CLAUSE 5.—(Exclusion of contributions in assessing tenant right.) (Hansard, 8 July 1937)

§ Mr. MacLaren
At the beginning of the discussion to-day the criticism of Clause 1 went rather wide of the mark and into wider questions dealing with the land, but it was asserted that any improvements created in the land through the operation of the Act would place the owner of the land in a position to charge a higher rent to the user or to capitalise the advantage of soil. I would ask hon. Members to look at this Clause. There is the exclusion of any contributions in assessing tenant right. This is a gift to the owners of the land. The tenant is not able to claim any compensation of rights against the landowner in respect to anything done to his land under the Act. Hon. Members will observe that in this particular Clause words are embodied which strengthen the argument used previously in the Committee this afternoon. It is always extremely interesting to notice that, when certain arguments are used on this side of the Committee to prove that advantages attaching to the land arising out of enactments passed by this House will go into the pockets of the landowners, there is always the ready answer from the other side "That is not so." But when the landowner himself is faced with a similar situation, see what he says in this Clause, because I gather that the landowners inspired this Clause. It says, in line 37: by reason of the improvement of the land by the addition thereto of lime or basic slag in respect of which a contribution has been made under this Part of this Act. There is a direct admission that the adding of the lime and slag has improved the value of the land. The tenant is to be barred from claiming any value to himself in respect of this expenditure under the Bill. If the tenant cannot claim something in respect of the improvement of the land, during the time he was using it because of the slag and lime put into it at the Government's expense, I submit that the landlord has no right to gain an advantage, and this Clause should be opposed. Inasmuch as the landowner will capitalise any improvement in his land due to the expenditure under this 645 Bill, the tenant has as much right to claim it as the landlord. With these points of criticism, I will conclude by saying that I hope there will be a Division taken on this Clause, and a direct opposition to it.

§ Mr. Riley
This Clause is certainly interesting, and it would be useful to the Committee if we could have some more precise elucidation of it by the Minister a s to what is its specific object. My Lon. Friend has given us one interpretation. Is it to protect an ingoing tenant from being saddled with an enhanced valuation because of the contribution of lime and slag? Is it to avoid, for instance, a sitting tenant who has received a contribution by way of slag and lime including that in the valuation when he goes out?

§ Mr. Turton
The hon. Member for Burslem (Mr. MacLaren) has a wide and deep knowledge of land valuation and the works of Henry George, but he has found himself corrected by the hon. Member for Dewsbury (Mr. Riley) on this point. Why should an ingoing tenant have to pay more because this lime has been put on the land? If the hon. Member is going to oppose this Clause, he is putting forward a most unjust position for every ingoing tenant, and the ingoing tenant will realise that not only is he wrong about the taxation of land values, but about the customs of the country.

§ Mr. MacLaren
If a landowner were selling the land would he capitalise the advantages under this Bill?

§ Mr. Turton
If the landlord is selling his land he will find that any notice given to the tenant is inoperative.

§ Mr. Holdsworth
I do not think that the hon. Member for Burslem (Mr. MacLaren) has failed to make his case. I do not think that the hon. Member for Dewsbury (Mr. Riley) is quite correct. The purpose is to protect the first turnover, but, if there is a new tenant, by this Clause you acknowledge that the land has been made better at the expense of the public. There can be no getting away from that, and what is to prevent the landlord saying to the next tenant, 646 "I have more valuable land here; it will produce more. Therefore pay a higher rent"? That is the case of the hon. Member for Burslem. He said that we were giving by this Bill a present to the occupier of land for which he has done nothing in return, and he sees no reason why if a present is given at the expense of the public, a distinction should be drawn between the tenant and the owner. There is nothing to prevent a landlord, in making a new agreement with a new tenant, charging a higher rent.

§ Mr. Turton
This Clause deals with the rights of outgoing tenants. The hon. and learned Member for North Hammersmith (Mr. Pritt) shakes his head, but he knows perfectly well that the custom of the country is that ingoing tenants pay outgoing tenants for tenant right.

§ Mr. Holdsworth
I agree with that, but there is nothing to prevent a property owner saying to himself, "Although I have not compensated the outgoing tenant, there is nothing to prevent me from putting up the rent to the ingoing tenant."

§ Mr. Pritt
Surely the hon. Member for Thirsk and Malton (Mr. Turton) does not cover nearly all the ground in what he says. It is common enough under the custom of the country that compensation should be paid by an ingoing tenant, but there must be many cases in the course of a year where this compensation falls to be paid by the landlord. A tenant may have been given notice to quit and there may be no question of cancelling the notice by Statute or anything of the sort. Whatever is right or wrong about the Clause, surely one of the positions with which it unquestionably deals is this. One finds that one is giving public money to improve the land of private persons. If one does not have a Clause of this kind, a tenant will be entitled to say, sometimes to the landlord, and sometimes to someone else, "I have improved your land and I want to be compensated for doing it," and this is a Clause to permit the landlord to say, "So far as the community helped you to do that, I am not going to pay you for it; I am going to put the money into my own pocket." The point is that, having 647 robbed the general public for the benefit of particular individuals, they are trying to decide clearly which of these individuals shall put the swag in his pocket.

§ Mr. W. S. Morrison
It is laid down by Section 1 of the Agricultural Holdings Act, 1923, that a tenant when he leaves a holding is entitled to obtain as compensation such sum as fairly represents the value of the improvement to an incoming tenant. We are dealing here with land where changes in tenancy take place. In these circumstances, the incoming tenant has to pay the appropriate compensation, but in the Act among the improvements which are specified are liming and the application of artificial manures to the land, and in the event of any dispute as to the value of the improvement the matter is to be referred to arbitration. If the Committee follow the advice of the hon. Members for Burslem (Mr. MacLaren) and South Bradford (Mr. Holdsworth) they will say that a man who has spent £25 on land should be entitled to charge £50 to an incoming tenant for it. The £25 he got from the State he would also get from the incoming tenant, and the whole object of the Clause is to make it clear that when this scheme has been put in operation, when a man comes to have his tenant right assessed, you should have the outgoing tenant compensated for the value of what he himself, without the assistance of the taxpayer, has contributed to the value of the soil.
Many hon. Members have mentioned the case of a landlord taking on the land himself, and have raised questions, about the landlord's ability to charge a higher rent, and so on. This Clause does not deal with that at all. Its object is to effect justice between incoming and outgoing tenants. The larger question of the power to charge higher rents and so on is an attractive field for another discussion, and one which we may defer until a suitable opportunity arises. I think the Committee would be well advised not to follow the advice of the hon. Member for Burslem.