HC Deb 17 June 1931 vol 253 cc1819-29

I beg to move, in page 21, line 32, after the word "before," to insert the words "or after."


On a point of Order. May I submit to you, Mr. Dunnico, that this Amendment, which stands on the Order Paper in the name of the Chancellor of the Exchequer, is out of order. Clause 21 is the Clause which provides, as it stands at present, that the provision contained in a lease granted before the passing of the Act that any taxes shall be payable by the lessee shall not apply in respect of the tax. That is very clear and intelligible. A similar provision appears in Sub-section (3) of Clause 15, of which the marginal note is "Recoupment of tax to leaseholders by lessors." Sub-section (3) provides that the provisions of the first two Sub-sections of that Clause shall have effect notwithstanding any agreement made before the passing of the Act. That Clause, I respectfully submit, would necessarily be construed by the courts as not having any effect upon the validity of the agreement made after the passing of the Act. It invalidates an agreement made before the passing of the Act unless, as an implication, it leaves valid an agreement made after the passing of the Act. Now we come to Clause 21, and the Chancellor of the Exchequer proposes to invalidate agreements which, by necessary implication, I have suggested to you are validated by Clause 15, Subsection (3). I, therefore, suggest that at this stage it is too late to put in those words, and that the proper place would have been to insert them in Clause 15 (3). For those reasons, I beg to submit that the Amendment is out of order.

The SOLICITOR - GENERAL (Sir Stafford Cripps)

The hon. and learned Member for Fareham (Sir T. Inskip), I think, has not observed that Clauses 15 and 21 deal with two different subject matters. Clause 15 (3) says: The provisions of the last two foregoing Sub-sections shall have effect notwithstanding any agreement, and deals with cases where the owner who is a lessee hands back part of the tax to his lessor, that is to say, where he is the holder of over a 50 years' lease. Clause 21 deals with precisely the opposite case, where an owner attempts to hand down the tax to someone who has a shorter term of lease under him. Therefore, the two provisions deal with quite different cases, the one where the tax is being handed back up the scale, and the other where it is being handed down the scale.


It is a difficult thing for the lay mind to decide fine legal points of this kind. Taking a plain man's view of this question, my own interpretation is that Sub-section (3) of Clause 15 is related to the two previous Sub-sections dealing with leases of 50 years and upwards; Clause 21 appears to me to be more of a general nature and contains provisions of a much wider character. I do not think that this Amendment is invalidated by reason of the provision in Clause 15 and that I could on those grounds rule it out of order.


Having regard to the very short time at our disposal, it will probably be better to accept your Ruling. [HON. MEMBERS: "Hear, hear!"] I am not going to be deterred even by the mirth of hon. Gentlemen opposite, who appear to be quite incapable of understanding any point.

7.0 p.m.


I will endeavour to be as brief as possible in explaining the point which is covered by the Amendment. The matter which is referred to here, as also the matter referred to in Clause 15, deals with the incidence of the tax. The procedure of the Bill is that the burden is placed upon the owner, who is defined in Clause 26 as either a freeholder or a leaseholder holding for a period originally granted of over 50 years. In the event of a lease, it is proposed, and it has already been decided in Clause 15, that the leaseholder shall have the right to pass back the tax, according to certain principles, to the superior leaseholder or to the freeholders. Sub-section (3) of Clause 15 provides that the intention of Parliament shall not be thwarted by any Clause that may be in existing leases. It leaves, in the case of leases made after the passage of the Act, freedom to vary the conditions therein contained. The object of the present Clause as drafted is to deal, not with the case of the owner and his superior landlord, but with the case of the owner and sub-leases which he may grant for shorter periods than 50 years. As the Bill stands, it provides that the intention of Parliament in this respect also shall not be prevented by the existence of any words in the lease granted before the passage of this Measure. Now that would put in on precisely the same footing downwards as it was put upwards in Clause 15, but it was realised that the two cases differed in important respects. In the case of leases of 50 years and upwards, they are matters of considerable moment, skilled advisers would be available, and we may take it for granted that, where a new lease is coming into question, the matter will be thoroughly understood by both sides. In the case, however, of small leases, to a small shopkeeper for example, it often happens that the tenant is not really represented by a skilled adviser, and it is therefore essential that his interests should be safeguarded, and that nothing should be done to his detriment through a misunderstanding of the position. In those circumstances, it was decided to put in the words "or after." Otherwise this is what is likely to happen. It is quite common to have words which say that the lessee shall bear all rates and taxes and this will, of course, put upon the lessee the burden of this tax, contrary to the intention of this Bill. In order to protect the lessee from that, we propose this Amendment and, when the Committee consider the point carefully, they will see the logic of it.


