HC Deb 26 February 1936 vol 309 cc531-87

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a Second time."

7.39 p.m.

Mr. CROOM-JOHNSON

I beg to move, to leave out the word "now," and at the end of the Question, to add the words "upon this day six months."

The subject with which this particular Bill deals is one, which, I confess for my part, is outside any general political issue, and I approach it from the point of view of one who is a ratepayer in London and has no other interest in the matter whatever. I desire to discuss the Bill, as far as I can, from the point of view of a number of quite humble people who, as I see the Measure, are likely to suffer somewhat considerably if we give the Bill a Second Reading. I suppose that it is known to those of us who were present in the last Parliament that there are a number of Members who think that private legislation of this sort, of a purely local character, should not make amendments in the general law of the country. We take the view, which we believe is the right view, that, with the considerable extension in the means of communication throughout the country, there is rather too much of a local character about a good deal of our legislation, and that it is nowadays highly inconvenient that the law, certainly on major matters, and on a great many minor matters too, should be defined according to whether you start from over some boundary which is to be perceived upon the map but is not to be perceived at all by the ordinary traveller through the country.

But when you come to deal with a subject like the present one every argument which can be advanced against local legislation dealing with amendments in the general law can be advanced to a very much greater extent. A matter of this sort, highly important as no doubt it is, should not be dealt with through the ordinary Private Bill legislation of Parliament. I observe that in the case. for the promoters they ask that the matter should be allowed to go upstairs where evidence may be called, but I cannot shut my eyes to the fact that that evidence must of necessity, if the Bill goes upstairs, be confined to the County of London, and further that, if the Bill were given a Second Reading and by any accident got upon the Statute Book, the demand would be almost irresistible for the law to be similarly extended to other parts of the country in respect of which the evidence would not have been examined, and where the case for the spread throughout the country would, therefore, not really have been made the subject of complete discussion and criticism.

I do not want to take up time on this main point. My hon. Friends and I who have put down the Amendment for the rejection of the Bill have expressed our views on this topic many times previously. We have opposed local Bills coming from local bodies on many previous occasions wholly independently of any particular political complexion that the particular local body might happen to have, and we feel, as we felt before we had been approached by any body of persons whatever in connection with this matter, that if ever there was a time when the Iaw was to be amended for an area as distinct from the general law of the country, this was the time when we must make our protest. As I have said, I approach the matter simply from the point of view of a London ratepayer with no interest in any of the matters that are likely, if the Bill passes, to be made subject to the proposed legislation. I have no interest in the taxation of property of any sort or kind in any part of the country, as far as I am aware, and, that being so, I want to examine this proposed legislation and what it is likely to accomplish.

I should like to say one other word having regard to certain statements which have been made outside. I speak purely in my capacity as a private Member. I represent no organisation of any sort or kind. I put my Amendment down without having been approached by any organisation, and I stand at this moment entirely independent of any body of persons except for communications from a small number of my constituents who think that, if the Bill passes, the matter is likely to be extended into the county of Somerset, with which I am connected. I want, therefore, to look at the proposal from the point of view of trying to see whether it is one that is going to be of any advantage to the community as a whole. If it is, the House will, no doubt, act in accordance with that view, but I want to offer to those who have promoted the Bill some considerations which lead me to the view that this matter has not really been examined with sufficient care in all its implications.

Rating is, at best, in every-day practice a very difficult job when you come to deal with it. I have no doubt that, if we were all free to invent an entirely new system of rating, there are a great many things in the existing system that we should desire to see altered. I have no doubt that some of the difficulties and inconsistencies which have crept into our system of rating since its birth, as long ago as the reign of Queen. Elizabeth, might, if we started all over again with a clean slate, be put in a different way. But I am bound to recognise that a very large number of people, particularly people of humble means, have so conducted their affairs in life that they have relied upon the system as it exists. They know the evils and they know some of the difficulties, but they have conducted themselves upon the basis that when houses and hereditaments, as they are called in the Bill, are producing no rent and are lying empty there is no liability to the local authority for rates.

We must recognise that a very large percentage of the houses in the County of London are owned by people who, through thrift, and perhaps a tiny legacy here and there, have managed to secure houses for themselves or for their friends. I want to approach the matter rather from that point of view, to see what the possibility is of this change affecting them. One must recognise that a very large percentage of the houses in London —the figure is not mine; I give it as it reached me—are subject to mortgages. It has been suggested to me that as many as 95 per cent. of houses in London—I assume that means the houses of people of moderate means—are subject to mortgages. A very large number of them are subject to ground rent. A very large number of them are intended to be lived in by the people who buy them, but a great many people who buy houses intending to live in them meet the fate which must come to all of us in the end and frequently they leave behind those who find themselves in a much worse position than they were—I will take a familiar case—during the husband's lifetime, and very frequently it happens that they are forced to give up possession because they are unable to go on residing there. I know that there is a Clause in the Bill that is supposed to give some amount of relief to such persons upon their making application within the somewhat elaborate terms in the Bill. I have examined the Clause to see whether it really meets the case. I do not think it does.

Let us see what the situation is with regard to a number of these houses. This is an actual case, put to me quite recently, a case quite familiar in London, with a ground rent of £10 a year and a mortgage of about £350. The rate is about 5 per cent., because of course you are dealing with leasehold premises, which are frequently met with in London. If that man has a mortgage upon the house, he has to find during the time the house is let the amount of his mortgage interest and the amount of his ground rent. The mortgagee, therefore, knows that, assuming that such a house—this again is a figure which may be taken as generally indicative of the example that I am giving—is worth £60 a year, you get, when you have made all your deductions for repairs and so forth, an ample margin which is available by way of the difference between the ground rent plus the mortgage interest and the rent which is really what helps to form the security for the mortgage. A great many of these houses are purchased through building societies and we shall have to consider, and I hope the House will consider, the effect of these proposals on building societies, thrift societies and other similar organisations which advance money to their members on the security of houses which they purchase for the occupation of themselves or others. Assume that a house falls empty and assume, as very often happens if it is an old-fashioned house, not with all those modern conveniences that so many people seem to desire, or containing too many rooms, or for one or other of the very many reasons why it is that houses do not let, and you find that, if this Bill goes through, the owner will find himself with £10 ground rent, with his mortgage interest, which I have taken at five per cent., on £350 and, in addition, the extra rate.

It is true that such a person may be able to go to the local authority under Clause 7 and make an application. That, in the view that I take of it, is extremely circumscribed in its character and gives very little security to the owner. But think of the effect of it with regard to the future when a man who is building such a house is going to try to get a mortgage to assist in its construction. At present he would be able to say to the mortgagee, "Here is the possible rental value and here are the outgoings. There is a wide margin and you can safely advance the money." It may be that there ought to be no cause for alarm on the part of the mortgagee, but how are you going to get hold of all the individuals who lend money in this way, many of them quite humble people? Small mortgages of a few hundred pounds saved by long years of endeavour and thrift are quite commonly obtained every day through solicitors. You will have to go to these individuals if you can and persuade them that the security is just as good after as it was before.

I can see great difficulty in attempting to do it, and I can see the further diffi- culty that the obvious answer of the, individual who is invited to lend his money will be, "I cannot be quite sure. I think there is an added risk," and his solicitor will probably try to get an extra half or one per cent. upon the mortgage interest. I am not dealing with the large owner of properly, who can probably stand up to the increased burden. These are cases of small private mortgages to small owners of property who themselves very often find that the margin is extremely near, and one meets many such people of whom it is safe to say that every sovereign matters. You will find this sort of point occurring. The total amount of rateable income in the county of London—I think I have the figures for 1933–34—is just under £30,000,000 a year. The amount of money that I have seen estimated as likely to come out of this proposed additional rate is about £300,000 a year. I make that about one per cent. The 25 per cent. has been fixed, I suppose, because that is the smallest sum which it is economically possible to collect, because the costs of collection as you go down the scale are obviously going to be much more disproportionate. But, if you are only going to collect a rate of five per cent., which I submit might on a certain view be a fair sum, it is plain that the cost of collection of five per cent. of the existing rate is likely to be out of all proportion to any value that is going to be obtained.

I want the House to think for a moment of the £300,000. That. is the amount which it is estimated will be received. It is said that the total amount of extra rates which could be obtained—again I take the figure.; for 1933–34—if all the voids were filled would be about £1,400,000. I have seen a figure, given by the right hon. Member for South Hackney (Mr. H. Morrison) in a newspaper article yesterday, of £1,200,000, and, if you take his figure, one-quarter of that is £300,000, a figure which has been given elsewhere. That, again, is subject to all the exemptions provided for in the Act, to the supposition that property which has not been let for some time is likely to be of the same assessable value as if it were fully let—a supposition to which I cannot subscribe—and also subject to the difficulty which arises with regard to factories. For rating purposes the additional value given to a factory because of the machinery installed is used to bring up the assessable value whereas it is a positive difficulty in the way of letting the factory if the machinery is left behind. I suggest that the figure of £300,000 is an extreme figure to take.

A simple calculation will show one other thing. If the result of this reform, as it is called, is going to do what is suggested, namely, to force owners of houses to take lower rents than they can afford to take—and again I am talking of humble people—in order to bring rents down, the effect would be that the assessable value of the premises would also come down. There is no escape from that; and if the assessable value comes down you will get less money from the rates. If it goes on for any prolonged time it must have an effect on properties in the neighbourhood. You cannot let one house in a road at a much reduced rent without making some change in the rest of the houses. Is there going to be any advantage to the people who live in these houses? I am shocked at the disparity between rent and income which runny people are forced to pay, but if this result follows you are going to get a decline in the total assessable value of the county of London. I am not sure that we have not reached a peak point with regard to the assessments in the county of London. If the assessment value for the county of London is reduced by 1½per cent., it will wipe out the figure of £300,000, which is supposed to be derived from this new impost on the ratepayers of London.

The Measure has been brought forward as a means of making a fairer redistribution of the incidence of local taxation in London, and I have attempted to show that it will cause injury to people whose houses are let, and that they will not get the advantages which it has been suggested they will derive. If the total amount of the extra rates were spread over the rest of the county—assuming that all the voids were filled up and that assessment values did not decline—I understand that a figure of 6d. might be expected as the total benefit to be derived on the rates spread over the whole of the county. It is proposed to take one-quarter of that, 1½d., and, on the basis that everything goes on as before—that must be the basis—you are again brought back to the figure of £300,000 as the amount which is going to be obtained from the proposal. That is the main point, and I shall be interested to hear the arguments of those who support the Bill with regard to the benefits to the small owner of small property in London. If it is suggested that the small owner is going to benefit, that he will get his rates reduced, a great many of them will have their incomes reduced as well. If the value of property is reduced it will affect not only taxation for local purposes in the county of London but also national taxation in the shape of Death Duties and Schedule A Income Tax, and it might be—again I think this is a matter upon which we might have expected some statement from the promoters—that you will merely transfer £300,000 into the coffers of the London County Council and at the same time extract another £300,000 by decreased returns so far as the Exchequer is concerned.

There is another point. I have gone on the basis that the London County Council is the rating authority. The rates differ in each of the Metropolitan boroughs. The amount of voids differ in each borough; the amount which one borough suffers in loss by reason of voids is much greater than another. When this matter was discussed in 1925 on an Amendment in Committee on the Rating and Valuation Bill of that year, it was pointed out that there were at that time just under 20,000 empty houses in London. I am dealing now with houses—not with hereditaments. The interesting thing is that these empty houses were not in the poorest parts of London but chiefly in parts where there were very large houses which, owing to the change in economic and social conditions, were no longer able to be let. They were the type of houses in which people would not live because they could not afford to do so, or because they did not want them, or because the houses were old-fashioned. In the course of that Debate the late Mr. Scurr, who knew a great deal about the social conditions in London, said: These empty houses in London are 19,685. They are not in the poorest portions of London, and it is not the poorest portions of London that are going to benefit by this reform. I suggest that the figure of 25 per cent. is grossly excessive in any view of the case. The total amount of rates in London—I am taking the last figure that I recollect—is 11s. 7d. in the £. It has been suggested that empty houses have the benefit of certain services, and certain figures which have been circulated show that with regard to the London Fire Brigade, street lighting, sewers, paving and the like, these services cost about 3s. 1d. in the £, or 27 per cent. of the total rates that are levied. Is it to be contended that practically the full amount of these services are of advantage to empty houses? After all, the object of a rate is to obtain a fund for the benefit of the people who live in the rating area, not for the benefit of a row of houses. Take the position of the Fire Brigade. Empty houses are usually covered by insurance—certainly the mortgagee sees to this. The Fire Brigade, as to 14 per cent. of its expenses, is made a contribution by the fire offices, and the fire offices, therefore, insure both empty houses and full houses. It would be interesting to know whether that matter has been taken into account in connection with the figure in respect of the Fire Brigade.

