TAX ON LAND VALUES.

HC Deb 07 May 1931 vol 252 cc659-747

Resolution reported, That there shall be charged for the financial year ending the thirty-first day of March, nineteen hundred and thirty-four, and for every subsequent financial year, a tax at the rate of one penny for each pound of the land value of every unit of land in Great Britain.

Resolution read a Second time.

Sir HENRY BETTERTON

I beg to move, in line 3, after the word "value," to insert the words: excluding such value as may have accrued by reason of any improvements made by the owner thereof or any of his predecessors in title.

Mr. SPEAKER

I shall have to ask the House to confine itself to the actual question raised in the Amendment. If any hon. Member wants to raise the wider issue of the taxation of land values he must do so when I put the question, "That this House doth agree with the Committee in the said Resolution."

Sir H. BETTERTON

I am much obliged, Mr. Speaker, for the direction you have given us, and, as far as I am concerned, I shall confine myself quite strictly to the Amendment, and beyond pointing out that the only alternative to the acceptance of this Amendment is a policy of nationalisation, I shall adhere most strictly to your ruling. We are, of course, in the same difficulty in regard to this Amendment, as we have been during the whole of the Debates of the last three days. We have not the Finance Bill before us and, therefore, do not know the precise terms of the Bill which is to be founded on this Resolution. Nor have we had the help of a White Paper which in normal circumstances would have shown exactly the intentions of the Government. On the other hand, we have had during the last three days, particularly from the Solicitor-General whom I must warmly congratulate, a series of explanations which sometimes were obscure and often contradictory, and I submit that we are therefore entitled to a plain answer to a plain question, and that is whether, in the view of the Government, improvements as such should or should not be taxed?

Years ago, before I became a Member of the. House, a slogan which was very prevalent was "Untax improvements made by man." So far as I can see, this Resolution and the Bill propose to tax improvements which, quite clearly, are not the gift of the Creator, but are the results of man's work, and paid for by wages. This Amendment, therefore, in my view tests the sincerity of the Government when they say that their object is to secure to the community its share of the site value of land. If that is the object, then they have no alternative but to accept the Amendment. If their contention is something else, not merely to tax site values but also to tax improvements which have been clearly made by man, then all those references to the gifts of the Creator to man become rather nauseating cant. May I remind the House of the declaration of the intention of the Government as contained in the Gracious Speech from the Throne at the beginning of this Parliament? On the face of it it appears perfectly clear. It was: My Ministers propose to introduce legislation to secure for the community its share in the site value of land. The burden of the speech of the Chancellor of the Exchequer, and of the other speeches we have heard from the other side of the House during these Debates, including the speech of the Solicitor- General himself, in effect was that where a value is increased by the action of the community that increased value should be taxed. That is the old argument, and no one knows it better than the Chancellor of the Exchequer himself. It was the subject of controversy 20 years ago, and has been to some extent ever since. The Chancellor of the Exchequer in support of his argument referred to arterial roads and the accretion of site value of land abutting on arterial roads by reason of the action of the community. He referred also to the tubes, and gave illustrations from Liverpool and the London County Council development at Becontree. I wish to put to the House this perfectly simple proposition. If the community is to take its share in the site value of land increased by the action of the community as a whole, then as a necessary corollary, and as a simple act of elementary justice, the individual should be entitled to retain the fruits of his legitimate expenditure, which expenditure has constituted and is responsible for the value of the land itself. In other words, the builder or the developer shall not be taxed upon the improvements which he himself has moved. That is putting in the simplest possible language, and in the shortest possible way, the point I desire to bring before the House.

It would be easy to provide many illustrations of the point I have put in this short way, but I know there are many hon. Members who want to take part in the Debate, and I do not propose to occupy the time of the House for many moments. There is, however, a case which I think illustrates the point I desire to make as well as, perhaps better than, any other, and I give it for the one reason that I happen myself to know the place, as I rent a house not far from the site in question, and therefore can speak with some local knowledge of the facts. I refer to the Welwyn Garden City. When I first knew Welwyn, the site of the Welwyn Garden City was agricultural land, and that not of very high quality. It was purchased some years ago at a price which I have ascertained ranged round about £30 an acre—the highest I think was £35 an acre—and it represented a fair agricultural value of the land purchased for the purposes of development. The purchasers bought a considerable estate, and they have spent something like £400,000 upon it. They have built houses and roads, and sewers and curbs; and this large plot is now in the process of development. Their object is to develop it. There is no question of holding the land up, because the owners are only too ready that bouses should be built and that the development, which is always of course in advance of the actual buildings, should proceed as rapidly as possible.

Another object is, of course, to attract to that very beautiful and picturesque hit of country the building not only of houses, but of factories. I have always understood that one of the most effective ways of reducing the pressure in the towns is to induce owners of factories to build them away from the large towns, in places where the workers in the factories can carry on their business under healthy and charming surroundings. I should have thought that it would be the object of any Government to encourage such a project as this and to place no unnecessary obstacle in the path of their development. The right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) told us in his speech the other day when, with engaging candour, he described himself as a reprobate landlord, that If they turn up the Land Valuation Bill of last year they will see what he is proposing now. It was then proposed to exempt agricultural land and minerals and, therefore, I am justified in taking that Bill as the basis of what is going to be proposed when the Finance Bill comes along. Perhaps we shall hear later on whether I am right or wrong in that assumption."—[OFFICIAL REPORT, 4th May, 1931; col. 83, Vol. 252.] According to my information, if the Valuation Bill is to be the basis of the proposals in the Finance Bill, the effect will be that the developments I have described at Welwyn Garden City will be subject to this tax, and the effect upon that development will be absolutely disastrous. The only answer I have heard to the point I am making now—and it was only made rather grudgingly and by way of an aside—was that given by the hon. Member for Burslem (Mr. MacLaren). He said: If any private individual believes that he can create, by his own individual effort, communal value in land, then why does he not go to the Sahara Desert? Why does he not go to the top of Ben Nevis?"—[OFFICIAL REPORT, 6th May, 1931; col. 422, Vol. 252.] Was that an answer? May I put this to the hon. Member for Burslem? If he went into the Sahara Desert and irrigated it, and if he induced his friends to go there with him, would he then expect, as a result of his good services and his enterprise, to be taxed by penal taxation as a recompense for the services he had rendered in irrigating the Sahara Desert? Can it be suggested that the proposal to tax improvements in the circumstances I have described has anything to do with obtaining for the community its share in the site value in land or giving back to the community what the Creator originally gave it?

8.0 p.m.

Can it be suggested, after the facts I have mentioned and in the circumstances I have described, that there is any question at all of taxiing what is the gift of the Deity and what is not the work of man? There are many other cases very similar to the one I have described and which I could give to the House, but the illustration I have given is sufficient to meet the point. To tax improvements and developments such as I have described is not merely unjust and unfair, but is in the highest degree contrary to public policy. I thought in my innocence that the view which I am now expressing was the view both of the Labour and the Liberal parties. But last night the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) recommended us to read the Bill which was introduced by the right hon. and learned Gentleman the Member for Spen Valley (Sir J. Simon) in 1924. This is what he said: May I commend to the Chancellor of the Exchequer, if he has not already determined on the draft of his Bill, the Bill which was introduced by the right hon. and learned Member for Spen Valley (Sir J. Simon) in 1924. It is a Bill for the Rating of Land Values (No. 2) Bill. He will find there a very simple, very direct, and a very unequivocal definition of land values which are to be the basis of taxation. I earnestly commend the Chancellor of the Exchequer and the Attorney-General, who I have no doubt will be engaged in the drafting of this Measure, to spend a few minutes in studying the draft of the definition of land values suggested by the right hon. and learned Member for Spen Valley as the basis of valuation.—[OFFICIAL REPORT, 6th May, 1931; col. 437, Vol. 262.] When the right hon. Gentleman the Member for Carnarvon Boroughs was speaking, I went out and got this Bill from the Library. I found that this Bill was ordered to be brought in, and the names upon it are Sir John Simon—I am leaving out the names of hon. Members who are not now in the House—Captain Wedgwood Benn, Mr. Jowett, Mr. Duncan Millar, Mr. Graham White, and Mr. Ernest Simon. I can quite well appreciate the spirit of benevolence which induced the right hon. Gentleman the Member for Carnarvon Boroughs to call our attention to a Bill brought in by the right hon. and learned Gentleman the Member for Spen Valley. In this Bill, Section 5 (3) says: The said Commissioners shall proceed forthwith to make a valuation of the capital and annual value of each hereditament. When we look at the definition which is commended by the right hon. Gentleman to the Government as worthy of imitation, we find these words: The expression 'capital land value' means the amount of the fee simple which the hereditament may be expected to realise if sold at the time of the valuation by a willing seller in the open market "— Mark those words— apart from all buildings or improvements. The words which I am proposing in my Amendment are: excluding 6uch value as may have accrued by reason of any improvements made by the owner thereof or any of his predecessors in title. What is the attitude to-day of those eminent and distinguished members of the Liberal party who supported that Bill in 1924? What, for instance, is the view of the hon. Member for Withington (Mr. E. D. Simon), whose enthusiasm in the cause of housing and housing development is admired in all quarters of the House? What is the view of the hon. Gentleman the Member for East Fife (Mr. Millar), who spoke last night, and of the other Liberal Members who supported the Bill in 1924? And what, I ask with even greater emphasis, is the view of the Attorney-General? In 1924, by backing this Bill, he said that in his view improvements should be excluded. The Attorney-General cannot be always on every point improvising his life-long convictions. Are we not entitled to know if he has changed his mind, and, if so, why he has changed his mind? If the object of the Government, therefore, is merely to tax site values, as indicated and stated in the King's Speech— to tax values which have been increased by the action of the community —then they should accept this Amendment and exclude improvements'. I am precluded from going into the merits of the alternative, which is nationalisation, and I do not intend to do so, but I would point out that if their object is not what was stated in the King's Speech, and if it was something quite different; if their object is the object which was clearly and bluntly put by the Chancellor of the Exchequer last Monday— By this Measure we assert the right of a community to the ownership of land."—[OFFICIAL REPORT. 4th May, 1931; col. 48, Vol. 252.] —then we are entitled to say that this pretence that the object is merely to tax the increased site value, is a pretence and nothing more. That that alternative to the present proposal is widely held is notorious. The hon. Member for Burslem said in 1926, and it made a great impression on my mind, that he looked upon private ownership of land as nothing short of immoral; that it was, indeed, a crime against the moral law for any human being to take as private property that which was the common gift of God to the whole of mankind. If it be the intention of the Government to expropriate the owners of land by a tax such as is now proposed, I want to ask what is the protection which we were told on Monday was to be afforded to the owners of the plots of a site value of £120 and under?

Mr. DEPUTY - SPEAKER (Mr. Dunnico)

I must be careful not to allow this to develop into a general discussion. This matter does not arise on this Amendment, but it could be discussed on the Motion, "That this House doth agree with the Committee in the said Resolution." I think we must restrict the Debate on this Amendment exclusively to what is contained in the Amendment.

Sir H. BETTERTON

I have no intention of transgressing the Ruling which was given by Mr. Speaker, and I shall content myself with saying that, if that be the policy and object of the Government, then the protection which was supposed to be granted to the small freeholders of £120 and under, is gone. We shall, of course, have other opportunities under more satisfactory conditions when the Bill is before us, and we know exactly what it contains, of discussing it. I will conclude by saying that, so far as I am concerned, I am perfectly certain that if this Amendment is not accepted, it should be clear that the object of the Government will meet with great opposition not only from the large landowners who may object to the Government's proposals, but from the hundreds and hundreds of thousands who have bought the land upon which they live and upon which they work, and who will feel that it is without justification to tax them for the soil upon which they live.

Sir HILTON YOUNG

The purpose of the Amendment, which has been so clearly expounded to the House by my hon. Friend the Member for Rushcliffe (Sir H. Betterton), is to seek to put the House in the position of knowing the broad lines of the basis of the tax which it is asked to pass. The truth is that, up to the present time, we have been in so much doubt upon the broadest aspects of what that tax is, that there is a danger of a very profound misconception on the part of a large body of opinion in the House. We do not know whether this is the sort of tax that appeals to the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood), a tax purely upon site values, or whether it is to be frankly a tax upon general values in land, of a much wider and less discriminating sort. It is clear that the Government cannot oppose the Amendment without at least telling the House what they mean. If they accept the Amendment, it is clear that it is to be, in intention, a tax upon site values which will appeal to the right hon. and gallant Member and his friends. If they reject this Amendment it is equally clear that the pretence about its not being a tax upon industry and capital, and not being to the detriment of housing, completely falls to the ground.

In order to try to ascertain what the intentions of the Government are, we naturally exercise a very careful scrutiny upon the sayings of the responsible Ministers in describing the tax, but I confess that it still leaves me in some doubt. I suppose the most authoritative exponent in recent times was the Solicitor-General, who spoke yesterday. In the Solicitor-General's first and very able contribution to this difficult subject we find a pronouncement which is certainly very remarkable. He gives us the basis of the justification in equity of the tax. He says: The reason for the putting of the tax on the land value at the moment, in whosoever hands it may be, is that it is held that the community have an interest in all the land … It is by reason of the continued expenditure of the community that that value "— that is, the value of the land— is preserved to the owner from day to day.… It is for these reasons that the tax is a fair tax; it is a mere acknowledgment by the owner of the land, a gift by him in exchange for a very great benefit which he is hourly receiving from the community."—[OFFICIAI REPORT, 6th May, 1931; cols. 521–2, Vol. 252.] They say that a new broom sweeps clean. Certainly in this case the new broom has swept very clean. He has swept away the whole of the argument in favour of a tax on site values. The old argument for a tax on site values—and I thought that it had considerable validity—was justified because it would resume into the hands of the community from one who held it the site value created by the community. That is not the Solicitor-General's justification. With his fresh mind coming to this subject he has made, as fresh minds often do, a most important contribution. He has rediscovered the principle which lies at the basis of all taxation, and it has occurred to him that that applies to this tax as much as to any other. So it does. Let us look at the Solicitor-General's words again: It is for these reasons that the tax is a fair tax; it is a mere acknowledgment by the owner of the land, a gift by him in exchange for a very great benefit which he is hourly receiving from the community. All property in the world is due to the action and the expenditure of the community, and it is because that is so that taxes are looked upon, according to the consensus of mankind, as a fair contribution to the community. Let us look at the Solicitor-General's words again: It is by reason of the continued expenditure of the community that that value (the value of the land) is preserved to the owner from day to day."—[OFFICIAL REPORT, 6th May, 1931; col. 521, Vol. 252.] It is equally true to say that it is by reason of the continued expenditure of the community that the value of the buildings on the land is preserved to the owner from day to day. If it were not for the fact that the community spends money on the maintenance of roads, light, and in keeping the country peaceful through the police, the Army and the Navy, what would be the value of any buildings upon any land? Therefore, when we analyse this remarkable contribution of the Solicitor-General towards the theory of taxation we find that his justification is a justification that would apply just as well to a tax upon the buildings as it would to a tax upon the land.

I cannot help thinking that the Solicitor-General would have taken ground easier for him to defend if instead of these experiments in the restatement of not unfamiliar general principles he had boldly ranked himself with the Chancellor of the Exchequer, who holds the manful theory, apparently, that it is a crime to hold land and that a tax upon land is justified as a punishment or as a fine upon the criminal. If that be so, as the hon. Member for Rushcliffe (Sir H. Betterton) has explained by a most careful analysis, the whole basis in equity of a tax upon site values finds no justification in the scheme before the House. I am inclined to suggest, although I confess there is still great doubt until the Financial Secretary to the Treasury tells us what the intention of the Government is, that behind this dubious phrase of land values there is the intention of the Government not to exempt the improvements on the land but to tax improved values.

I do not think it is possible to have a clear view upon this matter unless we realise that there are at least four values of the land concerned. I am very much afraid of the difficulties of nomenclature, because everyone calls each of these values by a different name. We know the thing, but there is great confusion owing to the difference in names. The values are, first, the agricultural value, or what the Chancellor of the Exchequer calls the cultivation value. That is the value of the land for the purpose of cultivation, sites that could be used for no other purpose. The next value that we have to distinguish is the unimproved site value, that is, the value of the land for the purpose for which it would fetch the highest value in the market in its prairie state, stripped of any improvements due to the expenditure of capital or the work of man. That is an important value for the purpose of the scientific basis of a site values tax. Next, there is the improved site value, that is, the value of the land for the most lucrative purpose for which it can be sold in the market and in its existing state as regards improvements made by main roads, and so on. That I suspect to be what the Government call the land value. We are entitled to a clear statement on the subject as to whether the Government by land value mean the improved or the unimproved site value.

Lastly, there is the full value, that is, the value of the land with its improvements and the building upon it. A point which I fear may very often escape the attention of one who does not acquaint himself fully with the facts of the case is this, that the difference between the improved and the improved site value is very often due not to the work of the community, not to expenditure by the community, not to the expenditure of public money, but to private enterprise and the investment of private capital. That being so, is it not perfectly clear to anyone who tries to get a clear definition that if the Government intend to tax the improved site value and not the unimproved site value they will be imposing a direct burden of taxation upon the investment of capital and upon enterprise? If that be so, I invite the right hon. and gallant Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood) to range himself with us in an attack upon this ridiculous falsification of all the beautiful arguments of his school of site value taxers.

Let me take a single instance to make clear what I mean. I would like to elaborate the illustration given by the hon. Gentleman the Member for Rushcliffe (Sir H. Betterton). I ask the House to consider, first, the case of the very best sort of undertaker, who is going to develop land for the benefit of the community—the sort of undertaker whom the community most desires to encourage, the one man who does all that we most desire to see done in the interest of the maintenance of the health of the country and the preservation of its amenities. I ask the House to consider the case of a private enterprise which acquires land in the neighbourhood of a city and proceeds to develop it on the most liberal and advanced lines. It has to lay down branch roads. It may have to do surface drainage. It may have to provide flood prevention works and things of that sort, and, in any case, it must provide branch roads, paths, kerbings and branch sewers. Then, being the model type of developer, it will proceed to spend money on garden plots, public green spaces and, it may be, on benches and fountains and the planting of trees. If the Government reject our Amendment, that will be a declaration on the part of the Government of their intention to put this new tax upon the investment of capital in enterprises of that class. In other words, it will be an expression of an intention on the part of the Government to discourage, precisely, that form of development which is advocated by every advanced and liberal-minded person interested in benefiting the community and preserving the amenities of the country.

Take the other side of the picture. What is the sort of development which we all most deplore? It is the sort of development which is carried out by the speculative and grasping undertaker with no eye for anything except immediate profit, who acquires a plot of land on a new main road—the minimum plot necessary in order to comply with the local building regulations—who takes advantage of the main road, of the main sewer, of the public footpath, of the public lighting, who spends not one penny in the ways I have indicated, but simply plants his building there. If the Government reject our Amendment, it is a declaration of intention on the part of the Government that that man is to escape the tax and is to be given an advantage in comparison with the man who is carrying out decent development in the interests of the community as a whole. In other words, and in a single phrase, if this tax goes through without amendment, we shall have a tax for the promotion of ribbon development.

This House has, I understand, been struggling for some years now to find ways to prevent ribbon development. At any rate, Members of this House have undertaken great efforts to promote schemes—private Bills, public Bills and Measures of all sorts—to secure adequate powers for local authorities and other authorities to prevent that particularly mischievous form of development. Without the reservation which we desire to impart into it, this scheme, if it is to put a tax on improved site value, as it must necessarily do, will strike a deadly blow at all our efforts for the preservation of amenities and the reasonable development of our cities. It will place a heavy fresh burden precisely upon that class of expenditure which is necessary to provide the amenities and conveniences and advantages which are desired, and to prevent that miserable, ugly, unhealthy form of development with which we are all familiar in the neighbourhood of our great cities.

If it had not been for the circumstance that the wording of the original Resolution was dubious—because "land values" we know, means nothing—if it had not been for that remarkable experiment in theoretical justification of this tax by the Solicitor-General which turned out to be nothing but a justification for any and every tax; if it had not been for the vigorous onslaught of the Chancellor of the Exchequer upon the criminals who have been misled by the laws of their land into investing money in that form of property—if it had not been for these things, I would not have supposed it possible that the Government would have had the effrontery to propose to the House in the present condition of the country a scheme which would involve a tax upon the improvement of land. I should not have thought that they would have had the courage to do it in the face of the instructed opinion of those on their own benches who understand the nature of a site value tax. Lastly, I should not have supposed in view of the experience not only of this country, but of all the world, that they would have ventured to propose a form of valuation which we know to be impossible.