This is a very difficult and immoral Clause and, although I have listened to every word carefully, I am certain the hon. Gentleman himself would be the first to say that it is not possible for any layman to understand it from what he has now told the Committee. He has done his best, but his involved explanation would not be understood by men of average intelligence not trained in the forms of the law. Here we have a Guillotine which will fall on this complicated Clause in a few minutes, instead of our having a couple of hours to discuss it. I shall, therefore, content myself with opposing the Clause by protesting against the Amendment. The word "before" in the Clause is bad enough, as it breaks all previous contracts and upsets the foundation of all good faith, but to add the word "after is worse. I am inclined to think that, when the Clause was drafted, the Chancellor of the Exchequer did not understand it would mean breaking every contract. We in this country hold by the principle known as a "scrap of paper." The maintenance of good faith between nations and between man and man is the foundation of all morality, and I make my protest as a layman against the breaking of contracts by this Clause.


There are two comments I wish to make. The pretence the Minister gave us for this Amendment does not hold water at all. He told us that it was to protect the tenant against bearing the burden of the tax. It cannot have that effect because, in actual fact, the landlord would put the burden of the Land Value Tax on the tenant by increasing the rent, and would thereby evade the intention of the Amendment. Secondly, it might clearly be to the interest of both landlord and tenant to contract out of the burden primarily imposed upon the landlord. There is no certainty at all as to the continuing burden of this site value tax. It may vary at the quinquennium, or the actual scale of the tax may be increased, and so it may be to the interest of both to fix a stable rent which does not vary at all. If a low rent is fixed, it may be to the interest of a tenant that he should bear the burden of the tax which is variable. Liberty of contract is to the interest of both sides, and the defence which the hon. Gentleman has set up has no bearing on the subject.


When lawyers fall out, there is a chance of honest men coming by their own. In this ease, the hon. and learned Member has just told us that landlords can evade their responsibility to the State with the connivance of the tenant, and that they can enter into bargains behind the back of the State for the purpose of evading their responsibility. That is really what these speeches mean. An Act of Parliament is about to be carried, and in the meantime bargains can be made to evade it. That proposal comes from a party which is supposed to represent the gentlemen of England, who are full of morality and money. As far as we are concerned, it is fair that, if the land belongs to the people who claim to own it, then they should not put their responsibilities on those who rent the land from them. That is the attitude of the party opposite. The business man or the farmer who rent from a landlord will have the burden shifted on their shoulders. The landlord, through his mouthpiece in this House, says, "If you will only enter into a bargain with me, we will dodge the Government." That is the speech of an expert in the law. Thank God I am not a lawyer! That is the kind of morality which comes from the benches opposite. The worker cannot dodge the tax. He has to pay the bill every time and, when the landlord comes round for the rent every Monday morning, there is no question who is responsible. He cannot dodge it at all yet the clever people opposite, whatever Government may be in office, are able through manipulating the machinery so to rig it up that Phil Garlic pays the tax. We are not clever enough to understand their legal chicanery, but we can see a hole in a ladder as quickly as anyone. As far as we are concerned, all these attempts to dodge taxation do not butter any parsnips. This attempt to dodge taxation is not worthy of those who claim to represent the honour of Britain.


I desire, as one of the class to which the hon. Member has just referred, the class of lawyers, to support the Amendment—


Hear, hear! There are some honest lawyers left.