Take another matter—new houses—by which I mean houses erected since the Metropolitan Management Act, 1855. In most cases the sewering, paving, and laying out of the streets and lighting to some extent, has been done and to some extent paid for by the people who own the houses in the particular street. The burden of making up the roads is already a very heavy one on a great many people. In those circumstances is it just, when estimating how much should be charged on an empty house, to take the total value of the full service with regard to the maintenance of sewers, lighting, paving and so on? I venture to submit that this is a matter which has obviously not been taken into account. I can find no trace of it in the statement by the promoters, in the debates of the London County Council or in the announcements that have been made.

I will now deal with another fact. Some figures were given in the London County Council the other day in connection with the total number of visits paid to empty houses, as compared with occupied houses, by the Fire Brigade, and those figures are very astonishing. I will quote from the figures for 1934, because the figures for that year appear to be least favourable to the view I am putting forward, and no one will be able to contend that I am putting the case too high. In 1934 the total number of attendances of the Fire Brigade war 4,609 and of those only 97 were in respect of empty properties. In those circumstances, is it just to say, "The Fire Brigade rate is included in this, and we will charge the whole of it against the empty premises in order to justify the 25 per cent.?"

The fact is that these matters have not been fully investigated. In my respectful opinion, it is no answer to come to the House and say. "Here is a new proposal; we are going to have something quite different from the remainder of the country," and not give the House an opportunity of obtaining evidence and submitting it to a committee. I do not suggest for a moment that there may not be some small service which the community renders to an owner whose house is empty for some time, but to put the value of that service at 25 per cent. is indeed to put it at a figure which, I suggest, is beyond all reason. I will not present calculations of my own to the House, but I have seen the figure put as low as 5 per cent., and, in the case of individuals who are more optimistic from the point of view of the opposition to this Bill, as low as 1 per cent. In any case, I submit that there is no justification whatever for putting the figure as high as 25 per cent.

It has been said that it is too late to oppose a reform of this sort, because Scotland and the City of London have it. The City of London is not a. comparable case at all. In the City of London the tax was imposed immediately after the Great Fire, and it is the result of long history. All the main big people who own property in the City of London know quite well what is the situation, and their share of the general rate, which is a small one within the City of London, is 1s. 0½d in the pound. Consequently, the City of London is in a totally different class, and when its history is examined it does not bear out the claims which are made that it should be treated as a piece of evidence in support of the present Bill.

With regard to the position in Scotland, I know nothing except that which I have learned by attending a few Scottish Debates in this House. Only a few days ago we had a discussion with regard to Scottish rating, and I heard it stated over and over again that many of the difficulties which arise in Scotland in connection with housing matters are due to the anomalous rating system which exists in that country. [An HON. MEMBER: "Nonsense !"] I repeat that I know nothing of these matters myself, and my knowledge is limited to statements I have heard in this House over and over again. Is there any hon. Member on the chief Opposition Benches who is satisfied with the housing position in Scotland? In the Debate on Scottish rating one hon. Member said that on a comparable house a man in Glasgow would have to charge £20 in order to obtain what would be £14 a year rent in this country. [An HON. MEMBER: "In Edinburgh as well?"] I do not know that. I assume that those statements are well founded. If they are correct, I am bound to say that the argument that I should look at the rating system in Scotland in order that I may be persuaded to fasten it upon the County of London, where I have lived all my working life, where I reside and where I am a ratepayer, does not convince me.

For these various reasons, which I have tried to express as compactly as I could, I venture to submit that this Bill should not be given a Second Reading, and should not be dealt with upstairs. I submit that if the principle is a good one—and at the moment there seem to be most cogent arguments against it—it should be dealt with in a Government Bill in order that we may have evidence from the whole country with a view to seeing why we should make this change. I am not enamoured of the argument that because our rating system has followed one particular line since the days of Queen Elizabeth, we are to be afraid of looking at any conceivable amendment. We shall not make much progress if that sort of argument is followed. I venture to suggest, however, that there is no good reason for this particular Bill and that both in its details and in its principles it is wrong. Accordingly, I invite the House not to give it a Second Reading.

8.25 p.m.

Mr. HARVEY

I beg to second the Amendment.

I shall not attempt to emulate my hon. and learned Friend the Member for Bridgwater (Mr. Croom-Johnson), who has covered the ground remarkably well, but I should like to explain my position on this Bill. I take no political interest whatever in the affairs of the London County Council or in local affairs at all. I think I have shown that, in connection with various measures which have been brought up from time to time by the London County Council and particularly the Waterloo Bridge proposal which was before this House on three occasions. In each case, without consideration for the colour of the proposers, I strongly supported the proposals and I think the House was wrong when it voted against those proposals. But this Bill is an entirely different proposition. We are now-faced with a business proposition and, regarding it as such, I take exception to the attitude of the London County Council on this Measure.

Rating in London and rating generally has always been a charge on the occupier, be he tenant or beneficial owner and not on the property itself. That has been the general principle in the past. As my hon. and learned Friend has said when rates are calculated at 11s. 6d. in the pound the service which the London County Council renders is supposed to represent 3s. 1d. I agree that the service accorded to an owner of unoccupied property is not anything like the amount indicated in the Bill. I rather agree that there may be ground for the contention that such an owner is liable for something but that something ought to be defined, not by the London County Council but by the Government and at the proper time. In my own borough of Lambeth, a typical London borough, during the recent election, pamphlets were circulated showing that the loss of rates in the borough was £18;000 a year. That happens to be the highest it has ever been and the London County Council supposed that the loss to them amounted to £4,500. But that figure included property which could not be let, property which was under notice for demolition and property which could not, in any circumstances, produce the rate which, it was said, ought to be produced by it.

I understand that those in favour of the Measure are bringing up the special case of Scotland in support of their claim. We know from the Debate in this House on 12th February last that there is no case, as far as Scotland is concerned, which cannot be adequately answered. There is not the slightest doubt that tremendous dissatisfaction exists in Scotland with the rating principles wihich are adopted there and that people there want to be put and have consistently asked to be put on the same system as England. The case of the City Corporation in London has also been mentioned. As has been pointed out it was in 1667 that this particular rate was introduced in the form of a tax. It was eventually merged in the City rates. It has now become one-half of the general rate or one shilling in the pound equal to one-ninth of the total rates as against the proposal of the London County Council in this Bill of 25 per cent.

Possibly an argument will be used with regard to what took place in Committee in 1925 on the Rating and Valuation Bill. The Chancellor of the Exchequer then rejected a proposal of the London County Council for the inclusion of unoccupied hereditaments. He did so because he said it would interfere with the development of building. It is to be remembered that 1925 when that proposal was made was very different from 1936. It was before the great depression and before the American slump. It was a time when the supply of houses and properties generally was not equal to the demand. To-day the position is different. The demand is being met largely by private initiative and enterprise and this Bill would have the effect of curbing that initiative and enterprise which has brought this country up to a much better level in this respect than Scotland. In connection with the Scottish comparison I would point out that in Scotland six houses are being built by corporations to each one built by private enterprise but in England a greater number of houses is being built by private enterprise than by public authorities. That is an argument against the Bill because it shows that enterprise, initiative and speculation will not be indulged in if we pass Measures such as this. The Liberal Land Committee in one of their reports made the remark: To levy any higher rate than one penny on empty houses might indirectly have a detrimental effect upon the supply of capital for building. There is no question about the fact that in Scotland it has had a detrimental effect and I cannot see any argument in favour of the Bill which can be advanced on the Scottish case. I look upon the Bill as something approaching a capital levy. I look upon it as a curb on enterprise and a means of upsetting mortgage values. My hon. and learned Friend indicated that he was not interested in property and speaking for myself I do not want it to be thought that I am interested in property. I have had very little interest in property, and it would not make very much difference to me whatever happened. That is speaking quite personally, but I feel that this is an entirely unjust matter, and I would like to give a little case that came before my notice the other day, as an illustration of what might and perhaps would happen under this Bill.

A certain property that I know of in the West End of London was let at £800 a year, and the tenant went bankrupt. It was very difficult to get possession. The property was supposed to be worth from £600 to £650 a year of anybody's money, but it was not possible to get that. It was eventually let, for the purpose of letting it, as the promoters of this Bill suggest, at a sum of £200 a year, on a three years lease. Then came the local council and said, "Whatever you like to do with the rent is no business of ours. The value of this property for rating purposes is £410 gross." That is, roughly speaking, about £350 net, and on that, with the rate at 12s. in the pound, it is easily calculable how much the man has to pay in rates. Then also comes the question of Schedule A, and that is always based as a minimum on the rating assessment. The rating surveyor does not bind himself to the rating assessment. It may be more, but at least it is no less, and therefore the tenant who was being obliged to let the property for the purpose of keeping it let, had to pay on £350 net, at 12s. in the pound, and he also had to pay Schedule A, and he could only deduct the proportion of the £200 rent that he paid under Schedule A from the landlord.

If that rent were taken as the enforced letting rent, I want to ask the promoters of the Bill, What is a reasonable rate to pay if the landlord is going to forgo some of his rent to keep his property let? You cannot in all fairness maintain the old rateable value. Therefore, it must happen that the assessment will come down, and the assessments in that particular district would all have to come down, because corresponding adjoining properties would have a grievance, and a very legitimate grievance, because one property had got special favours. Therefore, the poundage of the whole district would go up.

I maintain that if this Bill were brought into operation, for a little while, especially during the period of the quinquennium, there would be an increase, because it would operate quite satisfactorily, from the promoters' point of view, probably for a year. It might operate for a little more, but it would be bound to bring assessments down. It would be bound to make all the difference in the world to the assessments of the various districts in London, and remember those districts for rating purposes vary from 9s. 9d. in the City to 26s. in some of the outlying districts. Therefore, the quarter rate which our friends are proposing to charge would become a very serious matter when the rates amount to a considerable sum. But when assessments come down, the poundage will have to go up, and I believe the promoters of the Bill know perfectly well that in operation, and after very little time, they could get nothing out of it to equal the trouble and the dislocation which they are proposing to impose by this Bill.

To take another point, landlords are being accused of holding up property for the purposes of getting higher rents. What happened in the days immediately after the War I do not know, but I imagine that there was some justification for that statement at that time. To-day there is not the slightest justification for such a statement. I consider that a decent landlord to-day is suffering a great enough misfortune in having empty property on his hands, without being charged a quarter of the regulation rate of the district. I might also mention the questions of building finance and of mortgages, and, knowing a little about building society business and the tremendous amount of money there is invested by the building societies in mortgages, which amounts to something like £600,000,000 to-day, it becomes a very serious question when you begin to disturb those mortgages by reason of an attack on what I call thrift and the savings of individuals who have invested their money in property.

The Mover of this Amendment has referred to difficulty in the cost of collection. The promoters of the Bill know very well that when they begin to try to collect the rates from the owners of property, they may be joint owners and they may be very difficult to get at, and if the property is going to remain indefinitely unoccupied, I suppose it means something in the nature of confiscation. Whether they mean that or not, I do not know. Perhaps we shall hear in the course of the Debate. Without making a great deal of my feelings in regard to this Bill, I would say that I think it is a bad Bill. I do not like mentioning this, but it has struck me for some time that there may be something in the promoters' idea in regard to it that the expenditure of the London County Council is rising. I am not making any comment about it beyond the fact that it is rising, but when you get a rising expenditure and you are comparing that with what is inclined to be a declining expenditure somewhere else, it becomes a little bit ridiculous to make this comparison which they do make.

Another point that has struck me in regard to this matter is this: I do not know whether I am treading on the corns of my Friend if he will allow me to call him that, the leader of the London County Council, whom I have known for some considerable time, but it has struck me —it may be my own personal opinion, and I am voicing it for what it is worth—that the London County Council have an election coming next year, and I thought perhaps there might be something in the propaganda with regard to that election. I am influenced in saying that by a report which appeared in la newspaper yesterday, in which it was said that the Division Lists of to-night's Division would be carefully scrutinised. I do not mind that, because if I have a conviction that a thing is right I do it, and it does not make any difference to me what threats are used in regard to elections. To use a colloquial expression, they are like water on a duck's back. Generally speaking, this Bill is illogical and unjust and, I would add, it is unnecessarily punitive. I think that I have expressed myself sufficiently to show that I am conscientiously opposed to the Bill, and that I am not opposing it from any political motives.

