HC Deb 30 June 1955 vol 543 cc620-41

(1) Subject to the provisions of the Schedule (Adoptive rating of site values) to this Act a rating authority or, as regards the County of London, the London County Council may adopt or abandon that Schedule.

(2) If and so long as that Schedule has been adopted and not abandoned by a rating authority or by the London County Council, the provisions of that Schedule shall have effect in the area of that rating authority or, as the case may be, in the County of London.

(3) All expenses of and consequent upon the adoption or abandonment of that Schedule (including, but without prejudice to the generality of the foregoing, all additional expenses of valuation) shall be paid by the rating authority or, as the case may be, by the London County Council adopting or abandoning the Schedule. —[Mr. Stokes.]

Brought up, and read the First time.

Mr. R. R. Stokes (Ipswich)

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

The Temporary Chairman (Mr. H. Hynd)

I think it will be for the convenience of the Committee, and also desirable, to consider with this new Clause the proposed new Schedule dealing with the same subject in the name of the right hon. Gentleman.

Mr. Stokes

That will be a very great help. Perhaps by way of explanation to the Committee I might say that the new Schedule is really a mixture of the L.C.C. Bill of 1938, copies of which are now practically non-existent and which are almost as valuable as first editions of "The Pilgrim's Progress," and Mr. MacLaren's Bill of 1937. Substantially, it says what we tried to carry out in the Act of 1931, and which we shall no doubt carry into law when we on this side of the Committee are once again the Government.

The object of the new Clause is to provide additional or alternative sources of revenue for local authorities. Everybody knows what a jam the local authorities have got into over their finances, and everybody knows they are getting more and more dependent on central Government funds, which in the opinion of many of us, is undesirable. It is increasing year by year until almost 50 per cent. of the expenditure of local government is met from central Government funds. In 1953 a sum of £411 million was supplied from the central Government against £436 million collected by way of local rates.

I propose to make the case for the rating of site values. As a matter of fact, it is admirably set out in a pamphlet to which the Minister referred on 17th June. He described that as a pale pink piece of paper. If it is as pale pink as that, perhaps the right hon. Gentleman would accept the new Clause? If he examines what is involved and what lies behind the whole concept, he will find that this is a radical piece of legislation which, I am afraid, it is unlikely that a Tory Government would accept.

Karl Marx, in the fourth volume of his great work "Das Kapital," in page 849, suddenly stumbled across the great truth that The expropriation of the masses of the people from the land forms the basis of the capitalist method of production. If the right hon. Gentleman can call that pale pink, I shall be much interested to know what he calls bright red. What we are seeking to do in this proposed new Clause is to remove the land monopoly. It is the first step towards so doing. Frankly, I do not expect that the Government will accept this new Clause. A Government based on land monopoly will hardly dream of doing anything so radical, but it is as well that we should have that fact on the record, and that is one reason why the new Clause has been put down.

One of the villainous things this Government have done since they have been in office has been, without making any compensatory action in exchange, to remove the development charge from the Town and Country Planning Act. Some of us thought that was not an effectual way of dealing with the improved value but at least the development charge recovered for the people some of the com- mercially created land values. In the event, the development charge made land more expensive for the user without stopping the landlord from scooping the pool. What the landlord said to everybody was, "You jolly well pay the development charge. If you will not do that, I shall not sell and you will not be able to have the land." And so that method broke down.

I am reinforced in my belief that it is unlikely that the Government will accept this new Clause by the statement made by Mr. Baldwin in June, 1931[Laughter.]—this is important because the Measure was on the Statute Book at the time when the taxation and rating of site values had been introduced in the Finance Act, 1931, in Labour's Budget. What Mr. Baldwin said in the debate in June of that year, in support of what no doubt will be the action which the Minister will take tonight, was: I can say one thing about it"— he meant this Act— if we get back to power the tax will never see daylight. Well, it did not. [HON. MEMBERS: "Hear, hear."] Obviously, the Government will not let it do so tonight—unless I can talk sufficiently long for all the Tories to go home and all the cohorts of Labour to come back.

The point I want to make at the outset is how the rating of site values would be applied, because that is so often misconceived. So many people believe that a rate on site values means a level rate on every acre of land. It does not mean anything of the kind. It means that there will be a rate on every piece of land regardless of size, and whether used or unused, according to the real value which attaches to it at the moment of valuation and it will be valued as if it had nothing on it at the date of the valuation but as if every area in the immediate neighbourhood was in that state of development at the date of valuation.

I want to say also at the outset that this tax which the Clause envisages is a just tax, because it is levied on the values which are created by the community as a whole and not on the efforts of the individuals as such. Again and again, one gets from supposedly intelligent people objections to introducing this Measure. I have had something to do with this subject in the last thirty years.

In the course of a few minutes, because I do not propose to speak for long, I wish to recite some of the objections. The first is argued by the extremely ignorant, that what the new Clause proposes is too difficult to do. That is nonsense, because it has been widely done in Denmark, Australia, some provinces in Canada, New Zealand, and South Africa. There have been cases where it has been what I would call improperly introduced, but nowhere where it has been thoroughly introduced has it ever been dropped. Surely, that is a great argument in support of my contention that the Minister should at least consider the Clause before entirely rejecting it.