There can be no doubt that, in matters of this kind, lessees or tenants require protection very vitally. Anyone who has had to do with the drafting of leases realises that in most cases the lessee is very largely at the mercy of the lessor. In a large number of cases, where a large estate is let out on leases, the lessee is invariably told by the agent or by the solicitor who acts for the lessor, "This is common form. This is the way all the leases are drawn up and, if you object to it, you do not get the lease." Let me remind the Committee of the type of Clause which is introduced into those leases. A tenant or lessee enters into, a covenant of this kind "To pay and discharge in addition to the rent all rates, taxes, duties and assessments other than tithe rent charge, and landlord's property tax but including all charges whatsoever whether parliamentary, parochial or of any other description which may occur during the said term imposed on the premises or the landlord or the tenant in respect thereof." Under this Clause, which exists in 99 per cent. of the leases granted, unless the tenant has the protection afforded by Clause 21 of this Bill, he will be at the mercy of the landlord who will pass over

to him the tax imposed under this Bill. I therefore support the Amendment.


I rise only because I want to express a suspicion which is in my mind, that these two words may have something to do with the discussion which proceeded yesterday. That is all I wish to say.

Amendment agreed to.

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

The Committee divided: Ayes, 271; Noes, 177.

Division No. 317.] AYES. [7.14 p.m.
Adamson, Rt. Hon. W. (Fife, West) Evans, Capt. Ernest (Welsh Univer.) Law, Albert (Bolton)
Adamson, W. M. (Staff., Cannock) Foot, Isaac Law, A. (Rossendale)
Addison, Rt. Hon. Dr. Christopher Freeman, Peter Lawrence, Susan
Altchison, Rt. Hon. Craigle M. Gardner, B. W. (West Ham, Upton) Lawrie, Hugh Hartley (Stalybridge)
Alexander, Rt. Hon. A. V. (Hillsbro') Gardner, J. P. (Hammersmith, N.) Lawson, John James
Alpass, J. H. George, Major G. Lloyd (Pembroke) Lawther, W. (Barnard Castle)
Ammon, Charles George George, Megan Lloyd (Anglesea) Leach, W.
Angell, Sir Norman Gill, T. H. Lee, Frank (Derby, NE.)
Arnott, John Gillett, George M. Lee, Jennie (Lanark, Northern)
Aske, Sir Robert Glassey, A. E. Lees, J.
Attlee, Clement Richard Gossling, A. G. Leonard, W.
Ayles, walter Gould, F. Lloyd, C. Ellis
Baker, John (Wolverhampton, Bilston) Graham, D. M. (Lanark, Hamilton) Logan, David Gilbert
Baldwin, Oliver (Dudley) Graham, Rt. Hon. Wm. (Edin., Cent.) Longbottom, A. W.
Barnes, Alfred John Gray, Mliner Longden, F.
Barr, James Grenfell, D. R. (Glamorgan) Lovat-Fraser, J. A.
Benn, Rt. Hon. Wedgwood Griffith, F. Kingsley (Middlesbro' W.) Lunn, William
Bennett, Sir E. N. (Cardiff, Central) Griffiths, T. (Monmouth, Pontypool) Macdonald, Gordon (Ince)
Bennett, William (Battersea, South) Groves, Thomas E. Mac Donald, Rt. Hon. J. R. (Seaham)
Benson, G. Grundy, Thomas W. Mac Donald, Malcolm (Bassetlaw)
Bevan, Aneurin (Ebbw Vale) Hall, G. H. (Merthyr Tydvil) McElwee, A.