The actual difficulties in the way of making a valuation on any other basis but that which would be effected by this Amendment will be too great for any practical administration to overcome. I do not underrate the extreme difficulty of making it on the basis which we now suggest. It is because I think that these theoretical valuations of land are impossible that I have given up any hope of this tax. I am, as I have said, one who still thinks that there is a case of theoretical validity for the tax, but I have learned from bitter experience, and from watching the history of land taxes, that the world in which we live is so imperfect that the theoretical beauties of these schemes cannot be realised. It is too difficult a task for the valuers to find these theoretical valuations. That is not the experience of this country only; it is the experience of that favourite example of the right hon. and gallant Member for Newcastle-under-Lyme, the United States of America. I learn from the works of extremely experienced experts upon valuation that in those States in which an attempt has been made to differentiate between site value and full value—there are a few States where such an attempt has not been made—the result has shown that the inequalities, absurdities, irregularities and anomalies of valuation are greater where it has been attempted to make that differentiation than they are under the old system.

It is not our business to try to help the Government about that matter. We know, as regards any of these valuations, that they are difficult, but with regard to the form of valuation which will have to be effected if this Amendment is not adopted—that, we say, is absolutely impossible and unrealisable in a practical way. The simple point and the point which the Government will have to face is this. Here are the site value taxers telling us that this is not a burden on industry at all, that it has the wonderful merit that industry escapes the burden, that land cannot be removed whatever you do, that the land is always there, and that there is always the same amount for the purposes of the community. That is true, but what we say is also true, that capital can be removed and that there is not always the same amount of capital available for the benefit of the community.

If you could put a tax upon land values only, then that which the land taxers say might be true, but, as a matter of fact, we suspect that what the Government are proposing to do is to put an additional heavy burden upon capital. If they do so, the result will be to drive capital out of housing, to starve development, to substitute for all enlightened forms of development the most unenlightened, and those which we most desire to avoid. The result of the tax, unless this Amendment be accepted, will be to paralyse our efforts for making the country a country which preserves its amenities, and in which it is still possible to live a decent life, and it will impose a heavy burden upon all industry.

Colonel WEDGWOOD

I congratulate most heartily His Majesty's Opposition, not merely on this rapid conversion to really sound methods of taxation, but on the development on those benches, after three days, of protagonists of those sound ideas. I had thought that in this three days' Debate on this question, the loss of Captain Pretyman and Harold Cox was irreparable, but I recognise in the hon. Member for Rushcliffe (Sir H. Betterton) an able successor to these able protagonists. The conversion of the Opposition will, I hope, convert those on these benches who do not yet see the light, so that we may have in future a happy united family on these benches. I would not suggest for a moment that this Amendment has not been put down bona fide and that this is not the real intention of the hon. Member for Rushcliffe. I see that we have here a really refreshing desire to impose this tax on pure unadulterated land values.

I remember that we have had this before. I think by the time that hon. Members opposite have studied the question a little more fully, they will realise that the attack that must necessarily be developed by the old opposition to this scheme must be an attack in the direction of making land values so economically and morally sound, that an actual mundane valuation of that value is quite impossible. We had this Amendment last time. I do not know whether the Government accepted it in this form, because it was only one of a series of Amendments to secure that land valuation should really be of land free from any taint of improvement. We excluded hedges, timber, and fruit trees and bushes. We even excluded the grass on the land, and went on to exclude anything that any predecessor in title had done under the ground. It was a bald-headed and a bald-faced attempt, and it was made so satisfactory and so pure a definition of land values, that valuation failed in consequence. I beg the Government not to be led away by suggestions of this sort, even though put forward in perfect good faith by hon. Members opposite who at last see the light.

One or two points were raised by hon. Members that ought to be corrected. The hon. Member for Rushcliffe kept within the rules of order in a marvellous manner. I congratulate him on that. He dragged in the right hon. Member for Spen Valley (Sir J. Simon), and produced the Bill which was introduced by the right hon. Gentleman two or three years ago to allow local authorities to levy rates on land values. He produced the definition which was advertised by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George), and he proceeded to say that they wanted the definition of the right hon. Member for Spen Valley. He omitted to notice that the definition in that Bill was not the definition that he has put down here. The definition here goes a good deal further. It excludes such value as may have accrued by reason of any improvements made by the owner thereof or any of his predecessors in title. I am afraid that that would cover the value of the improvements without regard to whether those improvements have been exhausted or not. The right hon. Member for Spen Valley left the question of the definition of improvements out, and the hon. Gentleman will be well advised to leave the definition out until we see the Government's Bill and recognise what will be taxed.

The other point made was that we were including buildings in this value. I am certain, however, that buildings will not be included in the land valuation. We have the Bill which the Government introduced last year; there buildings are excluded, and we may be quite certain that buildings will not be in in this valua- tion. The right hon. Member for Seven-oaks (Sir H. Young) seemed to think that if the Government or the local authority ceased to find money for education, policing, roads, lighting and so on, the value of buildings would go down; therefore, he said, taxation was paid at the present time to keep up the value of buildings. That is not so. The value of buildings does not depend in the very least upon the expenditure of Government money on the social services. The expenditure of Government money on those services is reflected directly and solely in the value of land. The value of a building depends, and must depend, upon the cost of replacing that building and upon the cost of producing a similar house elsewhere. That is what regulates the cost of the building, but the value of the site depends directly upon the expenditure of public money. Where a site is built upon, its value is maintained—or increased or decreased perhaps—entirely by the expenditure of public money, and by the demands from the public for the privilege of living on that piece of land.

Imagine two towns—one where the policing is excellent, where the education of the children is first rate, where the streets are well lit and the roads properly maintained; and the other town, with exactly the same population, where the policing is thoroughly bad, the roads are in holes, the water is polluted, and the same amount of money, perhaps, is spent on keeping the town, but spent unwisely by the town council. We know perfectly well that anybody is prepared to pay more for a site in a well-governed town than for a similar site in a badly-governed town. The additional rent he is prepared to pay for the privilege of living or carrying on his business in the well-governed town is an exact measure of the benefits conferred upon the citizens of that well-governed town by the wise expenditure of the public money. Naturally the man is prepared to pay a little more, because he is getting a little more. Indeed, the system of taxation which I and hon. and right hon. Gentlemen opposite have supported is not really a system of taxation at all, but is a system of paying for benefits received. Just as I measure on the meter the gas which I use in my house, and pay for the quantity I use, so here a man pays for the amount of benefit he receives by the expenditure of public money in the rent he pays for the plot of land.

In the last few days we have had nearly all the old saws trotted out. We have had the story of £150 which was invested in land 300 years ago. [Interruption.] We have not yet had the widow and orphan, and we have not yet had the suggestion of a tax on red-headed men, though we shall have it shortly. [Interruption.] The hon. Member for North Paddington (Mr. Bracken) will bring it up. We have not yet had—and I will present this to hon. Members for future use—the cry that this scheme is a base departure from that sound canon of taxation which says that taxation should be levied according to ability to pay! It is a shocking departure from that principle!

Mr. DEPUTY-SPEAKER

The right hon. and gallant Member is going far beyond the terms of the Amendment be-fore the House.

Colonel WEDGWOOD

I apologise. I agree that what I have been saying has been somewhat wide of the mark, and I do not want to give hon. Members opposite the opportunity to go outside the strict letter of the law to-night. The speeches we have heard so far have kept admirably to the point. Hon. Members opposite want to exclude every atom of improvement. I am with them heartily in their desire, I thoroughly approve of their sentiments, of their morals and of their economics, but I beg them to realise that it is not always possible to get absolute perfection in any Act of Parliament. We have to get what is practical and possible, and what the Government are getting here is what is practical. I hope we shall have the whole-hearted support of hon. Members in pressing the Bill forward, with the realisation that though perfection is not attainable we may get the nearest approach to it.

Major HILLS

I listened with the very deepest interest to the speech of the right hon. and gallant Member for New-castle-under-Lyme (Colonel Wedgwood). It took me back 23 years, and if he says that all the old arguments have been brought forward from this side I retort that the arguments on the other side have not changed very much in that interval. Though I listened to him with the greatest interest, he left me completely mystified. On the question of improvements, he asked whether it was intended to confine the valuation to unexhausted improvements. Of course exhausted improvements have no value at all, and would not be taken into account. Then he went on to plead for a definition on which Somerset House can make an efficient valuation. I quite agree—but a valuation of what? Does he or does he not mean to include in the valuation the cost of improvements that have been made to the land by the owner or his predecessor in title? He did not say. All he said was that he wanted a workable valuation. I very much think that the right hon. Gentleman has fallen from grace. For the sake of getting a Bill through he is going to compromise with a principle which he has held as long as I have known him, that taxation should be levied only on the site value of land and should not include improvements made by the owner.

I am afraid that the germ of compromise which emerged from the Liberal benches when the right hon. Gentleman for Carnarvon Boroughs (Mr. Lloyd George) supported the Government in this Resolution, although he had wanted to tax increment value 23 years ago and this Resolution says nothing about increment value, is now spreading to the incorruptible soul of my right hon. and gallant Friend. He did an injustice to himself when he attacked my right hon. Friend the Member for Sevenoaks (Sir H. Young) for saying that taxation is the return made for certain values which the community gives. If I understood him aright he said that all the services which a community gives in the sense of police, sanitation and so forth, inure to the benefit of the site alone. Then he went on to say that the value of a building is the cost of replacement, but the rate at which replacement may be required must come into the calculation. If there is a bad police service and a house is knocked about it has to be replaced more quickly, and the right hon. Member for Seven-oaks was entirely right, and the words used by the Solicitor-General yesterday when he defined what he claimed to be the right of the community to tax land were really only a general statement which applies to all taxation on all classes of property.

I hope that before we go any further the right hon. and gallant Gentleman will ease the minds of those who, though they have disagreed with him, have always respected the convictions which he has held. I have always regarded him as the one bright light in a naughty world. Perhaps his own career has not been benefited by the sincerity of his convictions. He has stood fast m good times and in bad times, and now at last, when the Government propose something which he knows in his heart is wrong, and when we are going to hear, as we shall hear from the Financial Secretary to the Treasury, that the Government intend to tax improvements and to tax capital, he is compromising and is taking something which I never suspected he would take. I would rather see him go down fighting for a principle in which he believes, even though that principle were a wrong principle, than see him compromising with the Mammon of unrighteous. I do not believe that in the end he will profit thereby. So great is the assistance that the right hon. Gentleman might get from the hon. Member for Burslem (Mr. MacLaren) that I believe if they had stood firm they might have converted the Government to their principles, but by giving way and yielding to influences which I should have suspected would not have moved the soul of the right hon. Gentleman the Member for Newcastle-under-Lyme, they have defeated the cause which they have at heart.

9.0 p.m.

Mr. MacLAREN

I must confess that when I looked at this Amendment I concluded that we had on the other side of the House an ingenious and ingenuous generation of gentlemen. As I listened to the discussion on the Amendment I also, like my right hon. and gallant Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood) marvelled at the purity of doctrine which emanated from the benches opposite, and I was a little entertained by the sophistry of their arguments. History goes a long way back, and on looking at this Amendment my mind runs even beyond the time of William the Conqueror. If we begin to make deductions of this kind, there is no telling where we are going to land. Much of what was said by the hon. Member for Rushcliffe (Sir H. Betterton) was if he will not mind my saying so clever padding. The hon. Member asked, if I erected works in the desert and began to plough the sands, would I expect to be compensated? Of course I would, I should not be allowed to go about at large, I should be locked up. This is a point which the hon. Member will have to grasp, that no man is likely to expend any effort or money on any capital development unless the site upon which he is spending the money warrants the undertaking. I would rather pay attention to developments nearer home. I would not be a party in this House to supporting any Government that would bring in a tax upon the value of land if they had at the back of their mind some intention of including within a land value tax some form of tax upon capital or improvements. I would not stand for that. That would be false to the principle for which I have stood for years. Taking the speech of the Chancellor of the Exchequer into account, there is nothing that warrants such a suspicion as far as I know. Therefore, I think it is very encouraging to those who are moving this Amendment to say that when I am demanding a tax on site values, I am not demanding a tax on the improvements upon the land created at the expense of the owner. When we come to the ingenuous suggestion at the tail end of the Amendment dealing with improvements made by the owner thereof or any of his predecessors in title, that is a matter which has been reviewed in years gone by in this House, and there must be some datum line drawn when you come to consider what "predecessors in title" have done to improve the land. In the past it has been suggested that the tax should be levied upon the land, but not upon any improvements made less than 50 years ago. I might have agreed to this Amendment as it stands if it had contained some limitation in regard to the number of years, that is to say, if they had added to the Amendment: Such improvements as have been effected less than 60 or 25 years ago. To leave the period open leaves the proposal quite meaningless, and if I went into the Law Courts with such a defence in front of me, it would reduce the proposition to nonsense, because the person I should be searching for might long since have passed out of existence. I frankly say that I would be willing to accept this Amendment if the hon. Gentleman opposite would put in a line or two providing for a limitation such as I have suggested. If this cannot be done, I must abide by the Government Resolution as it appears on the Paper, and I am as certain as I stand here that the Government will not bring in a Clause or a Valuation Bill which will mislead those of us who have been loyal to the principles in which we firmly believe, that this is a real, honest and definite attempt to segregate from the site value of the land and call upon those who own the site value to contribute in the form of taxation. I think it would be quite unfair for hon. Gentlemen opposite to quote, as has been done by the hon. Member for Rushcliffe (Sir H. Betterton), the definition—with which I heartily agree—in the Rating Bill brought into this House by the right hon. and learned Member for Spen Valley (Sir J. Simon), and to attempt at the same time to say that the wording of this Resolution, if it embodied their Amendment, would be on all fours with the quotation which was read in the House this evening. While some of the older Members of this House become retrospective, and begin to think that their youth is recalled as they listen to the old arguments to which we listened 23 years ago, I can assure them that some of us, who followed the discussions quite as keenly in those days, can notice in this innocent-looking Amendment the same old subtle attempt that Mr. Pretyman and Mr. Trustam Eve used to try to work off years ago. We tell hon. Members opposite to take back this Amendment and try to give it some other turn or twist, some other delightful little phrase, and see if they cannot make it more successful than it will be to-night.

Lieut.-Colonel FREMANTLE

It might be useful if I could contribute some statement with regard to the actual expenses involved in the improvements which we are discussing in connection with this Amendment. We have to consider what we are going to tax. The main cost of development is, of course, that of roads and sewers, and it seems to me that we have no right to charge with this special tax the actual work which has been laid down and executed on the land. Sir Thomas Whittaker, a very well-known worker in connection with the land taxation movement, in his book on, "The Ownership and Taxation of Land," laid it down that the cost of developing the land as regards roads and sewers amounted, pre-War, to from £437 to £656—or say an average of £500—per acre. In addition to that, he stated that the owner gave up as much as 25 per cent. of his land for roads. That is rather an excessive estimate, but, nevertheless, the owner does give up a considerable amount for roads, which would not come into development. That has to be considered as being part of the general improvement, and there is no reason why a definite capital outlay like that should be included in the proposed tax.

The Chancellor of the Exchequer, in his original speech on the Resolution, gave the instance of the Becontree Estate of the London County Council, which is, perhaps, the largest area for which one can give actual figures. Yesterday evening, at the last minute, in a naturally restive House, I tried to give the actual figures in regard to Becontree, but, unfortunately, my words did not reach the reporters correctly, and they are reported in the OFFICIAL REPORT to-day with two noughts left out of the figure. I am surprised that any words reached them at all. I am glad to have an opportunity of giving the actual figures for the improvement costs with regard to Becontree. The Chancellor of the Exchequer gave the area as 2,000 acres. It is 2,700 acres. He gave the cost of purchase as £265,000, but as a matter of fact it was £500,000 for the 2,700 acres. In the original statement of the Chancellor of the Exchequer, which was most misleading, he used these words, as if he were stating comparable figures: Let me give one particular instance … the London County Council Becontree housing scheme. The London County Council bought just over 2,000 acres. According to the assessment for local rating it was valued at £7,000"—

Mr. DEPUTY-SPEAKER

Have these figures any direct bearing upon the Amendment before us?

Lieut.-Colonel FREMANTLE

Yes, Sir. The Chancellor said: The assessment for local rating valued it at £7,000. They received for it £295,000."—[OFFICIAL REPORT, 4th May, 1931; col. 50, Vol. 252.] Those figures were quoted as comparable figures. As a matter of fact, the rateable value was definitely raised by the work of the London County Council; it had been raised by the improvements on the land.

Mr. DEPUTY-SPEAKER

The hon. and gallant Member is now entering upon a general Debate. The Amendment before the House is, however, confined to the question of improvements and whether they should be taxed. The hon. and gallant Member must keep to the Amendment.

Lieut.-Colonel FREMANTLE

I will try to confine my remarks more closely to the Amendment. The value stated was taken as the value of the original land, but it was not; it was the value of improved land. The land as bought by the London County Council was improved land. I was very much accused for buying it, because it was bought at the market value.

Mr. DEPUTY-SPEAKER

The hon. and gallant Member is now replying to an argument which was raised in Committee, and which has no direct bearing upon the Amendment before the House. The Amendment before the House deals exclusively with the question whether improvements shall be included in the tax on land values.

Lieut-Colonel FREMANTLE

I want to keep to the point, and I only want to say that the market value of the land when the London County Council bought it already included market gardening. Therefore, it was already considerably improved, and that entered into the price Further improvements were, of course, made afterwards.

Mr. DEPUTY-SPEAKER

The House is not dealing with the question whether the value of any improvement entered into the price paid for a particular plot of land or not. The House is now dealing solely with the question whether improvement value shall be taxed or not in the proposed Bill.

Sir JOHN SIMON

On a point of Order. Would you be good enough, Mr. Deputy-Speaker, to give a Ruling for the benefit of others in the House? This is the only occasion on which the Report stage of this Resolution will be discussed in the House. Are we to understand that any of us who may want to make a speech on the general proposal would be debarred unless they limited their observations strictly to the terms of this Amendment?

Mr. DEPUTY-SPEAKER

No; my Ruling is altogether different. At the moment we have before the House a definite Amendment. When that Amendment, which raises a particular issue, has been disposed of, the question will be proposed, "That this House doth agree with the Committee in the said Resolution," and then general questions can be discussed. But general questions cannot be discussed upon this precise and definite Amendment.

Lieut.-Colonel FREMANTLE

I am afraid that I still do not quite understand why discussing the nature of improvements does not help us to consider whether those improvements should be taxed or not. What I am trying to point out is the nature of the improvements, and to give chapter and verse for them.

Mr. DEPUTY-SPEAKER

The hon. and gallant Member must not ignore my Ruling. He was demonstrating what improvements justified the price paid for certain land by a public authority. That question may be considered in the general Debate, but it does not and cannot arise on this particular Amendment.

Lieut.-Colonel FREMANTLE

Would it be in order if I gave an instance of another estate, saying what was the actual history of the improvements that took place, and discussed the question whether they should be taxed or not? If that would not be in order, I will conclude my remarks.

Mr. DEPUTY-SPEAKER

It is very difficult for me to say what is or is not in order until the hon. Member makes his statement. What I am pointing out is that the hon. and gallant Member is entitled to put forward any argument to justify the improvement value not being taxed under the proposed Bill, but he is not entitled to reply to statements made yesterday as to the purchase price paid by a particular body in connection with an entirely different matter.

Lieut.-Colonel FREMANTLE

I think that the rest of my argument will be in order. If not, of course, I shall at once accept your Ruling. What were the actual improvements made at Becontree? The main improvements were roads and sewers, and it is necessary to bring home to the House the magnitude of this particular payment when we are considering whether it shall be included or not under this proposal. The London County Council did the actual improvements. On the 1,500 acres, the roads and sewers only had amounted to £987,000. It seems to me to make an enormous difference whether you are going to tax the value of the land including that £987,000 or to tax it minus the £987,000.

