaller the amount of tax which that site will have to bear.

May I take another aspect of this proposal? Everybody, I think, agrees that in the modern development of our towns and suburbs it is highly desirable that the number of houses to the acre should be as small as possible. The modern idea is to limit strictly the number of houses to the acre, to spread the development as widely as possible and, wherever possible, to provide each house with a garden. If you are going to deduct four times the Schedule A value, it obviously is the interest of the builder, the owner of the land, and even the individual people who occupy the houses, that the buildings should bear the largest possible proportion of value to the actual site value, and the effect will be to encourage that intensive development which we are all anxious to avoid. That must inevitably result if we try to mix up these two hopelessly incompatible and contradictory principles. Site value, if it has any meaning at all, is charged on capital value and is charged irrespective of the user of the land, but Schedule A is Income Tax which is derived from the actual user of the land as it is—and of the buildings, as I am reminded. It is a tax derived from actual use on an annual value allowing certain deductions in respect of repairs and maintenance. That annual value may have no relation whatever to site value, and in attempting to come to an arrangement which would satisfy the conscience of the Liberal party, or at least would not violate that conscience too greatly, the Government, as I say, have attempted to combine these two contradictory and incompatible principles. The result is that the anomalies under this proposal will be even worse than those which would have arisen had the tax been left in its original state.

Therefore, I ask the Solicitor-General why the Government have chosen the arbitrary figure of four? I should think that it is very difficult to argue that the value of the sites in any given area is one-fourth of the total value of the land under its present user. That is a position which may occur or may not occur, but I do not know if the Solicitor-General has any figures to support the proposition that the proportion of one-fourth or one-fifth—I am not certain how it works out—of the value of the land unit, is a reasonable value to put on the site and that the remainder is a reasonable value to put on the development. I shall be interested to hear if he has any figures or arguments in support of that proposition.

I fail to see any reason for putting in the figure "four," and I find a little difficulty in defending the figure "five" which I propose in its place, but I am doing it on the Solicitor-General's assumption that the figure "four" is correct. Presumably, when the Land Tax is in operation it will be, like other charges, like tithe, like the old Land Tax, etc., a charge against the annual income which the taxpayer will be entitled to deduct. Therefore, his Schedule A assessment will go down. If that is the case, I should say, assuming, which I do not for the moment, the Solicitor-General's assumption is correct, some allowance ought to be made. By putting on this tax you are lowering the Schedule A assessment. You are lowering its value, and therefore the concession which apparently is given to hon. Members below the Gangway will be very much less valuable than they think, because Schedule A will be down, and therefore four times Schedule A will be down. For that reason I would suggest that if the Attorney-General's assumption is correct, five is more nearly the correct figure than four. I am still to be convinced that four is the correct figure, and still more am I to be convinced that the attempt to mix up a tax levied on capital value with an assessment levied on what the land actually brings in at the moment, is either feasible or desirable.


I beg to second the Amendment.


The hon. and gallant Member for Oxford (Captain Bourne) said that the tax would have been better if it had been left in its original state. I wonder how many landowners who support the hon. and gallant Member take the same view that he does on that point. I suggest that if he put that proposition forward to his friends who own land in built-up areas he would not find them in agreement with him, although no doubt the more public spirited of them might.

Captain BOURNE

I said it would be not as anomalous; not certainly lighter.


The words that the hon. and gallant Member used were that it would have been better if it had been left in its original state. [Interruption.] The right hon. Member for West Woolwich (Sir K. Wood) is not going to get me by making an interruption of that kind. The hon. and gallant Member asked me why we adopted the figure "four." The reason why this system was adopted was fully explained yesterday and I do not propose to go again into the general reasons for the adoption of this system to arrive at the net land value which is to be taxed at 1d. in the pound capital value. The reason why the figure "four" was taken was because that was the figure which was arrived at in the discussions which led to the compromise.


What reason is there in that?


The right hon. Member for Edgbaston (Mr. Chamberlain) asks me what reason there is in that. The reason is that, having arrived at a compromise, the figure "four" was set down. If he asks me why I think the figure "four" is a reasonable figure I will tell him. It is because one is attempting to arrive at some figure which will give a measure of the use which is being made of the land unit for the purposes of the community and, as was explained yesterday, the rough criterion of that is Schedule A, because that is fixed upon the price that is paid for letting or taking the land from year to year, and that gives the rough value as regards the whole of the site and the buildings upon it. If you start with the view that where land is substantially fully developed you want to reduce the tax to the lower level of one-eighth of a penny, then taking the rough figure "four" will give you that result, in our opinion, and it is upon that basis that the figure "four" has been taken. You take a particular unit of land and the varying buildings on that unit—you cannot compare unit with unit—and as you progressively increase the utility of the buildings on the land you get a progressively increasing Schedule A. If you multiply that by "four," you will arrive when you get fully developed land at about the figure of one-eighth only. That is the reason why the figure "four" has been adopted.

I do not propose to go into the general argument as regards this method of arriving at the net land value, but I do want to comment on one further thing which the hon. and gallant Member for Oxford said, with which I entirely agree, and that is that a tax on land values is a totally different thing from Schedule A, and the tax under Schedule A. I agree with that statement, and it is for the reason that we look upon the tax on land values as a new tax. It will not be a tax which will be deducted in arriving at Schedule A. It will be an additional tax. [HON. MEMBEES: "Double taxation."] Therefore the reason that the hon. and gallant Member gave for converting four into five disappears. I know no other reason that he has put forward.


Will the Solicitor-General endeavour to develop to the House his reasons for coming to the conclusion that four times the annual value would bring the exemption in the ease of a fully developed land unit up to that amount which would give it total exemption but for the one-eighth of a penny that is to be charged?