Bondfield, Rt. Hon. Margaret Hall, J. H. (Whitechapel) McEntee, V. L.
Bowen, J. W. Hall, Capt. W. G. (Portsmouth, C.) McGovern, J. (Glasgow, Shettleston)
Bowerman, Rt. Hon. Charles W. Hamilton, Sir R. (Orkney & Zetland) MacLaren, Andrew
Broad, Francis Alfred Harbord, A. Malone, C. L'Estrange (N'thampton)
Brockway, A. Fenner Hardie, David (Rutherglen) Manning, E. L.
Bromfield, William Hardie, G. D. (Springburn) Mansfield, W.
Bromley, J. Harris, Percy A. March, S.
Brooke, W. Hastings, Dr. Somerville Marcus, M.
Brothers, M. Hayes, John Henry Markham, S. F.
Brown, C. W. E. (Notts, Mansfield) Healy, Cahir Marley, J.
Brown, Ernest (Leith) Henderson, Rt. Hon. A. (Burnley) Marshall, Fred
Buchanan, G. Henderson, Arthur, Junr. (Cardiff, S.) Mathers, George
Burgess, F. G. Henderson, Thomas (Glasgow) Matters, L. W.
Buxton, C. R. (Yorks. W. R. Elland) Henderson, W. W. (Middx., Enfield) Maxton, James
Caine, Hall-, Derwent Herriotts, J. Messer, Fred
Cameron, A. G. Hirst, G. H. (York W. R. Wentworth) Middleton, G.
Cape, Thomas Hirst, W. (Bradford, South) Mills, J. E.
Carter, W. (St. Pancras, S. W.) Hoffman, P. C. Milner, Major J.
Chater, Daniel Hollins, A. Montague, Frederick
Church, Major A. G. Hudson, James H. (Huddersfield) Morgan, Dr. H. B.
Clarke, J. S. Hunter, Dr. Joseph Morley, Ralph
Cluse, W. S. Isaacs, George Morrison, Rt. Hon. H. (Hackney, S.)
Clynes, Rt. Hon. John R. Jenkins, Sir William Mort, D. L.
Cocks, Frederick Seymour John, William (Rhondda, West) Muff, G.
Cove, William G. Johnston, Rt. Hon. Thomas Muggeridgs, H. T.
Cripps, Sir Stafford Jones, Llewellyn-, F. Murnin, Hugh
Daggar, George Jones, Henry Haydn (Merioneth) Newman, Sir R. H. S. D. L. (Exeter)
Dalton, Hugh Jones, J. J. (West Horn, Silvertown) Noel Baker, P. J.
Davies, E. C. (Montgomery) Jones, Rt. Hon. Lelf (Camborne) Noel-Buxton. Baroness (Norfolk, N.)
Davies, D. L. (Pontypridd) Jowett, Rt. Hon. F. W. Oldfield, J. R.
Davies, Rhys John (Westhoughton) Jowitt, Rt. Hon. Sir W. A. (Preston) Oliver, George Harold (Ilkeston)
Day, Harry Kedward, R. M. (Kent, Ashford) Oliver, P. M. (Man., Blackley)
Denman, Hon. R. D. Kelly, W. T. Owen, Major G. (Carnarvon)
Dukes, C. Kennedy, Rt. Hon. Thomas Palin, John Henry
Duncan, Charles Kenworthy, Lt.-Com. Hon. Joseph M. Paling, Wilfrid
Ede, James Chuter Kirkwood, D. Palmer, E. T.
Edmunds, J. E. Knight, Holford Parkinson, John Allen (Wigan)
Edwards, C. (Monmouth, Bedwellty) Lang, Gordon Perry, S. F.
Edwards, E. (Morpeth) Lansbury, Rt. Hon. George Pethick-Lewrence, F. W.
Egan, W. H. Lathan, G. (Sheffield, Park) Phillips, Dr. Marlon
Picton-Turbervill, Edith Shield, George William Turner, Sir Ben
Pole, Major O. G. Shillaker, J. F. Vaughan, David
Potts, John S. Short, Alfred (Wednesbury) Viant, S. P.
Price, M. P. Simmons, C. J. Walkden, A. G.
Pybus, Percy John Simon, E. D. (Manch'ter. Withington) Walker, J.
Ouibell, D. J. K. Sinclair, Sir A. (Caithness) Wallace, H. W.
Ramsay, T. B. Wilson Sinkinson, George Watkins, F. C.
Rathbone, Eleanor Sitch, Charles H. Watson, W. M. (Dunfermline).
Raynes, W. R. Smith, Ben (Bermondsey, Rotherhithe) Watts-Morgan, Lt.-Col. D. (Rhondda)
