HC Deb 19 June 1933 vol 279 cc531-8

Rule 4 in No. VII. in Schedule A to the Income Tax Act, 1918, shall have effect as if the words "or any land" were added after "house," in line 3, and the words "or the land" were added after "house," in line 7.—[Brigadier-General Brown.]

Brought up, and read the First time.

5.53 p.m.

Brigadier-General BROWN

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

May I explain how the rule works? You get relief for an empty house, and we propose to add "or any land." Schedule A reads: Tax under this Schedule shall be charged on all lands, tenements and hereditaments, whether occupied at the time of assessment or not, hut if any house is or becomes unoccupied for the year, etc. We desire to add, after the words "any house," the words "or any land." The object of the Amendment is to apply to derelict land the practice that is already in existence in regard to empty houses. The agricultural situation makes the position very acute for many farm lands, and I have been asked to move this Clause owing to the difficulties that the Chairman of a Board of General Commissioners have found in trying to assess, when land has been left derelict, and when they have had to re-assess it before the quinquennial valuation came on, on appeal by the owner. They find that it is very difficult to give, perhaps in the second year, what is a fair assessment for the rest of the quinquennial period, not only from the point of view of the owner of the land, but from the point of view of whether it will bring in more money to the Government if the land is let in the meantime.

When land is unlet, it is deemed by Income Tax authorities to be in the occupation of the owner, who is liable under Schedule A on the full assessment. Relief can only be given by reassessing under Schedule A for the rest of the quinquennial period. Various conditions are given. It is very common in the Eastern Counties to see grazing by the river for which one used to get a good rent, and which now has become unletable. The owner is assessed on the value of that land which does not let, and he appeals against the assessment. If the owner is a farmer, he puts two or three cattle on that land to occupy it, and then he can come under Schedule B, and, although the land is practically derelict he can get off altogether under claims for farm losses. If the owner is, as very often happens, a charitable institution or a widow, and cannot let the land, or cannot afford any stock, the owner will be liable to pay the whole of the assessment under Schedule A, and that is simply a dead loss. If land is letable at any time, under the proposed Amendment the Treasury would at once get the full assessment. The chairman of the Board of Commissioners points out that it is impossible for them to re-assess derelict land. I hope that the Financial Secretary to the Treasury will give us a chance and will have this point looked into. I think that he will find that it is advantageous to the Treasury, and that the Treasury will support him.

Lieut.-Colonel ACLAND-TROYTE

I beg to second the Motion.

5.59 p.m.

Mr. T. WILLIAMS

Perhaps it would have been better if the Financial Secretary to the Treasury had replied upon this Clause, although we can anticipate what the reply would have been. The hon. Member for Caerphilly (Mr. M. Jones) suggested a short time ago that some of the proposed new Clauses were, in the circumstances and in some instances, rather impertinent on the part of the hon. Members who were moving them. I will not be quite so harsh, but I want to say that the hon. and gallant Member for Newbury (Brigadier-General Brown) is the finest example of class loyalty in this House. I have nothing but admiration for the marvellous activity that he always displays on behalf of the landlords. I am not sure, however, that the cases which he brings forward from time to time are quite legitimate. This is another example to which the Financial Secretary will not find it very difficult to reply, particularly if he bears in mind some of the previous cases which have been turned down. A landowner may have 20 or 30 farms, or he may have three or four farms, for which he charges an economic rent. He determines what is an economic rent—possibly £l, 30s. or 35s. per acre. He may lose one of his farmers, and the farm becomes available for a new tenant, but the owner of the land is the one person who can fix the rent. The would-be farmer can either take the land at the rent determined by the landowner or he can leave it—

Brigadier-General BROWN

The landowner has to pay the tax until the land is let.