Secondly, it is objected to because it is argued that land value is difficult to arrive at. That also is absolute nonsense, because actually the only thing which it is really easy to arrive at is the value of land. It is when one starts arguing about the value of the building improvement on it that one gets into quite a considerable jam, and has to bring in valuers, architects, surveyors, and goodness knows what, in order to arrive at the real value of the improvements.

I do not wish to take up time discussing the details. All that is needed is a separate column in the valuation roll showing the value of the land separately from the improvements; and anyone who says that it cannot be done has not the remotest idea of what he is talking about.

Mr. Cyril Osborne (Louth) rose——

Mr. Stokes

I thought that the hon. Gentleman would get up, and I am glad he has done so.

Mr. Osborne

If it is so easy and so necessary, why did not the right hon. Gentleman and his hon. Friends do it when they were in power?

Mr. Stokes

I thought that that would be said. I will tell the hon. Gentleman precisely why. We were so busily engaged in undoing what had been done by the villainous Tories in the years before that we had not time to get on with the job. Now, as the hon. Gentleman will realise, here we are today debating this Motion. It is mentioned in the great circular in connection with local government finance sent round by the Labour Party at the time of the General Election, and all I can say is that the hon. Gentleman and his friends are "for it" when they get out—which I hope to goodness they do in a very short time.

The third thing which is very often referred to is that if we had a rate on site values, it would be passed on in the form of higher rents, that all the landlords would do would be to put up the rents. I shall not take up time in arguing this aspect. It is all contained in the pamphlet which was referred to by the Minister as being "pale pink." There the arguments are set forth admirably. All economists of any repute agree that it is virtually impossible to do so, and I will quote a simple example.

We pass taxes, in the form of import duties and the rest of it, on to goods, because all goods carry the tax. But if, for example, there was a shoe shop in a main street and another shoe shop in a side street—where the land values were entirely different—and both shops sold the same quality shoes, it would be impossible to pass the higher land value of the main street into the selling price of the shoes because, if one did so, everyone would "bunk" around the corner to buy shoes from the shop in the side street.

Mr. Nabarro rose——

Mr. Stokes

Here is another hon. Gentleman who does not understand.

Mr. Nabarro

If everyone "bunked" around the corner and bought shoes from the shop in the side street, in a very short time the shop in the side street would become the shop in the main street.

Mr. Stokes

It could not, because the other chap is there already. One can apply that to Bond Street; it is perfectly simple.

It is quite impossible to pass this rate on site values on in higher rents. Virtually every economist of note agrees with that. I know there are some "half-cock" economists who do not accept it, but all economists of repute agree that it is impossible to pass a rate on site values into the price of goods. It has to be paid by the landlord or the person who enjoys the site value. In fact, as is said in this eminent pamphlet to which I have referred, The land value rate or tax is like a handicap in a race. It levels up the different advantages and just as one runner cannot shift his handicap onto another so the landowner cannot shift his land value rate onto the tenant or consumer. That is an economically accepted fact.

9.30 p.m.

On the fourth and last objection, I quote an example. It is asked, "Is it worth while?" All I can say is that a Bill relating to the L.C.C. in 1938 was framed on a 1936 estimate of annual valuation taken by the L.C.C. It was on the basis that the annual value of the land controlled by the L.C.C. was £32 million and that a 2s. rate would give a total rate of £3.2 million. That was in the Bill introduced in 1938 by my right hon. Friend the Member for Lewisham, South (Mr. H. Morrison), who then represented Hackney, North. He has shifted around a bit. It was turned down because Mr. Speaker of the day did not consider it was a Bill which should be introduced by a private Member. Of course, the Government of the day were totally opposed to doing anything of the kind.

If passed into law, the proposed new Clause would do four main things. It would help to take the speculative value out of land. That is quite certain to anybody who has taken the trouble to study the matter. Secondly, it would bring more land into proper use. At the present time, provided that a man does not do anything with his land, he pays no rates or taxes. Thirdly, it would prevent a too-early encroachment by urban developers on good agricultural land, and it would force all the land in urban areas into proper use and ensure that it was used before developers went further afield on to cheaper land and thus interfered with the agricultural production which is so important at the present time.

Fourthly, it would remove one of the main impediments to development. Anybody who has had anything to do with local government knows that one of the great difficulties is the cost of land when a local authority wants to develop it. One of the craziest things at present is that the more we develop the more difficult we make it to develop any further. When land is developed in one area, the price of land all around it goes up, so that when we take the next step we have to pay more.

If we rated site values, we could collect the increased value in the form of a rate in the immediate area of the last piece of land developed. We would collect the improved value, and the money would enable us to go on to the next development. We should virtually create a fund from which the next step would be facilitated.