I think I have said so already. It is a matter of opinion. It cannot be a matter of anything else. There is no evidence that I know of, because there has not been a valuation carried out on which to test the opinion. The opinions on this side of the House——


And of the right hon. Member for Darwen (Sir H. Samuel).


And the opinions of hon. Members below the Gangway when they meet in compromise, come out at the figure "four."


Will the Solicitor-General answer this question? Does he agree that the effect of this provision is that the value of buildings must be four times the value of the site in order to make four times the annual value under Schedule A equivalent to the value of the land unit? That is a mathematical certainty, and that being so, the criterion then becomes this, whether the site is only fully developed when the buildings upon the site are worth four times the site itself. That is a thing which everybody can judge for himself, and I want to know from the hon. and learned Gentleman why he thinks that it must be four times the value of the site before the site can be considered to be fully developed?


That is not the basis upon which this proceeds. The basis is that, taking a particular site, not comparing one site with another, you got by a multiplication of this sort, with a progressively rising Schedule A, a progressive diminution of the effective amount of land value which is taxed, and when you take a figure of four times the Schedule A which includes site value as well as buildings, we are of opinion that you will then ultimately reach the case where you get a minimum land value, and that is one-eighth of the original land value.


That is not my point at all.


It is obvious, from the answer of the Solicitor-General, that there is no reason whatsoever for the figure 4 being put in. The nearest approach to a reason that he has given is that the figure 4 is the least that the Members of the Liberal party would take. That is a curious basis upon which to frame legislation which will affect very severely a large section of the population of this country. Surely the Solicitor-General has forgotten to mention the fact that hardly any two areas in the whole country are similar, and that there are hundreds of differing factors which must alter the situation in each case, and as long as you continue to have a purely arbitrary figure 4, based upon neither rhyme nor reason, you are bound to produce not only anomalies but great injustices as well. Many cases have been pointed out already. My right hon. Friend in front of me said that when the annual value is multiplied by four, presumably the Government, consider that that area of land is fully and properly developed.

The other evening we had actual instances from Glasgow and from the City of London where it was shown that the building laws prevented any buildings being erected on those particular spots, the annual value of which, multiplied by four, could possibly equal the site value. I notice that on that occasion the hon. Member who answered for the Government said that those were exceptional circumstances—every case is an exceptional circumstance—and I notice that he failed to reply to or make an observation upon those instances, which were multiplied by various Members from these benches. I notice also that he omitted to reply to the point raised by my hon. and gallant Friend the Member for Oxford (Captain Bourne), that the incidence of this tax would mean that those individuals who were engaged in developing land would be prone to build upon each acre as many houses as they could—exactly the opposite of what we have all contended, in this House and elsewhere, should be the case. Surely the proposal of the Government would mean that those who are developing land will be inclined, after this Measure comes into operation, to build on a particular acre more houses than it is desirable to build, because the more houses there are, obviously the less tax the owner of the land will have to pay.

If that is not so, I hope the Solicitor-General will answer it, but I notice that he avoided that point. I presume that he admits that there are areas in London, Glasgow, and other big cities where four times the annual value can never equal the site value, owing to the operation of building laws and other matters. If that is a fact, and he agrees that it is, there is nothing more to be said, except that he must admit that there are instances of a most glaring anomaly which is created under this Bill. The learned Solicitor-General said, "I cannot give you any reason. It just happens to be the figure on which we compromised, after a great deal of discussion." I gather that that was the gist of his remarks. "Having at last settled upon this mysterious number of four, we think we had better stick to it." I expect the Government are grateful to have got some figure to which the Liberal party could agree, and for their sakes it would be as well that they should keep to that figure, which has enabled them to tide over a very difficult period in their life and to remain in office.


The Solicitor-General has shown a deplorable lack of calibre in this matter. He was asked the opinion of the Government, or the liberal party, or both, why four was a proper denominator in this connection, and when we asked upon what his opinion is based, he said that it was baaed upon nothing, but was just an opinion. The Solicitor-General knows perfectly well that when he is asked an opinion as a lawyer, it is based, if not upon evidence, at any rate upon other considerations—let us call them facts. On a previous occasion in this Debate the Lord Advocate, who is not in his place—perhaps the mathematical formula is too much for him—said the expression "facts" was an extremely loose expression; "facts" is not so narrow an expression as "evidence." We would like to know upon what facts he gave his opinion that four was the proper denominator. He tried to impress the House that it was a scientific mathematical calculation based upon the considered view of a valuer, and that it was a kind of mock auction between the right hon. Member for Darwen (Sir H. Samuel) and the Chancellor of the Exchequer—an arbitrary figure reached between them as a result of an agreement between two sections of the Government party.

Which did he mean? Did he mean that the denominator four was based upon an honest calculation, or did he mean that it was the result of a political compromise? If the Solicitor-General would enlighten us upon that point, he would enlighten a great number of Members of this House and relieve our minds, because it is a tradition of the House that legislation is produced in relation to the facts, and not as a result of some compromise between two parties without having any relation to the true facts. How often in litigation does one solicitor write to another and say, "I have counsel's opinion on this matter, and it is conclusive"; and the other solicitor writes back, and says, "I would like to know the facts you disclosed to counsel before you asked his opinion." So the Solicitor-General's opinion, which is paraded before us as conclusive, and behind which he refuses to go, is not in the least impressive unless we know the facts which gave rise to that opinion.