I should like to give a more definite instance of what the development of land means. This is from a firm of valuers in the City of London dealing with two estates. The first case is a recent purchase of 20 acres of land. The question is how has the development taken place. The value of the land to-day is £25,000. On that the capital tax in this case, at a 1d. in the £, would amount to £100. If this land is sold, at once the purchaser proceeds to construct roads, and it will cost £6,400. That is a further development. Is that going to be taxed? As a matter of fact the value of that plot of land would rise from £25,000 to £36,000. The proposal at present is to tax the £36,000. There is a third process. Supposing the taxation is made at present on this £36,000, the next periodical valuation comes round and the roads will have been made up. That is a further improvement which has to be done in the ordinary way of development. That will probably cost another £6,000. You will then have £42,000. Are you going to tax that £42,000 in full, towards which the actual purchasers will have spent out of their pockets £6,000 in making up the roads, or are you going to exclude it, or are you going to exclude the former £6,000, or are you going to go still further and tax the value of the land as it was originally purchased minus its virgin actual value? Let us take an instance of an improvement which is supposed to be due to the public convenience of a shopping site. It is 3½acres with a value of £13,000. The purchaser would proceed to construct roads again. Here is an improvement at a cost of £2,200. Then he will sell the land with an improved value for £25,000. If it is sold in plots, it will very likely sell at a considerable price. If the plots came below £120, they would be excused. The owner will have paid a very considerable amount towards the development of the plots and they are going to increase in value. At the next valuation they will have gone up above the £120 and presumably would be taxed. Where is the justice of taxing one or the other according to which part of the development they have actually spent out of their own pocket? I feel that that is a practical difficulty.

I should like to endorse what seems to me the strongest instance of all, that brought forward by the right hon. Member for Sevenoaks (Sir H. Young) and the hon. Member for Rushcliffe (Sir H. Betterton). It is that of the garden city. I have been associated both with Letchworth and with Welwyn. There we started with unimproved land at £40 an acre and it has been developed. On an independent valuation one plot of land recently sold, in the very centre of the town, was actually valued at the rate of £40,000 per acre. If you go to Hendon, you will see the same thing. In a garden city the whole improvement has been done voluntarily and out of the very slender resources, and yet it is suggested that that should be taxed. I hope that will appeal to the Government. I am not sure whether under the original statement of the Bill it is not going to be removed, because we have an exception made of public utility corporations. Will that include these bodies that do these public improvements? It does not affect the point that we are dealing with in the Amendment, because those improvements, whether they are done by local authorities or by a garden city, are no different from when they are done by a benevolent landlord. If the benevolent landlord does his duty and is able to do so, he has spent an enormous amount in improvement in exactly the same way as those bodies have done. Is one to be excepted and not the other? I hope all these improvements will be excepted from the very harsh taxation that is proposed. You cannot draw a line as to where improvement begins and where it ends. I hope the improvements which can be proved to have been executed in the generation immediately preceding the valuation will be excepted from the tax, otherwise you are going to stop enterprise and to have a deleterious effect upon the development of land of all kinds which I am sure the Government, as well as ourselves, are anxious to prevent.

Mr. BENRILEY

I hope the hon. and gallant Gentleman will excuse me if I do not take up the argument he has been using, because I do not find in it any relevance to the issue involved in the Amendment. The criticism I have to make of the Amendment is that it is based upon an assumption for which those who have spoken in support of it have produced no evidence whatever. It is the assumption that, in the proposal with regard to placing a tax on land values, improvements are to be taxed. It is not only that assumption which has been put forward by speaker after speaker, but it has also been assumed, equally without foundation, that we on these Benches who for many years have been identified with the advocacy of the taxation of land values also desire to see improvements taxed. For neither of these assumptions has any evidence whatever been produced. On the contrary, all the evidence that has been before the House during these discussions points in an entirely contrary direction. I have not to-night, or yesterday seen any evidence adduced, or a single statement by the Chancellor or by any supporter of the principle, that there was any intention to place a tax upon improvements at all. On the contrary all the evidence is in the opposite direction.

Without detaining the House, I want to call attention to the evidence which is available on this subject. I have no desire to anticipate any exposition of the proposals in relation to the question of improvements that may be made by the Financial Secretary or whoever speaks, but there is documentary evidence which is public property. Last year the present Chancellor of the Exchequer brought into the House a Bill called the Land Valuation Bill which was backed also by the Financial Secretary and two other members of the Government. In, that Bill he set forth the basis upon which the tax will be-related to improvements. As this Bill was deliberately brought in by the Chancellor and supported by the Government I think we may reasonably assume that these were the conditions attaching to the incidence of the land tax in relation to improvements. It said: The Commissioners of Inland Revenue … shall, as soon as may be after every valuation date, cause a valuation to be made of all land in Great Britain showing, with respect to every piece of land, the land value thereof as at the valuation date, that is to say, the amount which the fee simple in possession might have been expected to realise upon a sale in the open market on that date upon the assumptions— (a) that there had not been upon or in the piece of land—

1. (i) any buildings;
2. (ii) any works except any road and any works executed for the purposes of any public service or for agricultural purposes.
3. (iii) anything growing on the land except grass and any heather, gorse or other natural growth, and, in the case of agricultural land, except also hedges and trees other than fruit trees."

Sir A. STEEL-MAITLAND

I did not quite hear the second Sub-section. Did it except roads?

Mr. RILEY

The second Sub-section refers to there not being upon or in the piece of land any buildings or any works. The right hon. Member for Sevenoaks (Sir H. Young) in his speech basing his criticism of the proposal upon this assumption, for which there is no foundation, drew us a picture of what was going to happen after some enterprising person had created new works which, with the tax to be imposed on land values, would also be taxed. This Bill provides expressly for the exclusion of any such improvements of that kind. On these grounds, I submit that so far there has been no evidence advanced in support of the Amendment. The proposal is a tax on site values and not on improvements at all.

Captain BOURNE

I do not think that anybody in the House will deny that it is the intention of the hon. Member for Dewsbury (Mr. B. Riley) and the hon. Member for Burslem (Mr. MacLaren) that in the taxation of land values any improvements should be included whatever. I have discussed this question many times with the hon. Member for Burslem, and I know he has always stated very clearly that in his opinion improvements should be clear of the tax. The point where we disagree with hon. Members is that it is by no means clear that the Government's proposals do, in point of fact, exclude improvements made either by the owner or by his predecessor to the title. The hon. Member for Dewsbury quoted just now the question of roads being considered in making the valuation, but I would point out that, quite apart from high roads and public-roads, there are a large number of roads maintained by the inhabitants which are private roads and put down by the owner when he is developing the land, and beyond these there are quite a number of service roads in agricultural districts. These, again, are private roads, and presumably roads within the meaning of the proposal, but which are absolutely necessary if the land is to be used for agricultural purposes. I do not think they represent works resulting from pressure by the community about which the Chancellor has talked in such wide terms. There is no value resulting from that which, apparently, the Government want to get at, and I think that is a point to be considered. Then the hon. Member referred to what is upon the land. I can quite understand that for urban purposes grass is grass and nothing but grass, but the hon. Member for Dewsbury is quite well aware that grass is by no means uniform, and that some is pasture and some is grass of another kind.

Mr. B. RILEY

It is all grass and the word used is grass.

Captain BOURNE

It may be grass in the way he uses the word, but in some cases if you put cattle on that grass they would very nearly starve, and in other cases they would wax fat. In nearly every case where the cattle would wax fat the value of the grass is not a natural product, but is cultivated grass resulting from being manured and worked on for generations, and is an entirely artificial product.

Mr. RILEY

The hon. Gentleman will not forget that agricultural land as such is not to bear the tax.

Captain BOURNE

If the hon. Gentleman will be patient, I want to point out that one reason why I am supporting the Amendment is because it makes it perfectly clear that all agricultural land is exempt. I listened with great patience to the statement of the Chancellor. I have not his exact words, but it is perfectly clear to me that a very large amount of agricultural land will not escape this tax, irrespective of whether it is land which at the moment is ripe for development or not. I am arguing this particular thing chiefly from that point of view. The argument of the hon. Member for Burslem was somewhat disingenuous. It was that he would support the Amendment if the words "predecessors in title" were not in it. I will agree that if you pursue these words to the utmost capacity, you might find yourself back before the Norman Conquest.

I ask the hon. Member to look at the Resolution. It is to be a tax on every unit of land. I would point out that the Amendment merely seeks to decide how long the valuers should go back for the improvements and how long they should not. A general Resolution of this kind acts as an instruction to the Committee on the Bill, and it is necessary to draw the phrasing somewhat widely, unless you should find, when you come to work out the details, that you have unnecessarily restricted the Committee in the work that it has to do.

I should like to refer to one other point made by the hon. Member for Burslem (Mr. MacLaren). He said that if he went into the Sahara Desert and started to bore, in order to sink a well for the purpose of irrigation, he would be looked upon as a lunatic. He must know that people are already trying to irrigate parts of the Sahara Desert by sinking wells. What matters is not so much the site as the capacity of the soil. Perhaps he includes that in the term "site." If he does, then it is a slightly misleading term. I am thinking rather of agricultural land, of which I have had far more experience. In many cases, if you take the fee-simple value of the land and compare it with the capital required to place an improvement on the land, the fee-simple value is a minus quantity. I rather forget whether hedges were dealt with under the Valuation Bill or not. It is a little difficult to remember.

I am not quite certain whether the terms of that Bill are going to be included in the Finance Bill this year. You have to build hedges and gates, and make a surface road for farm buildings and farmhouses, and in many cases the capital value of these improvements far exceeds the present value of the land. You can sell the land very often much more cheaply than you can put up a farmhouse or buildings. The land itself, irrespective of where it is situated, is valueless. What are valuable are the improvements that mankind has put upon it, the capital sunk into it by generations of owners.

Take a constituency such as mine. Oxford has grown, and is extremely anxious to keep a green belt around it, for amenity purposes. It is a thing we want and badly need. That belt is sterilised for building purposes, and consequently, it having been under a restrictive covenant, the proposed tax will not apply to it. We have to consider the land just outside that belt. If the green belt is to be of much use, it will have to be a mile or so wide, and farther out you will have land which is not sterilised for building, and may be developed, and possibly will be under the town-planning scheme. This land will have a hypothetical building value. It may be a very great many years before that hypothetical value can be turned into a concrete value. For the moment, the only value that land has is as occupation land. Land in that part of the world lets for agricultural purposes at, roughly, £l an acre. A man might be willing to give £30 an acre, or perhaps £35 an acre, as a long-shot speculation, but some day the city of Oxford will extend there, and possibly that land will be sold at £70 an acre. The present proposals will be absolutely bound to put a value on that hypothetical speculative building value. The speculative value may never come off. The owner may gamble, and he is legitimately entitled to do so, and the valuer is bound to take into account the value that the owner places upon the land. If you take the amount of value sunk in the land, in equipment, the manurial value, the hedges, ditches, drains and farm buildings, the probability is that the capital value of these will only come to half as much as the capital value of the land. In the far distant future there may be a far greater value for this occupation land.

I am interested in this Amendment chiefly from the point of view of agricultural land. Any land alongside a main road, such as an important arterial road, acquires a hypothetical building value, although for the moment that could not be realised and the land could not be developed. But if you put in the actual capital sunk in the land, as against the present agricultural land, you will at least safeguard the owners of that land from taxation, until their land is ripe for development and the point of view is somewhat different. In the case of urban land the landlord desires to develop his land by laying out sewers, roads, footpaths, etc., before that land can be sold for building purposes. That is a very necessary development, and one that benefits the community. It is one that is undertaken at the expense of the landlord. The estimated cost of such development is probably taken into account before taxing begins on the site value. To make the site value is work that has to be done by the vendor, and not by the local authority, in the generality of cases. The local authority may take it over, but it does not do the work in the first instance. It seems to me that, in mere equity, these improvements should be allowed to revert to the possessor and the owner of the land, before the tax is charged upon it.

Mr. MARJORIBANKS

It is said that when the secrets of all hearts are open, the recording angel will be able quite easily to divide the sheep from the goats. [Interruption.] I think that the merit of this Amendment is that it can divide the sheep from the goats among hon. Members opposite, and that it has divided the sheep from the goats. I regret to say that the right hon. Member for Newcastle-under-Lyme (Colonel Wedgwood) is classed among the goats and that the hon. Member for Burslem (Mr. MacLaren) is classed among the sheep, because he has accepted the principle of the Amendment. The enigma of the Chancellor's speech at the very outset of these Debates, was whether he was out for nationalisation, or out to tax land values scientifically. He based his arguments upon justice and equity, although there was little enough justice and equity to be found in his observations. We heard his speech. He began by saying that the Almighty had given the land to the people, and he went on to say that you must render unto Caesar the things that are Caesar's, which was the most flagrant nonsense I ever heard in my life. He sought to confuse these two—

Mr. DEPUTY-SPEAKER

I cannot allow the hon. Member to develop a general discussion and I must request him to keep more to the point of the Amendment.

Mr. MARJORIBANKS

I am sorry I offended. I was seeking to make my observations show that the Chancellor of the Exchequer had based his arguments for this taxation upon justice and equity, and I was going to see whether in his simple proposal justice and equity were to be found. One is so used to professions of faith from the Chancellor of the Exchequer that one can only judge finally what he means by his words. It is far different with the horn Gentleman the Member for Burslem. There we have a burning faith, great sentiment, considerable scholarship and comparative youth. One realises the way the hon. Member for Burslem, with his faith, will vote. He has not disappointed me this evening. I think that we were all very much moved by his argument the other day. He told us the story about the pheasant moor in Yorkshire, where the landlord was given every advantage under the law, whereas we were asked to—

Mr. DEPUTY-SPEAKER

The hon. Member should confine himself to the question before the House. I am rather afraid that if the hon. Member digresses in this manner we shall be led into a general discussion, and that is what I want to avoid.

Mr. MARJORIBANKS

I am very sorry, but the whole argument of the hon. Member for Burslem was that improvements should not be taxed. That was the whole of his appeal. He went on to talk about the slum landlord and how he was taxed for every improvement he made upon the homes of the people. Therefore, I wish to point out that the Amendment is merely carrying out the main principles enunciated by my hon. Friend yesterday. I made the comparison between the moor in Yorkshire and the slum estate in order to show the real principle at which we are driving in this Amendment. We are seeking to avoid taxing the homes of the people, which would inevitably ensue if the proposal now introduced was ever put forward in law. I was very disappointed with my right hon. and gallant Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood), whom I have always considered to be a great idealist. His attitude, purely and simply, was one of cynicism, or perhaps despair. He wishes to see the proposal put into some legislation, and he is prepared to see an injustice done in order to get his proposal put forward. Not so the hon. Member for Burslem. He said that he is prepared to accept the principle of the Amendment, and I shall be very disappointed if the limitation he proposes is not subsequently included in an Amendment put forward by us at a later stage. At any rate, I think that the principle is right. If you are going to have this sort of thing you must have it on the lines enunciated by the hon. Member for Burslem. The proposal in its naked form would never be welcomed in a court of law, and the hon. Member was right in trying to place some limitation upon it.

I would ask hon. Members to consider the main principle which is behind the Amendment. Unless you introduce some principle of this kind you will be taxing the homes of the people at large. I am sure that neither the hon. Member for Burslem nor any of his supporters, nor any persons who really care for the welfare of the people, would wish to see within any period of transition people suffer at large as a result of any general taxation. When my hon. Friend was speaking, I seemed to see the shadow of Henry George himself sitting by his side pointing him into the Aye Lobby on this Amendment. I hope that ho will see that we are prepared to accept some limitation of the Amendment, and that he will at least vote for the principle of the matter rather than for cynicism and expediency as proposed by the right hon. and gallant Member for Newcastle-under-Lyme. The hon. Member for Burslem talked to us the other day in a way which really moved us. He talked about the valuation being the great corner-stone of justice for the people of this country. If he is going to put into the very heart of his corner-stone a principle of flagrant injustice, it will wholly defeat the justice of the Tax and any proposals resulting therefrom.

Mr. PETHICK-LAWRENCE

I think that if we are to have a discussion on the larger issue before we reach a late hour, it will be for the convenience of the House if I intervene at this point in the discussion. In accordance with your Ruling, Mr. Speaker, I propose at this stage to deal solely and quite briefly with the Amendment which is before the House. We are used to two types of amendments. There are those which are genuinely put forward to modify and improve an original proposal. There are those which are the equivalent of a direct negative. The Amendment which we have before us to-night is ingeniously chosen, for, while it takes the form of a genuine modification, it is in fact so destructive that were it accepted by this House, the Resolution and any Bill founded upon it would never work. Why? Because the criterion which the right hon. Gentleman who put down this Amendment asked us to adopt is, in fact, quite fantastic. It has no limit either of time or of degree.

Let me take the question of time first. Hon. Members opposite do not in their Amendment, as my hon. Friend the Member for Burslem (Mr. MacLaren) said, put down any date beyond which you are not to go. Take, for example, the case of South London. non. Members are probably aware that there was a time when the site of what is now a considerable part of South London was a marsh, subject at high tide to be under the level of the river. What is it which hon. Members who put forward this Amendment suggest we should do with regard to the sites of South London? Quite clearly at some period in history which we cannot specify with any accuracy, the owners of that part of South London spent a certain amount of money in clearing the site of water and making it available for the structures which have been erected upon it. How are you to deal with that? How are you to ascertain such "value as may have accrued by reason of any improvements made by the owner thereof or any of his predecessors in title with regard to that land"?

Quite clearly you could not make that valuation unless you adopted the method suggested by the right hon. and gallant Member for South Croydon (Sir W. Mitchell-Thomson) in his speech yesterday. But why should you stop at the date I have suggested? Why not go back to the time of Queen Boadicea and the London there was in those days? If you were to adopt the criterion of compound interest suggested yesterday by the right hon. Gentleman the Member for South Croydon, you could quite easily show that there was not a single site up and down this country which did not owe its origin to what was done at some time and with regard to which the value of improvement calculated on that basis would entirely exceed any site value to-day. Therefore, from the point of view of time alone, the Amendment in its present form is entirely disastrous.

Take also the question of degree. I should have thought that hon. Members in every part of the House must realise that there are some things which go by the name of improvements which could not possibly be excluded from the value of the land without destroying the calculation of any value at all. Yet, if the Amendment were to be accepted, the Resolution would impose upon the Bill no possible exception to such exclusion. The hon. and gallant Member for Oxford (Captain Bourne), who is generally so very clear on constitutional practice, was, in this case, I am afraid, mistaken. I thought he would have recognised that a Resolution in Committee of Ways and Means must be drawn so widely as to cover every possible charge. If the Amendment were accepted and this Resolution were limited accordingly, it would be impossible to widen it beyond the scope of the original Resolution.

Captain BOURNE

The point that I was dealing with was the point raised by the hon. Member for Burslem (Mr. MacLaren), that if we left in the words "of his predecessors in title," you would subsequently be able to limit the term to 50 years. I was not dealing with the question that the Financial Secretary is now raising. I was not attempting to argue that.

Mr. PETHICK-LAWRENCE

I realise the point the hon. and gallant Member was trying to make and I think he was wrong. If we were in this resolution to exclude from the scope of taxation any improvements even if they were effected prior to 50 years ago we could not afterwards limit the exclusion to those that took place subsequently to 50 years. [An HON. MEMBER: "Why not"?] Because of the recognised procedure of this House. While I am referring to the hon. Member for Oxford I will add that he will find, when he sees the text of the Finance Bill, that a great deal of the criticism that he made with regard to agricultural land is not borne out in fact.

I have no desire to accuse the hon. Member who moved the Amendment of disingenuousness, but the House would be very simple if they did not see through the real object which the promoters of the Amendment have in mind. The hon. and gallant Member for Ripon (Major Hills) quite frankly gave the position away, because referring to the right hon. Member for Newcastle-under-Lyme (Colonel Wedgwood) he said that he would rather 6ee the right hon. and gallant Member go down fighting for his principles unmodified than to see him compromise and succeed. The hon. Member for Eastbourne thoroughly agreed with that point of view. That is natural, because hon. Members opposite wish to see the whole of this taxation fail, and because they want to see it fail they hope to make the principle so rigid that it would bring the proposal to nothing. Vain is the net set in sight of the bird, and hon. Members on this side are not going to be taken in quite so easily.

10.0 p.m.

The hon. Baronet opposite asked me this question. "If you reject our Amendment, what is your solution of this problem? Do you intend to include or exclude improvements in the definition of site value"? That is a very simple question to ask, but it is not quite a simple question to answer, and for the very good reason that improvements cover a great number of entirely diverse things. In the main, I am afraid that I shall have to give the answer which has necessarily been given before, that hon. Members will have to await the text of the Bill. They will not have to wait very long. When we have finished this discussion to-night, the Bill will be introduced, and it cannot be very long before its text is before the House.

Mr. SMITHERS

Can the Financial Secretary say the exact date? Will it be after Whitsuntide?