8.46 p.m.

Mr. G. STRAUSS

We have heard at considerable length, about which I do not complain, arguments from hon. Gentlemen opposite that this Bill, which the London County Council is bringing forward, should not be proceeded with. They have voiced in the House in a very fair manner most of the criticism which has been the subject of an intensive campaign throughout the country against the Bill, and they have suggested, particularly the hon. Member who spoke last, that there are all sorts of terrible things behind the Bill which do not appear on the surface. The hon. Member for Kennington (Mr. Harvey) suggested that it was a first step towards confiscation, and I think that the idea has generally been put abroad that this proposal is a novel one, hastily conceived and quite revolutionary. I want to explain to the House that this Measure, far from being that, is a simple proposal for bringing a measure of social justice into the rating system of London, that it goes not one step beyond that, and that the arguments which have been put forward against it outside the House and inside are ill-founded and grossly exaggerated. Much of the argument put forward, particularly outside the House, has been unquestionably political. I do hope that the House will consider the matter this evening entirely on the merits of the proposal, quite apart, from other prejudices, because I believe that if the House considers it on the 'merits alone it will give the Bill a Second Reading and allow the details to be considered in Committee upstairs.

What is this villainous proposal—villainous in the view of the hon. Member who seconded the Amendment? It is simply that empty property to-day receives very considerable service from the local authorities; the general body of ratepayers provide to the owners of empty property considerable and invaluable services for which they do not get paid. The services have already been mentioned by the hon. and learned Member for Bridgwater (Mr. Croom-Johnson). They are the obvious services, such as police protection, which in some respects is more important in the case of empty property than in the case of occupied property. There is fire protection, and may I here assure the hon. and learned Gentleman that the figure given in the calculations is the net cost of the fire brigade apart from contributions, which are voluntary, from the insurance companies. There are, too, lighting, highway and main and local drainage services. All these confer direct benefit on the owner of empty property, and when the hon. and learned Gentleman argues that the 25 per cent. which these services roughly represent is really more than the owner of the property should pay, and is more than the services he receives, may. I put this to him?

Other services carried out by the local authority also benefit the owner of empty property indirectly to a considerable extent. There is, for example, the poor rate. Large sums are paid by the local authority in poor relief, and if they were suddenly stopped, I suggest that the result would be so anarchic and society would be so severely affected, that the value of all property, empty and full, would be thereby lessened. Consequently, the indirect services such as the poor rate contribute to keeping up in value empty as well as occupied property. The figure of 25 per cent. is, therefore, very fair in all the circumstances. It might be argued and proved in Committee upstairs that the figure should be less by 5 per cent. or more, but as a general statement I do not think one could put a fairer figure down than 25 per cent. I suggest that the argument that the owner of empty property who is receiving direct and indirect benefit from the community should pay the community for that service is really unanswerable. It is true that all sorts of reasons, which are ill-founded but have been put forward with great ingenuity by the hon. and learned Member, have been advanced against it. I want to deal as fairly as I can with those arguments. The first is that this proposal has not been carefully examined and that it is leading, as the hon. Member for Kennington said, to confiscation, or, as has been said by an hon. Member outside the House, it is a direct attack on private enterprise. I would remind the House that this has been the subject of careful consideration in the past. The Royal Commission which sat in 1899 came to this conclusion after careful examination: We think it would be fair if some charge were made in respect of unoccupied properties which, undoubtedly, receives some benefit from public expenditure. But, at the same time, there would be hardship if the full burden of rates were imposed in such cases. We think the equity of the case would be met by requiring the owners to pay a portion of the rates in respect of the unoccupied hereditaments. Further than that, quite recently the London County Council, not with the present majority, but when it had a Conservative majority, passed a resolution in favour of this principle. In 1923 a resolution was passed to this effect: That subject to further consideration of points of detail, more particularly in regard to the exemption of properties from 'empty rate' in certain circumstances, the Council is of opinion that it is desirable that legislation should be promoted by His Majesty's Government to provide that the owners of empty properties should be required to pay rates thereon to the extent of one-quarter of the rates which would he payable ii the premises were occupied; and that the Minister of Health be informed accordingly. If this proposal be one of confiscation, the friends of hon. Gentlemen opposite were just as much in favour of it as we are. I think that proves that that argument is ridiculous. Moreover, when in 1925 the Rating and Valuation Bill was discussed in this House the County Council took steps to submit an Amendment to provide that unoccupied properties should be made rateable at one-fourth the average rate. So this proposal is not a revolutionary one. It does not even start with the present majority at County Hall. It started as far back as 1899, and was confirmed by the late Council by a unanimous vote: Then it is suggested that this proposal is something quite new in the history of rating in this country. That statement was even made in a circular sent to all Members by the Chartered Surveyors' Institution, who really ought to know better. They say in paragraph 11: The proposal, moreover, introduces the principle that rates are a tax on property in respect of the ownership of property, a principle wholly different from that which has governed the law of rating in England since 1601. When precedents are sought in this House hon. Members frequently go back to the time of Elizabeth, but here one can go back even farther. In Henry the Eighth's Statute of Sewers there is a provision that the incidence of the cost should fall on all property, whether occupied or un-occupied. Indeed, it was a general rule until recently that owners of unoccupied premises should pay their share of the services they received. I do not think it is always essential to show a precedent when a case is brought forward. There are many things we should like to see done which have no precedent, but in this case we happen to be reinforced by a large number of excellent precedents. In London, until the passing of the Metropolitan Management Act, 1855, it was the general custom, under the various Acts which governed the administration of London, to rate property whether it was occupied or unoccupied. In the City of London up to 1667 the whole rate fell on unoccupied property as well as occupied, and after 1765 unoccupied property had to bear half the general rate. But there is a more recent precedent for this principle which some hon. Members opposite think so obnoxious. In 1930 the Land Drainage Act was passed, and that specifically orders that that part of the cost of land drainage which falls on the owner of property should fall on him whether the property is occupied or unoccupied. When it can be shown that this principle was in force in the time of Henry VIII and was passed again by this House in 1930, the argument that this proposal upsets all our ideas about rating has no force whatsoever.

Again, it is argued that it would be wrong to have a rating system for London which would be different from the rating in other parts of the country. There might be some force in that contention were it not for the fact that the law of assessment for rating in London is already different from that for other parts of the country. London has different legislation in regard to many matters. It has its own public health legislation. Scotland has already been quoted, and the principle is in force there to the extent of making unoccupied property pay 50 per cent., double the amount proposed under this Bill. Under the Dublin Corporation Act, 1890, unoccupied property in Dublin was made to bear a rate not less than 33 per cent. of the rate borne by occupied property; and so excellent, apparently, was that provision found to work that Mr. de Valera has recently increased the rate on unoccupied property to between 50 and 100 per cent., according to the special circumstances of the particular properties.

It has also been argued by hon. Members opposite that this proposal would stop building. I really cannot take that argument very seriously. It was coupled, I think, with the argument that values of all house property would fall, and I suggest that those two arguments cancel one another out, because if all house building stops then the values of existing property will not fall.

Let me give a concrete case to show that the proposed incidence of taxation on empty property is nothing like so serious as has been suggested and would not stop a single person from building a house. Take a house of which the gross value is £40. The rateable value would be £28 and assuming the rates were 10s. in the £ the sum which the owner would have to pay when it was unoccupied would be £3 10s. per annum. Moreover, he would only have to start paying six months after the house had entered the valuation list, not six months after it had been built. When the owner of property has to pay other charges which go on continuously whether the property is occupied or unoccupied—mortgage interest, ground rent, insurance and so on—is it seriously suggested that this payment of £3 10s. per annum, to start six months after the property is in the valuation list, would prevent a single builder from putting up houses? The case has only to be stated in order to be confuted. Then it has been said there would be a big fall in the values of house property if this Bill passed. I do not see why that should be so. In the city of London, in Dublin, in Scotland, where this principle has been in operation, there has been no fall in the value of property.

Lieut. - Colonel Sir CHARLES MacANDREW

Did I understand the hon. Member to say there had been no fall in the values of property in Scotland?

Mr. STRAUSS

No fall in the value of property in Scotland because of this principle of rating empty property; and, indeed, there has been no greater fall in Scotland than there has been in England.

Sir ROBERT HORNE

Oh, undoubtedly. You cannot get away from the figures.

Mr. STRAUSS

Hon. Members apparently think differently on this matter.

Sir R. HORNE

There is no question about it at all. There has been a far larger fall in the value of property in Scotland than in England. The facts are remarkable.

Mr. NEIL MACLEAN

On a point of Order. The fall in the value of property—[ Interruption.]

Mr. DEPUTY-SPEAKER (Sir Dennis Herbert)

Is the hon. Member rising to a point of Order?

Mr. MACLEAN

Yes.

Mr. DEPUTY-SPEAKER

Then will he please address it to me?

Mr. MACLEAN

I want to draw your attention to the statement made by the right hon. Gentleman the Member for Hillhead (Sir R. Horne). He is not accurate in his statement that the fall in the value of property in Scotland is due to what he says.

HON. MEMBERS

Order!

Mr. DEPUTY-SPEAKER

I must rule quite definitely against the hon. Member that this is not a point of Order and attempts at interruptions of this kind, as points of Order when they are not, are most improper. It is not a point of Order; it is a point of Debate.

Mr. MACLEAN

May I ask you this, as a point of Order? Is an inaccurate interruption made by a Member, even when an hon. Member gave way, not improper also?

Mr. DEPUTY-SPEAKER

It is not a question of accuracy or inaccuracy; it is a question of order.

Mr. KENNEDY

May I ask you if you will apply your Ruling impartially to both sides of the House?

HON. MEMBERS

Oh! and Withdraw!

Mr. DEPUTY-SPEAKER

Mr. Strauss.

Mr. STRAUSS

The point I was making is that there has been no fall in value, as the result of the principle being in operation in those areas. There has been a fall in Scotland owing to other reasons; for instance, industry moving South. I do not think anyone would hold that this has been the reason why there has been such opposition to the proposal which has been put forward. Common sense shows that the proposal is a desirable one, and would be beneficial to all localities.

The reason why opposition has been put forward is, I think, that property owners are almost invariably frightened of any change in the system of rating or taxation which applies to their property. They always see behind it something dreadful or sinister, as the hon. Member for Kennington (Mr. Harvey) has seen something sinister behind the present proposal. There is nothing sinister behind it. The proposal is so simple; it is equitable and it is plainly just that the owner of empty property should pay for the services he should receive. It is impossible to prove that the proposal will have the serious effect on house-building that has been suggested this evening. I have done my best to show that such arguments are faulty, and I ask the House to consider the matter on the basis not of the propaganda that has been put forward outside or on the basis of party feeling, but on the merits of the proposal. I am convinced that if hon. Members will consider the proposal on its merits alone, they will give it a Second Reading, allowing the details, many of which are difficult and complicated, to be thrashed out in Committee.

The hon. Gentlemen who moved and seconded the rejection did not give full credit to the number of exemptions which are contained in the Bill, and which will prevent the hardships which it has been suggested might arise. A very important exemption—I might better call it a provision—has not been mentioned at all. It is that where the owner of an unoccupied property is unable, for one reason or another, to pay his empty rate, the local authority can ask the first tenant who occupies that tenancy to pay the rent to the local authority. That will prevent hardship. [Laughter.] Hon. Gentlemen laugh at that proposal, but it is in force to-day in the City of London. I ask the House to give the Measure a Second Reading and to consider it on its merits alone, when I feel sure they will desire not to hinder but to help the London County Council in its endeavour to apply to the citizens of London this long overdue and very desirable Measure of social reform.

9.10 p.m.

Mr. KEELING

I rise for the first time to address this House, and I know I can rely on the traditional kindness and indulgence of my brother Members —and the one sister Member whom I see present. Although I do not represent any London constituency I am a member of the Westminster City Council, and I have been asked by that Corporation, and by eight other Metropolitan boroughs who have petitioned against the Bill, to represent their view. Beside those nine councils, there are two others who have received the Bill without enthusiasm, although they have not petitioned against it. I may draw the attention of the House to the fact that those 11 councils collect among them more than half the rates of London. The London County Council does not collect rates; its more agreeable task is to spend two-thirds of the rates which are collected by the borough councils.