Richards, R. Smith, Frank (Nuneaton) Wedgwood, Rt. Hon. Josiah
Richardson, R. (Houghton-le-Spring) Smith, Lees-, Rt. Hon. H. B. (Keighley) Wellock, Wilfred
Riley, Ben (Dewsbury) Smith, Rennie (Penistone) Weish, James (Paisley)
Riley, F. F. (Stockton-on-Tees) Smith, Tom (Pontefract) West, F. R.
Ritson, J. Smith, W. R. (Norwich) Westwood, Joseph
Roberts, Rt. Hon. F. O. (W. Bromwich) Snowden, Rt. Hon. Philip Whiteley, Wilfrid (Birm., Ladywood)
Romeril, H. G. Snowden, Thomas (Accrington) Whiteley, William (Blaydon)
Rosbotham, D. t. T. Sorensen, R. Wilkinson, Elien C.
Rowson, Guy Stamford, Thomas W. Williams, David (Swansea, East)
Russell, Richard John (Eddisbury) Stephen, Campbell Williams, E. J. (Ogmore)
Salter, Dr. Alfred Strauss, G. R. Williams, Dr. J. H. (Llanelly)
Samuel, Rt. Hon. Sir H. (Darwen) Sullivan, J. Williams, T. (York, Don Valley)
Samuel, H. walter (Swansea, West) Sutton, J. E. Wilson, C. H. (Sheffield, Attercliffe)
Sanders, W. S. Taylor, R. A. (Lincoln) Wilson, J. (Oldham)
Sandham, E. Taylor, W. B. (Norfolk, S. W.) Wilson, R. J. (Jarrow)
Sawyer, G. F. Thorne, W. (West Ham, Plaistow) Winterten, G. E.(Leicester, Loughb'gh)
Scott, James Tillett, Ben Wise, E. F.
Sexton, Sir James Tinker, John Joseph Wood, Major McKenzie (Banff)
Shakespeare, Geoffrey H. Toole, Joseph Young, R. S. (Islington, North)
Shepherd, Arthur Lewis Tout, W. J.
Sherwood, G. H. Townend, A. E. TELLERS FOR THE AYES.—
Mr. Thurtle and Mr. Charleton.
Acland-Troyte, Lieut.-Colonel. Croom-Johnson, R. P. Leighton, Major B. E. P.
Ainsworth, Lieut.-Col. Charles Culverwell, C. T. (Bristol, West) Lewis, Oswald (Colchester)
Albery, Irving James Cunliffe-Lister, Rt. Hon. Sir Philip Little, Graham-, Sir Ernest
Allen, Lt.-Col. Sir William (Armagh) Dalkeith, Earl of Llewellin, Major J. J.
Amery, Rt. Hon. Leopold C. M. S. Dalrymple-White, Lt.-Col. Sir Godfrey Locker- Lampson, Rt. Hon. Godfrey
Astor, Viscountess Davidson, Rt. Hon. J. (Hertford) Lockwood, Captain J. H.
Atholl, Duchess of Davies Maj. Geo. F.(Somerset, Yeovil) Long, Major Hon. Eric
Atkinson, C. Davison, Sir W. H. (Kensington, S.) McConnell, Sir Joseph
Baldwin, Rt. Hon. Stanley (Bewdley) Dawson, Sir Philip Macdonald, Capt. P. D. (I. of W.)
Balfour, George (Hampstead) Despencer-Robertson, Major J. A. F. Macquisten, F. A.
Balniel, Lord Dugdale, Capt. T. L. Maitland, A. (Kent, Faversham)
Bellairs, Commander Carlyon Eden, Captain Anthony Margesson, Captain H. D.
Betterton, Sir Henry B. Elliot, Major walter E. Marjoribanks, Edward
Bevan, S. J. (Holborn) Erskine, Lord (Somerset, Weston-s.-M.) Meller, R. J.
Birchall, Major Sir John Dearman Everard, W. Lindsay Merriman, Sir F. Boyd
Boothby, R. J. G. Falle, Sir Bertram G. Milne, Wardlaw-, J. S.
Bourne, Captain Robert Croft Ferguson, Sir John Mitchell, Sir W. Lane (Streatham)
Bowater, Col. Sir T. Vansittart Fleiden, E. B. Monsell, Eyres, Com. Rt. Hon. Sir B.
Bowyer, Captain Sir George E. W. Ford, Sir P. J. Morrison, W. S. (Glos., Cirencester)
Bracken, B. Forestier-Walker, Sir L. Muirhead, A. J.
Braithwaite, Major A. N. Fremantle, Lieut.-Colonel Francis E. Newton, Sir D. G. C. (Cambridge)