Mr. PETHICK-LAWRENCE

I am afraid that on that matter hon. Members will have to wait, but I can assure them that it will not be very long. When they get the text of the Bill they will find their questions fully answered. I am, however, prepared to say that so far as improvements are of such a kind that their exclusion can be provided for consistently with the preservation of the integrity of the proposal, and with the practicability of its administration, they will be found to be excluded from the Bill. I know that hon. Members opposite would like to see exclusion whether or not it was compatible with practicability, because they do not want practicability.

Sir H. BETTERTON

Will the Financial Secretary explains what he means by integrity?

Mr. PETHICK-LAWRENCE

It is perfectly clear what I mean. Here is a scheme put forward which has to work. Hon. Members on this side of the House, and hon. Members below the Gangway opposite know perfectly well that the object of hon. Members opposite is to get a scheme, if there is to be a scheme at all, that will not work. Our intention is to have a scheme that will work. What did the Chancellor of the Exchequer say in his opening remarks on this question, on Monday last. He said: In preparing a complicated scheme of taxation of this nature innumerable occasions arise when there is some degree of conflict between abstract theory and administrative practicability. Whenever, in the course of my long preparation of this scheme, this conflict has arisen, I have striven to get as near logicality as was consistent with the simplicity and effectiveness of the scheme."—[OFFICIAL REPORT, 4th May, 1931; cols. 56–7, Vol. 252.] Those words indicate the policy that will be embodied in the text of the Bill. When we come to the practical scheme we intend to put on the Statute Book, it will be a scheme which will work and achieve its object. With regard to Amendments at later stages of the Bill, they will be considered in the same spirit. If they are likely to improve the Bill and make it work more effectively, and more suitably for its purpose, they will be considered with a view to acceptance, but if they are designed or if their effect is calculated to wreck the Bill and to make the scheme unworkable, then we believe that this House, which thoroughly believes in this proposal, will secure their defeat.

Sir D. HERBERT

I always admire the lucid way in which the Financial Secretary to the Treasury is able to put his case, but on the many occasions on which I have heard him reply to a Debate I have never beard him succeed so well as he has done to-night in making no reply whatever. My hon. and gallant Friend who moved this, Amendment quoted a very definite example, that of the case of Welwyn Garden City, and the Financial Secretary has taken no notice of that whatever. What we want to know from the Government may be laid down on this example of Welwyn Garden City. I think we are entitled to expect before this Amendment goes to a Division, a clear answer on that particular point. A large tract of land bought at a price of £30 to £35 an acre is now a flourishing garden city, most of it, or a great part of it, built over with all the necessary open spaces and conveniences. Every vacant plot there at the present time is worth a great deal more than £35 per acre. I should like to know whether the Government consider that any substantial part of that large improvement of the site value of the land of Welwyn Garden City is due to anything else whatever but the foresight, the judgment, the work and the expenditure exercised by the Garden City Company and those whom it brought to the spot to do the work there. It is almost impossible to suggest that in Welwyn Garden City any of that large increment in the value of the land which has taken place during the last few years can in any way be described as unearned increment or as increment which is due to the community as distinct from the immediate community and the owners who have developed it.

But the interesting thing is this. One can only suppose that the Government do not intend to exclude this improved value which has been brought about by the owners of the property, and in those circumstances let us see whither the tax leads us. The tax on every house in Welwyn Garden City, with the exception of some of the very small houses, will be undoubtedly a substantial one. The tax on the company itself, with its interest in the ground rents and the portions which have been let off, and its remaining interest in the still undeveloped or only partially developed part, will obviously be substantial, and I should like to know how it is that the Government can possibly think that they can go on with the tax on those lines without accepting an Amendment of this kind. How can they possibly expect anybody to believe them, when they say that they are supporters of the development of garden cities and that they are supporters of an increase in the housing accommodation of this country?

The fact of the matter is that the Government quite obviously do not know at the present time what it is they mean to value or on what basis they are going to value it. It may be—I do not know whether it is the case or not—that the Bill is already drawn, but I am perfectly certain that, if it is drawn, the Financial Secretary has not the slightest idea what it means. [Interruption.] If it is otherwise it would be interesting to know, in answer to this case, either from the learned Attorney-General or the learned Solicitor-General, what the proposals are in this respect. My hon. Friend asked just now what was the meaning of the "integrity of the proposals." It is merely laughing at this House to say that you are answering a question, and then to answer it by saying that it is to be in accordance with the integrity of an unknown quantity. The proposals are an unknown quantity. We have tried to get at them the whole time, and the Financial Secretary has professed to answer by giving us answers which are no answers at all.

One object which we must have in these Debates, at any rate, is to make it quite clear to this House and to our constituents what it is that the Government are doing, and to make it clear that every one of the large number of people in this country who own their own houses, I calculate of any value over £750 or thereabouts, will be hit by this particular tax. What we would like to hear is how that can be reconciled with the theory that this tax is intended to be a tax upon people who are holding up the development of the land. The fact of the matter is that, as shown by the discussion on this Amendment tonight, the proposals, whatever they are—we have only the vaguest notions of them—will tax the small landowners and will tax those members of the community who only own that little bit of land on which their own home is erected. [Interruption.] I have heard hon. Members throughout the few words I have been saying making interjections. I do not know whether there is anything in them, no doubt because they do not make them in a manner in which I can hear them.

Mr. B. RILEY

The smallholders and the small houses are specially exempted, as are also small plots.

Sir D. HERBERT

That is one item of the proposals about which we have got definite information. It is where the tax would amount to less than 10s. What I said just now was that the owner of every house of the value of probably £750 or a little more would be hit by the tax.

Mr. SPEAKER

I think these remarks had better be made on the Question, "That this House doth agree with the Committee in the said Resolution." They do not appear to be relevant to the Amendment now before the House.

Sir D. HERBERT

I am sorry, Mr. Speaker, if I was led away by interruptions, but if I might reply to the interjection made on the opposite side of the House I would like to do so in a very few words, by saying that we have got a definite statement and we know that the tax will be levied upon the owner of every house, the site value of whose house is anything over £120 capital value. I am sorry if I went beyond the terms of the Amendment. Whatever may be the result of this Amendment and, of course, we know what the result will be in the Division lobby, the Debate at any rate has done something to expose the objects of the Government in these proposals, the integrity of which we have not yet discovered.

Mr. WOMERSLEY

I am disappointed with the reply of the Financial Secretary because I had hoped that he would have verified the statement of the hon. Member for Dewsbury (Mr. B. Riley) that the proposals in the Finance Bill will be on all fours with the proposals in the Valuation Bill of last year. If he had told us that it would have removed a great deal of anxiety from the mind of many people who are very anxious indeed to know what is going to happen as regards their property, upon which they have spent a great deal of money in improvements. The class for which I am speaking at the moment is the shop-keeping class of the country. Quite recently I attended a conference of representatives from every part of England, Wales and the North of Ireland, and I can assure the Financial Secretary that the sooner the Government let the people know what they intend to do as regards improvements effected by the owners of property and their predecessors in title, the better it will be for the Government themselves.

Shopkeepers are in this position. They have desired legislation by this House to help them in regard to the value they have put by their own efforts into the property they have rented for business purposes. This House passed a Landlord and Tenant Act which definitely laid it down that compensation shall be paid for any improvements made by the tenant or his predecessors in title, when the man had to give up his lease. They argue that if the Government are going to put a value on the property without taking into account the improvements the man himself has effected, it will go in the opposite direction to the Landlord and Tenant Act.

Mr. MacLAREN

The hon. Member has made a quotation from the Landlord and Tenant Act, to the effect that compensation shall be paid for improvements effected by the tenant and his predecessors in title, but: the Act also stipulates that where compensation is paid nothing shall be paid in regard to anything which may be attributed to site value.

Mr. WOMERSLEY

We are not asking by this Amendment for anything more than is in the Landlord and Tenant Act. We are not asking for anything in regard to site value. We are asking that the improvements effected by the man shall be taken into consideration. The Financial Secretary cannot tell us what is to be in the Finance Bill. He says that until the Resolution has been disposed of the Bill cannot be drafted. We shall have a dummy Bill presented to-night, and the Bill itself will come along in about a fortnight's time. I hope the arguments I am putting forward will induce the Government to include provisions in that Bill which will meet the wishes of the class of people for whom I am now speaking. A few years ago the bulk of these people had to rent their properties because they were not in a position to purchase, or because there was no compulsion to purchase. During the last few years many men have been forced to borrow money from building societies or banks in order to buy their business premises, the reason being that, owing to the severe competition for shop premises, these men were being rack-rented, and they have had to pay prices for their property based on the rack rents.

Mr. MacLAREN

Hear, hear!

Mr. WOMERSLEY

I am glad that the hon. Member for Burslem (Mr. MacLaren) agrees, at any rate, that these people have had to pay through the nose for the property. Are the Government going to allow something by way of compensation for the improvements which these men have put in, by their own efforts, in building up their businesses? Because they have been rack-rented they have had to pay an extortionate price for the property, and unless the Government do what I suggest, then it is not the man who has charged the extortionate price who will have to pay, but the poor chap who has been charged the extortionate price. If ever there was a case of gross injustice, this is one. In the last two years, we have had a revaluation of property for rating purposes.

Mr. MacLAREN

Who did it?

Mr. WOMERSLEY

I do not care who did it. It will not make the thing any better or any worse, whoever did it. The fact of the matter is that shopkeepers who have had to pay these enormous prices for their properties have been valued for rateable purposes on the prices which they paid—not on the site value but on the site value plus improvements. What is more—and hon. Members opposite will doubtless cheer this also—they complain very bitterly that they derive no benefit from the De-rating Act. [HON. MEMBERS: "Hear, hear!"] Well, I remember that when we were discussing that Act, hon. Members opposite talked about how the poor shopkeeper was going to be penalised. In order to act consistently with the arguments which they used on that occasion they will have to support this Amendment. If they are going to render justice to these people, they must support the Amendment. It is a simple Amendment. I do not consider that it is an attempt to trap the Government—unless it is an attempt to trap them into honest treatment of these people. If the Government say that it is not worded as they would like it, then I wish to know what better form of words they can find. The main point is this. Are they prepared to accept the principle? If you take out the improvements of predecessors in title you are going to deprive a man of a value for which he has already paid because, as hon. Members opposite very well know, in the purchase of a business goodwill is taken into consideration, and the improvements effected by the seller. If you say that merely because a man has bought a business recently, he is not to have the benefit of the improvements previously effected, for which he has paid, you will do him a grave injustice.

I turn from the case of the shopkeeper because I am satisfied from the expression on the countenance of the Solicitor-General that he is in sympathy with my point and that when we get the Bill we shall find that provision has been made in it for the shopkeepers, as regards improvements in their properties. I should like to deal with another question in connection with expenditure on improvements. We are at present discussing the Town and Country Planning Bill which deals with, among other matters, the question of increased values attaching to land owing to the fact that the community, or a local authority on behalf of a community, has decided on certain improvements. What are the Government going to do, in relation to the tax which we are now discussing, with the man who has spent a large sum in improving certain building sites with the object of reaping benefit later on, but has not reaped the benefit? I want to draw the attention of the Solicitor-General to a statement that was made by the chairman of the Trafford Park Estates, Limited, when dealing with this question whether money spent on improvements should be included in the valuation of the estates. He said: Since the estates were purchased, the company had spent more than £1,000,000 in improvement, developing roads, railways, drains, electricity and gas supplies, and so on. These improvements were the means of supporting a population of nearly a quarter of a million people, and have directly increased the rateable value of the district by £266,246. Hon. Members who come from that part of the country know very well that the development of the Trafford Park estates has conferred a great benefit on the whole community in that district. I should be glad if people as enterprising as the Trafford Park Estates Company would come to my constituency and develop factory sites there. My constituents would be very grateful. Are such people, who have been enterprising in developing estates on these lines, to be penalised because of their enterprise? Unless this Amendment is accepted, I cannot see how they will be helped. I feel satisfied that even people like the hon. Member for Burslem, who go about the country teaching that all taxation, and even local rates, could be secured by a tax on land values, are not prepared to go so far as to say that the taxation of site value should include all sorts of improvements that have been carried out by the person who owns the land, or by his predecessor in title, and that by his very enterprise he should be penalised even more than the negligent man who has done nothing to his estate.

When you develop back land, even when it is near a main road, it means the expenditure of a large sum of money on improvements, because people will not begin to build until you have provided streets and sewers, and local authorities will not take charge of the streets until they are made up to their satisfaction. When people have spent large sums of money on that land, and possibly waited many years before reaping any benefit, is it fair that the expenditure of this money should not be taken into consideration? If the hon. Gentleman, the Financial Secretary had told us plainly that the Government stood by the provisions that were contained in the Valuation Bill of last year, which were quoted by the hon. Member for Dewsbury, we should have had something concrete to work upon, but it is evident that it is not the intention of the Government to do that, for it would have been very simple for the Financial Secretary to have said so if it were. The Government could easily accept the Amendment; they would place themselves in no difficulty whatever if they did. I heartily support the Amendment on behalf of those people whom I am here to represent.

Major COLVILLE

I rise to support this Amendment from a particular angle, wishing to put forward the effect which this Resolution will have on industry in the country unless an Amendment such as this is accepted. One can carry on an insurance business or a stockbroker's business from an office table, but those industries which employ most men and are, at the moment, the most depressed, are those for which a large area of land is necessary. To build ships, to produce coal, to quarry stone, to produce iron and steel and textile goods, one needs a considerable amount of land, and in all such cases it must be recognised that the value of the land has been enhanced by the enterprise of those who have set up the factories or works on the sites. We have heard a lot about the community making the land valuable, but surely it must be acknowledged that in the case of factory sites and shipyards the values have been created by the companies. At a time when there are so many unemployed, and when everyone ought to be striving to lower the costs of production, it is monstrous that the Government should propose what is a new direct tax upon industry, and that those industries which need the largest areas of land are to be the most heavily hit.

I have been looking into the case of a particular works in Glasgow. It is a small place employing between 200 and 300 men, but it stands on a valuable site. Many factories situated in towns have valuable sites. If the tax is applied on the basis suggested, I have calculated that this firm will have to pay an annual tax of £1 per man employed. Is it fair, at a time when we are doing our best to give men employment, to add a tax of £l per man employed under the guise of shifting the burden of taxation from one shoulder to another? We have heard it said that this is only a case of a readjustment of burdens, but there is no suggestion here of any readjustment, but merely an addition. If the Amendment were accepted, those who by their enterprise have created the value attaching to sites by putting up factories and giving men employment would be relieved from a new and unfair burden. If the right hon. Gentleman can assure us that there is no intention of adding further direct burdens to industry I shall be much relieved, but in the three days' Debate I have heard nothing to indicate that that will be the case. On the contrary, it has been made clear to me that it is the intention of the Government to levy a tax on all land used for industrial purposes, which will be a direct addition to the cost of production.

Sir CHARLES OMAN

This Debate has been largely concerned with ethics and morals. The Chancellor of the Exchequer himself said that God gave the land to the people, and that the community was now going to take over its rights. I must not go into that question, because that is the general thesis. One must not ask, for instance, "Did God give the United States as they now exist to the Red Indians or to the settlers who came in and displaced the Red Indians?" or "Does Australia properly belong to the black fellows or to the gentlemen who are now giving us so much financial trouble?" That is a general topic, and I am not going into it. The theory has been put forward that the community, or the State, has improved the land, and that the community ought to be entitled to the unearned increment, but I do not think it has been realised that this theory of unearned increment carries with it logically and correspondingly the theory of unearned decrement. If the State interferes and by running an arterial road through what has been a residential estate thereby destroys its quiet amenities and brings down the value of the houses, it is clear that the State ought to compensate all the owners of those houses for what it has taken from them.

I have not heard anybody bring in the theory of unearned decrement, but it seems to me that this Amendment, which prevents the laying of unjust taxation on unearned increment, carries with it logically the right to claim unearned decrement. I cannot see how it can be urged by any one that when the State has destroyed part of the value of a citizen's land the State should not compensate him. I cannot see that there is any arrangement by which, when a district, owing to the action of the State, grows progressively less and less attractive, and less and less full of amenities to the dwellers in the surrounding houses, the assessment of the value of that land should not be brought down progressively as well. The landowner or the house-owner is being made to pay, not on the present value of his unit—though I do not understand what that unit is—it may mean anything, it may relate to Hyde Park or the site of the Bank of England—and I should very much like to know what—

Mr. SPEAKER

The hon. Member's remarks would be more suited to the Question "That this House doth agree with the Committee in the said Resolution." The Question before the House is the actual Amendment.

Sir C. OMAN

I completely bow to your authority, Mr. Speaker. As I have spent five minutes in distracting the attention of the House I will simply content myself with saying that I think this Amendment is the only right and rational way of dealing with the matter.

Mr. CHAMBERLAIN

I beg to move, as an Amendment to the proposed Amendment, at the end, to add the words "within the last fifty years."

I rather regret to note from the speech which was addressed to the House by the Financial Secretary to the Treasury that his natural kindly mental temperament has been so distorted and embittered by the strain of meeting the arguments addressed to him that he finds in this Amendment some sort of ingenious device or trap to lure an innocent Government into an untenable position. No, sir, if the Government has got into an untenable position it will be of their own volition, and not by reason of anything that has been done on this side of the House. In that the hon. Member is entirely mistaken. This Amendment-has been designed to clarify the situation, and to enable us to get a somewhat more accurate idea of what are the purposes in the mind of the Government in making this proposal. There may be, perhaps, a secondary purpose, and that is to ascertain whether these proposals give a clear idea of what they are and whether they are consistent with the reasons put forward by the various speakers on behalf of the Government. When I think that for two whole days we debated in Committee the general proposals in a sort of fog of doubt, and uncertainty, when the Government employed every device of evasion and postponement and downright rudeness—[Interruption.]—to conceal from the Committee what they are proposing to do, it seems to me that it was very necessary that an Amendment of this kind should be put down in order that we might ascertain really where we are trying to go.

Even hon. Members below the Gangway on this side of the House, apparently, shared in the general ignorance. Some of us on these benches were innocent enough to suppose that, when all those afternoon calls were paid at Downing Street, the subject of discussion was politics; but, after the statement of the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) yesterday, it is quite clear, of course, that it was only to have a cup of tea and talk of cabbages and kings, and why the sea is boiling hot, and whether pigs have wings; and that nothing that might be done under this Bill ever came on the carpet at all. But we hardly required the assurance of the right hon. Gentleman the Member for Carnarvon Boroughs, because his speech itself was sufficient evidence that he was in fact entirely ignorant of the proposals of the Government, for all his arguments were devoted to the grievances aroused by betterment which had been obtained at the expense of public money, and not to the proposals of the Chancellor of the Exchequer. It was not until the end of our discussion in Committee, when the Solicitor-General made that speech which has earned for him so many well deserved compliments, that we began to understand a little more about the matter. He gave us his version of the justification for the proposals that we now have before us, and I should like just to read to the House a passage from his speech which I think is very illuminating. He said: The imposition of this tax, coupled with the valuation which must necessarily precede it, is one of the measures which have been long and consistently advocated by those on this side of the House "— I leave out a few words which are not germane to the purpose— as a just means of securing to the community as a whole some part of the wealth which that community has created. … Vast sums have been spent by the community in the past in improving the facilities and services connected with the land in this country, and great works are now being carried through at enormous expense, and will in the future be carried through probably upon an ever-increasing scale. It is the expenditure of these moneys in the past by the community which has developed the land throughout the country, and has given it the value which it now has in the hands of the owners. It is the continual expenditure of this money from day to day that upholds and maintains those value for the owners, and it is only common justice that those who own the land which is so benefited, and will be further benefited in the future by the expenditure of the resources of the community, should pay some acknowledgment to the community for those benefits."—[OFFICIAL REPORT, 5th May, 1931; cols. 522–3, Vol. 252.] The House will see that that statement of the Solicitor-General amounts to this, that all improvements in the value of the land have been solely created by the public expenditure of the community, and that the only thing which keeps those values in operation to-day is the continued expenditure of public money by the community. That appears to me to be a very startling statement, hardly consistent with the common experience of every one of us. Take the common case of a man who buys a piece of land which he thinks is nearly ripe for development. That land has a certain value; it may be that it has a certain potential value; but the person who has bought the land then proceeds to spend a large sum of money on it. He has to make roads, he has to construct sewers, he may have to do a certain amount of drainage, he may have to do a certain amount of levelling, and in the end he has probably spent several times as much money upon the development of his land as he paid for the land itself. What is the result of that upon the value of the land? The value of the land is improved, and it is improved by the expenditure of that man, and not by the action of the community. After all, the community is there all the time. The community was there before the man spent money on the land. [Interruption.] I do not understand what the hon. Member is denying. I am assuming that the community is there ail the time. This is land in the neighbourhood of a large town, where the community resides. It is true that the presence of the community gives a certain potential value to the land, but the land does not acquire that value until the owner has come and spent his share of the money. That must be so. The community was there before and it is there after. The community has not changed. Only one thing has changed, and that is the money that is put into the land by the owner. That is the value of the land which has been created by the owner and it is that value which we seek by this Amendment to exclude from the tax.