The present system of rating is absolutely crazy. If, as the owner of valuable land in the middle of a town, I do nothing with it I make no contribution to the rates, however valuable the land. I could own the site of the Bank of England and graze a goat on it. I should be rated for agricultural land and pay nothing, although the site of the Bank of England is probably worth £10 million and the annual value is probably worth £500,000, on which a 2s. rate would produce £50,000. If we rated site values, we should say to the owner of the site of the Bank of England, "Go on, graze your goat on it, but pay us £50,000 for the privilege of doing so." He would soon do something more important than graze a goat.

Under the present rating system, houses which are in ill repair are relieved of their rates: the more they fall down, the better. The only criminal is the man who improves his property, for then his rates go up. Surely, that is Bedlam.

I am reminded of the parable given in the House of Commons some years ago by Mr. MacLaren, who was then hon. Member for Burslem. The parable was of a rating assessor walking into a provincial town and running into the man who owns the land outside it and who does very little with that land. He says "How are you getting on?" The man replies "I am doing very little with this land. I am just grazing a few cows. In time business will come west, land prices will rise and I will make a scoop." And the rating assessor says "You are the man who makes England great. We will relieve you of 75 per cent. of your rates."

Then he goes into one of the industrial areas and asks the managing director of a big concern "How are things?" The managing director replies "Magnificent. We have built a new canteen, we have built a new shop, and put in more machinery." The rating assessor says "Great—well done—we will put another £500 a year on your rates." The fact that the concern was quite wrongly derated to the extent of 75 per cent. does not affect the argument [Laughter.] It does not because, of course, the 1929 Act should be withdrawn—but we have had that argument already today.

The assessor then goes to a residential area and finds someone who has improved his house by adding a couple of bedrooms, and a bathroom with all the latest American plumbing, and the rest—and what does the rating assessor say? "Fine, indeed—but another five quid for your trouble." Then he goes down to the slums, where everything is in a glorious state of dilapidation. He runs into the factor representing the owner of some of these disgraceful buildings in my constituency, and asks "Well, Mr. Smith, how are things today?" He is told, "Much worse than they were last year. The drains are blocked up, the windows are bust and the roofs are leaking." The answer of the rating assessor, under our rating system, is "Well done, thou good and faithful servant. Come down to the town hall and we will write down your rates by 50 per cent."

Is it any wonder that the whole system of rating has gone completely cock-eyed? By this new Clause we seek to start to put it right and to restore to the people the 'things that they themselves have created and to get away from the landlords and the monopoly which they hold. I once had an interesting correspondence with Sir Oliver Lodge on this subject—God rest his soul. He has gone to a better world, but he was a very intelligent chap. At the end of the correspondence, he wrote to me saying, "You know, I had not realised it until you put it to me, but in this great, free country of ours there is no place where a man can stand up free and unfettered, because of land monopoly." Except, of course, on the Queen's highway—and if he stands there long enough he will be moved on for causing an obstruction.

What I have done tonight is to move this new Clause, not with any sincere belief that the Government are intelligent enough to accept it—the Minister did not understand it and called my pamphlet pale pink—but in order to get it on the record that, having been shown the light, the Government sin against it; and that will help to throw them out at the next General Election.

Mr. Sandys

In view of the lateness of the hour, perhaps hon. Members will not mind if I intervene at this stage.

We have all heard of people who find an Income Tax advantage in having a farm, but it is perhaps one beyond the odds to graze a goat at the Bank of England—but I think that we have all enjoyed the breezy, forthright, humorous way in which the right hon. Gentleman the Member for Ipswich (Mr. Stokes) has presented his Clause. I think that I have shown myself to be very open minded and receptive to the ideas put forward today from various quarters in the Committee for major changes in the law, and provided that I am satisfied that this is really an improvement, I can assure hon. Members that I shall be equally open minded and receptive, particularly in view of the delightful way in which the right hon. Gentleman put what he described as a radical proposal.

Frankly, I do not feel that it is an improvement. It is certainly not a new idea. It is one that has been gone over and examined and inquired into by countless Royal Commissions and other commissions and committees of various kinds set up by various Governments of different political complexious. The most recent was the Erskine Simes Committee on which the right hon. Member for Ipswich himself sat until he had to resign when he became Minister of Works. All these inquiries have had the same result. They have all produced reports, with a majority report and a minority report. I have looked at the figures, and almost always the majority has been two-thirds and the minority one-third. The two-thirds majority has invariably come down against the proposal to rate site values.

Mr. Stokes

May I interrupt the right hon. Gentleman for a moment? I take it that he really has read both the majority and the minority reports? Assuming that he has done so, may I ask whether he would not admit that in substance the majority report of the Erskine Simes Committee completely falls to the ground by the removal of the development charge?

Mr. Sandys

I know that is a point.

Mr. Stokes

A big point.

Mr. Sandys

I will deal with the point in a moment. They came to the con- clusion that the rating of site values was neither practicable nor desirable.