Really the Solicitor-General is almost insulting the House of Commons in coming here with his opinions, whether they be the opinions of the Liberal party or not, the basis of which he does not vouchsafe to us. The House would readily give its indulgence to the Solicitor-General if he would explain his opinion. It is admittedly a rough and ready calculation, and he entirely failed to answer the arguments of my hon. Friend the Member for Oxford (Captain Bourne). We must always take the opinion of the hon. Member for Burslem (Mr. MacLaren) and the hon. and learned Member for South Nottingham (Mr. Knight) as conclusive on these matters, and the opinion of the hon. Member for Burslem was that in New York the value of the sky-scraper was about equal to the Value of the site. We have no skyscrapers, thank goodness, in this country yet, but we can only conclude that as a result of this innovation in taxation in this country, we must inevitably get the hideous American architecture introduced here in order to make the proposals of the Solicitor-General fair. Otherwise, the value of the site can never be equal to the value of the building. The result of this particular Amendment will be the accentuation of the tendency for the whole face of London to be changed. They are doing a far greater thing than imposing a tax; they are going to change the architecture of this country. That must inevitably be so if there is any fairness or justice about this proposal. I appeal to the Solicitor-General to give us some definite facts upon which he has based his opinion.


I am very much interested in what has been said about the basis of this figure four, but I feel that the Solicitor-General has not given us a reasonable explanation of why a site should be regarded as fully developed when the cost of the buildings is four times the site value. I have been looking at the matter and have come to the conclusion that it is the outcome of an elementary mathematical calculation based upon the value of money, upon a certain rate per cent. I am sorry to see the Solicitor-General look so shocked. I will take a short illustration. Supposing an assessment under Schedule A is £800 a year. Multiplying that by four gives £3,200. In order that it should escape this tax the site value must be £3,200. We have the assessment at a figure of £800 and we have to get at the value of the property, and on a 5 per cent. basis one takes 20 years' purchase. Twenty years' purchase gives the figure of £16,000, which is just five times £3,200, and the difference between five and one gives you the figure four. So I think I am right in saying the whole of this calculation does depend upon some rate per cent. in the capitalisation of the annual value. What reason have the Government got for taking 5 per cent.? Recently the value of money has been 5 per cent., but it is slightly under 5 per cent. now, and in the course of 30 or 40 years it may change very appreciably. Is it proposed to change this factor every time the value of money changes? Unless that be done there is no basis whatsoever for arriving at the figure. I should be glad if someone would give an answer to this particular question.


This is a very interesting subject, and I do not think the hon. and learned Gentleman has given proper consideration to it. If I understood him correctly he said he had no facts on which the figure four was based, that it was a figure arrived at by compromise between his colleagues and himself and the Members of the Liberal party. That is a very interesting piece of information for the House. No doubt the Members of the Liberal party put forward very proper proposals when they first suggested a figure for this reduction. Will the Solicitor-General tell us what was the first figure which the Liberal party put forward as a reduction figure? If he will not tell us himself possibly he will give a lead to the right hon. Gentleman the Member for Darwen (Sir II. Samuel), who will tell us what was the figure. This is a compromise House of Commons, the Government only survive by compromise, and in these circumstances ordinary Members of the House are entitled to have the full facts on a matter such as this.

The situation in this House is becoming intolerable. I do not want to be insulting to hon. Gentlemen opposite, but it is obvious that they do not want to go to the country, and it is also obvious that they desire to get compromise Measures through this House. In justice to the people outside we are bound to press the Government to give us proper information on these questions. I feel very sorry for the Solicitor-General who is in a very uncomfortable position, because he does not feel sure what the party below the Gangway are going to do. Here is a grand opportunity for a gesture to the House. If I am correct in my surmise, the figure we are suggesting is the very same that the Liberal party put forward at the compromise proceedings. This deductional figure of five times was the very figure the Liberal party aimed at, and I suggest to the Solicitor-General that this is an opportunity for him to get the good will not only of his own party, but of all parties. I give the Liberal party the credit of having suggested this figure to the Government, and if the Solicitor-General will accept it, he might make a gesture to the right hon. Gentleman the Member for Darwen (Sir H. Samuel) who takes this question so seriously, and if he puts forward any figure it must have been most carefully considered.


I press the Government to give this Amendment further consideration, and I ask them to do so for purely practical reasons. First of all, as a manufacturer and a developer of land, I am going to be severely hit by this tax. What is the position of a man who owns land under the Rent Restrictions Act? That land under Schedule A is not giving any return because the rent is restricted, but it will be very bady hit, and what is the owner going to do? In the first place he will try to buy out or get rid of all those tenants living under the Rent Restrictions Act, and that is a procedure of which no one is in favour. Take for a second case a man who owns a large area of works manufacturing bulky materials, which do not necessarily require a high building and a lot of machinery, but only sheds and lean-to's. That man is going to be taxed twice. My third case is the development of land, and several references have been made to sky-scrapers. In London and other large towns there are laws and restrictions which prevent the putting up of buildings to the height of more than 80 feet or 100 feet, which is the height allowed by the London County Council. These are very definite cases where the owner, developer, or manufacturer is going to be very seriously hit by the tax. I ask the Solicitor-General to be generous and make the figure five times instead of four.


We have been trying to get some information as to why the number "five" should not be accepted, but the whole proceedings appear to me to be somewhat of a farce. It is unprecedented, at any rate as regards the many Budgets which I have heard debated in this House, that there has been no senior of the Government present. The Solicitor-General is a new Member, and we all admire the way in which he has taken to the Parliamentary arena; but he must excuse my saying that some of us who are old hands are not so easily misled by his sophistries. We have only junior officers of the Government present, and, no matter what arguments are put forward, they can only make replies which are in the nature of "sealed orders." I desire to protest that a serious Debate like this, in view of the short time allowed for it, is not being attended to by the Chancellor of the Exchequer or some other member of the Cabinet who is able to make a compromise or concession. Earlier in the evening, when the Lord Advocate was here, he had to get out of a very awkward situation as well as he could, and he was only able to do so by means of his mechanical majority. I hope that during the rest of the proceedings the House will have the advantage of the presence of a Cabinet Minister who can hear the arguments and will be able to make concessions when the arguments convince him that something ought to be done.