In one of the passages in that speech of the hon. Member for Burslem (Mr. MacLaren) which has been so much quoted, he suggested that an individual who thought he created value by his own efforts might find, if he went to the Sahara, that those same efforts would not in fact create the value, and from that he argued that, therefore, it was only the community that created the value in the land. But that applies to a great many other things besides land. What would be the value of the "Daily Mail" in the Sahara? What would be the value of the Solicitor-General in the Sahara? If we are to take his words and say that the man who has benefited by the presence of the community must pay his fair acknowledgment for the very great benefit which he is hourly receiving from the community, what is the difference between the position of the man who has put money into the land and the position of the Solicitor-General himself, who owes his value to the fact that he is practising in a large community? Why is he not to pay? What is the pretext for singling out this particular form of capital and saying it shall be subject to a tax which is not inflicted upon any other kind of capital, although all are equally in the same position that they owe a certain amount of their value to the presence of the community in which they live. I think I have established that there is a real value which is created by the expenditure of the owner's money, and we want to know what is the attitude of the Government towards those improvements.

The Financial Secretary, in his speech a little while ago, did not attempt to defend his position on any ground of equity or justice. He defended it simply and solely on the ground that he wished to preserve the integrity of his Bill. That is a poor ground on which to defend an important principle, but I take the question of the integrity of his Bill. What was his objection to the Amendment? He said it was ingeniously devised to make the Bill impracticable because of the question of time. It was not workable. We could not go back into the dim recesses of past history and ascertain for all past time what improvements have been made either by the owner or by any of his predecessors in title. I will agree with him so far that the Amendment is put down to establish the theoretical position, and I am quite prepared to admit that, when you come to practice, you cannot literally carry out your theory in its whole perfection. The Chancellor of the Exchequer takes the view that, when there is some conflict between the practicability and the theory, you must get as close as you can to the theory consonant with the preserving of practicability. I am quite certain that my hon. Friends on this side of the House will follow that course to-night. The hon. and gallant Member for Oxford (Captain Bourne) suggested that having established the general principle by the Amendment, he would be fully prepared when we came to the Clause in the Finance Bill to accept some limitation to it.

The SOLICITOR - GENERAL (Sir Stafford Cripps) indicated dissent.

Mr. CHAMBERLAIN

The Solicitor-General shakes his head, no doubt referring to the argument put before us by the Financial Secretary that, according to the procedure of the House, that would be impossible. I grant him that. I want very much to meet the difficulties of the Solicitor-General and the Financial Secretary, and, therefore, with a view to helping the Government I am proposing an Amendment to my hon. Friend's Amendment which will put the limitation that they deem to be necessary into the Amendment now. I am encouraged to do that because I find that such a limitation is actually in practice in another country. Here I am indebted to one of those numerous publications in coloured covers which are issued from time to time by the party of hon. Members who sit below the Gangway on this side. In their industrious researches they have discovered that in 1922 in Denmark a land valuation and tax Bill was introduced in which the value of improvements was very properly separated from the value of land, and one of the provisions was that all valuations must show the selling value of the land as if unimproved, and, further, that allowance was to be made for improvements of virgin land which could be proved to have been undertaken in the preceding 30 years.

Thirty years seems a little short, and I am venturing to put in 50 years, but I do not imagine a difference of 20 years will make the difference between practicability and impracticability. As the integrity of the Bill will not be injured, I must assume that the Government will see their way to accept the Amendment. The decision of the Government in regard to this amending Amendment will really be the acid test of their sincerity in this matter. They claim that their sole purpose is to obtain acknowledgment from the owner of a gift he has received from the community. We are not in this Amendment questioning that principle. All we are doing is to say that where an improvement in the value of the land is not due to the community but demonstrably due to the action of the owner himself, that shall be excluded from the tax which is proposed. We want to know what is going to be the attitude of the Liberal party on this question, because we know very well what their principles are. I have another publication in a different cover, also published by the Liberal party. In this they say:— We are in agreement with the principle of taxing land values in so far as any parcel of land acquires site value as the result of the community's activities and expenditure but to say that all land derives its value from the presence of a community in its neighbourhood is to stretch a literal truth much too far. … We would go further and say that means should be found so to adjust taxation and rating that improvements whether they take the form of buildings or of increasing the capital value of the land itself, will be to the utmost degree encouraged. From the principles which they lay down in this publication, I think I can fairly claim their support in the Lobby for the Amendment which I have moved.

Mr. BEAUMONT

I rise to support the Amendment to the Amendment which has just been moved by my right hon. Friend. I do it with a certain amount of regret, because I frankly prefer the original suggestion which was moved earlier in the evening. The Government rejected that, and I am not surprised. [Interruption.] I was not in the least surprised because, as my right hon. Friend has said, it is the acid test of their intention. Our contention is that the Government's intention in this matter is entirely different from what they have professed, during this three days' Debate. My right hon. Friend, in moving the Amendment, has given the Government every opportunity for making their attitude perfectly clear. Either that attitude is a sincere desire to give to the community a portion of that wealth which they claim that the community has created, or it is a scheme to get at the landlords at any cost and by any means. If they reject this Amendment, it is not the least use of the Chancellor of the Exchequer coming down to this House and telling us of the Creator's intentions. I do not know how the Chancellor knew what those intentions were, and, in fact, I do not believe that the Chancellor did know. I decline to accept him as an interpreter for the Creator. [Interruption.]

It is no use. [HON. MEMBERS: "Withdraw!"] I cannot see that I have said anything which is in the least inconsistent with order or with correct procedure. A Chancellor of the Exchequer is one thing, and a minor prophet is another. Nor can the right hon. Gentleman, the Member for Carnarvon Boroughs (Mr. Lloyd George), continue to support this tax, with his tongue firmly embedded in his cheek, and with those moving words about the flight of the rural landowner, to which we listened yesterday. The real reason why the right hon. Gentleman and hon. Gentlemen opposite refused the first Amendment, is that they are not out to get the increment that has been created by the community. They know that such increment is relatively small, and that the major part of the value of land has been created by the work of the owners, past and present. They know that if they accepted this Amendment, their Land Act would disappear in smoke.

There has been some talk in the past few days of the attitude of my party towards this proposal, and suggestions have been made that they might possibly not be as opposed to it as people might previously have been led to suppose. If the Government refuse this Amendment, it is clear that that is not in the least due to their desire to get for the community something which belongs to the community, but that it is an attempt to attack a particular class, because hon. Members know that that class has got too much sense ever to support them. It is pure and unadulterated class legislation, and if this Amendment is refused, it stands so, undisguised and without shame. If this Amendment is refused, and if it is laid down by the Government, and by the Liberal party, that they do not mind who made the increment, who has improved the land, that they do not mind who did the work or put in the capital, or who took the risk, and that because a man owns land, he has to be attacked, then there can be no question that the party to which I belong will fight this Measure at every stage, in every way and with very weapon.

11.0 p.m.

The question of an increment tax need not only apply to land. I do not say anything about the attractive possibility of the Solicitor-General's view of the land valuation tax. There are many hon. and right hon. Gentlemen in this House who belong to the same profession as the Solicitor-General, and it might very fairly be argued that their value would fail to exist if no law courts had been built by the community. It might equally be said by the Chancellor of the Exchequer that they had been given by the Creator for the enjoyment of all mankind. This is the acid test, and I would at least pay hon. Members opposite a compliment to which hon. Members below the Gangway are not entitled, namely, that they are unashamed about this matter. They admit, whatever their

Front Bench say, that this is a class attack. They do not trouble about justice and equity. Their attitude is, "Let us get at them." [HON. MEMBERS: "Hear, hear!"] The cheers that welcomed that remark are a justification of every word I have said. Either the Government propose to tax increment which is the result of public expenditure—if they do they will accept the Amendment moved by my right hon. Friend—or they mean to tax the landowner, irrespective of equity and justice, simply because he is a landowner, and in that case they will refuse the Amendment.

The SOLICITOR-GENERAL

I am sure it is not necessary for me at this hour to detain the House by saying at any length that this is another snare into which the Government do not intend to fall. The right hon. Gentleman's suggestion that they wished to be of assistance by putting down this extra Amendment was a benevolence which was, I think, intended to react for his own benefit and not for the benefit of the Government. My hon. Friend the Financial Secretary to the Treasury has already explained why such an Amendment as this could not be accepted. The reason is that if the Resolution is put into hard and fast terms, it destroys all possibility of alteration in the Finance Bill. If these words were adopted, whatever they may mean—and I do not know what improvements mean for they are difficult to define, as hon. and right hon. Gentlemen opposite know—it might well be a question when we come to the Finance Bill whether something which was or was not to form a part of the Tax came within the improvements. The question of whether specific improvements are or are not part of the subject matter can be dealt with, I suggest, far more suitably on the Finance Bill, when hon. and right bon. Gentlemen opposite will see how it is to be dealt with in the proposed Bill.

Question put, "That those words be there added to the proposed Amendment."

The House divided: Ayes, 149; Noes, 224.

Division No. 237.]	AYES.	11.5 p.m.
Acland-Troyte, Lieut.-Colonel	Baldwin, Rt. Hon. Stanley (Bewdley)	Bellairs, Commander Carlyon
Ainsworth, Lieut.-Col. Charles	Balfour, Captain H. H. (I. of Thanet)	Betterton, Sir Henry B.
Amery, Rt. Hon. Leopold C. M. S.	Beamish, Rear-Admiral T. P. H.	Bevan, S. J. (Holborn)
Atholl, Duchess of	Beaumont, M. W.	Birchall, Major Sir John Dearman
Bird, Ernest Roy	Fremantle, Lieut.-Colonel Francis E.	Percy, Lord Eustace (Hastings)
Bourne, Captain Robert Croft	Ganzoni, Sir John	Peto, Sir Basil E. (Devon, Barnstaple)
Bowater, Col. Sir T. Vansittart	Gault, Lieut.-Col. A. Hamilton	Pownall, Sir Assheton
Bowyer, Captain Sir George E. W.	Gilmour, Lt.-Col. Rt. Hon. Sir John	Ramsbotham, H.
Boyce, Leslie	Graham, Fergus (Cumberland, N.)	Remer, John R.
Bracken, B.	Greene, W. P. Crawford	Reynolds, Col. Sir James
Brass, Captain Sir William	Grenfell, Edward C. (City of London)	Roberts, Sir Samuel (Ecclesall)
Broadbent, Colonel J.	Gretton, Colonel Rt. Hon. John	Rodd, Rt. Hon. Sir James Rennell
Brown, Brig.-Gen. H. C. (Berks, Newb'y)	Gunston, Captain D. W.	Ross, Ronald D.
Buchan, John	Hacking, Rt. Hon. Douglas H.	Ruggles-Brise, Colonel E.
Butler, R. A.	Hannon, Patrick Joseph Henry	Russell, Alexander West (Tynemouth)
Butt, Sir Alfred	Harvey, Major S. E. (Devon, Totnes)	Salmon, Major I.
Campbell, E. T.	Henderson, Capt. R. R. (Oxf'd, Henley)	Samuel, A. M. (Surrey, Farnham)
Carver, Major W. H.	Herbert, Sir Dennis (Hertford)	Sandeman, Sir N. Stewart
Castle Stewart, Earl of	Hills, Major Rt. Hon. John Waller	Shepperson, Sir Ernest Whittom[...]
Cayzer, Sir C. (Chester, City)	Hudson, Capt. A. U. M. (Hackney, N.)	Skelton, A. N.
Cazalet, Captain Victor A.	Hunter-Weston, Lt.-Gen. Sir Aylmer	Smith, Louis W. (Sheffield, Hallam)
Chamberlain, Rt. Hn. Sir J. A. (Birm., W.)	Inskip, Sir Thomas	Smith-Carington, Neville W.
Chamberlain, Rt. Hon. N. (Edgbaston)	Iveagh, Countess of	Smithers, Waldron
Chapman, Sir S.	Jones, Sir G. W. H. (Stoke New'gton)	Somerville, A. A. (Windsor)
Churchill, Rt. Hon. Winston Spencer	Lamb, Sir J. Q.	Somerville, D. G. (Willesden, East)
Clydesdale, Marquess of	Lane Fox, Col. Rt. Hon. George R.	Southby, Commander A. R. J.
Cockerill, Brig.-General Sir George	Leighton, Major B. E. P.	Spender-Clay, Colonel H.
Colville, Major D. J.	Lewis, Oswald (Colchester)	Steel-Maitland, Rt. Hon. Sir Arthur
Conway, Sir W. Martin	Little, Graham-, Sir Ernest	Taylor, Vice-Admiral E. A.
Courtauld, Major J. S.	Llewellin, Major J. J.	Thomas, Major L. B. (King's Norton)
Courthope, Colonel Sir G. L.	Locker-Lampson, Rt. Hon. Godfrey	Thompson, Luke
Croft, Brigadier-General Sir H.	Locker-Lampson, Com. O.(Handsw'th)	Thomson, Mitchell-, Rt. Hon. Sir W.
Crookshank, Capt. H. C.	Lymington, Viscount	Tinne, J. A.
Croom-Johnson, R. P.	McConnell, Sir Joseph	Titchfield, Major the Marquess of
Culverwell, C. T. (Bristol, West)	Macdonald, Capt. P. D. (I. of W.)	Todd, Capt. A. J.
Cunliffe-Lister, Rt. Hon. Sir Philip	Margesson, Captain H. D.	Train, J.
Dalkeith, Earl of	Marjoribanks, Edward	Turton, Robert Hugh
Davies, Maj. Geo. F.(Somerset, Yeovil)	Meller, R. J.	Wallace, Capt. D. E. (Hornsey)
Davison, Sir W. H. (Kensington, S.)	Merriman, Sir F. Boyd	Ward, Lieut.-Col. Sir A. Lambert
Dixey, A. C.	Milne, Wardlaw-, J. S.	Waterhouse, Captain Charles
Duckworth, G. A. V.	Monsell, Eyres. Com. Rt. Hon. Sir B.	Wayland, Sir William A.
Dugdale, Capt. T. L.	Moore, Lieut.-Colonel T. C. R. (Ayr)	Wells, Sydney R.
Eden, Captain Anthony	Morrison, W. S. (Glos., Cirencester)	Williams, Charles (Devon, Torquay)
Edmondson, Major A. J.	Muirhead, A. J.	Windsor-Clive, Lieut.-Colonel George
Elliot, Major Walter E.	Newton, Sir D. G. C. (Cambridge)	Winterton, Rt. Hon. Earl
Erskine, Lord (Somerset, Weston-S-M.)	Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld)	Wolmer, Rt. Hon. Viscount
Everard, W. Lindsay	O'Connor, T. J.	Womersley, W. J.
Falle, Sir Bertram G.	Oman, Sir Charles William C.
Fermoy, Lord	O'Neill, Sir H.	TELLERS FOR THE AYES.—
Fison, F. G. Clavering	Ormsby-Gore, Rt. Hon. William	Sir George Penny and Sir Victor
Forestier-Walker, Sir L.	Peake, Capt. Osbert	Warrender.
NOES.
Adamson, Rt. Hon. W. (Fife, West)	Burgess, F. G.	Gibson, H. M (Lancs, Mossley)
Adamson, W. M. (Staff., Cannock)	Burgin, Dr. E. L.	Glassey, A. E.
Addison, Rt. Hon. Dr. Christopher	Caine, Hall, Derwent	Gossling, A. G.
Aitchison, Rt. Hon. Craigle M.	Cameron, A. G.	Gould, F.
Alexander, Rt. Hon. A. V. (Hillsbro')	Cape, Thomas	Graham, D. M. (Lanark, Hamilton)
Alpass, J. H.	Carter, W. (St. Pancras, S. W.)	Graham, Rt. Hon. Wm. (Edin., Cent.)
Ammon, Charles George	Chater, Daniel	Gray, Milner
Angell, Sir Norman	Church, Major A. G.	Greenwood, Rt. Hon. A. (Colne).
Arnott, John	Cluse, W. S.	Griffith, F. Kingsley (Middlesbro' W.)
Aske, Sir Robert	Clynes, Rt. Hon. John R.	Groves, Thomas E.
Attlee, Clement Richard	Cocks, Frederick Seymour	Grundy, Thomas W.
Ayles, Walter	Compton, Joseph	Hall, G. H. (Merthyr Tydvil)
Baker, John (Wolverhampton, Bilston)	Cove, William G.	Hall, J. H. (Whitechapel)
Baldwin, Oliver (Dudley)	Cripps, Sir Stafford	Hall, Capt. W. G. (Portsmouth, C.)
Barnes, Alfred John	Daggar, George	Hamilton, Mary Agnes (Blackburn)
Barr, James	Dalton, Hugh	Hamilton, Sir R. (Orkney & Zetland)
Batey, Joseph	Davies, D. L. (Pontypridd)	Hardie, George D.
Benn, Rt. Hon. Wedgwood	Davies, E. C. (Montgomery)	Harris, Percy A.
Bennett, Sir E. N. (Cardiff, Central)	Davies, Rhys John (Westhoughton)	Hastings, Dr. Somerville
Bennett, William (Battersea, South)	Denman, Hon. R. D.	Haycock, A. W.
Benson, G.	Dudgeon, Major C. R.	Hayday, Arthur
Bevan, Aneurin (Ebbw Vale)	Dukes, C.	Henderson, Thomas (Glasgow)
Birkett, W. Norman	Duncan, Charles	Henderson, W. W. (Middx., Enfield)
Blindell, James	Ede, James Chuter	Herriotts, J.
Bondfield, Rt. Hon. Margaret	Edmunds, J. E.	Hicks, Ernest George
Bowerman, Rt. Hon. Charles W.	Edwards, C. (Monmouth, Bedwellty)	Hirst, G. H. (York W. R. Wentworth)
Broad, Francis Alfred	Edwards, E. (Morpeth)	Hoffman, P. C.
Brockway, A. Fenner	Egan, W. H.	Hopkin, Daniel
Bromley, J.	Foot, Isaac	Horrabin, J. F.
Brooke, W.	Freeman, Peter	Hudson, James H. (Huddersfield)
Brothers, M.	Gardner, B. W. (West Ham, Upton)	Hunter, Dr. Joseph
Brown, C. W. E. (Notts, Mansfield)	Gardner, J. P. (Hammersmith, N.)	Isaacs, George
Brown, Rt. Hon. J. (South Ayrshire)	George, Major G. Lloyd (Pembroke)	Jenkins, Sir William
Buchanan, G.	George, Megan Lloyd (Anglesea)	John, William (Rhondda, West)

Johnston, Rt. Hon. Thomas	Mills, J. E.	Sinclair, Sir A. (Caithness)
Jones, Llewellyn-, F.	Milner, Major J.	Sinkinson, George
Jones, Morgan (Caerphilly)	Montague, Frederick	Sitch, Charles H.
Jowett, Rt. Hon. F. W.	Morley, Ralph	Smith, Ben (Bermondsey, Rotherhithe)
Jowitt, Sir W. A. (Preston)	Morrison, Rt. Hon. H. (Hackney, S.)	Smith, Frank (Nuneaton)
Kedward, R. M. (Kent, Ashford)	Morrison, Robert C. (Tottenham, N.)	Smith, Rennie (Penistone)
Kelly, W. T.	Mort, D. L.	Smith, Tom (Pontefract)
Kennedy, Rt. Hon. Thomas	Muggeridge, H. T.	Smith, W. R. (Norwich)
Kinley, J.	Murnin, Hugh	Sorensen, R.
Lang, Gordon	Nathan, Major H. L.	Stamford, Thomas W.
Lansbury, Rt. Hon. George	Naylor, T. E.	Stephen, Campbell
Lathan, G.	Noel Baker, P. J.	Sullivan, J.
Law, Albert (Bolton)	Noel-Buxton, Baroness (Norfolk, N.)	Sutton, J. E.
Law, A. (Rossendale)	Oliver, George Harold (Ilkeston)	Taylor, R. A. (Lincoln)
Lawrence, Susan	Oliver, P. M. (Man., Blackley)	Taylor, W. B. (Norfolk, S. W.)
Lawson, John James	Palin, John Henry	Thurtle, Ernest
Lawther, W. (Barnard Castle)	Paling, Wilfrid	Tillett, Ben
Leach, W.	Palmer, E. T.	Tinker, John Joseph
Lee, Frank (Derby, N. E.)	Parkinson, John Allen (Wigan)	Tout, W. J.
Lee, Jennie (Lanark, Northern)	Perry, S. F.	Townend, A. E.
Lees, J	Pethick-Lawrence, F. W.	Trevelyan, Rt. Hon. Sir Charles
Lewis, T. (Southampton)	Picton-Turbervill, Edith	Vaughan, David
Lindley, Fred W.	Potts, John S.	Viant, S. P.
Lloyd, C. Ellis	Price, M. P.	Walkden, A. G.
Longbottom, A. W.	Quibell, D. J. K.	Walker, J.
Longden, F.	Ramsay, T. B. Wilson	Watkins, F. C.
Lovat-Fraser, J. A.	Raynes, W. R.	Watson, W. M. (Dunfermline)
Lunn, William	Richards, R.	Watts-Morgan, Lt.-Col. D. (Rhondda)
MacDonald, Malcolm (Bassetlaw)	Richardson, R. (Houghton-le-Spring)	Wedgwood, Rt. Hon. Josiah
McElwee, A.	Riley, Ben (Dewsbury)	Wellock, Wilfred
McEntee, V. L.	Ritson, J.	West, F. R.
McKinlay, A.	Romeril, H. G.	Westwood, Joseph
MacLaren, Andrew	Rosbotham, D. S. T.	White, H. G.
Maclean, Sir Donald (Cornwall, N.)	Rowson, Guy	Whiteley, Wilfrid (Birm., Ladywood)
Maclean, Nell (Glasgow, Govan)	Salter, Dr. Alfred	Whiteley, William (Blaydon)
MacNeill-Weir, L.	Samuel, Rt. Hon. Sir H. (Darwen)	Wilkinson, Ellen C.
McShane, John James	Samuel, H. Walter (Swansea, West)	Williams, David (Swansea, East)
Mander, Geoffrey le M.	Sanders, W. S.	Williams, Dr. J. H. (Llanelly)
Manning, E. L.	Sawyer, G. F.	Williams, T. (York, Don Valley)
Mansfield, W.	Scurr, John	Wilson, C. H. (Sheffield, Attercliffe)
Marcus, M.	Sexton, Sir James	Wilson, J. (Oldham)
Markham, S. F.	Shepherd, Arthur Lewis	Wilson, R. J. (Jarrow)
Marley, J.	Sherwood, G. H.	Winterton, G. E.(Leicester, Loughb'gh)
Marshall, Fred	Shield, George William	Wise, E. F.
Mathers, George	Shiels, Dr. Drummond	Wood, Major McKenzie (Banff)
Matters, L. W.	Shillaker, J. F.	Young, R. S. (Islington, North)
Maxton, James	Short, Alfred (Wednesbury)
Messer, Fred	Simmons, C. J.	TELLERS FOR THE NOES.—
		Mr. Hayes and Mr. Charleton.