I accept the point made by the right hon. Gentleman that at that time they had necessarily to look at the matter in the context of the Town and Country Planning Act, 1947, which contained the provision to which the right hon. Gentleman has referred. But since then there has been a further examination of this problem in relation to Scotland, though the problem in Scotland is no different from the problem in England so far as the question of the rating of site values is concerned.

The Sorn Committee came to the conclusion that Another alternative to the present system of valuation and rating which has been suggested as a possibility on previous occasions is the taxation of site value.

Mr. Stokes

What is the date of this Report?

Mr. Sandys

Last autumn. The Report goes on to say: This was comprehensively examined by the Committee on the Rating of Site Values, of which one of our number was a member, whose report was published in 1952. This Committee"— that is, the Erskine Simes Committee— concluded that the meeting of any part of local expenditure by an additional rate on site values is neither practicable nor desirable … and they go on to say: … and we have not received any evidence which leads us to dissent from that view.

Mr. Ross

The Minister should not be allowed to get away with that. They did not ask for any evidence. If the right hon. Gentleman reads the terms of reference, he will see that they were not considering new ways of raising finance at all.

Mr. Sandys

It is a very authoritative report. They went into the whole question of rating, and they say that they considered this alternative proposal. Whether it was in their terms of reference or not, I am merely remarking—and I think it is a matter of interest to the Committee —that a body who sat and reported upon these and related questions thought it worthwhile to say in their report—whether it is in their terms of reference I do not know, and it is irrelevant to the issue—that they saw no reason to express any contrary opinion about this issue.

Mr. Ross

Read the terms of reference.

Mr. Sandys

If the hon. Member for Kilmarnock (Mr. Ross) is not interested in this, that is all right; but some other hon. Members in the Committee may think it has some relevance and is of interest for the simple reason that this authoritative Committee considered the matter after the repeal of the provisions of the 1947 Act.

Mr. Ross

I am interested in it. The only difference between myself and hon. Members opposite, who claim to be interested in the point, is that this is a Scottish Committee, I have read its Report and hon. Members opposite have not. Nor has the Minister. He has read only an extract. He should read the terms of reference.

Several Hon. Members rose——

Mr. Sandys

I do not want to pursue the matter.

Mr. C. R. Hobson (Keighley) rose——

Mr. Sandys

I think what I said was quite relevant to the issue—certainly as relevant as the goat and the Bank of England.

The right hon. Member for Ipswich also quoted Karl Marx, which was of some interest and no doubt as relevant to the subject as the Sorn Committee. The right hon. Gentleman's pale pink pamphlet was of interest, for he is not always regarded as being on the extreme left of the party.

Mr. Stokes

Perhaps the right hon. Gentleman will believe me when I say that I consider the Left wing of the Labour Party entirely reactionary.

The Deputy-Chairman (Sir R. Hopkin Morris)

Perhaps the right hon. Gentleman will not go too far afield.

Mr. Sandys

In order to restore the balance, I will remind the Committee that the right hon. Gentleman also referred to what Mr. Baldwin said in 1931, but we will not go into that. The right hon. Gentleman is very good at summing up a situation. He said he was quite sure that I would not accept his proposal, and I should certainly not like to disappoint him.

9.45 p.m.

Mr. C. R. Hobson (Keighley)

I am disappointed in the Minister's reply. He took from the Sorn Committee's Report something entirely out of context, and it was evident that he had not read the Report. This is not good enough when we are discussing such an important matter as this new Clause. The best thing the Minister could do would be seriously to consider circulating my right. hon. Friend's pamphlet as a White Paper. At least he would then be able to understand what is meant by the taxation of site values.

The last time the House discussed the question of the rating of site values, in 1937, it was on a Motion very similar to the new Clause and was in the context of new road development. I want to bring the argument back to the present position. What we are finding today is that land is being deliberately left vacant and undeveloped. Bombed sites are deliberately being left undeveloped. This is done in order that the price of the land will increase. This increase in value will be due entirely to the work of the community and to the services provided by various public bodies and municipalities. The landlord will have done nothing whatever to contribute to the increased value.

Many quotations could be made, but I will give one only—the price which Gorringes had to pay for land at Victoria. In 1902 they paid for that site a ground rent of £350. In 1952 the figure had risen to £50,000. Who had created that wealth? It was the firm. The absence of rating of site values not only penalises the community, but also people desirous of developing their undertaking and their business.

This new Clause is purely permissive. It has been the express desire of London County Council on more than one occasion to have this power. Tonight the Minister has not given a single reason why this should not be adopted. I challenge anyone on either side of the Committee to answer this question. Can anyone say that every time a development takes place, whether for roads, new schools, or housing, immediately the price of the land does not go up and in itself is an incubus on taxation? The Minister has not given an alternative and has given no reason for rejecting the Clause. The only way in which such a position can be avoided is by taxing the value of the land.

It is absolute bunkum to say that this is impracticable and cannot be carried out. As my right hon. Friend the Member for Ipswich (Mr. Stokes) has pointed out, it is done in Denmark and various parts of the Commonwealth. It is a practical proposition and, what is more important, large public works have been carried out in New Zealand and Australia, where it has been a practice, at a much lower cost to the community than would be the case in Britain. The classic example is Sydney Harbour Bridge.