Although we are opposing the Bill, we do so with regret, because the relations between the borough councils and the London County Council have of recent years become increasingly friendly, and not least during the last two years, when Labour has been in power on the London County Council. Time was when this was not so. The borough councils and the London County Council used to quarrel, sometimes rather hotly, and almost on every subject, but they have realised that "when the powerful disagree the humble suffer," and by means of consultation and good will they now, in most cases, come to friendly agreement. We trust that this case will not break those friendly relations. I go further and venture to hope that when the London County Council have heard the arguments against the Bill they will come to realise that they and the people of London will not suffer, but will rather gain, if this Bill be thrown out.

Having said that, I must say quite baldly that I regard the Bill as thoroughly bad. I do so entirely on its merits. I have not had any suspicion, as the hon. Member for North Lambeth (Mr. G. Strauss) suggested we might have, that there is something behind the Bill. I judge it entirely as I read it. Three reasons have been advanced by the hon. Member for North Lambeth for the Bill. The first is that because empty properties benefit from certain services they ought to pay for them. The five services are the police, the fire brigade, the lighting of the streets, the paving of the streets and the drains, and because those five services cost between them one-quarter of all the rate collected, it is suggested that the rate imposed on empty properties should be one-quarter. In other words the Bill assumes that an empty property derives the same benefit from those five services as does an occupied property. That seems an absurd assumption. The hon. Member for North Lambeth said that empty properties, also benefit from the poor rate. Perhaps some hon. Member who follows me will explain how an empty house benefits from the poor rate. I cannot understand that.

It is also said that the levying of this rate on empty premises will ease the burden on occupied premises. It has already been pointed out that, on an optimistic calculation, the yield of this quarter-rate on empty premises will only amount to about £200,000 or £250,000; and that is only three-fourths of one per cent. of all the rates collected in London. In other words, the occupiers of occupied premises at present pay 100 per cent. of the rates, and if this quarter-rate on empty premises realises the most optimistic expectations the occupiers will in future still have to pay 99¼ per cent. What, then, becomes of the argument that the rating of empty premises is going to ease the burden on occupied premises? The burden on individual owners of empty premises will, under this Bill, be severe, but the relief to the occupiers of occupied premises will be absolutely negligible.

I would make this further point: There is no practical injustice in the present system. Most premises become empty sooner or later, and when a house or an office or a factory becomes empty the owner of it gets his recompense, in exemption from rates under the present system, for the slight extra burden which he bore when the premises were occupied. This point was mentioned by the Committee on Local Taxation appointed by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), which reported in 1914, and I should like to read just a few words from what they said: We doubt whether the present system in relation to unoccupied houses really produces much hardship as between ratepayers. If A's house is unoccupied for this half-year and no rates are payable, B's rate burden is slightly increased. In the next half-year the case may be reversed, and in the long run matters Work out, probably, with a fair degree of equality. I may point out that this Committee sat at a considerably later date than the Royal Commission on which the hon. Member for North Lambeth relied. I turned up the Royal Commission's Report in the Library, and the pages were quite yellow with age. It also sat at a date considerably subsequent to the reign of Henry VIII, on which the hon. Member also relied. The hon. Member for North Lambeth made the surprising remark that until recently the rating of empty property was common in this country. I challenge him or any other hon. Member opposite to produce authority for that statement. He referred to the system of rating for land drainage which was introduced quite recently, but that, of course, is not really the same question. The drainage rate is directly beneficial to the particular land on which the rate is imposed.

So much for the twin arguments that empty properties ought to pay because they benefit, and that the Bill will ease the burden on occupied premises. I come now to certain positive objections, and I suggest that the effect of this Bill will be serious, and even disastrous. Like my hon. and learned Friend the Member for Bridgwater (Mr. Croom-Johnson), I am not a property owner. I do not own a single stone or brick, either in London or in any part of the country; I have not even purchased any part of the discarded masonry of the Palace of Westminster. It is not in the interests of property owners that I am opposing this Bill, but because I believe that it will hit industry and will certainly increase unemployment. The obligation to pay rates on empty properties will, I suggest, undoubtedly discourage building. We have the remarkable fact—the rating of empty properties in Scotland has been mentioned, but I do not think this figure has been mentioned—that since the War the number of working-class houses in Scotland built by private enterprise has only been one-fifth, in proportion to the population, of the number which has been built in England. And it is not only the building of working-class houses that will suffer. Big offices and flats in London take at least three years to let, and the exemption for six months provided by the Bill is not at all adequate.

We hear a good deal on both sides of the House about the need for industrial reorganisation. Industrial reorganisation must take, usually, one of two forms. It either means rationalisation, which involves the closing of redundant factories, or it means that a manufacturer scraps his old plant and old factory and moves to a new one. In either case the rating of the empty property which he will have to leave or discard will surely make him think twice before he builds a new factory or goes in for that rationalisation process.

We have been told that the rating of empty premises obtains in Scotland, but, like my hon. and learned Friend, I listened very carefully to the Debate on the Scottish rating system, and not only did I not hear one single voice raised in favour of the rating of empty property in Scotland, but I heard a good many complaints about it. [An HON. MEMBER: "From which side?"] I heard complaints from both sides about the rating of empty property in Scotland. The Bill proposes to fasten on London the very system about which there are so many complaints in Scotland. Is it possible that the London County Council, by introducing this system into London, seeks to discourage the migration of Scotsmen to London? I certainly have no such desire, and, even if I had, I think that the price is too high.

Just one word about the City of London. As we have already been told, the rating of empty property obtains in the City of London, and has obtained since the time after the Great Fire, when the City Fathers had obviously to rate empty property, because there was no other property that they could tax. But the rate imposed on empty property in the City of London is only one-ninth, and that seems to me to be a very poor argument for imposing a quarter-rate on the rest of London. The City of London has been left out of this Bill, and it seems to me to be a most remarkable omission. It is perfectly true that the City of London has its own police force, but it occupies much the same position vis-à-vis the London County Council which the Metropolitan borough councils occupy. It has the services of the London County Council's fire brigade; it has the services of the London County Council's drainage system; and it seems to me to be an extraordinary injustice that, while the people of the rich City of London only pay a one-ninth rate on their empty properties, yet, if this Bill were passed, the people of the comparatively poor borough of Lambeth, which the hon. Member opposite represents, would have to pay a quarter-rate. Finally, I suggest that this Bill violates the elementary principle well known in this country that there should be no taxation without representation. Unlike Scotland, England does not give a municipal vote to property owners as such, and I want to ask the London County Council whether, if this Bill goes through, they are going to propose that property owners should be put on the municipal register. If so, I think that they may be surprised at the result. There are a good many other defects in this Bill, but other hon. Members want to speak, and therefore I am going to leave them to deal with those points and so help to dig the grave which I think this Bill deserves.

9.27 p.m.

Mr. LANSBURY

I wish to support this Bill, not because I think it is a very courageous or big Measure. I think that it is a very small Measure, but, like so many other proposals brought forward in this House, it is a step in the right direction. Before I pass on I should like to congratulate the hon. Member for Twickenham (Mr. Keeling), although I disagree with his conclusions. If he will allow me to say so, I think that by his speech he has made us all realise that he understands very thoroughly the question which we are discussing to-night. I would like to say to him that I am extremely sorry that the Westminister City Council has grown weary in well doing. That council some years ago, after the Poplar councillors had gone to prison, through its clerk and its chairman, took the lead in voluntarily taking over the cost of Poor Law relief in London to a very large extent. I think that we should not have got through with the proposals which eventuated in the cost of the poor being transferred from the localities to the centre had not Westminster on the day we met taken the lead, and I am very much surprised to find that they have joined in a sort of combination, relatively speaking a small one, to try to stop this Bill getting through, because the same arguments as were used to bring the Westminster Council to the position of taking the lead apply equally to this proposal to-night.

What is the situation? It is not that the London County Council benefits. That is to say, they do not suffer the obloquy of levying the rates. The rates are levied in London by the borough councils, and it is the poorer districts that feel this burden much more than any other portions of London. In the borough of Poplar, part of which I represent, we lose something like £39,000 to £40,000 a year, partly by compounding, partly by empty properties, and to a small extent by irrecoverable arrears. When the London County Council levy their precept on us they levy it on our rateable value, not on what we can collect, not on the total that comes into the bank from the ratepayers. This proposal would make probably somewhere about a twopenny rate difference to us in Poplar. To Westminster and the City of London twopence in the pound is not very much, but to us in Poplar it is a very considerable amount indeed and makes a considerable difference to the people who have to pay. I should have thought that the richer boroughs would not have used the kind of argument that hon. Gentlemen have been using to-night in this respect, because they must realise that if we are to stand up to the rating system in London it is quite certain that we should have this kind of relief. I should like to correct the hon. and learned Member for Bridgwater (Mr. Croom-Johnson). I do not know the circumstances under which John Scurr made the speech to which the hon. Member referred.

Mr. HERBERT MORRISON

Perhaps I can tell my right hon. Friend. Mr. Scurr was acting on behalf of the then Conservative County Council.

Mr. LANSBURY

Perhaps that was so, but I want to point out to the House that part of the statement that was put to the High Court contained a reference to the fact that at that time the loss to the ratepayers of Poplar through having to pay the central rates on the rateable value, without any deductions, amounted to somewhere between £50,000 and £60,000 a year. That was then a very considerable burden on the ratepayers. To-day that sum is reduced to something like £16,000 and it costs us a 5½d. rate. We shall get this small amount if this Bill is carried, and I should have thought that the richer boroughs would not have stood in our way. The hon. Member for Twickenham said that we shall not help forward trade and development, and so on. I think that he makes a mistake there, because I am quite certain that in any reorganisation scheme this sort of proposition would not have any weight. No one will undertake to take premises under a reorganisation scheme without being pretty sure that they are going to occupy them for at least a considerable period. This is really aimed at people who for one reason or another keep property out of occupation. The hon. and learned Gentleman the Member for Bridgwater said that no one keeps houses empty.

Mr. CROOM-JOHNSON

I do not think I said anything like that. I should not dream of making a statement as wide as that.

Mr. LANSBURY

I was going to qualify the statement. I think the hon. and learned Gentleman said there were very few people, if any, who did so. Almost alongside my own house for three or four years some very admirable properties were kept out of letting, although the borough council would have been quite willing to buy them and to turn them into dwellings for people by whom they were very much needed. I wished at that time that we had had power to levy the whole rate on the owner, but we had no power to levy anything. I am sure that if he had been obliged to pay 25 per cent. of the rates he would have let the houses. He kept them empty until he could pull them down and build some houses on the back on an entirely different plan. There may have been reasons which we knew nothing about, but we never got any reason from him at all. I can give the Minister the history of the matter, because the borough council again and again tried to deal with these properties. We have had similar properties held out for considerable periods. We had in Bow Road a great stretch of land where the property had been allowed to become dilapidated and for years it was impossible for us to get possession because the owners were waiting for an increase in the value of the land. That also can be verified by the borough council.

An hon. Member has said that this Bill may be brought forward with a view to the election. I was elected on a local authority in Poplar in 1892 and this was one of the questions that we put in our election address. It has been a burning question ever since I knew anything about rating or rent or anything else. The hon. and learned Gentleman the Member for Bridgwater does himself less than credit when he urges as an argument against the Bill that other people will want the same thing. That seems to me to be an argument in favour of the Bill. If there are people outside who are longing to get it, I should have thought that, being a good democrat, he would want to start along the road so that eventually those who are waiting for it might point to the success of this venture and obtain the consent of Parliament to an enlargement of the scheme. One of these days the whole question of London's assessment and rating must be tackled. It is a very chaotic position altogether. I hope that some Government will take it in hand and, if it means the abolition of the borough councils, we must stand up to that, or lie down to it. I do not think it would matter very much if they were all improved off the face of the earth and the London County Council given the power to assess, to rate and to administer London.

I know that that will sound a very unpopular thing to say to many of my friends, but I think that London suffers very much indeed from not being a unified Metropolis and, when you come to deal with London's assessment system, you discover that you can only get that efficiently done from the centre. There are different methods, and different people carry through the assessments, and when you come to the rating system it is grossly unfair, as the Westminster Council recognised in 1920 or 1921, when they voluntarily bore the burden. I am certain that, if the city of London was called upon to help, the Common Council would not object, because when the committee for dealing with the unemployed was launched by Mr. Walter Long it was the city of London that first of all volunteered to levy themselves in order to ease the burden of the poorer districts.