Briscoe, Richard George Galbraith, J. F. W. Nicholson, Col. Rt. Hn. W. G.(Ptrsf'ld)
Broadbent, Colonel J. Ganzonl, Sir John Oman, Sir Charles William C.
Brown, Brig.-Gen. H. C. (Berks, Newb'y) Gault, Lieut.-Col. A. Hamilton O'Neill, Sir H.
Buchan, John Gilmour, Lt.-Col. Rt. Hon. Sir John Ormsby-Gore, Rt. Hon. William
Buchan-Hepburn, P. G. T. Gower, Sir Robert Percy, Lord Eustace (Hastings)
Bullock, Captain Malcolm Grattan-Doyle, Sir N. Perkins, W. R. D.
Butler, R. A. Grenfell, Edward C. (City of London) Peto, Sir Bas[...] E. (Devon, Barnstaple)
Cadogan, Major Hon. Edward Gritten, W. G. Howard Pownall, Sir Assheton
Campbell, E. T. Guinness, Rt. Hon. walter E. Ramsbotham, H.
Carver, Major W H. Gunston, Captain D. W. Remer, John R.
Castle Stewart, Earl of Hall, Lieut.-Col. Sir F. (Dulwich) Reynolds, Col. Sir James
Cayzer, Sir C. (Chester, City) Hamilton, Sir George (Ilford) Richardson, Sir P. W. (Sur'y, Ch'te'y)
Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.) Hartington, Marquess of Roberts, Sir Samuel (Ecclesall)
Chadwick, Capt. Sir Robert Burton Haslam, Henry C. Rodd, Rt. Hon. Sir James Rennell
Chamberlain, Rt. Hn. Sir J. A. (Birm., W.) Heneage, Lieut.-Colonel Arthur P. Russell, Alexander West (Tynemouth)
Chamberlain, Rt. Hon. N. (Edgbaston) Herbert, Sir Dennis (Hertford) Salmon, Major I.
Chapman, Sir S. Hoare, Lt.-Col. Rt. Hon. Sir S. J. G. Samuel, A. M. (Surrey, Farnham)
Christie, J. A. Home, Rt. Hon. Sir Robert S. Samuel, Samuel (W'dsworth, Putney)
Clydesdale, Marquess of Howard-Bury, Colonel C. K. Sandeman, Sir N. Stewart
Cobb, Sir Cyril Hudson, Capt. A. U. M. (Hackney. N.) Sassoon, Rt. Hon. Sir Philip A. G. D.
Cohen, Major J. Brunei Hunter-Weston, Lt.-Gen. Sir Aylmer Savery, S. S.
Colfox, Major William Philip Hurd, Percy A. Sheppersen, Sir Ernest Whittome
Colman, N. C. O. Hurst, Sir Gerald B. Skelton, A. N.
Colville, Major D. J. Hutchison, Maj. Gen. Sir R. Smith, Louis W. (Sheffield, Hallam)
Cooper, A. Duff Inskip, Sir Thomas Smith, R. W. (Aberd'n & Kine'dine, C.)
Courthope, Colonel Sir G. L. Jones, Sir G. W. H. (Stoke New'gton) Smith, Carington. Neville W.
Cowan, D. M. Lamb, Sir J. Q. Smithers, Waldron
Cranborne, Viscount Lane Fox, Col. Rt. Hon. George R. Somerville, D. G. (Willesden, East)
Crichton-Stuart, Lord C. Latham, H. P. (Scarboro' & Whitby) Southby, Commander A. R. J.
Croft, Brigadier-General Sir H. Law, Sir Alfred (Derby, High Peak) Spender-Clay, Colonel H.
Stanley, Hon. O. (Westmorland) Tryon, Rt. Hon. George Clement Windsor-Clive, Lieut.-Colonel George
Steel-Maitland, Rt. Hon. Sir Arthur Vaughan-Morgan, Sir Kenyon Winterton, Rt. Hon. Earl
Sueter, Rear-Admiral M. F. Wallace, Capt. P. E. (Hornsey) Withers, Sir John James
Taylor, Vice-Admiral E. A. Ward, Lieut.-Col. Sir A. Lambert Womersley, W. J.
Thomas, Major L. B. (King's Norton) Warrender, Sir Victor Wood, Rt. Hon. Sir Kingsley
Thompson, Luke Waterhouse, Captain Charles Young, Rt. Hon. Sir Hilton
Thomson, Sir F. Wayland, Sir William A.
Thomson, Mitchell-, Rt. Hon. Sir W. Wells, Sydney R. TELLERS FOR THE NOES—
Train, J. Williams, Charles (Devon, Torquay) Sir George Penny and Major the Marquess of Titchfield.