It is not good enough to say, as the Minister has said tonight, from his brief and a quotation from a Report, that the taxation of site values is a load of nonsense and moonshine when the contrary is the truth. Let there be no dubiety about that. I hope this matter will be pressed to a Division. Whatever the result may be, this will not be the last time we shall hear about taxing and rating of site values between now and the next General Election. The absence of any taxation of site values is putting a premium on the under-development of this country.

Whatever the views of the Minister may be tonight, he has seriously to consider his position and to understand what is meant by the rating and taxation of land values. When he has done that, I am convinced he is a man of sufficient fair-mindedness and integrity of character for his reason and mental ability to make him regret the speech he made to the Committee tonight and make him an ardent supporter of the taxation of site values.

Mr. C. W. Gibson (Clapham)

I must confess that I was amazed at the line taken by the Minister in his reply. It really is not good enough to treat a Motion like this—an attempt to find a solution to the most difficult problem in local government today—in the way in which the Minister treated it. I think it disgraceful.

Quite naturally, my right hon. Friend the Member for Ipswich (Mr. Stokes), as one would expect, talked of the general principles of the rating of site values. Anyone who has taken the trouble to study this problem knows that it is automatically acceptable. If there were time, I could quote in favour of this policy economists who are the heaven-sent professors of the Tory Party. Adam Smith, who found the excuses for Victorian capitalism, wrote in favour of the taxation of land values which, he said, could not be passed on; the landowner always had to pay it. John Stuart Mill did the same. If necessary, I could quote others.

It is not sufficient of an answer to a proposition of this kind for the Minister to say that there has been a lot of inquiries in this country and that everyone has turned down the proposition. In fact, that is not true. The taxation and rating of land values was introduced by the late Lloyd George, many years ago.

Mr. Ede

Where is his son?

Mr. Gibson

It went ahead until a Tory Government came in and scrapped the lot. The late Philip Snowden introduced it in a Budget in the House. Again, it was going ahead until a Tory Government came in and scrapped it.

It is not sufficient to say that there have been inquiries and they have always been turned down. With the kind of inquiry that some of them have been, there is bound to be an adverse report because of the tremendous pull of the vested interests of land. That is one vested interest which has always been able to protect itself every time that Parliament has made some sort of move towards curbing its monopoly. The land people have always done it, and they did it recently in the abolition of the principle of public ownership of land development by the abolition of development charges in the Town and Country Planning Act. That was something which, I admit, I did not oppose, because I never thought that the plan embraced by that Act would produce the goods, and it did not. That does not mean that one is not strongly in favour of communally created land values belonging to the people who create them and not to private landlords.

It is suggested—the right hon. Gentleman rather suggested it—that the proposal is quite impracticable, but other countries have used this method for the raising of taxation and local rates for many years. It is significant that any of the towns in the Commonwealth, in America and in Europe—for example, Denmark—which have used this method of supplementing their local rate income have never gone back on the proposition once they have put it into operation.

Let me quote the words of a prominent man in Denmark, who, writing in a document which is sent to all of us by the Danish Embassy, said a few months ago: In Denmark today we collect through land-value taxation, half of the capital value of the land and since 1948 a parliamentary commission has worked with the problem—how to collect the whole unearned value of the whole kingdom for the whole people. That is what we are after. The same man made another striking statement when he said that Denmark had collected land values for the benefit of the people since the days of King Canute. Whether they have done, I do not know. The point is that they are applying this principle with success and. as a result, are taking taxation and rating off properties and off enterprise.

The object of the Clause is to help the local authorities. The right hon. Gentleman does not seem to know that over 400 local authorities in this country have passed resolutions in favour of the rating of site values. The more that this method is understood, the more people are coming round to recognise that it can be done.

Most of the opposition, when it gets away from the plainly self-interest aspect, is on the grounds that this is all right as a theory and the values which are created are created by the community, but that it is not practicable. The answer is to go to some of the places in our own Commonwealth. I could quote a number but will give just one. In New South Wales £A7 million is collected each year from the rating and taxation of site values alone.

The City of Copenhagen collects its income from the rating of site values in Copenhagen. Here is evidence that it is practicable to do that. I have a copy of the land map of Copenhagen, and it shows every site in the city separately valued by expert valuers. Copenhagen has been doing that for 50 years.

10.0 p.m.

In New York, which one can regard as the home of violent capitalism, they are doing the same thing. Every five or six years in New York a land map is produced setting out the value of every piece of land in that city. I say that what little Denmark can do, what America can do, and what many of the big cities in the Commonwealth can do this country can and ought to do, and would do but for the power of the vested interests which have always and so far successfully resisted this proposition.