I trust that my right hon. and gallant Friend will forgive me, as a very junior Member, if I show a certain amount of sympathy for the Government after the attack which he has made. All who have listened to these Debates must realise only too well why the Solicitor-General is conducting them. We all know that he is the only Member on the Government side, with the possible exception of the hon. Member for Burslem (Mr. MacLaren), who has attempted to make out a case for these taxes, and, after the experience which the party opposite have had with other Members on their Front Bench, it is very natural that the Solicitor-General should be the only one whom they will trust on the Government Front Bench at this late hour of the night. It may be a matter for regret that they cannot find a senior member of the Government to handle this case, but it is a matter for no surprise to anyone who has listened to the case for these taxes which has been put forward from the benches opposite.

I intervened really to address once more the question, "Why four?" There seems to be a sort of "Alice in Wonderland" attitude in regard to these taxes. There is a sort of fanciful and entirely humorous aspect of them which will appeal to all except the unfortunate people who will have to pay them if they come into force. One is reminded of the quotation from "Alice in "Wonderland":

"'Why?' said Alice.

'Why not?' said the March Hare."

That is really all the answer that the Government have given on this question. Legislation on these lines is becoming a pure farce.


Why five?


I would reply by asking, Why anything?. Why, in fact, these taxes at all? No satisfactory explanation has ever been given. In answer to the question "Why five?" I would say that six would be a better number, and seven would be better still, because cither would reduce the incidence of this futile and unfair tax, and, the larger the number, the smaller would be the taxation. [Interruption.] As my hon. Friend the Member for Barnstaple (Sir B. Peto) says, "The higher the fewer," or "The greater the less." I think that anyone who has listened to the Debates on this tax must agree that the less the tux paid the greater will be the benefit to the country.

After all, we have not only an unexampled case for reducing the incidence of this dishonest and ridiculous tax. We have the appeal which we understand was so passionately and fervently made from the benches below the Gangway. It was their suggestion and, when we remember the speech of the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) the other day in which he said that a General Election would come when he thought the country was ready for it, I suggest to hon. Members opposite that they ought to give him some semblance of the dictator's power. Taking everything into consideration, this is a case in which they might give up the shadow of their tyranny for the substance, which would be of so much benefit to the country when the taxes come in. No adequate reason has been given why four rather than five should be the number. Adequate reasons have been adduced why five is an infinitely better figure—per- sonally I would rather see six or seven—but anyone who has listened to the Debate and studied the question carefully will feel bound to support the Amendment.


I cannot give the hon. Member a reply as to why the figure four has been used in this formula, but I can give a very plain answer to the question why four should be preferred to five. I prefer four because it gives a larger measure of justice to the community than if you use five. There has been an enormous amount of special pleading on the part of vested interests in connection with the proposals of this Bill, and, although I prefer four, as I would prefer two as against four, or as I would prefer the original basis rather than any figure at all, yet, even so, four in large numbers of cases represents a fairly substantial measure of justice to large numbers of people who will come under liability to the tax. Take the enormous number of cases for developing substantial houses in which perhaps £1,000 of capital may be put into both land and buildings, and the proportion between the building and the land may be represented by £800 for the building and £200 for the land. One is entitled to assume that such a property would be assessed under Schedule A at £50 a year. Four times that gives you exactly the value of the site, and will reduce the tax to an eighth of a penny. For that reason "four" is preferable to "five."


This Clause did not appear in the original Bill. We know its history. It is an example of a compromise with representatives of the Liberal party. We all regret that the Chancellor of the Exchequer is not able, for physical reasons, to be present throughout our Debates. We have hero the right hon. Gentleman the Member for Darwen (Sir H. Samuel), who was certainly a principal in the negotiations on one side and must have known the views of the Liberal party and the Government as to the compromise before it was decided. It is a very peculiar method of legislation. This is a proposal which will measure the taxation to be imposed upon hundreds of thousands, probably a million, people in this country and those people are entitled to know the reason why the particular tax should be asked of them every year. They will know that there is some sort of attempt to marry two perfectly incompatible things, namely, the taxable value of the buildings and the development of the site, subject to deductions under Schedule A and the capital site value. You have the multiplying figure 4, but no one will know how it has been arrived at. Quite apart from the fact that the Debate is being conducted in the dark there is present, on one side, one of the principals to the bargain, and he has remained in stolid silence throughout the Debate.

If we are to legislate by compromise and negotiation outside this Chamber, at least the Chamber should be informed of the basis of the negotiation. It is an insult to the House for the right hon. Member for Darwen, who knows the facts and that the Opposition have attempted to elicit them throughout the Debate and, have been refused by the Treasury Bench, to sit there and refuse to tell the House what is the basis upon which millions of taxes are to be levied in this country. That is the condition to which legislation is being reduced. I appeal to the House to stop this mockery of legislation by negotiations, bargains and compromises between one section of the House who hold the balance for the moment and the Government in power. What is the use of these Debates? We ask at least to be enlightened as to the basis of the compromise. We are refused the information while parties to the bargain sit in stolid silence. It is making a mockery of legislation, and we may as well close the House of Commons if this sort of thing is to go on.


I, also, was waiting to see if we could not elicit some light on the subject from the right hon. Gentleman the Member for Darwen (Sir H. Samuel). The whole reason for this proposal is wrapped in mystery. One of those who might have thrown light upon it, the Solicitor-General, has already spoken and has refused to do so. He merely stated his opinion, which resolved itself into the result of a compromise. At least we might have expected that the other party to the compromise would, through one of its authoritative members, have thrown some light upon the question as to how they arrived at the result. I do not know whether silence is golden. I suppose that it is. I suppose that the right hon. Gentleman the Member for Darwen is prepared to sit there and leave the mystery unexplained until the clock strikes eleven. What is the position which has been reached? First of all, we have been told that four times the annual value will give complete exemption except for that saving fraction which the Liberal party so complacently gave away together with their principles. Otherwise four times the annual value would give complete exemption when the site is fully developed.

