HC Deb 19 June 1933 vol 279 cc522-8

(1) So much of the amount assessed in each of the five years ending on the twenty-fifth day of March, nineteen hundred and thirty-eight, in any land tax parish on account of the unredeemed quota of land tax charged against that parish as is assessed upon agricultural property therein shall be remitted

(2) Nothing in this section shall affect the terms of any contract for the redemption of land tax entered into under section thirty-two of the Finance Act, 1896, a amended by section sixty-four of the Finance Act. 1921.

(3) In this section the expression "agricultural property" shall have the same meaning as is assigned thereto by section twenty-two (Definitions) of the Finance Act, 1896.

(4) This section shall be deemed to have had effect as from the twenty-fifth day of March, nineteen hundred and thirty-three. —[Brigadier-General Clifton Brown.]

Brought up, and read the First time.

6.26 p.m.

Brigadier-General CLIFTON BROWN

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

If I had my way, I should like to see that Land Tax was compulsorily redeemed and agricultural land freed from that unfair burden. The tax is very unfair in its incidence. One of the reasons advanced why the Government should have five years to look into it is the extraordinary confusion that exists all over the country. That would be borne out by every valuer who tries to unearth the ramifications of little bits of land and the owners liability to Land Tax. It would be an advantage to have a moratorium for five years. My proposed Clause asks that only agricultural land should have that moratorium so that the Government can find out where this tax is levied on purely agricultural land. It would be a great advantage to agriculture if the burden were taken off. The total amount collected from Land Tax is £600,000 a year, but the amount on agricultural land is only about £200,000. It is not asking much to help the industry to that extent at the present moment. The tax is chargeable on the full annual value at a rate that must not be less than one penny or more than one shilling. The more a property is improved the heavier the tax becomes, so that it is a direct tax on development, and that is the last thing we want in times like these. It is payable out of rent received and to that extent reduces the powers of the owner to develop. There are many people who have redeemed their Land Tax, and I am glad to say that I am one of them, but that is no reason why those who have not redeemed it should not be fairly treated. The argument may be put up that as so many people have redeemed the tax others should be able to do it, but in these days they cannot do it with the condition of agriculture what it is.

5.29.p.m.

Lieut.-Colonel ACLAND-TROYTE

I beg to second the Motion.

I need hardly remind the Government of the serious state of agriculture and to assure them that a small concession of this sort would be very much welcomed by agriculturists generally. I do not say that it would restore agriculture to prosperity, but it would be a small help and would encourage landowners to develop their property.

5.30.p.m.

Lord APSLEY

I would like to support this new Clause and to ask the hon. Gentleman whether he really does not think it is time this tax was taken away altogether? It is a very antiquated impost, causes a lot of administrative trouble, and costs almost as much to collect as it brings in. It was originally imposed by King Alfred to keep out the Danes. The Government could do that just as well by putting a little more on bacon. I really think it is time that this small and tiresome tax, which has only been kept on owing to political differences between industrialists and landowners in the last century which no longer exist now was removed, a proceeding which would enable farmers to get on a little better.

5.31.p.m.

Mr. E. EVANS

I have no objection to the new Clause as far as I understand it, but I am wondering whether any Member would be good enough to give us a little information as to what really is the burden of this Land Tax. I notice that all the three hon. Members who have spoken in support of the Clause have referred to the heavy burden which Land Tax lays upon landowners. My impression is that the burden upon landowners is comparatively small. In order that I may be in a position to vote quite freely and independently upon the merits of the case I should be glad to have a little more information of the burden of which we have heard.

5.32.p.m.

Mr. C. WILLIAMS

I will enlighten the hon. Member as to the burden. The burden is not so much the amount of the tax as that there are a certain number of small sums that have to be paid out. No one knows where he stands in this matter of the Land Tax, and the real burden arises from the charges of a lot of greedy second-rate lawyers, who make a good deal of money out of dealing with the claims. That is the real burden.

Lord APSLEY

As the hon. Member has asked what the burden is and has addressed himself to me, among other Members, may I reply? In my own case with a small property with a gross rental of £800 a year the Land Tax is £24, and that £24 could be better spent in paying two men to repair a stone wall.

5.33 p.m.

Mr. HORE-BELISHA

We may as well get the beginnings of this matter right. The Land Tax is an old tax; it is not quite as old as my Noble Friend says, but it was made perpetual in 1798, and takes the form of a fixed quota payable by the parish as a unit. The tax is limited to Is. in the £, and is remitted entirely when the total income of the owner of the land does not exceed £160 per annum, and one-half of the tax is remitted when the owner's income, though exceeding £160, does not exceed £400. Therefore, it is not upon the poorest section of the community that this tax rests. The fixed quota payable by the parish may be reduced by redemption, when an owner exonerates his land by payment of a capital sum equivalent to 28 years' Land Tax assessed on his land. My hon. Friends propose in this Clause that the tax should be remitted in the case of agricultural properties in each of the next five years. But there are persons who have redeemed the tax, in accordance with the terms I have read out, and on the distinct understanding that the tax was to be perpetual. What would their position be in that case? They would have a distinct injustice, and be entitled to come to the Treasury to ask for their money back, having paid it under complete misapprehension of the facts. I think that on that practical ground alone my hon. Friends will see that their Clause cannot be accepted.