Unless some new source of revenue is found for our local authorities, local government will collapse. I wonder whether all hon. Members know what has been the increase in the cost of local government since the end of the war. I have not all the figures, but I have them for the years from 1948 to 1954. Any hon. Member can see them. They appear in the White Paper on National Income and Expenditure. In 1948 the total expenditure of our local authorities was £711 million. In 1954 it was £1,103 million, a very substantial increase. Of that £1,103 million, £460 million was raised from the local rates, an increase from £317 million in 1948. There was a substantial increase in the amount of the central Government's grants, which increased from £279 million in 1948 to £432 million in 1954.

The greater the amount of central Government grant becomes to local government services the more will local government be hamstrung, and the less it will have of freedom, and the less will be the chance our local authorities will have of advancing on imaginative and forward looking plans. We want to reduce the amount of central aid to local government. If we can find a new source of revenue for our local authorities we ought to.

In spite of what the Minister says, I say that all the evidence shows to an unbiased mind that it is possible to give our local authorities a chance of raising a great deal of money in addition to that which they already raise, a chance of raising more money from a new source, and that source is the taxation of the values of land which at the moment contributes nothing whatever to the cost of local government services, although the money which our local authorities spend on their services increases land values in all our great towns.

The Minister is to be reprobated for taking the line he did. I do not know whether he thought that we did not mean this seriously. We do mean that unless something of this kind is done to provide our local authorities with a substantial increase in income local government will break down. It will break down because it is becoming more and more difficult for the ratepayers to stand the burden of this expenditure. I say we can lighten that burden in the way that it is done in New South Wales.

If we could raise a comparable amount of money we could take tax off our buildings. Hon. Gentlemen opposite who are so anxious to encourage building enterprise and the development of great industries would, I should have thought, have been prepared to support a proposition which, wherever it has been tried, has produced a situation in which taxation have been removed from enterprise and from building and put upon the land, so that it is borne by the landowner, who at present does not pay, and who never has paid, anything towards the cost of local government.

The Minister does not seem to believe that. At any rate, he did not take the trouble to answer that argument, and I suggest—[Interruption.] We can stay here all night if the hon. Gentleman likes it. I am very sorry that some hon. Gentlemen opposite realise that it is now past the hour when they expected to be going. I was hoping to get away before this myself. [HON. MEMBERS: "Then sit down."] We cannot be held responsible for wasting time on irrelevant Amendments. We have kept our discussions short on all our Amendments, and we have now reached one of the most vital and important proposals affecting this country, in particular local government.

We are entitled to expound it properly and to ask the Minister that he should give it much greater and—I was going to say courteous attention—although I do not accuse the right hon. Gentleman of not being courteous—but to give it more thought and more real respect for the arguments put forward by my right hon. Friend in introducing the new Clause.

Mr. Emrys Hughes

I wish to have only one point cleared up. The Minister referred to a constituent of mine. I have the honour to represent Lord Sorn in the House. Before the Joint Under-Secretary of State for Scotland leaves the Chamber, I have a question which I should like to have cleared up. I think the Minister quite unintentionally has given a wrong impression of the Sorn Committee, and I should like the Solicitor-General for Scotland to clear up this matter. Will he tell the Committee whether Lord Sorn's Committee had a definite remit to consider and report on the taxation of site values?

Mr. Sandys

It has been suggested that I inappropriately quoted the Sorn Committee's Report, and it was suggested that the examination of the question of the rating of site values was outside the terms of reference of the Committee. These are the terms of reference: To review the present system of valuation and rating "— that covers everything— (other than the derating of agricultural industrial and freight transport lands and heritages) in Scotland; Their first recommendation is: Neither a local income tax, the taxation of site values nor a local poll tax is practicable.

Hon. Members

Hear, hear.

Mr. Hughes

That is not the point. The reflection on Lord Sorn remains. I am quite sure that Lord Sorn would never have agreed to a recommendation in the Report without considering any evidence, and I should like to ask the Solicitor-General for Scotland whether the Sorn Committee took any evidence at all on the question of site values.

Mr. Stokes rose——

The Deputy-Chairman

The proceedings of that Committee have nothing to do with the proposal in the new Clause.

Mr. Hughes

My difficulty is this. I want to know how to vote on this Question.

The Deputy-Chairman

The hon. Member must make up his mind on issues that are relevant to the new Clause.

Mr. Hughes

Are we not entitled to an answer? Sitting over there is the Solicitor-General for Scotland, who should know everything about the Sorn Report, and, before casting my vote, I should like to have guidance from the legal representative of Scotland.

The Deputy-Chairman

The proceedings before the Committee cannot be relevant to this Clause.

Mr. Stokes

The disinclination of the Solicitor-General for Scotland to answer is only in parallel with the inability of the Minister to answer my arguments. On behalf of my hon. and right hon. Friends on this side, I must say that we are disappointed and disgusted with his performance tonight. He has not really attempted to deal with the arguments seriously. Having presumably read this great and effective pamphlet, which he described as "pale pink," he has not offered a single argument but has merely indulged in a lot of irrelevancies, and, without any doubt whatever, when we come to a Division my hon. and right hon. Friends and I will support this new Clause.

Mr. Jack Jones (Rotherham)

Will the Minister offer some guidance to hon. Members, and particularly to an Englishman? I have been in the House for only ten years. Would he indicate which occupant of the Government Front Bench is the Solicitor-General for Scotland?