Mr. WILLIAMS

The landowner may feel that, owing to the policy Of the Government with regard to subsidies, quotas, import restrictions, and Customs duties, agricultural produce is going to fetch a much higher price. It is true that that is an assumption, and the assumption also is that the poor, miserable consumer will have to pay the price. The hon. and gallant Gentleman is only concerned at the moment with the rent that the owner obtains, or hopes to obtain. If the owner is unable to find a farmer willing to pay, say, 35s. an acre for the land, he is prepared to leave it idle for a time, and therefore he does not receive the rent; and the hon. and gallant Gentleman feels that it is a hard- ship on the owner that he should be called upon to pay Income Tax on rent which he does not receive. As compared with property in the middle of a town, it may be a hardship; it is one of those anomalies of which the Financial Secretary is constantly talking; but really it is no hardship at all. It merely means that, if this relief were given to the worst kind of landowner in a rural area—I exclude from my argument the best kind— he would simply hold up the land until he could find a farmer who would pay the rent he desired to exact, just as the property owner in the middle of a town would hold up land ripe for development until he could get the price that he desired. I think the Financial Secretary will agree that that would be a step back into the dark ages, and I am sure that his Liberalism would prevent him from making this concession even though he thought it was financially sound.

I do not see how any Member of the House could encourage landowners, or anybody else, to keep land out of cultivation merely for the purpose of exacting a higher rent than the land is actually worth, and so compel the farmers to ask the Farmers' Union to press the Ministry of Agriculture to impose more duties upon imported foodstuffs, thereby increasing their price and making agriculture prosperous so that the landowner may exact the rent that he originally demanded. I hope that the Financial Secretary will tell the hon. and gallant Member that, although he is a loyal member of his particular class, his determination is not to be rewarded to-day, and that the hon. Gentleman will not only resist this Amendment, but will warn landowners that they have more than enough already, and that, until the unfortunate victims of the means test have been relieved of the burdens which have been inflicted upon them directly and indirectly during the last few years, the landowners are not to be further relieved.

6.6 p.m.

Mr. MICHAEL BEAUMONT

The hon. Member for Don Valley (Mr. T. Williams) has demonstrated, with his customary charm of manner, the feeling on matters rural and agricultural which persists on the other side of the House. There may be arguments against this proposed new Clause, but they are not the arguments advanced by the hon. Member, because the case cited by him simply does not happen. Unfortunately, it is not the landlords who settle what the rent shall be; I wish it were; it is the economic condition of the country and the state of the markets that settles what the rent of land shall be. All over the country today farms are let at rents which not only the landlords but the tenants and all concerned know to be uneconomic. That is because those rents are the only ones which under the prevailing conditions farmers can afford to pay. When the hon. Member talks about landlords keeping farms idle in order to exact higher rents, he must know that he is talking the most complete nonsense. I say that without any desire to be offensive, but it really is a hypothetical case which has been produced from the agile brain of the hon. Member.

The case of the rural landlord is utterly different from that of the town landlord. The town landlord may choose to hold up a plot of possible building land, and the land is not any the worse for building purposes even if it is unoccupied and unused for 10 years. But if a farm is left unfarmed for years, or even months, the situation is very different. The whole value of the farm will have disappeared, and, however much agriculture might boom, however much the beneficent policy of the Government is going to benefit the rural community—and I feel sure that the Government will take note with pleasure of the hon. Gentleman's optimistic outlook as to the result of their policy—a farm left unoccupied for any time would not command an increased rent which the landlord cannot get now. That policy simply would not pay any landlord in England, and there is no rural landlord in England who could afford to attempt to pursue it, even out of spite, so that the whole argument of the hon. Member falls to the ground.

This is not necessarily a question of benefiting one class or another; the object is merely to try to see that the landowner, who has always been singled out by hon. Members opposite and below the Gangway for savage and differential attacks, is placed on a par with the ordinary average member of the community, and is not taxed on income which he does not receive. Surely, even the Socialist party have not gone so far as to wish to tax people on money that they do not get. If the hon. Member wishes to put a tax on unoccupied land, that would be a site value tax, quite different from Income Tax, which, as its name implies, is supposed to deal with income. Our contention is that, if there is no income, there should be no tax. That is the beginning and the end of the proposed new Clause, and for that reason we commend it to the Government.

6.11.p.m.

Captain HEILGERS

I should like to ask the Financial Secretary to deal with the difference between the case of an unoccupied house and the case of unoccupied land. The unoccupied house escapes taxation, but derelict land has to pay. The house always has a potential value, but to my mind derelict land has none except in the fairy tales of the hon. Member for Don Valley (Mr. T. Williams).

6.12.p.m.