Some delusion also exists in their minds as to the cost which would be involved by accepting this Clause. They are calmly inviting us to forgo no less than £2,500,000. Now that the hon. and gallant Member for Newbury (Brigadier-General Brown) knows that he was wrong in thinking that the cost would be so small perhaps he will refrain from pressing the new Clause. Everybody appreciates the plight of agriculture, but, after all, agriculture has obtained certain reliefs, for instance, it is free from rates, and I do not think this would be the most practical form of giving further assistance to that great industry. If we desired to save £2,500,000 from the taxpayers' pockets in the course of the next five years I think we might find some more constructive means. I trust I have said enough to show my hon. Friends that while I have every sympathy with their general objective the actual proposal which they have made cannot be accepted.

Mr. C, WILLIAMS

Does the hon. Gentleman really mean that agriculture bears a burden of £2,500,000 arising from this tax each year?

Mr. HORE-BELISHA

No, my hon. Friend will notice that the Clause would remit the tax for the next five years, and the sum is £500,000 per annum.

Brigadier-General BROWN

The whole income from the Land Tax is about £600,000 a year, and all that this new Clause seeks to do is to relieve agricultural property. Three-quarters of the Land; Tax comes from cottages and land which has been developed, and the sum involved in this new Clause would be only about £200,000 a year.

Mr. HORE-BELISHA

Five-sixths of the tax is on agricultural land. I am advised that the figures are exactly as I gave them.

Lord APSLEY

Has the hon. Gentleman any idea—

Mr. DEPUTY-SPEAKER

Order! I would remind hon. Members that we are not in Committee.

5.38 p.m.

Mr. EASTWOOD

May I add my mite to this discussion? I appreciate that, as far as this year is concerned, it may be difficult for the Government to accept this new Clause. As far as I can gather, there would be difficulties in deciding how much of the money raised by the tax comes from agricultural land and how much does not. The object of this new Clause is to draw attention to the present position. The Land Tax, which has been unaltered now for more than a hundred years, is really a burden on some people. It falls unevenly, it falls unjustly, and it is a matter which no Government up to now has been able to tackle. I do not want to go outside the bounds of order, but I wish to make a suggestion to the Government. The great difficulty in dealing with this question is that if Land Tax were abolished at once it would create an injustice for the large number of people who have redeemed their Land Tax during the last 25 years, originally at 30 years' purchase and now at 25 years' purchase. The Land Tax really brings in very little to the Government. The figures for last year show that it was something like £600,000, of which roughly £200,000 had to be remitted to people who did not come within the limit. There has to be a great deal of expense to produce little revenue.

I make this suggestion humbly to the Government; if they would do something on these lines it would satisfy those who are proposing this new Clause. The suggestion is that from next year on every sale of land subject to Land Tax there should be compulsory redemption at 25 years' purchase. The following year let there be compulsory redemption at 24 years' purchase; the next year 23 years' purchase; and so on. In that way this uneven tax, which has been untouched for so long, which is hopelessly out-of-date, would automatically come to an end in 25 years without. any injustice on those who had redeemed their Land Tax during the past years. I would add this observation as an inducement to the Financial Secretary. At the present moment the* Land Tax brings about £600,000 a year, but with compulsory redemption on sale, which -would not hurt any vendor at all, we should within the next two or three years get probably something like £2,000,000 a year instead of £600,000. If the Financial Secretary will undertake to consider something on these lines my hon. Friends and I would be more than satisfied.

5.42 p.m.

Mr. MORGAN JONES

I should very much regret it if no words were spoken from this side in this controversy, and when we came to discuss this matter next year that fact were cited against us. I want to make it clear that we on this side are very glad indeed that the Financial Secretary has stood firm and has not yielded to this clamant demand from his supporters. We are told that it is only the small sum of £600,000 a year which is involved. May I remind hon. Members opposite that this year they have taken £400,000 from secondary school children? Why should we have a claim for this remission of taxation at a time when everybody else is being mulcted in the heaviest possible burdens? The hon. and gallant Member who moved the new Clause said that the more that was spent upon property the more there had to be paid under this tax. That is quite probable; just as a ratepayer who spends money on his house finds that he has added to its rateable value. I do not see that that argument has any special bearing upon this particular tax, and certainly it is no adequate argument for its remission.

Brigadier-General BROWN

In view of the fact that the Opposition have announced that they are going to support the Government, I beg to ask leave to withdraw the Clause.

Motion and Clause, by leave, withdrawn.