Question put, That the Clause be read a Second time:—

The Committee divided: Ayes 120, Noes 168.

Division No. 13.] AYES [10.10 p.m.
Albu, A. H. Brown, Thomas (Ince) Evans, Albert (Islington, S.W.)
Allaun, F. (Salford, E.) Butler, Herbert (Hackney, G.) Evans, Edward (Lowestoft)
Awbery, S. S. Butler, Mrs. Joyce (Wood Green) Evans, Stanley (Wednesbury)
Bacon, Miss Alice Castle, Mrs. B. A. Fletcher, Eric
Baird, J. Chapman, W. D. Gibson, C. W.
Benn, Hn. Wedgwood (Bristol, S.E.) Collick, P. H. (Birkenhead) Greenwood, Anthony
Blackburn, F. Collins, V. J.(Shoreditch & Finsbury) Grey, C. F.
Blenkinsop, A. Corbet, Mrs. Freda Griffiths, Rt. Hon. James (Llanelly)
Boardman, H. Craddock, George (Bradford, S.) Griffiths, William (Exchange)
Bottomley, Rt. Hon. A. G. Crossman, R. H. S. Hale, Leslie
Bowden, H. w. (Leicester, S.W.) Deer, G. Hall, John T. (Gateshead, W.)
Boyd, T. C. Dodds, N. N. Hamilton, W. W.
Brockway, A. F. Dugdale, Rt. Hn. John (W. Brmwoh) Hayman, F. H.
Broughton, Dr. A. D. D. Ede, Rt. Hon. J. C. Healey, Denis
Brown, Rt. Hon. George (Belper) Edwards, Robert (Bliston) Herbisen, Miss M.
Hobson, C. R. Mallalieu, E. L. (Brigg) Stewart, Michael (Fulham)
Holman, P. Mallalieu, J. P. W. (Huddersfd, E.) Stokes, Rt. Hon. R. R. (Ipswich)
Houghton, Douglas Mellish, R. J. Stones, W. (Consett)
Howell, Charles (Perry Barr) Mitchison, G. R. Strachey, Rt. Hon. J.
Howell, Denis (All Saints) Morrison, Rt.Hn.Herbert(Lewls'm,s.) Stross,Dr.Barnett(Stoke-on-Trent,C)
Hubbard, T. F. Moyle, A. Summerskill, Rt. Hon. E.
Hughes, Entry (S. Ayrshire) Noel-Baker, Franols (Swindon) Taylor, John (West Lothian)
Hunter, A. E. Oram, A. E. Thomson, George (Dundee, E.)
Irvine, A. J. (Edge Hill) Orbach, M. Viant, S. P.
Irving, S. (Dartford) Oswald, T. Warbey, W. N.
Janner, B. Pannell, Charles (Leeds, W.) Wells, William (Walsall, N.)
Jay, Rt. Hon. D. P. T. Parker, J. West, D. G.
Jeger, George (Goole) Parkin, B. T.
Johnson, James (Rugby) Peart, T. F. Wheeldon, W. E.
Jones, David (The Hartlepools) Price, J. T. (Westhoughton) White, Henry (Derbyshire, N.E.)
Jones, Jack (Rotherham) Proctor, W. T. Wilkins, W. A.
Jones, J. Idwal (Wrexham) Pursey, Cmdr. H. Willey, Frederick.
Jones, T. W. (Merioneth) Reid, William Williams, Ronald (Wigan)
Key, Rt. Hon. C. W. Rogers, George (Kensington, N.) Williams, W. R. (Openshaw).
King, Dr. H. M. Ross, William Williams, W. T. (Barons Court)
Lawson, G. M. Short, E. W. Wills, E. G. (Edinburgh, E.)
Lee, Frederick (Newton) Silverman, Julius (Aston) Wilson, Rt. Hon. Harold (Huyton)
MacColl, J. E. Simmons, C. J. (Brierley Hill) Yates, V. (Ladywood)
McKay, John (Wallsend) Skeffington, A. M. Zilliacus, K.
McLeavy, F. Snow, J. W.
Marion, S. Sparks, J. A. TELLERS FOR THE AYES:
Mr. Pearson and Mr. Holmes
Agnew, Cmdr. P. G. Grant-Ferris, Wg Cdr. R. (Nantwich) Maude, Angus
Aitken, W. T. Green, A, Mawby, R. L.
Allan, R. A. (Paddington, S.) Gresham Cooke, R. Maydon, Lt.-Comdr. S. L. c
Amory, Ht. Hn. Heathcoat (Tiverton) Grimond, J. Nabarro, G. D. N.
Armstrong, C. W. Grimston, Sir Robert (Westbury) Nairn, D. L. S.
Atkins, H. E. Gurden, Harold Neave, Airey
Baldwin, A. E. Hall, John (Wycombe) Nioolson, N. (B'n'm'th, E. & Chr'ch)
Balniel, Lord Hare, Hon. J. H. Nield, Basil (Chester)