Question again proposed, "That those words be there inserted in the Resolution."

Sir A. LAMBERT WARD

The defeat of the last Amendment by the big battalions of the Government has made abundantly clear what has been slowly emerging during the last few days, and that is that the real importance of this Resolution is that in the eyes of the supporters of the Government it will injure their political opponents. We are prepared to admit that a certain amount of the increment value of land may be due to the efforts of the community, but, on the other hand, it is equally clear that a great deal of the increased value of land may be rightly and properly attributed to the efforts of the owner, and in cases like that it is only right and reasonable that the owner should not be subject to this tax. There are innumerable cases in which the value of land has been entirely created by the enterprise of the owner or of the pioneers who have developed the land. I take, for instance, the case of the Canadian Pacific Railway and the effect it has had upon the gigantic Dominion of Canada. Not many years ago the pioneers of the Canadian Pacific Railway threw a frail line of rails across Canada. Who created the value of the land on each side of that line? Was it created by the community, the Red Indian who hunted the bison, or by the pioneers who made the line? On the same line of reasoning, who is entitled to the increment value of the land—the community, the Red Indians, or the shareholders of the company who took the risk of supporting an enterprise of that kind?

Take the case of a reclamation of which I happen to know, where marsh land of about eight acres, which was valueless, which was swamped at high tides, was reclaimed by a company and turned into very valuable land. A wall was driven along the edge of the deep water, and the marsh was filled in, with the result that about 10 acres of building land was reclaimed. Who is entitled to the increment value of that land? Who created its value? Was it the community, or was it the enterprise, the skill and daring, of those who carried out the work. In cases like that it seems to me nothing short of iniquituous that valuable land, created entirely by the owners, should be subject to this tax. On the other hand, where it can be proved that the value of the land has been created

or largely increased by the efforts of the community, I admit that a certain tax should be payable, and that is my reason for supporting the Amendment. We say, quite clearly, that although the value of the land has been created in many cases by the community in an equal number of cases the value has been created or increased entirely by the efforts of the owners.

Question put, "That those words be there inserted in the Resolution."

The House divided: Ayes, 148; Noes, 239.

Division No. 238.]	AYES.	[11.20 p.m.
Acland-Troyte, Lieut.-Colonel	Edmondson, Major A. J.	Ormsby-Gore, Rt. Hon. William
Ainsworth, Lieut.-Col. Charles	Elliot, Major Walter E.	Peake, Captain Osbert
Albery, Irving James	Erskine, Lord (Somerset, Weston-S-M.)	Percy, Lord Eustace (Hastings)
Amery, Rt. Hon. Leopold C. M. S.	Everard, W. Lindsay	Peto, Sir Basil E. (Devon, Barnstaple)
Atholl, Duchess of	Falle, Sir Bertram G.	Pownall, Sir Assheton
Baldwin, Rt. Hon. Stanley (Bewdley)	Fermoy, Lord	Ramtbotham, H.
Balfour, Captain H. H. (I. of Thanet)	Fison, F. G. Clavering	Remer, John R.
Beamish, Rear-Admiral T. P. H.	Forestier-Walker, Sir L.	Reynolds, Col. Sir James
Beaumont, M. W.	Fremantle, Lieut.-Colonel Francis E.	Roberts, Sir Samuel (Ecclesall)
Bellairs, Commander Carlyon	Ganzoni, Sir John	Rodd, Rt. Hon. Sir James Rennell
Betterton, Sir Henry B.	Gault, Lieut.-Col. A. Hamilton	Ross, Ronald D.
Bevan, S. J. (Holborn)	Gilmour, Lt.-Col. Rt. Hon. Sir John	Ruggles-Brise, Colonel E.
Birchall, Major Sir John Dearman	Greene, W. P. Crawford	Russell, Alexander West (Tynemouth)
Bird, Ernest Roy	Grenfell, Edward C. (City of London)	Salmon, Major I.
Bourne, Captain Robert Croft	Gretton, Colonel Rt. Hon. John	Samuel, A. M. (Surrey, Farnham)
Bowater, Col. Sir T. Vansittart	Gunston, Captain D. W.	Sandeman, Sir N. Stewart
Bowyer, Captain Sir George E. W.	Hacking, Rt. Hon. Douglas H.	Shepperson, Sir Ernest Whittome
Boyce, Leslie	Hall, Lieut.-Col. Sir F. (Dulwich)	Skelton, A. N.
Bracken, B.	Hannon, Patrick Joseph Henry	Smith, Louis W. (Sheffield, Hallam)
Brass, Captain Sir William	Harvey, Major S. E. (Devon, Totnes)	Smith-Carington, Neville W.
Broadbent, Colonel J.	Henderson, Capt. R. R. (Oxf'd, Henley)	Smithers, Waldron
Brown, Brig.-Gen. H. C. (Berks, Newb'y)	Herbert, Sir Dennis (Hertford)	Somerville, A. A. (Windsor)
Buchan-Hepburn, P. G. T.	Hills, Major Rt. Hon. John Waller	Somerville, D. G. (Willesden, East)
Buchan, John	Hudson, Capt. A. U. M. (Hackney, N.)	Southby, Commander A. R. J.
Butler, R. A.	Inskip, Sir Thomas	Spender-Clay, Colonel H.
Butt, Sir Alfred	Iveagh, Countess of	Stanley, Lord (Fylde)
Campbell, E. T.	Jones, Sir G. W. H. (Stoke New'gton)	Stanley, Hon. O. (Westmorland)
Carver, Major W. H.	Lamb, Sir J. Q.	Steel-Maitland, Rt. Hon. Sir Arthur
Castle Stewart, Earl of	Lane Fox, Col. Rt. Hon. George R.	Taylor, Vice-Admiral E. A.
Cayzer, Sir C. (Chester, City)	Leighton, Major B. E. P.	Thompson, Luke
Cazalet, Captain Victor A.	Lewis, Oswald (Colchester)	Thomson, Mitchell-, Rt. Hon. Sir W.
Chamberlain, Rt. Hn. Sir J. A.(Birm., W.)	Little, Graham-, Sir Ernest	Tinne, J. A.
Chamberlain, Rt. Hon. N. (Edgbaston)	Llewellin, Major J. J.	Titchfield, Major the Marquess of
Chapman, Sir S.	Locker-Lampson, Rt. Hon. Godfrey	Todd, Capt. A. J.
Churchill, Rt. Hon. Winston Spencer	Locker-Lampson, Com. O.(Handsw'th)	Turton, Robert Hugh
Clydesdale, Marquess of	Lymington, Viscount	Wallace, Capt. D. E. (Hornsey)
Cockerill, Brig.-General Sir George	McConnell, Sir Joseph	Ward, Lieut.-Col. Sir A. Lambert
Conway, Sir W. Martin	Macdonald, Capt. P. D. (I. of W.)	Waterhouse, Captain Charles
Courtauld, Major J. S.	Margesson, Captain H. D.	Wayland, Sir William A.
Courthope, Colonel Sir G. L.	Marjoribanks, Edward	Wells, Sydney R.
Croft, Brigadier-General Sir H.	Meller, R. J.	Williams, Charles (Devon, Torquay)
Crookshank, Capt. H. C.	Merriman, Sir F. Boyd	Windsor-Clive, Lieut.-Colonel George
Croom-Johnson, R. P.	Mline, Wardlaw-, J. S.	Winterton, Rt. Hon. Earl
Cunliffe-Lister, Rt. Hon. Sir Philip	Monsell, Eyres, Com. Rt. Hon. Sir B.	Wolmer, Rt. Hon. Viscount
Dalkeith, Earl of	Moore, Lieut-Colonel T. C. R. (Ayr)	Womersley, W. J.
Davidson, Rt. Hon. J. (Hertford)	Morrison, W. S. (Glos., Cirencester)	Wood, Rt. Hon. Sir Kingsley
Davies, Maj. Geo. F.(Somerset, Yeovil)	Muirhead, A. J.
Davison, Sir W. H. (Kensington, S.)	Newton, Sir D. G. C. (Cambridge)	TELLERS FOR THE AYES.—
Duckworth, G. A. V.	Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld)	Sir George Penny and Sir Victor
Dugdale, Capt. T. L.	O'Connor, T. J.	Warrender.
Eden, Captain Anthony	O'Neill, Sir H.
NOES.
Adamson, Rt. Hon. W. (Fife, West)	Ammon, Charles George	Baker, John (Wolverhampton, Bilston)
Adamson, W. M. (Staff., Cannock)	Angell, Sir Norman	Baldwin, Oliver (Dudley)
Addison, Rt. Hon. Dr. Christopher	Arnott, John	Barnes, Alfred John
Aitchison, Rt. Hon. Craigle M.	Aske, Sir Robert	Barr, James
Alexander, Rt. Hon. A. V. (Hillsbro')	Attlee, Clement Richard	Batey, Joseph
Alpass, J. H.	Ayles, Walter	Benn, Rt. Hon. Wedgwood
Bennett, William (Battersea, South)	Hopkin, Daniel	Pethick-Lawrence, F. W.
Benson, G.	Horrabin, J. F.	Picton-Turbervill, Edith
Bevan, Aneurin (Ebbw Vale)	Hudson, James H. (Huddersfield)	Potts, John S.
Birkett, W. Norman	Hunter, Dr. Joseph	Price, M. P.
Blindell, James	Isaacs, George	Quibell, D. J. K.
Bondfield, Rt. Hon. Margaret	Jenkins, Sir William	Ramsay, T. B. Wilson
Bowerman, Rt. Hon. Charles W.	John, William (Rhondda, West)	Rathbone, Eleanor
Broad, Francis Alfred	Johnston, Rt. Hon. Thomas	Richards, R.
Brockway, A. Fenner	Jones, Llewellyn-, F.	Richardson, R. (Houghton-le-Spring)
Bromley, J.	Jones, Morgan (Caerphilly)	Riley, Ben (Dewsbury)
Brooke, W.	Jowett, Rt. Hon. F. W.	Ritson, J.
Brothers, M.	Jowitt, Sir W. A. (Preston)	Romeril, H. G.
Brown, C. W. E. (Notts, Mansfield)	Kedward, R. M. (Kent, Ashford)	Rosbotham, D. S. T.
Brown, Rt. Hon. J. (South Ayrshire)	Kelly, W. T.	Rowson, Guy
Buchanan, G.	Kennedy, Rt. Hon. Thomas	Salter, Dr. Alfred
Burgess, F. G.	Kinley, J.	Samuel, Rt. Hon. Sir H. (Darwen)
Burgin, Dr. E. L.	Lang, Gordon	Samuel, H. Walter (Swansea, West)
Caine, Hall-, Derwent	Lansbury, Rt. Hon. George	Sanders, W. S.
Cameron, A. G.	Lathan, G.	Sawyer, G. F.
Carter, W. (St. Pancras, S. W.)	Law, Albert (Bolton)	Scurr, John
Chater, Daniel	Law, A. (Rossendale)	Sexton, Sir James
Church, Major A. G.	Lawrence, Susan	Shepherd, Arthur Lewis
Cluse, W. S.	Lawson, John James	Sherwood, G. H.
Clynes, Rt. Hon. John R.	Lawther, W. (Barnard Castle)	Shield, George William
Cocks, Frederick Seymour	Leach, W.	Shillaker, J. F.
Compton, Joseph	Lee, Frank (Derby, N. E.)	Short, Alfred (Wednesbury)
Cove, William G.	Lee, Jennie (Lanark, Northern)	Simmons, C. J.
Cripps, Sir Stafford	Lees, J.	Sinclair, Sir A. (Caithness)
Daggar, George	Lewis, T. (Southampton)	Sinkinson, George
Dalton, Hugh	Lindley, Fred W.	Sitch, Charles H.
Davies, D. L. (Pontypridd)	Lloyd, C. Ellis	Smith, Ben (Bermondsey, Rotherhithe)
Davies, E. C. (Montgomery)	Longbottom, A. W.	Smith, Frank (Nuneaton)
Davies, Rhys John (Westhoughton)	Longden, F.	Smith, Rennie (Penistone)
Denman, Hon. R. D.	Lovat-Frater, J. A.	Smith, Tom (Pontefract)
Dudgeon, Major C. R.	Lunn, William	Smith, W. R. (Norwich)
Dukes, C.	MacDonald, Malcolm (Bassetlaw)	Sorensen, R.
Duncan, Charles	McElwee, A.	Stamford, Thomas W.
Ede, James Chuter	McEntee, V. L.	Stephen, Campbell
Edmunds, J. E.	McKinlay, A.	Sullivan, J.
Edwards, C. (Monmouth, Bedwellty)	MacLaren, Andrew	Sutton, J. E.
Edwards, E. (Morpeth)	Maclean, Sir Donald (Cornwall, N.)	Taylor, R. A. (Lincoln)
Egan, W. H.	Maclean, Nell (Glasgow, Govan)	Taylor, W. B (Norfolk, S. W.)
Foot, Isaas	MacNeill-Weir, L.	Thurtle, Ernest
Freeman, Peter	McShane, John James	Tillett, Ben
Gardner, B. W. (West Ham, Upton)	Mander, Geoffrey le M.	Tinker, John Joseph
Gardner, J. P. (Hammersmith, N.)	Manning, E. L.	Tout, W. J.
George, Major G. Lloyd (Pembroke)	Mansfield, W.	Townend, A. E.
George, Megan Lloyd (Anglesea)	Marcus, M.	Trevelyan, Rt. Hon. Sir Charles
Gibson, H. M. (Lancs, Mossley)	Markham, S. F.	Vaughan, David
Glassey, A. E.	Marley, J.	Viant, S. P.
Gossling, A. G.	Marshall, Fred	Walker, J.
Gould, F.	Mathers, George	Watkins, F. C.
Graham, D. M. (Lanark, Hamilton)	Matters, L. W.	Watson, W. M. (Dunfermline)
Graham, Rt. Hon. Wm. (Edin., Cent.)	Maxton, James	Watts-Morgan, Lt.-Col. D. (Rhondda)
Gray, Milner	Messer, Fred	Wedgwood, Rt. Hon. Josiah
Greenwood, Rt. Hon. A. (Colne)	Millar, J. D.	Wellock, Wilfred
Griffith, F. Kingsley (Middlesbro' W.)	Mills. J. E.	West, F. R.
Groves, Thomas E.	Milner, Major J.	Westwood, Joseph
Grundy, Thomas W.	Montague, Frederick	White, H. G.
Hall, G. H. (Merthyr Tydvil)	Morley, Ralph	Whiteley, Wilfrid (Birm., Ladywood)
Hall, J. H. (Whitechapel)	Morrison, Rt. Hon. H. (Hackney, S.)	Whiteley, William (Blaydon)
Hall, Capt. W. G. (Portsmouth, C.)	Morrison, Robert C. (Tottenham, N.)	Williams, David (Swansea, East)
Hamilton, Mary Agnes (Blackburn)	Mort, D. L.	Williams, Dr. J. H. (Llanelly)
Hamilton, Sir R. (Orkney & Zetland)	Murnin, Hugh	Williams, T. (York, Don Valley)
Hardie, George D.	Nathan, Major H. L.	Wilson, C. H. (Sheffield, Attercliffe)
Harris, Percy A.	Naylor, T. E.	Wilson, J. (Oldham)
Hastings, Dr. Somerville	Noel Baker, P. J.	Wilson, R. J. (Jarrow)
Haycock, A. W.	Oldfield, J. R.	Winterton, G. E.(Leicester, Loughb'gh)
Hayday, Arthur	Oliver, George Harold (Ilkeston)	Wise, E. F.
Henderson, Thomas (Glasgow)	Oliver, P. M. (Man., Blackley)	Wood, Major McKenzie (Banff)
Henderson, W. W. (Middx., Enfield)	Palin, John Henry	Young, R. S. (Islington, North)
Herriotts, J.	Paling, Wilfrid
Hicks, Ernest George	Palmer, E. T.	TELLERS FOR THE NOES.—
Hirst, G. H. (York W. R. Wentworth)	Parkinson, John Allen (Wigan)	Mr. Hayes and Mr. Charleton.
Hoffman, P. C.	Perry, S. F.

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."

Mr. CAMPBELL

I agree with all that has been said by my colleagues to-night in condemnation of these Land Tax proposals,

and feel that they will work to the detriment of my constituents, but I wish to confine my remarks to the case of playing-fields, sports grounds and commons. I am very keen myself about all forms of sport, and do all I can to get facilities for others to enjoy games in the open air. In any constituency there are several dozen clubs—football, cricket, law tennis, bowls and other clubs. Some of them are the property of big banks and private firms, but the majority of them are clubs run by poor clerks and dependent upon the subscriptions of their members, and often maintained only with very great difficulty. Under the Bill as it stands [HON. MEMBERS: "What Bill?"] these clubs will be called on to pay extra taxation on their grounds. Many of these clubs are doing a great deal for the children of the elementary schools, allowing them to play on their grounds on two or three days of the week. They are only too delighted to do so, but if the clubs are to be taxed I rather fancy that another line of thought may arise.

Are our school play-grounds to be taxed? [HON. MEMBERS: "No!"] It does not say so anywhere in the Bill [HON. MEMBERS: "What Bill?"] I do not know whether hon. Members opposite are in a hurry to go home, but the quieter they are the sooner my speech will be finished. In London there is no less an area than 13,000 acres of public open spaces, and, by a coincidence, the area of private open spaces is exactly the same. According to the Bill [HON. MEMBERS: "What Bill?"] the 13,000 acres of public open spaces will not be taxed, but the private open spaces are to be. Is it the wish of the Government that the 13,000 acres of private open spaces should come into the building market?