Mr. KEELING

The City of London actually asked the London County Council to leave them out of this Bill.

Mr. LANSBURY

They had perfectly good reasons for doing so. For years they have had their own system, and apparently it has worked very well. As the hon. Member said himself, there are services which the City itself pays for throwing no burden on the rest of London. Anyhow, I am paying my tribute to the City of London for being ready to do something voluntarily, and I pay my respects to the Westminster City Council of 1920–21 for the manner in which they led the rest of the boroughs of London by championing the need of poor local authorities for relief. I cannot understand why they should want to stand in the way of our getting the very small relief which this Bill will give. I hope the House will give it a Second Reading.

9.44 p.m.

The MINISTER of HEALTH (Sir Kingsley Wood)

It may be for the convenience of the House that I should say a word or two on the point of view of the Government concerning this Bill. I welcome the statement of the right hon. Gentleman who has just spoken in commendation of the work of the City of London and of the Westminster City Council. I did not think I should live to hear such language from him.

Mr. LANSBURY

I do the right hon. Gentleman the courtesy of listening to him. He hardly ever does me the courtesy of listening to me. What I have said to-night I have said many times both inside and outside the House.

Sir K. WOOD

The right hon. Gentleman ought to have the freedom of the City.

I congratulate my hon. Friend the Member for Twickenham (Mr. Keeling) upon his very fine maiden speech. I have heard him on two occasions recently. I had the privilege of attending a meeting of the Westminster Council last week when I heard my hon. Friend speak in another capacity. I am sure that all of us who heard him this evening, in whatever part of the House we may sit, recognised that we have in my hon. Friend a great acquisition in this House, particularly as far as local government work is concerned. I congratulate him very much indeed. I do not propose to quarrel with the right hon. Gentleman on the question of the reform of London to-night, but would only express the hope that, as far as London valuation is concerned, it may be possible for the London County Council and the borough councils to come to some agreement on the matter, because, as the right hon. Gentleman knows, I would gladly welcome something in that direction. I emphasise what my hon. Friend the Member for Twickenham has said, that in anything we may say tonight none of us desires to take up an attitude on behalf of the borough councils against the London County Council or vice versa. I greatly value the statement my hon. Friend the Member for Twickenham made, that the good relationship between the borough councils and the London County Council has, if anything, improved recently.

As far as the abolition of the borough councils in London is concerned, I can only express the hope that the right hon. Gentleman may live long enough to see it come about. The only statement that I want to make to the House regarding this proposal—I do not propose to discuss the merits, which have been so ably dealt with by hon. Members on both sides of the House—is to remind the House that it would introduce a fundamental change into the settled system of English rating, and proposes to make that change by way of local legislation. The only statement I desire to make on behalf of the Government to-night is—I think it is obvious and it is certainly the view of His Majesty's Government—that if a change of such magnitude is to be made it should be applied to the country as a whole, and that it is not appropriate that it should be done by local legislation. The Government as at present advised have no intention of introducing such legislation, and therefore we cannot ask the House to vote for this Bill.

I do not wish to say anything concerning the details of the Measure, but I thought that it would be for the convenience of Members of the House if I expressed to them the view of the Government generally concerning this proposal.

9.49 p.m.

Mr. HOLMES

I cannot claim that I am making a maiden speech, but I ask the indulgence of the House as it is nearly 14 years since I last had the privilege of addressing it. I am rather sorry that my first speech on my return here is to be in opposition to a Bill promoted by the London County Council. I was a member of that body for nine years, and in those days we at County Hall thought that a Bill promoted by the London County Council should not be interfered with by Parliament, because the London County Council knew so much better than Parliament what was required for London. With this Bill it is a different case, because it is not a Measure that will concern London alone but one which will eventually alter the whole rating system of the country. I cannot help feeling that what the right hon. Gentleman the Member for South Hackney (Mr. H. Morrison) had in his mind when the London County Council was deciding to promote this Bill was, that before it reached this House, there would be a General Election and that he would find himself, when the Measure reached the House, on the Front Government Bench instead of on the front Opposition Bench. But the General Election turned out differently, and the right hon. Gentleman is now trying to make new precedent in this House by introducing a Government Measure from the front Opposition Bench.

The London County Council have furnished us with a memorandum giving reasons in favour of the Bill, and their speakers—the hon. Member for North Lambeth (Mr. G. Strauss) and the right hon. Gentleman the Member for Bow and Bromley (Mr. Lansbury)—have given their views upon it. The first point they made is that there will be no increase in the total amount of the rating. That may be true, but I have a shrewd suspicion that, as the administration of the right hon. Gentleman the Member for South Hackney and his friends has caused the expenditure of the London County Council to go up considerably, and as they have to face an election in March of next year, they want to find some new form of ratepayer on whom they can put some of the burden of their increased expenditure, so that the general rate of London will not go up so much.

The second reason that they gave why the owner of empty property should pay rates was because of the services which he receives. This point was dealt with by one or two speakers, and I will say a few words with regard to the four services mentioned by the hon. Member for North Lambeth. The police are aware that empty property cannot be burgled. It may want protection from boys throwing stones at the windows, but they never do that when the policemen are there. Empty property is not likely to catch fire. There is not an owner of empty property who wants the lighting or cleansing of streets, and as for main drainage, the only advantage the owner of empty property receives is that the rain water from the roof is taken away. Another reason given is that owners will be more likely to let their property at a lower rent. There is very little in that. To-day, if a person has an empty property, he nearly always places it in the hands of an agent, who will always advise him as to the rent he may expect to get, and as a general rule he accepts what he can get in due course. There is very little deliberate holding up for increased rents.

I turn to the other side. The best way to obtain reasonable rents is to supply an. adequate number of houses. Supply and demand come in as far as houses are concerned, as in other things. If there is a shortage of houses rents go up, and if houses are provided equal to the demand, rents are kept down. During the last few years an increased number of houses has been built in London, and elsewhere in the country. These, in the main, have been built by private enterprise, which has only been able to do this because it has been able to get the necessary money. If building companies or private individuals are unable to sell their houses, they cannot continue building because working capital is used up and there is nothing left with which to provide wages and material. During the past few years the investing public have been induced to take more interest in property. That movement has been helped by the fact that the yield from gilt-edged securities has become less and less. Beyond the investing public who have bought houses, and so assisted builders, whether companies or individuals, the building societies have not merely lent money to individuals who have bought their own houses but have extended their policy to lending money to people to invest in a house even where that person could only put up £20, £25 or £30. That has all helped to get houses sold and to finance the people who were building them.

What will be the result if we pass this Bill? It will mean that the confidence that has gradually been built up so far as investing in house property and buying houses is concerned will be shaken. People will not be ready to invest in that way. There is nothing more important than confidence. When we hear of the flight from the £, the dollar or the franc, it means that the people of the world have lost confidence in that particular country, and very likely the people of the country itself have lost confidence. There is nothing worse than being able to say about a man that you have lost confidence in him. There is nothing worse for a man in his business than people saying that they have no confidence in him and will not give him credit. This Bill would take away the confidence of the people from investing either in buying houses for their own occupation for investing purposes or buying through building societies for the purpose of helping to build houses. Slowing up in the building of houses will mean a reduction in the amount of employment in the building industry. I do not know whether the House realises that to-day there are 234,000 more men employed in all sections of the building trade than was the case three years ago. If we have a slowing down in the building of houses, some of the 850,000 men who are at present employed in the building trade will lose their jobs.

I express my opposition to the Bill because it goes against one of the principles that has always existed in this country with regard to taxation and rating, and that is, that the broadest back should bear the biggest burden. If I may take an analogy from the Chancellor of the Exchequer, when he receives each year the estimates and he knows the money that he must raise and calculates his revenue, he comes to a conclusion as to the amount he must obtain from Income Tax. Then the House decides, as it has done for many years, that those who have little or no income shall have such allowances that they pay nothing. Right up the scale, as a man's income increases he pays more. That is a principle on which we are all agreed. Why should not that be the case in regard to rating? Why should we say that while the man who has little or no income pays no Income Tax, the man who has property which is bringing him in no benefit and no income should pay rates.

10.0 p.m.

Mr. W. H. GREEN

I support the Bill. The hon. Member who opened the opposition to the Second Reading said he did so on behalf of those who would suffer if the Bill became an Act and was brought into operation. I claim to speak for the very much greater number of people who are suffering to-day because the principles embodied in the Bill are not now in operation. The London County Council have promoted the Bill, because they believe that it can be justified on many grounds. They feel that at the present time a great injustice is being done to the vast majority of ratepayers who have to pay for services from which they themselves benefit but also from which the owners of unoccupied property reap some benefit. I was sorry to hear the Minister say that he was not prepared to advise his party to support the Measure. That statement was not altogether unexpected, but some of us feel that it was a misuse of terms for him to declare that he did so because the Bill introduced a complete and fundamental change in the principle of rating. We would rather say that it introduces a new partner into rating. Rating at the present time rests upon the occupier. We say that when an occupier is no longer there a small proportion of the rates should come upon the shoulders of the owner.

We have been too modest in the Bill. I am rather inclined to quarrel with the Title of the Bill. I would have preferred the Title to have stated that it is a Bill to grant a rebate of 75 per cent. to the owners of unoccupied property. I have listened very carefully to the discussion, and I am not surprised that against the principle we advocate we have not heard a really sound argument. The bulk of the material points that have been raised would have been more appropriate to the Committee stage than to the Second Reading. There are one or two very elementary points that have not been sufficiently dealt with. In the first place, the levying of the rate presumes that it is for the provision of certain services. Does the owner of an unoccupied hereditament gain something from those services? That has not been disputed by hon. Members opposite. It has been admitted by a number of speakers that they would agree that the owner of unoccupied property does gain something from the services provided out of public rates, but the point they have taken up seems to have been that there is no agreement as to the exact amount which that benefit would represent. The county council have tried to work out as nearly as possible on as just and as equitable a basis a; they could what that service would mean, and they have fixed it at 25 per cent. I feel that they have erred on the moderate side. Some arguments advanced by hon. Members opposite have been self-contradictory. They have cancelled out each other. We have heard that if this Measure becomes an Act and its provisions are enforced it will produce something negligible. Then why worry about it? Further, I think the same hon. Members have used the argument that the proposed imposition would be an intolerable burden on the propertied class. It is a little difficult to reconcile those statements.

Mr. KEELING

There is nothing inconsistent. The point is that the individual occupier would be relieved of less than 1 per cent. of the rates which he at present pays, whereas the individual owner of an unoccupied house would have to pay a 25 per cent. rate.

Mr. GREEN

That does not explain away the contradiction. We are told that the Bill will restrict, building. Surely if it restricts building the effect will be to appreciate values, although some hon. Members have argued that it is going to decrease values. If we could divorce this discussion from all party bias and vested interests and judge it purely on grounds of equity, the bulk of hon. Members would go into the Lobby in support of it. One would imagine from the tornado of literature which has been circulated that this was a most revolutionary proposal originating in the mind of a Socialist county council in their first term of office. Instead, we are following the lines of our predecessors and trying to implement what is, in effect, Tory policy as far as London is concerned. We support a principle which has commended itself for half a century to the City of London, and which has not been found iniquitous and oppressive in Scotland. I am not aware of any special steps taken by Scottish Members to remove any grievance.

Sir R. HORNE

On the contrary, the most active steps have been taken to obtain changes in the law, and the present Secretary of State not very long ago gave what many people regard as a pledge to deal with this matter.

Mr. GREEN

I am not aware of any strenuous and widespread efforts in Scotland on this matter. I can well understand hon. Members desiring to remove rating altogether, and they have succeeded in wellnigh doing so in the case of certain great undertakings. The Bill has been promoted after careful thought and every effort has been made to remove all possible grievances. It deals with the ratepayer on grounds of justice and equity, and the opposition to it is selfish and anti-Socialist. I trust that even now hon. Members will realise the false attitude they are taking and will join us in the Lobby to ensure that the Bill may be thrashed out in Committee and its merits and demerits investigated thoroughly.

10.10 p.m.