Barber, Anthony Harrison, A. B. C. (Maldon) Nugent, G. R. H.
Barter, John Harrison, Col. J. H. (Eye) Oakshott, H. D.
Baxter, Sir Beverley Harvey, Air Cdre. A. V. (Macolesfd) O'Neill, Hn. Phelim (Co. Antrim, N.)
Bell, Philip (Bolton, E.) Harvey, John (Walthamstow, E.) Osborne, C.
Bell, Ronald (Bucks, S.) Heald, Rt. Hon. Sir Lionel Page, R. G.
Bevins, J. R. (Toxteth) Heath, Edward Panned, N. A. (Kirkdale)
Biggs-Davison, J. A. Hill, Mrs. E. (Wythenshawe) Pickthorn, K. W. M.
Bishop, F. P. Hirst, Geoffrey Pilkington, Capt. R. A.
Black, C. W. Hornsby-Smith, Miss M. P. Pott, H. P.
Body, R. F. Horsbrugh, Rt. Hon. Florence Powell, J. Enoch
Boothby, Sir Robert Howard, Hon. Greville (St. Ives) Price, David (Eastleigh)
Bossom, Sir A. C. Howard, John (Test) Price, Henry (Lewisham, W.)
Bromley-Davenport, Lt.-Col. W. H. Hudson, Sir Austin (Lewisham, N.) Raikes, Sir Victor
Brooke, Rt. Hon. Henry Hughes Hallett, Vice-Admiral J. Redmayne, M.
Bryan, P. Hughes-Young, M. H. C. Remnant, Hon. P.
Buohan-Hepburn, Rt. Hon. P. G. T. Hurd, A. R. Renton, D. L. M.
Campbell, Sir David Hyde, Montgomery Ridsdale, J. E.
Cary, Sir Robert Hylton-Foster, Sir H. B. H. Rippon, A. G. F.
Channon, H. Jenkins, Robert (Dulwich) Rodgers, John (Sevenoaks)
Chichester-Clark, R. Jennings, J. C. (Burton) Roper, Sir Harold
Clarke, Brig. Terence (Portsmth, W.) Johnson, Dr. Donald (Carlisle) Ropner, Col. Sir Leonard
Cordeaux, Lt.-Col. J. K. Johnson, Eric (Blackley) Sandys, Rt. Hon. D.
Corfield, Capt. F. V. Johnson, Howard (Kemptown) Schofield, Lt.-Col. W.
Craddock, Beresford (Spelthorne) Keegan, D. Shepherd, William
Crouch, R. F. Kerby, Capt. H. B. Simon, J. E. S. (Middlesbrough W.)
Cunningham, S. K. Kerr, H. W. Smithers, Peter (Winchester)
Currie, C. B. H. Kirk, P. M. Speir, R. M.
Dance, J. C. G. Lagden, G. W. Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)
Davidson, Viscountess Leavey, J. A. Steward, Harold (Stockport, S.)
Deedes, W. F. Leburn, W. G. Steward, Sir William (Woolwich, W.)
Dodds-Parker, A. D. Legge-Bourke, Maj. E. A. H. Storey, S.
Duthie, W. S. Lindsay, Martin (Solihull) Studholme, H. G.
Eden, J. B. (Bournemouth, West) Linstead, Sir H. N. Sumner, W. D. M. (Orpington)
Emmet, Hon. Mrs. Evelyn Longden, Gilbert Taylor, Sir Charles (Eastbourne)
Errington, Sir Eric Lucas-Tooth, Sir Hugh Teeling, W.
Fell, A. Macdonald, Sir Peter Thomas, Leslie (Canterbury)
Finlay, Graeme McLaughlin, Mrs. P. Thompson, Lt.-Cdr. R.(Croydon, S.)
Fletcher-Cooke, C. McLean, Neil (Inverness) Thornton-Kemsley, C. N.
Foster, John Maddan, Martin Tilney, John (Wavertree)
Freeth, D. K. Maitland, Cdr. J. F. W. (Horncastle) Vane,W. M. F.
Gammans, L. D. Maitland, Hon. Patrick (Lanark) Vaughan-Morgan, J. K.
Godber, J. B. Manningham-Buller, Rt. Hn. Sir R. Vosper, D. F.
Gower, H. R. Markham, Major Sir Frank Wakefield, Sir Wavell (St. M'lebone)
Graham, Sir Fergus Marples, A. E. Walker-Smith, D. C.
Grant, W. (Woodside) Mathew, R. Wall, Major Patrick
Ward, Hon. George (Worcester) Williams, Gerald (Tonbridge) Woollam, John Victor
Ward, Miss I. (Tynemouth) Williams, Paul (Sunderland, S.)
Whitelaw, W.S.I.(Penrith & Border) Wills, G. (Bridgwater) TELLERS FOR THE NOES:
Williams, Rt. Hn. Charles (Torquay) Wilson, Geoffrey (Truro) Mr. Legh and Mr. Wakefield.

Question put and agreed to.