Next we have learned that the site will be fully developed when the value of the buildings is four times that of the site. To that, up to the present, no denial has been given, and it can be mathematically demonstrated on a 5 per cent. basis. That is what we have reached. We have asked for the data why the buildings should be four times in value that of the site, and the Solicitor-General has told us that it is his opinion. We can judge from the facts, as regards these buildings, that there is no reason why this opinion should be held. So far as given instances are supplied to us on the best possible authority, there is no reason to believe that on a fully developed site you will always have buildings which are four times in value that of the site.

I will trouble the House with only two cases taken from one city, Edinburgh. There is a site in Princes Street, a cleared site, which was bought by Messrs. Woolworth for £115,000. The buildings are entered in the valuation roll at £5,500, less owners' rates, amounting to £4,400, and on the 5 per cent. basis the value of the buildings would be £88,000, or between two-thirds and three-quarters that of the site. Equally interesting is the case of the Liberal Club in Princes Street. Careful and competent information given of its site value on a comparison with Messrs. Woolworth's site, shows that the site value of this Liberal Club to be £65,000. At the present time it has completely developed its premises, no doubt, as far as it can, because the ground floor is taken up by two shops which are let by the club at a rental entered in the valuation roll, and that, with the annual valuation of the club's premises given in the roll, amounts to £2,900, less owner's rates, about £2,300. Therefore, calculated in the same way, the total value of the premises will be £47,000 and considerably less than the site value.


Has the right hon. Gentleman made any allowance, in regard to the Liberal Club, for the wasting assets?


Vacant possession may, perhaps, soon be given of it, in as much as it is estimated that the tax on it will amount to an annual sum of £231 6s. Those are just instances, and there are others all over the country, which go to show that this arbitrary figure of four to one, while it may be sufficient in some cases, is certainly not right in others. We have been given no data to explain how it has been arrived at, and all we are told is that it is the result of a compromise between the Government and the Liberal party. What we have to ask ourselves is this: does it really mean that the rate of taxation which hundreds and thousands of people will have to bear is to be determined by a compromise between two political parties, for which no reason, no justification, and no data has so far been given. If that is so, then all I can say is that of the many sorry spectacles that we have seen in the course of this Bill this compromise is one of the most discreditable.


Whatever else may be in doubt in this uncertain world there is not the slightest doubt as to why this Amendment has been moved. It is purely a political manœuvre to embarrass the Liberal party, without, of course, any hope of success. It is thought by hon. Members above the Gangway that five was the figure adopted by the Liberal party, and the Amendment has been moved in the vain

hope that a sufficient number of Liberals will be attracted by it to go into the Lobby with hon. Members above the Gangway and turn out the Government, and thus assist them to move over to the other side of the House. Their palms are itching for the seals of office. I submit that what has been going on for the last two hours is an absolute justification for the action of the. Liberal party as a whole in the support they gave the Government in putting forward the Guillotine Resolution. The discussing during the last two hours has been perfectly futile, and if there are no stronger arguments to be brought against this Bill than have been introduced by hon. Members their case must be very weak indeed. I only rise to protest against a shocking waste of Parliamentary time by hon. Members above the Gangway.


I only want to say in answer to the Member for Wolverhampton East (Mr. Mander) that it is not true that the arguments put forward from these benches have been put forward with the object of wasting time. The only thing we are trying to do is to protect the vested interests of the citizens of this country. [Interruption.] We desire to see justice done in the matter of taxation, and up to the present there has been no reply to the arguments we have put forward.

It being Eleven of the Clock, Mr. SPEAKER proceeded, pursuant to the Orders of the House of the 4th and 29th June, to put forthwith the Question on the Amendment already proposed from the Chair.

Question put, "That the word 'four stand part of the Bill."

The House divided: Ayes, 279; Noes, 231.