Captain DOWER

We have had many arguments for and against the Bill, but the strongest argument against the Measure is, as the Minister of Health has said, that, whatever hon. Members opposite may say, it does definitely propose a fundamental alteration in the principles of rating in this country. Whatever the merits or the demerits of the proposal may be, it should be introduced in the form of a public Bill which can be argued in relation to a system of rating for the whole country, and not merely as a Bill for London, even then leaving out the City of London. Those who support the Bill say that it does not matter, because there are already considerable differences between the rating system as practised in London and in the County of London. That is so to a minor degree, but I suggest that a fundamental principle like this, that empty houses should be charged rates, is a big issue and should be discussed in relation to the whole country. Hon. Members opposite have gone out of their way to dive back into the realms of antiquity. They love precedents, they believe in old-fashioned ideas, and they have discovered certain instances where taxation was imposed on empty property in the Gladstonian era.

One thing is absolutely certain, and that is that for many years as far as England is concerned, the principle whether property should be liable for rates or not has been based on beneficial occupation, and I am convinced that if you asked the ordinary householder in this country he would say that while he occupies the property and derives benefit from it he is liable to rates, but if he goes out, empties his home, why should he pay rates upon it? The hon. Member for North Lambeth (Mr. G. Strauss) said that there was an exception in the case of the Land Drainage Act, 1930, which put rates on empty property. The principle of that Act is entirely different. The principle of the Land Drainage Act, 1930, is that where public money is used to increase the capital value of land it is only just in those circumstances that the land should pay towards it. The only other point I want to make is this: Let there be no mistake, if the Bill receives a Second Reading, goes to Committee, and becomes the law of the land, it is not going to stop at that. It will be treated as an open invitation to borough and city councils all over England to say that, as the principle has been accepted for London, they want the powers as well. [HON. MEMBERS: "Hear, hear."] I agree, and, therefore, why not argue it as applying to the whole country and not merely to London?

Some hon. Members have said: "What harm is the Bill going to do? It is a most innocuous Measure and will not hurt anybody." I think it is going to be extremely injurious to the building industry and to new building development. Let me give an instance. If, in addition to the risks which already have to be undertaken, the interest which has to be paid on money borrowed and the long period before there is any return on the expenditure, you charge empty property with rates, you will do building development a great deal of harm. During recent years one of the principal forms of building activity, and one which has during very difficult years employed a number of men who would otherwise have been out of work, is the creation and erection of blocks of offices and flats. If the Bill became law it would deal a very injurious blow against this building. There is no question about that. After a block of offices had been put up it is. not a question of six months before they are let; very often it is a question of three or four years, and during that period the empty proportion of the block is often as much as 50 per cent. Now you are going to say that during the whole of that period you will charge rates upon the half that is empty. People will think twice and three times before they embark on the erection of fresh offices or blocks of flats.

Does the right hon. Member for South Hackney think that the statements he has made are likely to assist commerce? I can assure him that the building industry knows quite well that on 19th January, 1923, he said that empty properties ought to be rated at 50 per cent. Again, at Shoreditch on 25th September, 1920, he said that he would like to see empty properties rated at 100 per cent. I do think that when he answers to-night he should state what his views definitely are.

Mr. H. MORRISON

25 per cent.

Captain DOWER

I am very pleased to hear that the right hon. Member is becoming more conservative as he remains in this House. This is neither the time nor the place to discuss questions concerning the building industry, but I do not think it is out of order for me to remind hon. Members that calculations which have been made by very big building firms have stated that of every £100 spent in building £75 goes to labour wages directly or indirectly. That is a very important item.

There is another matter with which I would like to deal. It has been stated that there are 28,000 houses empty in London, and in this connection a most enlightening article by the right hon. Member for South Hackney appeared in a popular evening newspaper last night. He drew the attention of ratepayers to this matter, and said that here was a plan to save London ratepayers £1,200,000 a year. I would like to say that I am very pleased to see that the right hon. Gentleman is considering the ratepayers and the rate in the pound, because I was considering that the rate in the pound under his administration in London has increased.

I would like to ask the right hon. Gentleman one thing. I think we are entitled to know what is going to happen to the money which is raised from the rate on empty properties. Is it to be used to reduce the rate in the pound, or is the rate in the pound to be maintained at its present level and is the right hon. Gentleman going to say that he has a heaven-sent opportunity of finding money to pay for additional expenditure which has been incurred? I think we are entitled to know that.

It has also been suggested that these 28,000 houses are empty because the owners are trying to obtain high and exorbitant rents. I do not believe that for one moment. I do not say that there are not five or six per cent. of crazy people who think they can gain money in that way, although they certainly do not, for it has been shown that if property is left empty for three months and is then let for five years, it is the equivalent of a loss of six or seven per cent. on the rent when it is eventually let. Property in London is empty on account of natural causes to a very large extent. It is empty because there has been a change of fashion and the demand for a particular type of property has gone; or it may be that there is competition in a particular kind of house; or, as is often the case, that leaseholders have stringent covenants in their leases which prevent them from developing and altering the houses and thus giving them a marketable value. I think those are the reasons for which property is empty.

I think we are entitled to know what proportion of properties hon. Members opposite would like to see empty. Full rates, I am told, would realise something like £30,000,000. On empty properties there is a loss of £1,250,000. Therefore, roughly speaking there is one property empty out of every 25 properties. I do not think that is an unreasonable proportion. If there were no properties available to meet demand a great deal of hardship would be created and rents would certainly be increased. I believe the proper maxim to go upon in this matter is that the supply should be slightly greater than the demand. We have dealt with the question of whether increased revenue will be raised. I cannot agree that assessments will not be lower. I have had a letter from one of the principal authorities on rating in London, a leading expert of the City of London who advises on rating matters and this is what he says: It is my opinion that the effect of a rate of 2s. 6d. in the £ on empty properties would be to bring the rents of such properties down. In such circumstances the rating authority would be bound to include such properties in the provisional list and reduce assessments and, bearing in mind decisions of the court, it naturally follows that when the net quinquennial valuation was undertaken all the rateable values would have to be scaled down in order to secure uniformity of assessments. If the loss involved in lower assessments was not met by the revenue raised by the rating of the empty properties, how would the right hon. Gentleman opposite find the money for London County Council expenditure? Only by increasing the poundage of the rates. I have heard estimates of how much money would be obtained by these proposals. I accept the estimate of the chairman of the Finance Committee of the London County Council who said it would be something like £300,000 a year, but he also said that when reductions for exemption had been taken into account the amount would be about £200,000 a year or a little lower. If we calculate also the extra cost entailed in recovering rates—because it will not be possible to use the system of distraint to the same extent as it is used to-day—and if there is to be a loss owing to the lower assessments I do not think it is an under estimate to say that you would be very lucky if you had £100,000 a year or the equivalent of a ½d. rate.

The question for the House to decide is, whether it is worth while, for the sake of collecting an extra £100,000 a year, to put into operation a Measure which may be injurious to new building developments. In the City, where they have a 10 per cent. rate on empty houses, in 1934–35 the rates collected on occupied premises amounted to £3,600,000 and the rates collected on empty premises only amounted to £37,000 or about 1 per cent. We ought to make sure that it is worth while doing so, before we injure any industry by a Measure of this kind.

With regard to the actual provisions contained in this Bill, we are told that the proportion of 25 per cent. was arrived at by taking services into consideration, but I do not think anyone would imagine that empty properties receive the same amount of benefit as occupied properties, yet they are charged the same amount. As far as exemptions are concerned, any practical builder or anyone who has taken part in new building development would say at once that these exemptions are not adequate. Six months are to be allowed in the case of a new building, and that is enough as far as small houses are concerned, but as far as blocks of offices and flats are concerned, it is totally inadequate. Then again only two years are allowed for the demolition of property, but any builder will tell you that it frequently takes a much longer time to clear an area than two years.

Last of all, and what I think is the most iniquitous omission of all, is that no exemption of any kind is to be allowed in the case of properties being empty when tenants wish to carry out their own decorations and repairs. Between leases tenants frequently take two or three months to put their houses in order, and during this time they will have to pay rates under this proposal. I think these exemptions would be bound to be increased in Committee, and if they were increased, it would, of course, reduce still further the very small amount of revenue calculated to be brought in if the Bill becomes law.

It has been said that our opposition is not to the principle of the Bill, but is due to the fact that there is a Socialist majority on the London County Council. [HON. MEMBERS: "Hear, hear!"] We now know where hints of that kind come from. I can assure hon. Members that such a suggestion is utterly and completely without foundation. It is true that we are opposed to this Bill because it is a typical piece of Socialism, introducing injurious interference without any compensatory features on the other side of the account, but I can assure the House that my hon. Friends and I who are responsible for putting down the Motion for the rejection of the Bill did so in the first instance because we think it ought to have been brought forward as a public Bill, to apply to the country as a whole and not to London alone. We oppose it because we do not think the exemptions contained in it are sufficient, and we oppose it, finally, because we think the amount of revenue, if you get any at all, will not compensate for the injury that you will do to new building development. These are our reasons for opposing this Bill, and I seriously ask hon. Members to come into the Lobby when the Division is called and defeat this Bill on its Second Reading.

10.29 p.m.

Mr. H. MORRISON

The hon. and gallant Member who has just resumed his seat betrayed a very great curiosity to know what we were going to do with this money if we got it. He wanted to know whether, if we got it, we should use it to decrease the rates, or whether we should say to ourselves, "Now we have this extra money we can spend more." I really wish the hon. and gallant Member would understand the Bill before he makes a speech about it, and I wish that other hon. Members would do the same, for repeatedly it has been assumed that the London County Council is going to get this money. The truth is that it is not going to get a penny out of it. I am assuming, of course, that the Bill is carried. We do not propose that any of this money should come to the London County Council. In so far as this produces additional municipal revenue, it will go to the Metropolitan borough councils, not to the London County Council, which demonstrates to the House what a self-sacrificing body the present London County Council is. It was particularly pleasing to hear my hon. Friend the Member for Kennington (Mr. Harvey) in this Debate. I accept at once his assurance that he personally is not animated by political considerations. I know that he stood by the council in the Waterloo Bridge controversy and was not animated by political considerations when other people were, and I appreciate it. I was additionally pleased to hear the hon. Member because he is the only London Member of Parliament who has opposed this Bill tonight.

Sir ROBERT TASKER

Another one did not have the opportunity.

Mr. MORRISON

I am sure that the House has lost a great speech by not hearing the hon. Member. Everyone who has spoken, other than the hon. Member for Kennington, was not a London Member of Parliament.

Mr. GEORGE BALFOUR

There were many in the House ready to speak if time permitted.

Mr. MORRISON

I admit that the hon. Member is always ready for anything. Every one of the names down to the Amendment for the rejection of the Bill is that of a non-London Member of Parliament. All of them, of course, were fully exercising their admitted rights as Members of this House. I only say that to explain a particular welcome to my hon. Friend the Member for Kennington for making some London voice heard in opposition to this Bill, even though in so doing he spoke neither for the County of London nor for the constituency for which he sits.

Mr. BALFOUR

There were other names on the Order Paper, but only the first ones appeared on the Paper.

Mr. MORRISON

I fully appreciate that, but it is usual for the six most important names to appear on the Paper. I have made it clear that this Bill is promoted by the London County Council but that the financial advantage will be with the Metropolitan boroughs and not the County Council. I wish, in addition, to make it plain that a clear majority of Metropolitan borough councils, not all of them associated with the Labour party, are supporters of these proposals. In there circumstances, I think it can be said that there is a substantial body of London opinion behind this Bill and, as my right hon. Friend the Member for Bow and Bromley (Mr. Lansbury) said, we have repeatedly fought elections on this issue and it was in the programme of: the Labour party at the last County Council election, which we won. We urged it, and the House may take it that this proposal has the overwhelming support, of the people of London so far as the great majority are concerned.

The hon. Gentlemen who spoke for the Property Owners' Federation and organisations of that kind really must not confuse the Property Owners' Federation with the people of London. I know they genuinely think they are the same, but they are really wrong, and I assure hon. Members that the great bulk of the citizens of London, so far as opinions can be ascertained, are definitely in favour of the principle which is contained in this Bill. The hon. Gentleman the Member for Kennington asked whether we brought this before the House because we wanted something on which to win the next London County Council election. Let me assure him that the next County Council election is won by us already.

Mr. HARVEY

I will answer the right hon. Gentleman in the words of the late Lord Asquith. We will "wait and see."