Mr. HERBERT WILLIAMS

I should not have taken part in this Debate among landowners but for the speech of the hon. Member for Don Valley (Mr. T. Williams). He desires that people shall be taxed on an income which they have not got in order to force them to let their land at an uneconomic rent. I wonder what line he would take if the coalminers whom he represents were engaged in a dispute, and it were seriously proposed to impose upon them an Income Tax in respect of the wages which they were not receiving, for the purpose of driving them back to work. That seems to me to be a complete analogy—

Mr. T. WILLIAMS

The hon. Member ought to know, if he knows anything at all about these matters, that that is exactly what happens in every trade dispute.

Mr. H. WILLIAMS

It never happens at all in any trade dispute. No person is assessed for Income Tax on an income that he has not had, and, therefore, if a coalminer is not at work, the wages that he has not had during that period are not included in the return which he makes to the local inspector of taxes.

Mr. T. WILLIAMS

I wonder whether the hon. Member has ever heard of a lock-out, where mineowners, as well as other employers, have told workpeople, "Work is available for you at my price"?

Mr. H. WILLIAMS

Even then they are not liable to Income Tax during the period for which they are locked out. We are now talking about Income Tax on income that has not been received, and the hon. Member is proposing that landowners—I am not one of them, except to the extent of the house in which I live—shall be taxed on income which they do not receive. What would the hon. Member think if, during a trade dispute, the people whom he represents were made liable to Income Tax on the wages which they would have earned if they had stayed at work, in order to coerce them to accept their employer's terms?

6.14.p.m.

Mr. C. WILLIAMS

I do not think that my hon. Friend the Member for Aylesbury (Mr. M. Beaumont) and my hon. Friend the Member for South Croydon (Mr. H. Williams) have been quite fair to the hon. Member for Don Valley (Mr. T. Williams). After all, the hon. Member for Don Valley is one of the expert authorities of the Socialist party on the matter of agriculture, and, having arrived at that position, how could he be expected to know, without his brief, that when a farm is unlet it cannot be farmed? He cannot possibly know these things. Had my hon. Friends watched the hon. Gentleman, they would have found that out, and would not have omitted to note that obviously Transport House has failed. It is very unfair to blame any front-bencher who speaks merely from briefs, and I would ask my hon. Friends to be a little kinder to the hon. Gentleman.

6.15.p.m.

Mr. HORE-BELISHA

The Clause which we have been discussing proposes to extend to unoccupied land the relief from Income Tax which is at present given in respect of unoccupied houses. My hon. and gallant Friend the Member for Bury St. Edmunds (Captain Heilgers) has asked me to deal with the difference between an unoccupied house and unoccupied land. Anybody can tell what is an unoccupied house. It is there for all to see. The word has a popular connotation, and there is no difficulty whatever in determining the difference between a house that is occupied and a house that is not occupied. When you apply the same adjective, "unoccupied," to land, as my hon. Friends do by this Clause, you come up against an insoluble difficulty. What is unoccupied land? Is it land that is lying fallow? Obviously, that should not be exempt, because, in accordance with agricultural practice, it is left fallow at pertain seasons, or in certain years. Is land which is ripening for building purposes in order in due course to bring in a harvest to its owner to be exempt on the ground that it is unoccupied? Are the lands that are attached to a mansion for the purpose of amenities to escape taxation on the ground that they are unoccupied? I am sure my hon. Friends will see that it will be quite impossible to adopt this adjective in the ease of land. For that reason, the Clause could not be accepted.

The fact, however, that it would not be possible to adopt the adjective should not make us any less conscious of the grievance which my hon. Friends have expressed. There may be a grievance where it is impossible to let a farm, and it may be practicable to meet that grievance within the terms of the existing law. I, therefore, invite my hon. Friends to meet the officials of the Inland Revenue and to discuss the matter with them. An injustice may here and there be done temporarily, especially in times of difficulty, and, if the grievance can be met within the existing law, it will be satisfactory to my hon. Friends. I agree with the hon. Member for Don Valley (Mr. T. Williams) that as long as the hon. and gallant Gentleman the Member for Newbury (Brigadier-General Brown) and those who are associated with him remain in the House the interests of the land will not be forgotten and no cause which they have had at heart will go undefended. They have put up a series of proposals all of which have had some substance in them, and I trust that they will be satisfied with the invitation that I have extended to them.

Brigadier-General BROWN

I thank the hon. Gentleman very much for his invitation and beg to ask leave to withdraw the Motion.

Motion and Clause, by leave, withdrawn.