Division No. 369.] AYES. [11.0 p.m.
Adamson, Rt. Hon. W. (Fife, West) Benn, Rt. Hon. Wedgwood Brown, Rt. Hon. J. (South Ayrshire)
Adamson, W. M. (Staff., Cannock) Bennett, Sir E. N. (Cardiff, Central) Brown, W. J. (Wolverhampton, West)
Addison, Rt. Hon. Dr. Christopher Bennett, William (Battersea, South) Buchanan, G.
Altchison, Rt. Hon. Craigle M. Benson, G. Burgess, F. G.
Alexander, Rt. Hon. A. V. (Hillsbro') Bevan, Aneurin (Ebbw Vale) Burgin, Dr. E. L.
Alpass, J. H. Birkett, W. Norman Buxton, C. R. (Yorks. W. R. Elland)
Ammon, Charles George Blindell, James Caine, Hall-, Derwent
Angell, Sir Norman Bondfield, Rt. Hon. Margaret Cameron, A. G.
Arnott, John Bowen, J. W. Cape, Thomas
Attlee, Clement Richard Bowerman, Rt. Hon. Charles W. Carter, W. (St. Pancras, S. W.)
Ayles, Walter Broad, Francis Alfred Chater, Daniel
Baker, John (Wolverhampton, Bilston) Brockway, A. Fenner Church, Major A. G.
Baldwin, Oliver (Dudley) Bromfield, William Clarke, J. S.
Barnes, Alfred John Bromley, J. Cluse, W. S.
Barr, James Brooke, W. Clynes, Rt. Hon. John R.
Batey, Joseph Brothers, M. Cocks, Frederick Saymour
Beckett, John (Camberwell, Peckham) Brown, C. W. E. (Notts, Mansfield) Compton, Joseph
Cove, William G. Law, A. (Rossendale) Riley, Ben (Dewsbury)
Cripps, Sir Stafford Lawrence, Susan Ritson, J.
Daggar, George Lawrie, Hugh Hartley (Stalybridge) Roberts, Rt. Hon. F. O. (W. Bromwich)
Dallas, George Lawson, John James Romeril, H. G.
Dalton, Hugh Lawther, W. (Barnard Castle) Rosbotham, D. S. T.
Davies, E. C. (Montgomery) Leach, W. Rowson, Guy
Davies, D. L. (Pontypridd) Lee, Frank (Derby, N. E.) Salter, Dr. Alfred
Davies, Rhys John (Westhoughton) Lee, Jennie (Lanark, Northern) Samuel, Rt. Hon. Sir H. (Darwen)
Denman, Hon. R. D. Lees, J. Samuel, H. Walter (Swansea, West)
Dudgeon, Major C. R. Leonard, W. Sanders, W. S.
Dukes, C. Lewis, T. (Southampton) Sandham, E.
Duncan, Charles Lindley, Fred W. Sawyer, G. F.
Ede, James Chuter Lloyd, C. Ellis Scott, James
Edmunds, J. E. Logan, David Gilbert Scurr, John
Edwards, C. (Monmouth, Bedwellty) Longbottom, A. W. Shaw, Rt. Hon. Thomas (Preston)
Edwards, E. (Morpeth) Longden, F. Shepherd, Arthur Lewis
Elmley, Viscount Lunn, William Sherwood, G. H.
Foot, Isaac Macdonald, Gordon (Ince) Shield, George William
Gardner, R. W. (West Ham, Upton) MacDonald, Rt. Hon. J. R. (Seaham) Shiels, Dr. Drummond
George, Major G. Lloyd (Pembroke) MacDonald, Malcolm (Bassetlaw) Shillaker, J. F.
George, Megan Lloyd (Anglesea) McElwee, A. Shinwell, E.
Gibbins, Joseph McEntee, V. L. Short, Alfred (Wednesbury)
Gibson, H. M. (Lancs. Mossley) McGovern, J. (Glasgow, Shettleston) Simmons, C. J.
Gill, T. H. McKinlay, A. Sinclair, Sir A. (Caithness)
Gillett, George M. MacLaren, Andrew Sinkinson, George
Glassey, A. E. Maclean, Sir Donald (Cornwall, N.) Sitch, Charles H.
Gossling, A. G. MacNeill-Weir, L. Smith, Ben (Bermondsey, Rotherhithe)
Gould, F. McShane, John James Smith, Frank (Nuneaton)
Graham, D. M. (Lanark, Hamilton) Malone, C. L'Estrange (N'thampton) Smith, Lees-, Rt. Hon. H. B. (Keighley)
Graham, Rt. Hon. Wm. (Edin., Cent.) Mander, Geoffrey le M. Smith, Rennie (Penistone)
Gray, Milner Manning, E. L. Smith, Tom (Pontefract)
Greenwood, Rt. Hon. A. (Colne) Mansfield, W. Smith, W. R. (Norwich)
Grenfell, D. R. (Glamorgan) March, S. Snowden, Thomas (Accrington)
Griffith, F. Kingsley (Middlesbro' w.) Marcus, M. Sorensen, R.
Griffiths, T. (Monmouth, Pontypool) Markham, S. F. Stamford, Thomas W.
Groves, Thomas E. Marley, J. Stephen, Campbell
Grundy, Thomas W. Marshall, Fred Strauss, G. R
Hall, G. H. (Merthyr Tydvil) Mathers, George Sullivan, J.
Hall, J. H. (Whitechapel) Matters, L. W. Sutton, J. E.
Hall, Capt. W. P. (Portsmouth, C.) Maxton, James Taylor, R. A. (Lincoln)
Hamilton, Mary Agnes (Blackburn) Messer, Fred Taylor, W. B. (Norfolk, S. W.)
Hamilton, Sir R. (Orkney & Zetland) Middleton, G. Thurtle, Ernest
Hardie, David (Rutherglen) Mliner, Major J. Tillett, Ben
Hardie, G. D. (Springburn) Montague, Frederick Tinker, John Joseph
Harris, Percy A. Morgan, Dr. H. B. Toole, Joseph
Hastings, Dr. Somerville Morley, Ralph Tout, W. J.
Haycock, A. W. Morrison, Rt. Hon. H. (Hackney, S.) Townend, A. E
Hayday, Arthur Morrison, Robert C. (Tottenham. N.) Trevelyan, Rt. Hon. Sir Charles
Henderson, Rt. Hon. A. (Burnley) Mort, D. L. Vaughan, David
Henderson, Arthur, Junr. (Cardiff, S.) Muff, G. Viant, S. P.
Henderson, Joseph (Ardwick) Muggeridge, H. T. Walkden, A. G.
Henderson, Thomas (Glasgow) Murnin, Hugh Walker, J.
Henderson, W. W. (Middx., Enfield) Nathan, Major H. L. Wallace, H. W.