Mr. MORRISON

No, we do not wait and see. We act and do. I assure the hon. Gentleman that there is no constituency which we are more confident of holding at the next election than the constituency which he represents at the moment. The Minister of Health politely intimated the opposition of His Majesty's Government to the Bill, and although I used to be told by the hon. Member for Hampstead when I stood at that Box over there that I went much too far in indicating the views of His Majesty's then Government on private Bills before this House, the Minister to-night went as far as anybody would want him to go in indicating the clear and definite opposition of the Government to this Bill. He based his objection on the fact that this is a local Bill, whereas if the subject was to be dealt with it should be dealt with nationally. It is a curious idea of some Members that although this would be an unmixed evil if applied to London alone the objection would be removed if it were applied all over the country. So far that is the position of the Conservative party on the London County Council. They would support the application of this plan of wholesale robbery and confiscation to Great Britain as a whole, but only object to its being experimented with in the County of London.

The Minister of Health, whom I see there, not looking particularly happy, and almost as though he is a little ashamed of himself—as he ought to be—forgets that the whole history of rating legislation shows differences in practice in different parts of the country. It is the most utterly empty argument to urge that this proposal is wrong, because it is to be confined to a particular administrative area. Moreover, the Statute Book is full of special legislation for London, and nowhere more than in his own Department. Public health—special Acts for London. Housing legislation—special provision for London. Rating and valuation—special Acts for London. Of course I understand that the right hon. Gentleman was here to-night to discharge a task, and had to say something which would be pleasing to the hon. Gentlemen who sit behind him, but he and I know that he knows that his argument was unsound.

Does the right, hon. Gentleman know what his colleague the Secretary of State for Scotland has been up to? As recently as 1934, when the present Secretary of State was the holder of this office, there was an inquiry into the distribution of local rates in Scotland on the Dundee Corporation Provisional Order on 29th March, 1934, and the Members of the Committee before whom that inquiry was held were a thoroughly respectable body —Lord Meston, chairman, Lord Carnock, Mr. J. Wellwood Johnston, M.P. and Mr. J H. McKie, M.P. As far as I know that does not show a majority of dangerous revolutionaries. Power was sought by the Corporation of Dundee to levy rates on owners in respect of unoccupied property. Such rates had previously been levied in Dundee, but this was disputed and it was eventually held by the Court of Session in Lickley Brothers, Limited versus Dundee Corporation, in 1935, that this was illegal, under the Statute existing at the time the rate was imposed. Clause 12 of the Provisional Order sought powers to the Dundee Corporation to impose rates on empty property. There was opposition to it, precisely the same sort of opposition as has been offered by hon. Gentlemen on the other side of the House to-night. Listen to it, and if this does not sound familiar to hon. Gentlemen who have read all the communications that they have received on the subject during the last few weeks—

Captain DOWER

Including those from the promoters of the Bill.

Mr. MORRISON

The literature from the promoters of the Bill was of a very high order. The London County Council literature always is. The Clause was opposed by the Dundee Property Owners' and Factors' Association, which is the kind of organisation which is in a state of indignation about the rating system of Scotland and for whom hon. Members very efficiently and effectively act in this House. What did they say? The petition read: Your petitioners object to the powers sought in Clause 12, and submit that it is unjust, and would constitute a serious hardship upon owners, to be obliged to pay in respect of unlet and unoccupied lands and heritages from which no revenue is obtained. Your petitioners submit that no charge should be made by the corporation in respect of owners' rates for such period as premises are unlet and unoccupied. You may take it from me as absolutely certain that all the arguments which were advanced by the Dundee Property Owners' and Factors' Association was on behalf of the little property owner who was about to be ruined by the Dundee Corporation, just as all the arguments used by the hon. and learned Member who moved the rejection of the Bill were based on the case of the weak, small property owner.

Mr. CROOM-JOHNSON

Certainly.

Mr. MORRISON

The hon. and learned Member said it with conviction, and he now says, "Certainly." I have no more to say. What happened to that Provisional Order afterwards? The arguments advanced for the petitioners were similar to those put forward by the Property Owners' Associations against the Bill to-day. This eminently respectable committee found that the Preamble in respect of the Clause was proved, and reported to the present Secretary of State, the right hon. colleague of the right hon. Gentleman. I admit that the Secretary of State for Scotland is technically a Liberal and that the right hon. Gentleman the Minister of Health is technically a Conservative. No doubt there is some technical difference between them, but here is a real difference, for when that proposal was put to the Secretary of State for Scotland, all the objections which the right hon. Gentleman the Minister of Health has advanced to-night about local action, and Private Bills, and "It ought to be done by the Government but we are not going to do it," did not arise. The Secretary of State for Scotland confirmed the Dundee Corporation Order Confirmation Act on 12th July, 1934.

Miss HORSBRUGH

Is not the argument exactly the same, although the Secretary of State for Scotland is technically a Liberal and the Minister of Health technically a Conservative, that there should not be, in one locality, a difference from the rest of the country? If the Order had been granted in Dundee, there would have been a different rating system for Dundee from the whole of the rest of Scotland.

Mr. MORRISON

I take it from that, that the hon. Lady joins with my hon. Friends who represent Scottish constituencies in a hearty determination to maintain the rate on empty property throughout the whole of Scotland?

Miss HORSBRUGH

rose—

Mr. MORRISON

I was brought up according to doctrines of sex equality. The analogy is close enough for me. It is a very good analogy, and indicates that the Government are once more pursuing a dual policy. The truth is that the Government are opposed to the Bill. They have invited the House in so many words to reject it. I am inviting the House to reject the advice of the Government. It may interest the Minister to know that his Parliamentary private secretary, the hon. Member for Bromley (Sir E. Campbell) was a member of the London County Council during part of the period when they passed a resolution in favour of the principle contained in the Bill.

Sir EDWARD CAMPBELL

Were I sitting on the Front Bench, I should ask for notice of that accusation. I think the right hon. Gentleman will admit that the circumstances have entirely changed. In 1923 there was a glut of houses, and now there is a shortage. While I was very sensible to vote as I did then, I should be very sensible in voting the opposite way to-night.

Mr. MORRISON

That is a new argument, which has not been heard before. I will not pursue it. I agree that there is a change in circumstances. The hon. Member sits now behind the right hon. Gentleman the Minister of Health. He was not in that position in 1923. We are told that the opposition to this Bill is in the interests of the small property owner. Let us see who are the opponents of the Bill, and let us try to imagine how far they represent the average ratepayer, as distinguished from the property owners, or the small property owner. Here is a list which was published in the "Times" of 25th February. The first name on it is that of the National Association of Building Societies. I agree that that is a body which has a very large number of small owner-occupiers in its ranks—owner-occupiers whose rate burden would be relieved if this Bill were passed; and I say that, in taking the action it has taken, the National Association of Building Societies is not acting in the interests of the great mass of owner-occupiers. I remember that the Chairman of this Association functioned in the General Election—he functioned on the utter untruth that the Labour party proposed to damage the interests of the owner-occupier—as an assistant of the Conservative party. He has a right to do so, but we ought to know. If this National Association of Building Societies is going to become permanently one of the allies and associates of the great property-owning interests and the Conservative party, let them say so, and let us know where we are. The truth is that this Bill will benefit the owner-occupier who now is having to find part of the rates which are evaded by the owner of unoccupied property.

Who else is there that represents the great masses of the population on this question? Who are the organisations for whom hon. and right hon. Gentlemen are acting to-night? There is the Municipal Reform party of the London County Council. I say nothing about them here; I say plenty to them to their faces. Then there are the chief non-Socialist Metropolitan boroughs—a minority of the Metropolitan boroughs; the Chartered Surveyors' Institution; the Land Union—where is the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George)? There are the Incorporated Society of Auctioneers and Landed Property Agents; the Auctioneers' and Estate Agents' Institute; the London Municipal Society—let me not be tempted to say anything about them; the Scottish Rating Reform Association; the National Federation of Property Owners and Factors of Scotland; the National Federation of Property Owners and Ratepayers; the London Property Owners' Protection Association, Limited; the chief estate and property owning companies; the National Federation of Quarry Owners; the Freeholders' Society; the chief insurance companies—and Uncle Tom Cobleigh and all. It is absurd to suggest that that list of societies is representative of public opinion. Practically every one of them is a vested interest seeking to avoid its proper share of municipal burdens.

The opposition to this Bill is animated by a desire that certain privileged sections of the community shall not pay their proper share towards local taxation. Legislation in recent years has tended to exempt classes of the community from the payment of rates, and to concentrate the burden on the rest. I beg the House to consider not only justice to property owners but justice to the general body of ratepayers. We have practically relieved the whole of British agriculture from the payment of rates. We have relieved railways of three-quarters of their rates, and we have relieved industrial hereditaments of 75 per cent. I must not pursue the matter, but the railway companies have taken legal action which is tending enormously to diminish their rates, and in the case of one railway company it is declared that they have no rateable value whatever. The right hon. Member for Hillhead (Sir R. Horne) no doubt has his share of responsibility to the railway companies.

Sir R. HORNE

All that the railway companies desire is to get their legal rights. Is it to be assumed that the railway companies are to be put outside the pale of the ordinary citizen and denied their rights?

Mr. MORRISON

I am bound to say that the railway companies sometimes make strenuous efforts to get out of any liabilities. But if the right hon. Gentleman comes to the House of Commons, or goes to a court of law, and says that those people should not pay rates, these people should be exempted and that others should be excused, we who have to make up the difference in finding the rates have some right to be consulted.

Sir R. HORNE

Surely the right hon. Gentleman trusts a court of law to administer the law? You may alter the law if you like, but as the law stands surely a citizen is entitled to go to the court to have the law declared?

Mr. MORRISON

I agree, but I am bound to say that I should think it was going rather far to seek a. legal decision which declared that public undertakings should pay no rates at all. The basis of our argument is not that we are seeking additional revenue, The purpose of this Bill is to do justice as between one class of ratepayer and another. My hon. Friend the Member for North Lambeth has demonstrated that the owner of empty property does get some advantage from the municipal services during the period of unoccupation. I think he gets a great deal of advantage. It is no good saying that he gets no real advantage from the fire brigade. If a fire occurs on empty premises, the London County Council puts it out. We do not say, "We will not put your fire out because you are not contributing." Moreover, if a fire breaks out in neighbouring occupied premises it is important to put it out, to protect the unoccupied premises. If the drainage service did not function the unoccupied property presently would be worth nothing at all. It is the same with police, with street lighting and with highway maintenance. If the municipality was not ready, when property became occupied, to afford all the municipal services to it, the empty property would be worth practically nothing. I, therefore, say that this is a modest proposal. My only doubt is whether it ought not to be 50 instead of 25 per cent. It is in my judgment an eminently reasonable proposal, and I think the House ought to give it a favourable consideration.

It is argued that it will have the effect of reducing rents and, therefore, rateable value. There are many business men in the City and in Westminster who consider that the level of rents in those districts is extortionate, unreasonable and improper, and if the effect of the Bill were somewhat to reduce rents there and in certain other parts of London, they would welcome the action of Parliament in passing this Bill. There is, therefore, a perfectly reasonable and

rational case for the Bill. It is said that it is wicked, and almost immoral, that property which is not in beneficial occupation should be rated. May I draw one or two analogies and comparative cases? If property held on lease becomes empty, the ground landlord does not cease to charge rent. If a business man ceases to make a profit, his landlord does not cease to charge him rent and, if it is right that the owner of unoccupied property should pay no rates at all, is it right that the unemployed middle-class man or workman whose income ceases should go on paying rent to a private landlord, or even rates to the municipality or indirect taxes to the State? These are not unreasonable analogies.

Hon. Members are quick to plead the rights of the owner of empty property from which he is drawing no income, but they would resist to the last the right of the unemployed workman to the same consideration from the community so far as rent and taxes are concerned. The case for the Bill has been proved. I am only asking the House to give it a Second Reading and let the experts go upstairs and argue it out. The opponents can call evidence from any part of the country that they wish, or from any class of experts. The House should indicate that it is not afraid of the case for the Bill being examined impartially before a Committee and should give it a Second Reading and reserve their final judgment until it has been properly considered by a Committee.

Question put, "That the words proposed to be left out stand part of the Question."

The House divided: Ayes, 125; Noes, 254.