What, I should like to ask the Members, is the site value of a privately owned common? It cannot be enclosed. [Interruption.] I dare say some of the Members of the Government are interested in privately owned commons. Let me suggest that the health value of a privately owned common to the community is far greater than the site value. During the last few years Ministers of Health and Presidents of the Board of Education have supported the playing-fields movement and I am very anxious to know whether the Minister of Health and the President of the Board of Education are going to support this Resolution and allow this movement to be killed by the Bill which is to follow?

Mr. QUIBELL

On a point of Order, I would like to know whether we are now discussing the Bill which will follow the passing of this Resolution or the Resolution itself?

Mr. DEPUTY-SPEAKER

The Resolution before the House authorises the introduction of the Bill, and the hon. Member is quite in order.

Mr. CAMPBELL

I see that the right hon. Gentleman the First Commissioner of Works is in his place, and he has done a great deal to support the playing-fields movement, and he bas realised that it is for the benefit of the country that we should have as many open spaces as possible. If the Bill foreshadowed by this Resolution becomes law, all these open spaces will be closed. [Laughter.] It is very easy for hon. Members opposite to laugh, but they do not seem to take the slightest interest in the question of providing facilities for the children to enjoy their games and exercises. In my view, money spent upon providing open spaces is a form of economy. I am in favour of trying to keep people in a good state of health, instead of having to send them to hospitals. I hope that the right hon. Gentleman in charge of this Resolution will bear in mind that it is important to realise that there are in Greater London and the rest of the country thousands of acres of private open spaces used as cricket grounds, bowling greens and other forms of sport which are supported by some of the very poorest people in the country. It is not a question of the rich, because in many parts of the country these open spaces are supported and kept up by the boy scouts and boys clubs. [Interruption.]

Mr. DEPUTY-SPEAKER

I understand that quite a number of speakers wish to take part in the Debate. I do not say that these interruptions are entirely unimportant, but I do say they tend to prolong the Debate.

Mr. CAMPBELL

I should like to make my humble apologies, Mr. Deputy-Speaker, for speaking for more than the 10 minutes to which I promised to confine myself, but, on the other hand, I should like to draw your attention to the fact that although I may have been on my feet for 20 minutes, I have probably not been speaking for more than five. It is hon. Gentlemen on the Government Benches who will have the benefit of staying to listen to many more speeches, because, as they know from experience, the more they interrupt, the more speeches they will hear. As repetition is not permitted, I will sum up by saying that I sincerely hope the Government will give attention to the remarks I have made. The Solicitor-General made a few observations last night about playing-fields and school grounds, but he did not go into the facts of the case as I have mentioned them in connection with the many small clubs that are run by a very humble type of young people, who look forward at the week-ends to getting their games. They pan only manage with very great difficulty to keep these clubs going, and, on the top of all that, they are now threatened with extra taxation. I, therefore, implore the Government to take these facts into consideration. I have spoken only of facts which have been given me this afternoon by an authority, and which show that in London and Greater London there are 13,000 acres of private open spaces and 13,000 acres of public open spaces. It would be a crime were this land to be brought under the proposed Bill, so that the owners of it should have to pay this extra taxation.

Sir SAMUEL ROBERTS

It is somewhat unfortunate that technical and complicated matters of this sort have to be discussed at this late hour, but this is the first opportunity the House as a whole has had of discussing this Resolution because the discussion up to recently has been on a very narrow point. I wish to deal with one aspect of the question which comes very intimately to my constituency. I wish to describe the system by which practically all the land in my constituency has been developed during the last 50 years, and to show how the incidence of the tax will fall, the unfairness of the incidence and the effect of such taxation upon unbuilt-on land. I am afraid the explanation will be technical, dry and somewhat lengthy. [AN HON. MEMBER: "And unconvincing."] That we will leave till the end of what I have to say. I am certain that anything that is dry and technical will not be convincing to the hon. Member who interrupted. The principle on which the land has been developed is that either the original landowner or some individual or company who has bought the land from him has set out on a development scheme. The first thing he has had to do is to make rough roads and sewers. That having been done, the land has been laid out in plots and offered to private builders upon leases. In recent years the leases have been chiefly for 800 years. The period of 99 years has gone long ago. The builder, having taken, not a lease of the land but a provisional agreement, sets to work to build. As he has built, he has drawn money from financiers in one way or another, and, when the buildings have been practically completed, he has been able to take from the owner on actual lease at a ground rent. Having got the lease, he sells the house, retaining for the time being the ground rent. When he has accumulated a block of ground rents, it has not been to his interest to hold them. He is wanting to use his money for other purposes, so it has been the practice to sell the ground rents in blocks to investors. When Consols were standing at about 117, these ground rents went up to 27 years' purchase. They gradually came down to about 20 years, and I believe they have now fallen below 20. They have been bought, not by land speculators, not by people who are waiting for reversions—who would wait 800 years for a reversion?—but by investors who had bought them in competition with railway debentures, and other market securities.

What about the incidence of the tax? The Solicitor-General yesterday was very clear and explicit and I am grateful to him for stating what the Government's intentions are. He gave a specific case. I will take a specific case, too. I will take a case where the value of the land was £200 and the ground rent was £10. That land will not have increased in value more than the capital value at the time when the improvement was made and the house was built, and the ground rent will not be worth more to-day than the £200 that it was worth at the time when the individual purchased it. The tax of 200 pennies will come on, and will be collected from the occupant of the house, but, according to the Solicitor-General, assuming the two values to be the same—£200 site value and £200 ground rent—the occupier will deduct from the ground rent, when he pays it, 1s. 8d. in the pound. That is an additional tax on that investment of 1s. 8d. in the pound over above his Income Tax, Super-tax and every other tax. Can that be in any way justified? I cannot see there Is any fairness in it whatsoever. I should like to ask Liberal Members, and especially the right hon Gentleman the Member for North Cornwall (Sir D. Maclean) and the Hon. Member for South West Bethnal Green (Mr. Harris) If there is any justice or fairness in an extra tax of 1s. 8d. in the pound on investments of that sort?

It is unfair that a ground rent should be so taxed. What is the owner of it going to do? It will become absolutely unsaleable. Nobody is going to purchase it, because he will say that 1s. 8d. is put on it by this Budget, another 1s. 8d. in the next Budget and possibly another 1s. 8d. in the following one. There is no security whatever for the ground rent. Why should that individual and perhaps trustees, who acted on the advice of solicitors, accountants and land agents that these ground rents were well and duly secured, suffer not only the penalty of an immediate tax, but also the obvious fear that the tax may be increased and the whole property may be taken away from them. If you increase the penny to a shilling, everything they have got has gone and the investment disappears. I ask hon. Members is there any sense of justice whatever in it? Why should the man or woman who buys ground rents be penalised in that way, whereas the man who bought Consols or Great Western Debentures is to be free from it? There is no possible justice about it.

Take another point. Are you going to be able to develop land on this system of leasehold development in the future? I think it will be perfectly impossible to do so. I do not think anybody will create ground rents in future, because nobody will buy them. The only method of development will be the method of selling the freehold right out. Then the burden will fall, certainly, on the purchaser and occupier, but it will smash this principle of the 800 or 900 years' lease. This system has been a most valuable one for development. Hon. Members opposite are so fearfully prejudiced by the fact that anybody happens to be a landowner that they regard him as first cousin to Satan and will not give him fair-play. It has been far easier for the builder to work on the leasehold principle, because he does not have to pay cash down for the freehold. Hon. Members who have any knowledge of the work of the building societies know that what I am saying is absolutely true. The whole thing is rank injustice. The principle of the injustice is, that the Government and their supporters take no notice of existing facts and of the changes which have taken place in civilisation.

When I hear hon. Members opposite saying that God has given the land to the people, I always think what a fatuous sort of remark it is. I would ask them the question: "To whom did God give the land of the United States of America, 'God's own country'?" When they have answered that question, then they will probably see that they have to realise existing facts and circumstances. They will have to realise that the land of the United States of America belongs to the landowners of the United States, and not to the Red Indians. [Interruption.] I am afraid that hon. Members make it rather difficult for me to proceed with rapidity. There is plenty of time before daylight. They refuse to realise existing facts, and they are going to place the whole of this tax upon the people who today happen to be the owners of the land. People have sold it over and over again, and now the Government are going to tax the people who happen at this moment to be the owners. They are, therefore, taking, in the form of an annual tax, a capital confiscation of one-twelfth of the value of the site. That is obviously unjust. Surely, if they want to deal with this matter in any just way, they should draw a datum line in the present, and deal with the future. I think they would find there is not much opposition now to a form of duty on betterment or increment. In the past there might have been, but not so much now, the reason being that everybody has become so hard-up. If we hear of anybody having a little bit of luck, we all look round and say: "He's got a bit of luck. Let the State take some of it." We ought to say: "God bless him. Let him have it." It is a hard-up time. If there is a little bit of luck in that way, I do not think there will be great opposition in the future to taxing it, but to seize on the present owner of land and confiscate one-twelfth of the capital value or land in one fell swoop, from people who have bought in the open market, under the sanction of the law, is to penalise that section, to make ground rents unsaleable and to smash entirely the principle of developing land under the leasehold principle.

It is shaking confidence in the value of land and in the value of everything everywhere, and it is going to make it extraordinarily difficult for people to start developing land or putting money into the making of roads for development. Private enterprise in building will cease, and the only possible builder and householder will be the local authority. If you get rid of the private builder's help in housing, you will cut down very largely the number of houses that can be built. In every respect, this is an entirely retrogade Measure. If it does go through, it will be most damaging to the security and prosperity of the country, to housebuilding and to town-planning. In its present form, it should be resisted in every possible way by the Conservative Opposition.

Colonel RUGGLES-BRISE

My hon. Friend has given the House a very interesting example of the injustice which will be perpetrated if the proposals of the Government become law. He gave the example of the injustice to the owners of ground rents. I would like to draw the attention of the House to a somewhat similar case.

12 m.

Take the comparison between two persons who invested the same amount of money at the same time, say in 1920. One man invested £1,000 in land, and the other invested £1,000 in War Loan. Let us examine the position to-day. Hon. and right hon. Gentlemen opposite claim that any difference in the value of the land is due to the action of the community. We will assume that both the land which was bought for £1,000 and the War Loan which was bought for £1,000 have appreciated in value to the extent of 30 per cent., the land now being worth £1,300 and the holding in War Loan £1,300. That percentage, as a matter of fact, happens approximately to represent the rise in War Loan during the last 11 years, and therefore I take that figure as being an actual one. What has happened in the case of the rise in the value of the land? The owner of the land has probably spent a considerable amount of money in improving the land. Has the holder of War Loan particularly done anything to enhance the value of his holding in War Loan? The community probably has had nothing to do with the rise in the value of the land, but it is possible that the action of the community has had a good deal to do with the rise, or the fall in the value of War Loan. Why has the value of War Loan gone up to that extent? It is the misfortune of the community which has made War Loan rise by most of those points. It is because industry is not able profitably to make use of capital and to pay it out in wages at the present time. Therefore, money is lying ready for investment, not in industrial securities, but in securities of the nature of War Loan, with the result that War Loan is rising. The holder of War Loan has gained because the community has been going through a lean time. What is the justification for the Government saying that land should be selected as the one form of investment to be subjected to a form of penal taxation? The Government have been asked the question several times in the course of this Debate. My right hon. Friend the Member for Edgbaston (Mr. Chamberlain) asked the question of the Government in moving his Amendment this evening. No answer has been vouchsafed by any Government spokesman on the ground of equity. They have made no attempt to justify the selection of land for this particular form of penalty.

We will consider now the question which was enlarged upon at some length by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) yesterday. He tried to argue that land pays less taxation than does any other form of property. Of course, he was entirely wrong. The House would never be surprised at that. What does the owner of ordinary securities pay by way of taxation? He pays Income Tax, and if he is a wealthy man he pays Surtax, and when he dies, his estate pays Death Duties. What does the owner of land pay?

Land, especially if it is agricultural land, has to pay Income Tax twice. The owner pays once under Schedule A and he pays for the second time as occupier under Schedule B. If the land should happen to be mortgaged, owing to the fact that the rates of mortgage interest have risen from 1½ per cent. to 2 per cent. over pre-war rates, the owner of the land pays the mortgage tax as well, so that the land bears Income Tax three times over. In addition, the land is subject not only to surtax if it is of sufficient value, but Death Duties are levied on it. The Death Duties are a far more heavy burden on land than on any other form of securities. If a man who owns securities, dies, the State is paid a certain amount in cash and it is a comparatively simple operation for his solicitor and broker; but when the owner of land dies his executors have to instruct an estate agent to get out plans, and an auctioneer has to be instructed to advertise the property for sale. Possibly on the day of the sale there are no buyers, and although a great deal of expense has been incurred, no sale materialises and the executors are hard put to it to meet the claims of the State.

In addition to these forms of taxation, there is Land Tax, not Land Values Tax. Then there is tithe, another very heavy form of taxation. All these things lie very heavily on the land. They lie on no other form of security in the same way. Yet it is land that the Government select for a new form of penal taxation. There is also an indirect form of taxation on landed property and buildings, and that is the Rent Restrictions Act. A large number of owners depend for their livelihood on rents which have been restricted. Although cost of repairs and everything else has gone up, and although the value of neighbouring buildings of exactly the same quality has risen and other houses in the neighbourhood have been let at rents in proportion to the prices ruling to-day, owing to the Rent Restrictions Act, imposed by the State, many owners are deprived of a large part of their income. War Loan and other forms of security are exempt from such burdens.

The new form of taxation will hit the industry of agriculture. I have read the words of the Chancellor of the Exchequer very carefully and I think his explanation of the tax as affecting agricultural land is perfectly straightforward. There seems to be an impression in the minds of some hon. Members on the back benches opposite that agricultural land is going to be exempt from the tax. I can visualise those hon. Members going to their constituencies at the week-end and giving that impression. I sincerely hope that they will do nothing of the kind, because the words of the Chancellor of the Exchequer are very explicit on the matter. It is curious that at this time the Government should introduce a tax which will be a new burden on agriculture. The tax will hit the farmer, the nurseryman, the market gardener, and the allotment-holders within a certain radius of any centre of population. Why should they be subject to the tax? Is it that they have been making large profits, or is this the first instalment of the Government's new proposals for making farming pay? The Chancellor of the Exchequer says that this proposal will make land available to the community. But my right hon. Friend the Member for Croydon (Sir W. Mitchell-Thomson) dealt admirably with that point and showed that a whole body of legislation has been passed within the last 12 years which enables local authorities to acquire land which they may require at reasonable price. The Solicitor-General tried to whittle down the effect of that legislation, but he knows that any local authority which wants land can get it at a fair price. The price which the local authority is allowed to pay is fixed by the Government valuer, and if the price is disputed, it is referred to two official arbitrators.

The present Minister of Agriculture set up a Departmental Committee in 1921 and it reported at a time when everything was at an inflated value, that: Land for housing schemes can be obtained on reasonable terms, and no further economy in the provision of workmen's dwellings can be looked for from that source. It is absurd for the Chancellor of the Exchequer to put forward as one of the justifications for this new penal tax that it will make land available for the community. Nor will it make the land cheaper. If the Chancellor of the Exchequer meant that the seller will get less for his land, that may be true, but it does not mean that the buyer is to get the land cheaper. He will buy the land subject to a new charge and, if he is a prudent man, he will take into consideration the capitalised value of that charge. A large number of tithe-payers who are in difficulties about the payment of their tithe are told when they complain: "It is your own fault. When you or your forefathers bought the land you or they knew it was subject to the charge of tithe." The man who buys a plot for development will be in exactly the same position. He has to add on to the cost price of the land the capitalised value of the new charge imposed by the State. The effect of that is that when a man buys any land which is ripening for development, he is buying land which has become the copyhold of the State and subject to an annual fine.

What are the real intentions of the Chancellor of the Exchequer? They are two: First, the Socialist party, baulked of obtaining nationalisation by open means, that is to say, by robbery if no compensation is paid; is attempting to obtain their ambition by this thin end of the wedge. The Chancellor of the Exchequer has argued that land does not pay its fair share of taxation. That argument has been exploded. He has argued that it has not been available for the community. That argument will not bear examination. He says that the community is responsible for improvements. That idea has been exploded a hundred times during the course of these debates. There is nothing whatever in the arguments of the right hon. Gentleman or of any of the spokesmen of the Government which have been put forward in justification of this form of taxation. The fact is that the Chancellor of the Exchequer intends to nationalise the land of this country by stealth. It is only one penny in the pound now, but there are 239 pennies left which he means to have in the end. He will use the thumb-screw of the quinquennial valuation. If he cannot take the pennies off too quickly, he will attain his object by each quinquennial valuation, put up the assessment and get it in that way. His second object is a purely political one connected with the party below the Gangway. They have had their fantastic futilities first of "conquering unemployment" and then of "tackling unemployment" turned down. They are more than even a Socialist Chancellor of the Exchequer can swallow. At the game time Liberal support has got to be bought. It is vital to the existence of the Government; and the existence of the Government is vital to the Liberal party. Therefore a bargain, an unholy bargain, has had to be struck in order to give the Liberal party an excuse for keeping the Socialist party in office. The land tax is the sop by which the Socialist Chancellor of the Exchequer hopes to salve the uneasy conscience of the Liberal party.

Sir DONALD MACLEAN

It is perfectly clear that the House is under a great disadvantage in discussing this Resolution, because it does not know the terms of the Finance Bill. The Government cannot help that, and this is nothing more than an enabling Resolution. I would suggest that the Goverment should say when they are going to produce the Finance Bill. It is a very reasonable request. We have had three or four days' Debate, and we do not yet know when the Bill will be introduced. Everybody knows that by this time the Finance Bill is pretty well ready, together with the provisions relating to this Resolution. I hope that before the Debate closes, the Financial Secretary will be able to tell the House what it is entitled to know, when the Bill will be produced.

Mr. J. WILSON

This Debate, however, irrelevant it may have been to the subject of the Resolution, has crystallised the difference between the Opposition and ourselves in relation to the ownership of land. One is constrained to ask why, if the burden of owning land is so onerous, as we are expected to believe, the people who have to discharge the onerous duty of owning land do not give it up. If it is such an onerous duty to own land, why in the name of commonsense do not the owners yield the ownership to someone who would be quite willing to accept—

Mr. SPEAKER

The Question before the House is the taxation of land values, and not the ownership of land.

Mr. WILSON

I will assent to your Ruling, but I ask you to accept my submission that everything that I have said is quite in consonance with, and in reply to, speeches made on the other side. I submit that I am entitled to reply to speeches that were made when you were not in the Chair.

Mr. SPEAKER

I can only rule in accordance with my own views of what is in order when a particular Member is speaking. I cannot rule about something I have not heard.

Mr. WILSON

The simple point I must now make, since you have ruled that I cannot reply to speeches that have been made in your absence—

Mr. SPEAKER

I did not rule out a reply to speeches that have been made in my absence, but I did rule that nationalisation of land and all that it entails does not come within the Resolution before the House. The hon. Member will understand that if I allow speeches on that subject, I cannot rule out hon. Members opposite who answer them.

Mr. WILSON

I am not discussing the nationalisation of land. I was merely trying to follow speeches that were made in your absence. We have from the other side of the House a claim that the private ownership of land throws upon the owners some onerous duty which the community ought not to expect private owners to bear. I am merely suggesting to owners of land, if they have a complaint on that account, an easy way out, a way of which the community would be very glad to avail themselves. It would be an easy thing for the private landholder to absolve himself of all responsibility by transferring the ownership of his land to the State.

Mr. SPEAKER

It appears that I was quite correct in my Ruling.

Mr. OSWALD LEWIS

The first thing that a Chancellor may be expected to do when he is faced with the merits of some new form of taxation is to consider, first, what the tax would cost to collect, second, what it would yield, and third, what was the experience of other countries that had tried the same method of taxation. I want to call the attention of the House to this proposal in the light of those three considerations. The Chancellor told us that some 10,000,000 to 12,000,000 hereditaments would require to be examined. He also estimated the cost at between £1,000,000 and £1,500,000. That works out at about 2s. each on the average, that is, after allowing for the original assessment, for any disputed claims, and for the final decision. I suggest that the estimated cost is so obviously inadequate that it can only mean that the Chancellor was not prepared to take the House into his confidence as to what such a scheme would really cost, and that he deliberately took an extremely optimistic view of the cost. So much so that it is perfectly safe to prophesy that, if this tax is, in fact, imposed, the cost of this valuation will be nearer £5,000,000 than £1,000,000. As to the yield, here the Chancellor of the Exchequer had not even the courage to name a figure at all. Having studied the matter for years, having had the advantage of expert advice at every stage, he has come to the conclusion that the yield will be so grotesquely inadequate to the cost that he is ashamed to name any figure to this House.