Herriotts, J. Naylor, T. E. Watkins, F. C.
Hicks, Ernest George Newman, Sir R. H. S. D. L. (Exeter) Watson, W. M. (Dunfermline)
Hirst, G. H. (York W. R. Wentworth) Noel Baker, P. J. Wellock, Wilfred
Hirst, W. (Bradford, South) Noel-Buxton, Baroness (Norfolk, N.) Welsh, James (Paisley)
Hoffman, P. C. Oldfield, J. R. Welsh, James C. (Coatbridge)
Hollins, A. Oliver, George Harold (Ilkeston) West, F. R.
Hopkin, Daniel Oliver, P. M. (Man., Blackley) Westwood, Joseph
Hudson, James H. (Huddersfield) Owen, Major G. (Carnarvon) Whiteley, Wilfrid (Birm., Ladywood)
Isaacs, George Owen, H. F. (Hereford) Whiteley, William (Blaydon)
John, William (Rhondda, West) Palin, John Henry Wilkinson, Ellen C.
Johnston, Rt. Hon. Thomas Paling, Wilfrid Williams, David (Swansea, East)
Jones, J. J. (West Ham, Silvertown) Palmer, E. T. Williams, E. J. (Ogmore)
Jones, Rt. Hon. Leif (Camborne) Parkinson, John Allen (Wigan) Williams, Dr. J. H. (Llanelly)
Jones, Morgan (Caerphilly) Perry, S. F. Williams, T. (York, Don Valley)
Jowett, Rt. Hon. F. W. Pethick-Lawrence, F. W. Wilson, C. H. (Sheffield, Attercliffe)
Jowitt, Rt. Hon. Sir W. A. (Preston) Phillips, Dr. Marlon Wilson, J. (Oldham)
Kelly, W. T. Pole, Major D. G. Wilson, R. J. (Jarrow)
Kennedy, Rt. Hon. Thomas Potts, John S. Winterton, G E. (Leicester, Loughb'gh)
Kinley, J. Price, M. P. Wise, E. F.
Kirkwood, D. Quibell, D. J. K. Wood, Major McKenzie (Banff)
Lang, Gordon Ramsay, T. B. Wilson Young, R. S. (Islington, North)
Lansbury, Rt. Hon. George Raynes, W. R.
Lathan, G. (Sheffield, Park) Richards, R. TELLERS FOR THE AYBS.—
Law, Albert (Bolton) Richardson, R. (Houghton-le-Spring) Mr. Hayes and Mr. Charleton.
Acland-Troyte, Lieut.-Colonel Ashley, Lt. Col. Rt. Hon. Wilfrid W. Baldwin, Rt. Hon. Stanley (Bewdley)
Albery, Irving James Aske, Sir Robert Balfour, George (Hampstead)
Alexander, Sir Wm. (Glasgow, Cent'l) Astor, Maj. Hn. John J. (Kent, Dover) Balfour, Captain H. H. (I. of Thanet)
Allen, Sir J. Sandeman (Liverp'l., W.) Atholl, Duchess of Balniel, Lord
Amery, Rt. Hon. Leopold C. M. S. Baillie-Hamliton, Hon. Charles W. Beaumont, M. W.
Bellairs, Commander Carlyon Forestler-Walker, Sir L. Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld)
Betterton, Sir Henry B. Frece, Sir Walter de O'Connor, T. J.
Bevan, S. J. (Holborn) Fremantle, Lieut.-Colonel Francis E. Oman, Sir Charles William C.
Birchall, Major Sir John Dearman Galbraith, J. F. W. O'Neill, Sir H.
Bird, Ernest Roy Ganzonl, Sir John Ormsby-Gore, Rt. Hon. William
Boothby, H. J. G. Gibson, C. G. (Pudsey & Otley) Peake, Capt. Osbert
Bourne, Captain Robert Croft Gilmour, Lt.-Col. Rt. Hon. Sir John Penny, Sir George
Bowater, Col. Sir T. Vansittart Glyn, Major R. Q. C. Percy, Lord Eustace (Hastings)
Bowyer, Captain Sir George E. W. Gower, Sir Robert Perkins, W. R. D.
Boyce, Leslie Graham, Fergus (Cumberland, N.) Peto, Sir Basil E. (Devon, Barnstaple)
Bracken, B. G rattan-Doyle, Sir N. Pownall, Sir Assheton
Braithwaite, Major A. N. Greene, W. P. Crawford Pybus, Percy John
Brass, Captain Sir William Grenfell, Edward C. (City of London) Ramsbotham, H.
Briscoe, Richard George Gretton, Colonel Rt. Hon. John Reid, David D. (County Down)
Broadbent, Colonel J. Guinness, Rt. Hon. Walter E. Remer, John R.
Brown, Ernest (Leith) Gunston, Captain D. W. Rentoul, Sir Gervais S.
Brown, Brig.-Gen. H. C. (Berks, Newb'y) Hacking, Rt. Hon. Douglas H. Reynolds, Col. Sir James
Buchan, John Hall, Lieut.-Col. Sir F. (Dulwich) Roberts, Sir Samuel (Ecclesall)
Buchan-Hepburn, P. G. T. Hamilton, Sir George (Ilford) Rodd, Rt. Hon Sir James Rennell
Bullock, Captain Malcolm Hammersley, S. S. Ross, Ronald D.
Burton, Colonel H. W. Hanbury, C. Ruggles-Brise, Colonel E.
Butler, R. A. Hannon, Patrick Joseph Henry Russell, Alexander West (Tynemouth)
Butt, Sir Alfred Hartington, Marquess of Russell, Richard John (Eddisbury)
Cadogan, Major Hon. Edward Harvey, Major S. E. (Devon, Totnes) Salmon, Major I.
Campbell, E. T. Haslam, Henry C. Samuel, A. M. (Surrey, Farnham)
Carver, Major W. H. Henderson, Capt. R. R. (Oxf'd, Henley) Samuel, Samuel (W'dsworth, Putney)
Castle Stewart, Earl of Heneage, Lieut.-Colonel Arthur P. Sandeman, Sir N. Stewart
Cautley, Sir Henry S. Hennessy, Major Sir G. R. J. Sassoon, Rt. Hon. Sir Philip A. G. D.
Cayzer, Sir C. (Chester, City) Herbert, Sir Dennis (Hertford) Savery, S. S.
Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.) Hills, Major Rt. Hon. John Waller Shakespeare, Geoffrey H.
Cazalet, Captain Victor A. Hoare, Lt.-Col. Rt. Hon. Sir S. J. G. Shepperson, Sir Ernest Whittome