Division No. 63.] AYES. [11.0 p.m.
Adams, D. (Consett) Cove, W. G. George, Major G. Lloyd (Pembroke)
Adamson, W. M. Cripps, Hon. Sir Stafford Gibbins, J.
Alexander, Rt. Hon. A. V. (H'lsbr.) Daggar, G. Green, W. H. (Deptford)
Ammon, C. G. Dalton, H. Greenwood Rt. Hon. A.
Anderson, F. (Whitehaven) Davidson, J. J. (Maryhill) Grenfell, D. R.
Attlee, Rt. Hon. C. R. Davies, D. L. (Pontypridd) Griffiths, G. A. (Hemsworth)
Banfield, J. W. Davies, R. J. (Westhoughton) Groves, T. E.
Batey, J. Davies, S. O. (Merthyr) Hall, G. H. (Aberdare)
Benson, G. Day, H. Hall, J. H (Whitechapel)
Bevan, A. Dunn, E. (Rother Valley) Hardie, G D.
Broad, F. A. Ede, J. C. Harris, Sir P. A.
Bromfield, W. Edwards, A. (Middlesbrough E.) Henderson, A. (Kingswinford)
Brooke, W. Edwards, Sir C. (Bedwellty) Henderson, J. (Ardwick)
Brown, C. (Mansfield) Evans, D. O. (Cardigan) Henderson, T. (Tradeston)
Buchanan, G. Fletcher, Lt.-Comdr. R. T. H. Hicks, E. G.
Chater, D. Frankel, D. Holland, A.
Cluse, W. S. Gardner, B. W. Hollins, A.
Compton, J. Garro-Jones, G. M. Hopkin, D.
Jagger, J. Mathers, G. Smith, Ben (Rotherhithe)
Jenkins, A. (Pontypool) Maxton, J. Smith, E. (Stoke)
John, W. Messer, F. Smith, Rt. Hon. H. B. Lees- (K'ly)
Jones. A. C. (Shipley) Montague, F Smith, T. (Normanton)
Jones, Morgan (Caerphilly) Morrison, Rt. Han. H. (Ha'kn'y, S.) Sorensen, R. W.
Kelly, W. T. Morrison, R. C. (Tottenham, N.) Stewart, W. J. (H'ght'n-le-Sp'ng)
Kennedy, Rt. Hon. T. Naylor, T. E. Strauss, G. R. (Lambeth, N.)
Kirby, B. V. Paling, W. Taylor, R. J. (Morpeth)
Lansbury, Rt. Hon. G. Parker, H. J. H. Thorne, W.
Lawson, J. J. Pethick-Lawrence, F. W. Thurtle, E.
Leach, W. Potts, J. Tinker, J. J.
Lee, F. Price, M. P. Viant, S. P.
Leonard, W. Pritt, D. N. Walkden, A. G.
Leslie, J. R. Quibell, J. D. Watkins, F, C.
Logan, D. G. Richards, R. (Wrexham) Westwood, J.
Lunn, W. Riley, B. White, H. Graham
Macdonald, G. (Ince) Ritson, J. Wilkinson, Ellen
McEntee, V. La T. Roberts, Rt. Hon. F. O. (W. Brom.) Williams, E. J. (Ogmore)
McGovern, J. Robinson, W. A. (St. Helens) Wilson, C. H. (Attercliffe)
MacLaren, A. Rowson, G. Windsor, W. (Hull, C.)
Maclean, N. Sexton, T. M. Young, Sir R. (Newton)
MacMillan, M. (Western Isles) Shinwell, E.
Mainwaring, W. H. Short, A. TELLERS FOR THE AYES.—
Marklew, E. Simpson, F. B. Mr. Whiteley and Mr. Charleton.
Marshall. F. Sinclair, Rt. Hon. Sir A. (C'thn's)
NOES.
Acland-Troyte, Lt.-Col. G. J. Colman. N. C. D. Heilgers, Captain F. F. A.
Allen, Lt.-Col. J. Sandeman (B'kn'hd) Cook, T. R. A. M. (Norfolk, N.) Heneage, Lieut. -Colonel A. P.
Allen, Lt.-Col. Sir W. J. (Armagh) Cooke, J. D. (Hammersmith, S.) Hepburn, P. G. T, Buchan.
Amery, Rt. Hon. L. C. M. S. Cooper, Rt. Hn. T. M. (E'nburgh, W.) Herbert, Major J. A. (Monmouth)
Anderson, Sir A. Garrett (C. of Ldn.) Courthope, Col. Sir G. L. Hills, Major Rt. Hon. J. W. (Ripon)
Anstruther-Gray, W. J. Craddock, Sir R. H. Holdsworth, H.
Apsley, Lord Cranborne, Viscount Holmes, J. S.
Aske, Sir R. W. Croft, Brig. -Gen. Sir H. Page Hope, Captain Hon. A. O. J.
Assheton, R. Crookshank, Capt. H. F. C. Hopkinson, A.
Astor, Major Hon. J, J. (Dover) Croom-Johnson, R. P. Horne, Rt. Hon. Sir R. S.
Astor, Hon. W. W. (Fulham, E.) Cross, R. H. Horsbrugh, Florence
Atholl, Duchess of Crowder, J. F. E. Howltt, Dr. A. B.
Baldwin-Webb, Col. J. Culverwell, C. T. Hudson, Capt. A. U. M, (Hack., N.)
Balfour, G. (Hampstead) Davison, Sir W. H. Hulbert, N. J.
Balfour, Capt. H. H. (Isle of Thanet) Dawson, Sir P. Hume, Sir G. H.
Barclay- Harvey, C. M. De la Bère, R. Hunter, T.
Baxter, A. Beverley Denman, Hon. R. D. Jackson, Sir H.
Beauchamp, Sir B. C. Denville, Alfred Jones, Sir G. W. H. (S'k N'w'gt'n)
Beaumont, Hon. R. E. B. (Portsm'h) Dodd, J. S. Jones, H. Haydn (Merioneth)
Birchall, Sir J. D. Donner, P. W. Kerr, Colonel C. 1. (Montrose)
Beit, Sir A. L. Dower, Capt. A. V, G. Kerr, H. W. (Oldham)
Blair, Sir R. Duckworth, G. A. V. (Salop) Kerr, J. Graham (Scottish Univs.)
Blaker, Sir R. Duckworth, W. R. (Moss Side) Keyes, Admiral of the Fleet Sir R.
Blindell, Sir J. Duggan, H. J. Kimball, L.
Borodale, Viscount Duncan, J. A. L. Kirkpatrick, W. M.
Bossom, A. C. Dunne, P. R. R. Knox, Major- General Sir A. W. F.
Boulton, W. W. Eastwood, J. F. Latham, Sir p.
Bowater, Col. Sir T. Vansittart Edmondson, Major Sir J. Law, R. K. (Hull, S.W.)
Bower, Comdr. R. T. Ellis, Sir G. Leech, Dr. J. W.
Bowyer, Capt. Sir G. E. W. Elliston, G. S. Lees-Jones, J.
Boyce, H. Leslie Emery, J. F. Levy, T.
Boyd-Carpenter, Major Sir A. B. Emmott, C. E. G. C. Little, Sir E. Graham-
Bracken, B. Entwistie, C. F. Llewellin, Lieut.-Col. J. J.
Brass, Sir W. Errington, E. Lloyd, G. W.
Briscoe, Capt. R. G. Fildes, Sir H. MacAndrew, Lt.-Col. Sir C. G.
Brocklebank, C. E. R. Fraser, Capt. Sir l. M'Connell, Sir J.
Brown, Col. D. C. (Hexham) Fremantle, Sir F. E. McCorquodale, M. S.
Brown, Brig. -Gen. H. C. (Newbury) Fyfe, D. P. M. McEwen, Capt. H. J. F.
Bull, B. B. Ganzoni, Sir J. McKie, J. H.
Burghley, Lord Glimour, Lt.-Col. Rt. Hon. Sir J. Macmillan, H. (Stockton on-Tees)
Burgin, Dr. E. L. Gluckstein, L. H. Macnamara, Capt. J. R. J.
Butt, Sir A. Goldie, N. B. Magnay, T.
Campbell, Sir E. T. Goodman, Col. A. W. Maitland, A.
Cartland, J. R. H. Greene, W. P. C. (Worcester) Makins, Brig.-Gen. E.
Carver, Major W. H. Gretton, Col. Rt. Hon. J. Manningham-Buller, Sir M.
Castlereagh, Viscount Gridley, Sir A. B. Mayhew, Lt.-Col. J.
Cautley, Sir H. S. Grigg, Sir E. W. M. Meller, Sir R. J. (Mitcham)
Cayzer, Sir C. W. (City of Chester) Guest, Hon. 1. (Brecon and Radnor) Mills, Major J. D. (New Forest)
Cazalet, Thelma (Islington, E.) Guest, Maj. Hon. O.(C'mb'rw'll, N. W.) Mitchell, H, (Brentford and Chiswick)
Cazalet, Capt. V. A. (Chippenham) Guinness, T. L. E. B. Mitcheson, Sir G. G.
Channon, H. Guy, J. C. M. Muirhead, Lt.-Col. A. j.
Chapman, A. (Rutherglen) Hacking, Rt. Hon. O. H. Munro, P. M.
Christie, J. A. Hanbury, Sir C. Nall, Sir J.
Clarry, Sir R. G. Hannah, I. C. Nicolson, Hon. H. G.
Cobb, Sir C. S. Hannon, Sir P. J. H. O'Neill, Major Rt. Hon. Sir Hugh
Colfox, Major W. P. Harbord, A. Ormsby-Gore, Rt. Hon. W. G.
Collins, Rt. Hon. Sir G. P. Haslam, H. C. (Horncastle) Orr-Ewing. I. L.
Palmer, G. E. H. Samuel, Sir A. M. (Farnham) Sueter, Rear-Admiral Sir M. F.
Patrick, C. M. Samuel, M. R. A. (Putney) Sutcliffe, H.
Penny, Sir G. Sandys, E. D. Tasker, Sir R. 1.
Perkins, W. R. D. Sassoon, Rt. Hon. Sir P. Taylor, Vice-Adm. E. A. (Padd., S.)
Petherick, M. Savery, Servington Thomson, Sir J. D. W.
Pickthorn, K. W. M. Scott, Lord William Titchfield, Marquess of
Ponsonby, Col. C. E. Selley, H. R. Touche, G. C.
Power, Sir J. C. Shakespeare, G. H. Train, Sir J.
Pownall, Sir A. Assheton Shaw, Major P. S. (Wavertree) Tryon, Major Rt. Hon. G. C.
Procter, Major H. A. Shute, Colonel Sir J. J. Tufnell, Lieut. -Com. R. L.
Purbrick, R. Simmonds, O. E. Wakefield, W. W.
Radford, E. A. Sinclair, Col. T. (Queen's U. B'lf'st), Walker-Smith, Sir J.
Raikes, H. V. A. M. Smiles, Lieut.-Colonel Sir W. D. Wallace, Captain Euan
Ramsay, Captain A. H. M. Smith, L. W. (Hallam) Ward, Lieut.-Col. Sir A. L. (Hull)
Ramsden, Sir E. Smith, Sir R. W. (Aberdeen) Ward, Irene (Wallsend)
Rathbone, J. R. (Bodmin) Smithers, Sir W. Waterhouse, Captain C.
Rawson, Sir Cooper Somerset, T. Wayland, Sir W. A.
Rayner, Major R. H. Somervell, Sir D. B. (Crewe) Wickham, Lt.-Col. E. T. R.
Reed, A. C. (Exeter) Somerville, D. G. (Willesden, E.) Williams, H. G. (Croydon, S.)
Reid, Sir D. D. (Down) Southby, Comdr. A. R. J. Wilson, Lt.-Col. Sir A. T. (Hitchin)
Rickards, G. W. (Skipton) Spender-Clay, Lt.-CI. Rt. Hn. H. H. Windsor- Clive, Lieut.-Colonel G.
Ross, Major Sir R. D. (L'derry) Spens, W. P. Wise, A. R.
Ross Taylor, W. (Woodbridge) Stanley, Rt. Hon. Lord (Fylde) Wolmer, Rt. Hon. Viscount
Ruggles-Brise, Colonel Sir. E. A. Stewart, William J. (Belfast, S.) Womersley, Sir W. J.
Russell, A. West (Tynemouth) Storey, S. Wood, Rt. Hon. Sir Kingsley
Russell, R. J. (Eddisbury) Stourton, Hon. J. J. Young, A. S. L. (Partick)
Russell, S. H. M. (Darwen) Strauss, H. G. (Norwich)
Salmon, Sir I. Strickland, Captain W. F. TELLERS FOR THE NOES —
Salt, E. W. Stuart, Hon. J. (Moray and Nairn) Mr. Harvey and Mr. Keeling.

Main Question, as amended, put, and agreed to.

Second Reading put off for six months.