To turn to the third consideration, comparison with similar legislation in other countries, we have heard something during the debates on this Resolution of land taxation in other countries. One or two hon. Members opposite have quoted New Zealand. I wonder if those hon. Members, who so glibly quote New Zealand, have ever taken the trouble to read through the Acts of Parliament passed in New Zealand dealing with land legislation. If they had, they would be struck not by the similarity of the proposal which the Chancellor of the Exchequer is putting before us, but by its dissimilarity at every point. I expect, of course, the Solicitor-General who, I am entitled to assume, has studied these Acts. I want to put a few questions to him about New Zealand and about the land taxation Act of 1923, which is the consolidating Act in New Zealand, and to ask him why, after New Zealand has had some 50 years' experience of land taxation, the Government have deliberately decided in many most important respects to introduce an entirely different system into this country.

For example, let us take first the period of returns. The Chancellor of the Ex- chequer tells us that properties are to be reassessed every five years. As the Solicitor-General no doubt knows, it is provided under this Act that there shall be annual assessments. That is the result of the 50 years' experience in New Zealand that annual reassessments are necessary. That is an important point of difference because, first of all, there is the question of staff. If you have a staff to do your valuation and they take a year and a half or two years to do it, and then you have to wait five years for your next valuation, obviously your staff is dispersed and you have all the difficulty and expense of getting them together again. Can the Solicitor-General tell us why this period of five years has been deliberately chosen instead of the period of one year, which in the experience of New Zealand is necessary?

With regard to the question of notice of assessment, the Chancellor of the Exchequer told us that, in the first case, the owner of the property would be given notice of the assessment decided upon by the Government valuers, but that in the case of subsequent reassessments no such notice would be given. There, again, the experience of New Zealand is to the contrary. They provide for notice to be given of every assessment. I presume they have found it necessary, so it will be found necessary in this country. That is of importance, because it will obviously affect the cost. The Chancellor of the Exchequer said as much. At any rate, he let it be understood that he did not desire to have these notices sent out every time on the ground of expense. My point is that people who have had practical experience of this kind of taxation find it is, in fact, necessary to send out these notices. With regard to the question of appeals, the Chancellor of the Exchequer does not in all cases contemplate appeals to the Courts. In New Zealand they have found it is necessary to allow an appeal in the first instance to the Register's Court and a further appeal to the Supreme Court, either if a question of law is at issue or if it be a question of fact if the sum in dispute exceeds £200.

As I understand it, the proposal is to levy this tax on the whole value of the land that comes within the scope of the Bill. That, again, is contrary to what has been found practicable and wise in New Zealand. There, if the total property does not exceed £1,500 in value, tax is paid only on £1,000—£500 is deducted—and with larger sums some variations of that kind is allowed. Over and above that, allowance is made for the effect of mortgages and, in addition, discretion is given to the Commissioners who administer this law to allow exemptions in certain cases of hardship. It will be interesting to know from the Solicitor-General whether anything of that kind is contemplated in the Bill, whether the Government really mean to make any deduction of any part of the total before levying the tax, and whether they do not mean to take into consideration the fact of mortgages and do not propose to provide any machinery whereby in cases of hardship the tax may be modified or withdrawn. We have been told by the Chancellor of the Exchequer of certain classes of land which he proposes to exempt. I was particularly interested to read in this consolidating Act of New Zealand that they have found it wise to make a far wider series of exemptions. I do not imagine I am giving information to the Solicitor-General, but I would like to ask him, having the information in his possession, why it is that the Government have not considered the cases not only of universities and schools, but of land owned by friendly societies, registered building societies, and savings banks? All those classes of land are exempt from land taxation in New Zealand, which is one of those countries which hon. Members opposite have offered to us as an instance of the wisdom of this form of taxation. It would be interesting to know what is the broad consideration that has guided the Government in deciding not to exempt any of these classes of property.

Neither from the point of view of reasonable cost of collection, nor from the point of view of a substantial yield when collected, nor from the point of view of profiting by the long experience of other countries in this form of legislation has the Chancellor of the Exchequer been very successful in his proposals. We are, therefore, driven to wonder what is the real reason why this Resolution has been brought before the House. I suggest there are two principal reasons. The first is because, as we were shown in the Budget and in the Budget Statement, the finances of this country under Free Trade have broken down. The right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) used a very significant expression in speaking of the Chancellor of the Exchequer yesterday. He referred to him as "hard pressed." I venture to suggest that, though that description is undoubtedly correct, the reason is due to his own obstinacy and the folly of those who sit behind him through their declining to broaden the basis of taxation by indirect taxation. The other object with which this Resolution has been put before us would appear to be to dangle a bait before the palate of the right hon. Member for Carnarvon Boroughs. I suppose the Government feel that he has been given a little too much stick by his own supporters, and that they ought to reward him. He has had his reward; it is in the Scarborough by election. [Interruption.] I venture to say that, so far as we on this side of the House are concerned, we need not greatly trouble at the strengthening of the alliance between hon. Members opposite and hon. Members below the Gangway, because, the longer hon. Members opposite and hon. Members below the Gangway keep hon. Members in front of us in office, the greater will the collapse be when they go to the country.

Mr. PETHICK-LAWRENCE

I am sure that the House will not desire at this time anything in the nature of an extensive speech. There has been considerable debate on this question already, and we shall, as we all know, have many future opportunities of thrashing this matter out, both in principle and in detail. But it is common courtesy to hon. Members who have taken part in this discussion that I should say a few words in reply to the points that they have raised. As regards playing fields, I am not quite sure whether the hon. Member who raised that question was in the House last night when my hon. and learned Friend the Solicitor-General dealt with that question, but if he were not here then, he will find that a good deal of what he has said to-night was answered by the hon. and learned Gentleman. If there are other points which he wishes to bring forward in Committee, they will be considered on their merits. The right hon. Member for North Cornwall (Sir D. Maclean) asked me a question with regard to the date on which we shall have the Finance Bill. Since I spoke on that question during the previous discussion I have had an opportunity of making inquiries, and I find that the Bill will be introduced now, and I can confidently say that it will be in the hands of hon. Members not later than Wednesday of next week.

In the speech made from the back benches opposite in which an hon. Member endeavoured to illustrate the number of burdens that at present fall on the land and to prove that the land was taxed three times over with Income Tax, the hon. Member seemed to be under the impression that Schedule B was taxed on the value of the land, whereas it is merely a form to enable the farmer to do without accounts, and it is assumed that his profits are in the neighbourhood of the accounts. Of course, if the farmer pays a mortgage he takes just as much Income Tax as he pays any other way. Therefore, he is taxed only once. The reason for this tax being imposed is the reason that my hon. and learned Friend the Solicitor-General put forward so eloquently last night. Another hon. Member talked about the cost and told us that the Chancellor of the Exchequer was wrong in his estimate, and that it would cost about £5,000,000. He probably bases that statement on the misinformation spread about some days past with regard to the cost of the other valuation. The hon. and learned Solicitor-General pointed out quite clearly last night that it is not the valuation for the last scheme which cost £5,000,000, but that the figure of £2,000,000 was the total of that, and that that valuation was far more complicated than the one now required. The figure adumbrated of about £1,000,000 or £1,500,000 will probably be roughly the amount required. I do not think I need go further into the merits of this Resolution to-night. We have all discussed it, and many opportunities will arise later to go into it again. I hope the House will now come to a decision and give this Resolution its enthusiastic support.

Captairt HAROLD BALFOUR

In spite of the protests of hon. Members opposite, I have every intention of saying such words as I feel I should in honour say if I endeavour to do my duty to my constituents on this matter, before the Finance Bill appears on our breakfast tables and we see the worst before us. I say these few words in the hope that just the balance of logic and common sense may tip the scales in the minds of the Government before this Bill goes to print. In my constituency there is no direction in which this Bill will not hit those who are endeavouring to earn an honest livelihood in the different industries. Playing fields are used in my constituency—[An HON. MEMBER: "We are sick of playing fields."] Hon. Members opposite may be sick of playing fields, but in my constituency they are not, and perhaps these interruptions show the utter contempt of hon. Members opposite for those who use playing fields. [Interruption.] The playing fields in my constituency belong mainly to private schools, and during the holiday periods and the days when they are not occupied by boys playing games during the normal course of their training, they are willingly and freely lent to any society or institution or club that applies for their use. This burden which will now be placed on these schools is not an inconsiderable one in the Isle of Thanet, where all land has a potential site value.

This tax will undoubtedly prevent their free loan and their free use in the future as has been the case in the past. Charges will have to be made to cover outgoings caused by this tax. Every piece of agricultural land in my constituency, it so happens, is bounded by main arterial roads and main roads leading from one town to another, and yet, because of its geographical position, the Isle of Thanet grows the best barley, wheat and broccoli in the country. It is one of the few districts in which the Government have not succeeded in entirely killing in regard to prospects all agriculture, although they have done their best. By this measure they are going to place a burden directly on the agriculturist. Supporters of the Government say they are opposed to a tax on bread. They will be responsible for a tax on bread if they pass this tax.

My last point is the question of aerodromes. I am glad to see present the Under-Secretary of State for Air. The Government in this proposal are going to tax the site value of aerodromes, and yet every member opposite will say that this new form of transport is all important. We must develop new lines in this country, even although we lose some of our old industries. It may be that our coal industry is dying. Some of our agriculture will never revive. We may have to look to fresh industries for the future of this country. It may be that aircraft and aviation will supply one of these new industries, and yet the Government are to put a crushing burden upon an essential possession of this industry—an aerodrome close to the centre of a town. Around London there are something like six privately-owned aerodromes. The closer to the Metropolis the greater value is an aerodrome to the aircraft industry, and the closer it is the more valuable it is, and the more taxation the Government are going to put on an aerodrome if owned by private enterprise. That is one more example of the illogical attitude of the Government—an attitude of political expediency, of letting everything go to the wall. The Government have brought forward this half-baked Measure, hoping they will bring the electorate to think they are, as far as possible, to restore the land to the people, instead of imposing this crushing levy.

Mr. J. WILSON

On a point of Order. I desire to ask, Mr. Speaker, since you refused to let me discuss the question of national ownership of the land, whether we are now entitled to do so because of the remarks made by those on the other side.

Mr. SPEAKER

I understood the hon. Member was dealing with the subject of land values of aerodromes.

Mr. WILSON

Quite unfair.

Mr. SPEAKER

Order!

Captain BALFOUR

I was mentioning what was most needed at the present time if you are to revive industry. This is an attempt to gain votes at the expense of the prosperity of industry in this country. The Government were sent here as trustees by a minority of the electorate. A majority of the electorate will see that they will not come back, but that we on this side will come back.

Question put, "That this House doth agree with the Committee in the said Resolution."

The House divided: Ayes, 166; Noes, 94.

Division No. 239.]	AYES.	[12.55 a.m.
Adamson, W. M. (Staff., Cannock)	Herriotts, J.	Palin, John Henry
Addison, Rt. Hon. Dr. Christopher	Hirst, G. H. (York W. R. Wentworth)	Paling, Wilfrid
Alexander, Rt. Hon. A. V. (Hillsbro')	Hoffman, P. C.	Parkinson, John Allen (Wigan)
Alpass, J. H.	Hopkin, Daniel	Pethick-Lawrence, F. W.
Arnott, John	Hudson, James H. (Huddersfield)	Potts, John S.
Aske, Sir Robert	Isaacs, George	Price, M. P.
Ayles, Walter	Jenkins, Sir William	Quibell, D. J. K.
Baldwin, Oliver (Dudley)	John, William (Rhondda, West)	Ramsay, T. B. Wilson
Barr, James	Johnston, Rt. Hon. Thomas	Richardson, R. (Houghton-le-Spring)
Bennett, William (Battersea, South)	Jones, Llewellyn-, F.	Ritson, J.
Benson, G.	Jowitt, Sir W. A. (Preston)	Romeril, H. G.
Bondfield, Rt. Hon. Margaret	Kedward, R. M. (Kent, Ashford)	Rosbotham, D. S. T.
Brockway, A. Fenner	Kennedy, Rt. Hon. Thomas	Rowson, Guy
Brothers, M.	Kinley, J.	Samuel, H. Walter (Swansea, West)
Brown, C. W. E. (Notts. Mansfield)	Lang, Gordon	Sanders, W. S.
Brown, Rt. Hon. J. (South Ayrshire)	Lansbury, Rt. Hon. George	Sawyer, G. F.
Buchanan, G.	Lathan, G.	Scurr, John
Burgess, F. G.	Law, Albert (Bolton)	Shepherd, Arthur Lewis
Caine, Hall-, Derwent	Law, A. (Rossendale)	Sherwood, G. H.
Carter, W. (St. Pancras, S. W.)	Lawrence, Susan	Shield, George William
Charleton, H. C.	Lawther, W. (Barnard Castle)	Shillaker, J. F.
Church, Major A. G.	Leach, W.	Simmons, C. J.
Cluse, W. S.	Lee, Frank (Derby, N. E.)	Sinclair, Sir A. (Caithness)
Cocks, Frederick Seymour	Lee, Jennie (Lanark, Northern)	Sinkinson, George
Compton, Joseph	Lees, J.	Smith, Ben (Bermondsey, Rotherhithe)
Cripps, Sir Stafford	Lewis, T. (Southampton)	Smith, Frank (Nuneaton)
Daggar, George	Lindley, Fred W.	Smith, Rennie (Penistone)
Dalton, Hugh	Lloyd, C. Ellis	Smith, Tom (Pontefract)
Davies, D. L. (Pontypridd)	Longden, F.	Smith, W. R. (Norwich)
Davies, Rhys John (Westhoughton)	Lovat-Fraser, J. A.	Stephen, Campbell
Denman, Hon. R. D.	Lunn, William	Sullivan, J.
Duncan, Charles	MacDonald, Malcolm (Bassetlaw)	Taylor, R. A. (Lincoln)
Ede, James Chuter	McElwee, A.	Taylor, W. B. (Norfolk, S. W.)
Edmunds, J. E.	McEntee, V. L.	Thurtle, Ernest
Edwards, E. (Morpeth)	MacLaren, Andrew	Tinker, John Joseph
Egan, W. H.	McShane, John James	Tout, W. J.
Gardner, B. W. (West Ham, Upton)	Mander, Geoffrey le M.	Vaughan, David
George, Major G. Lloyd (Pembroke)	Manning, E. L.	Viant, S. P.
George, Megan Lloyd (Anglesea)	Mansfield, W.	Walker, J.
Glassey, A. E.	Marcus, M.	Watson, W. M. (Dunfermline)
Gossling, A. G.	Markham, S. F.	Watts-Morgan, Lt.-Col. D. (Rhondda)
Gould, F.	Marley, J.	Wellock, Wilfred
Graham, D. M. (Lanark, Hamilton)	Marshall, Fred	Whiteley, Wilfrid (Birm., Ladywood)
Gray, Milner	Mathers, George	Whiteley, William (Blaydon)
Greenwood, Rt. Hon. A. (Colne)	Matters, L. W.	Williams, David (Swansea, East)
Griffith, F. Kingsley (Middlesbro' W.)	Maxton, James	Williams, Dr. J. H. (Llanelly)
Grundy, Thomas W.	Messer, Fred	Williams, T. (York, Don Valley)
Hall, J. H. (Whitechapel)	Milner, Major J.	Wilson C. H. (Sheffield, Attercliffe)
Hall, Capt. W. G. (Portsmouth, C.)	Montague, Frederick	Wilson, J. (Oldham)
Hamilton, Mary Agnes (Blackburn)	Morley, Ralph	Wilson, R. J. (Jarrow)
Hardie, George D.	Mort, D. L.	Wise, E. F.
Harris, Percy A.	Murnin, Hugh	Young, R. S. (Islington, North)
Hastings, Dr. Somerville	Nathan, Major H. L.
Haycock, A. W.	Noel Baker, P. J.	TELLERS FOR THE AYES.—
Hayday, Arthur	Oldfield, J. R.	Mr. Charles Edwards and Mr.
Henderson, Thomas (Glasgow)	Oliver, George Harold (Ilkeston)	Hayes.
Henderson, W. W. (Middx., Enfield)	Oliver, P. M. (Man., Blackley)
NOES.
Acland-Troyte, Lieut.-Colonel	Carver, Major W. H.	Ferguson, Sir John
Ainsworth, Lieut.-Col. Charles	Castle Stewart, Earl of	Fison, F. G. Clavering
Amery, Rt. Hon. Leopold C. M. S.	Chamberlain, Rt. Hn. Sir J. A. (Birm., W.)	Fremantle, Lieut.-Colonel Francis E.
Astor, Viscountess	Chamberlain, Rt. Hon. N. (Edgbaston)	Gault, Lieut.-Col. A. Hamilton
Baldwin, Rt. Hon. Stanley (Bewdley)	Cockerill, Brig.-General Sir George	Greene, W. P. Crawford
Balfour, Captain H. H. (I of Thanet)	Cranborne, Viscount	Gunston, Captain D. W.
Beaumont, M. W.	Croft, Brigadier-General Sir H.	Hacking, Rt. Hon. Douglas H.
Betterton, Sir Henry B.	Crookshank, Capt. H. C.	Hall, Lieut.-Col. Sir F. (Dulwich)
Bird, Ernest Roy	Cunliffe-Lister, Rt. Hon. Sir Philip	Hartington, Marquess of
Bourne, Captain Robert Croft	Davidson, Rt. Hon. J. (Hertford)	Henderson, Capt. R. R. (Oxf'd, Henley)
Bowyer, Captain Sir George E. W.	Davies, Maj. Geo. F. (Somerset, Yeovil)	Hennessy, Major Sir G. R. J.
Boyce, Leslie	Duckworth, G. A. V.	Herbert, Sir Dennis (Hertford)
Bracken, B.	Dugdale, Capt. T. L.	Hudson, Capt. A. U. M.(Hackney, N)
Broadbent, Colonel J.	Eden, Captain Anthony	Inskip, Sir Thomas
Brown, Brig.-Gen. H. C. (Berks, Newb'y)	Edmondson, Major A. J.	Iveagh, Countess of
Buchan-Hepburn, P. G. T.	Elliot, Major Walter E.	Lamb, Sir J. Q.
Campbell, E. T.	Everard, W. Lindsay	Leighton, Major B. E. P.
Lewis, Oswald (Colchester)	Remer, John R.	Thomson, Mitchell-, Rt. Hon. Sir W.
Llewellin, Major J. J.	Roberts, Sir Samuel (Ecclesall)	Titchfield, Major the Marquess of
Locker-Lampson, Rt. Hon. Godfrey	Rodd, Rt. Hon. Sir James Rennell	Turton, Robert Hugh
Macdonald, Capt. P. D. (I. of W.)	Ross, Ronald D.	Ward, Lieut.-Col. Sir A. Lambert
Margesson, Captain H. D.	Ruggles-Brise, Colonel E.	Warrender, Sir Victor
Marjoribanks, Edward	Russell, Alexander West (Tynemouth)	Wells, Sydney R.
Merriman, Sir F. Boyd	Samuel, A. M. (Surrey, Farnham)	Williams, Charles (Devon, Torquay)
Monsell, Eyres, Com. Rt. Hon. Sir B.	Sandeman, Sir N. Stewart	Winterton, Rt. Hon. Earl
Moore, Lieut.-Colonel T. C. R. (Ayr)	Shepperson, Sir Ernest Whittome	Wolmer, Rt. Hon. Viscount
Morrison, W. S. (Glos., Cirencester)	Smithers, Waldron	Womersley, W. J.
Muirhead, A. J.	Somerville, D. G. (Willesden, East)	Wood, Rt. Hon. Sir Kingsley
O'Connor, T. J.	Southby, Commander A. R. J.
O'Neill, Sir H.	Spender-Clay, Colonel H.	TELLERS FOR THE NOES.—
Peake, Capt. Osbert	Stanley, Lord (Fylde)	Sir George Penny and Captain
Percy, Lord Eustace (Hastings)	Stanley, Hon. O. (Westmorland)	Wallace.
Ramsbotham, H.	Steel-Maitland, Rt. Hon. Sir Arthur

Bill ordered to be brought in upon the said Resolutions, and upon the Resolutions reported from the Chairman of Ways and Means, upon the 5th day of May, and agreed to by the House on that day, by the Chairman of Ways and Means, the Chancellor of the Exchequer, and Mr. Pethick-Lawrence.