Cecil, Rt. Hon. Lord H. (Ox. Univ.) Hope, Sir Harry (Forfar) Simon, Rt. Hon. Sir John
Chamberlain, Rt. Hn. Sir J. A. (Birm., W.) Home, Rt. Hon. Sir Robert S Skelton, A. N.
Chamberlain, Rt. Hon. N. (Edgbaston) Howard-Bury, Colonel C. K. Smith, Louis W. (Sheffield, Hallam)
Chapman, Sir S. Hunter-Weston, Lt.-Gen. Sir Aylmer Smith, R. W. (Aberd'n & Kinc'dine, C.)
Christle, J. A. Hurd, Percy A. Smith-Carington, Neville W.
Churchill, Rt. Hon. Winston Spencer Hutchison, Maj.-Gen. Sir R. Smithers, Waldron
Clydesdale, Marquess of Inskip, Sir Thomas Somerset, Thomas
Cobb, Sir Cyril Iveagh, Countess of Somerville, A. A. (Windsor)
Cockerill, Brig.-General Sir George Jones, Sir G. W. H. (Stoke New'gton) Somerville, D. G. (Willesden, East)
Cohen, Major J. Brunei Jones, Henry Haydn (Merioneth) Southby, Commander A. R. J.
Colfox, Major William Philip Kindersley, Major G. M. Spender-Clay, Colonel H.
Colman, N. C. D. Knox, Sir Alfred Stanley, Lord (Fylde)
Colville, Major D. J. Lamb, Sir J. Q. Stanley, Hon. O. (Westmorland)
Cooper, A. Duff Lambert, Rt. Hon. George (S. Moiton) Steel-Maitland, Rt. Hon. Sir Arthur
Courtauld, Major J. S. Lane Fox, Col. Rt. Hon. George R. Stuart, Hon. J. (Moray and Nairn)
Courthope, Colonel Sir G. L. Latham, H. P. (Scarboro & Whitby) Sueter, Rear-Admiral M. F.
Cowan, D. M. Law, Sir Alfred (Derby, High Peak) Thomas, Major L. B. (King's Norton)
Cranbourne, Viscount Leigh, Sir John (Clapham) Thompson, Luke
Crookshank, Capt. H. C. Leighton, Major B. E. P. Thomson, Mitchell-, Rt. Hon. Sir W.
Culverwell, C. T. (Bristol, West) Lewis, Oswald (Colchester) Tltchfield, Major the Marquess of
Cunliffe-Lister, Rt. Hon. Sir Philip Little, Graham-, Sir Ernest Todd, Capt. A. J.
Dalkeith, Earl of Llewellin, Major J. J. Train, J.
Dairymple-White, Lt.-Col. Sir Godfrey Locker-Lampson, Rt. Hon. Godfrey Tryon, Rt. Hon. George Clement.
Davidson, Rt. Hon. J. (Hertford) Lockwood, Captain J. H. Vaughan-Morgan, Sir Kenyon
Davies, Maj. Geo. F. (Somerset, Yeovil) Long, Major Hon. Eric Wallace, Capt. D. E. (Hornsey)
Davison, Sir W. H. (Kensington, S.) Lymington, Viscount Ward, Lieut.-Col. Sir A. Lambert
Dawson, Sir Philip Macdonald, Sir M. (Inverness) Warrender, Sir Victor
Despencer-Robertson, Major J. A. F. Macdonald, Capt. P. D. (I. of W.) Waterhouse, Captain Charles
Dixey, A. C. Macquisten, F. A. Wayland, Sir William A.
Dixon, Captain Rt. Hon. Herbert Maitland, A. (Kent, Faversham) Wells, Sydney R.
Dugdale, Capt. T. L. Makins, Brigadier-General E. Williams, Charles (Devon, Torquay)
Eden, Captain Anthony Margesson, Captain H. D. Wilson, G. H. A. (Cambridge U.)
Edmondson, Major A. J. Marjorlbanks, Edward Windsor-Clive, Lieut.-Colonel George
Elliot, Major Walter E. Merriman, Sir F. Boyd Winterton, Rt. Hon. Earl
Erskine, Lord (Somerset, Weston-s, M.) Millar, J. D. Wolmer, Rt. Hon. Viscount
Everard, W. Lindsay Monsell, Eyres, Com. Rt. Hon. Sir B. Womersley, W. J.
Falle, Sir Bertram G. Moore, Sir Newton J. (Richmond) Wood, Rt. Hon. Sir Kingsley
Ferguson, Sir John Morris, Rhys Hopkins Wright, Brig.-Gen. W. D. (Tavist'k)
Fermoy, Lord Morrison, W. S. (Glos., Clrensester) Young, Rt. Hon. Sir Hilton
Fielden, E. B. Muirhead, A. J.
Fison, F. G. Clavering Nail-Cain, A. R. N. TELLERS FOR THE NOES.—
Ford, Sir P. J Newton, Sir D. G. C. (Cambridge) Sir Frederick Thomson and Captain Austin Hudson.

Mr. SPEAKER then proceeded successively to put forthwith the Questions on any Amendments moved by the Government of which notice had been given to that part of the Bill to be concluded at Eleven of the Clock at this day's Sitting.

Amendments made: In page 15, line 38, leave out the words "a sum," and insert instead thereof the words "an amount."

In line 40, at the end, insert the words: (2) For the purposes of the charge of the tax, the land value of very land unit in respect of which a cultivation value is shown by the entries relating thereto shall be reduced either—

  1. (a) by the amount of that cultivation value; or
  2. (b) by the amount by which the land value would have been reduced under the last foregoing Sub-section if no cultivation value had been shown by the entries relating to the unit,
whichever is the greater.

In page 16, line 23, leave out Subsection (3).—[The Solicitor-General.]

Ordered, That further consideration of the Bill, as amended, be now adjourned."—[Mr. T. Kennedy.]

Bill, as amended, to be further considered To-morrow.

The remaining Orders were read, and postponed.

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