Lords Sitting of 8 May 1906

Preamble
The Lord Shute (V. Barrington) took the Oath.

PRIVATE BILL BUSINESS.
The LORD CHANCELLOR acquainted the House that the Clerk of the Parliaments had laid upon the Table the Certificate from the Examiners that the further Standing Orders applicable to the following Bill have been complied with:—;Gas Companies (Removal of Sulphur Restrictions.)
The same was ordered to lie on the Table.
Crellin's Patents Bill [H.L.]. Presented (pursuant to leave given yesterday), and read 1a.
Ritz Hotel Bill [H.L.]. Presented (pursuant to leave given yesterday); read 1a; and referred to the Examiners.
Manchester Churches Bill [H.L.]. The Chairman of Committees informed the House that the opposition to the Bill was withdrawn. The Orders made on the 22nd of March and Thursday last discharged, and Bill committed.
Folkestone and District Electricity Supply Bill [H.L.]. The Chairman of Committes informed the House that the opposition to the Bill was withdrawn. The Orders made on the 29th of March and Thursday last discharged, and Bill committed.
Cambrian Railways Bill [H.L.]. Reported from the Select Committee, with amendments.
Millwall Dock Bill. Reported, without Amendment.
Hull and Barnsley Railway (Steam Vessels) Bill [H.L.]; Nottinghamshire and Derbyshire Tramways Bill [H.L.]; Havana United Railways and Regla Warehouses Bill [H.L.]; North Metropolitan Tramways Bill; Hull and Barnsley and Great
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Central Railway Companies Bill [H.L.]. Reported, with Amendments.
Scottish Provident Institution Buildings Bill [H.L.]. Committed.
Portsmouth Water Bill [H.L.]. Leave given to the Select Committee to adjourn over To-morrow.
Scottish Union and National Insurance Company Bill [H.L.]—;(Petition for additional Provision). Examiners' Certificate of non-compliance with the Standing Orders referred to the Standing Orders Committee on Monday next.
Carlisle Corporation Bill; Todmorden Corporation Bill; Great Eastern Railway Bill. Read 2a, and committed.
Bacup Corporation Bill; Cardiff Gas Bill. Read 2a, and committed. The Committees to be proposed by the Committee of Selection.
North East Lincolnshire Water Bill; Thornton Urban District Gas Bill; New Mills Urban District Council Bill. Read 2a, and committed.
Uxbridge Gas Bill. Read 2a, and committed. The Committee to be proposed by the Committee of Selection.
Buenos Ayres Grand National Tramways Bill [H.L.]. Read 3a, and passed, and sent to the Commons.
H. R. Baines & Company Bill [H.L.]; Vauclain's Patent Bill [H.L.]. Returned from the Commons agreed to.
Great Yarmouth Waterworks and Lowestoft Water and Gas Bill [H.L.]; Western Valleys (Monmouthshire) Sewerage Board Bill [H.L.]. Report from the Committee of Selection, That the Five Lords appointed a Select Committee on the Mullingar, Kells, and Drogheda Railway Bill [H.L.] and other Bills do form the Select Committee for the consideration of the Great Yarmouth Waterworks, and Lowestoft Water and Gas Bill [H.L.], and the Western Valleys (Monmouthshire) Sewerage Board Bill [H.L.]; read, and agreed to. All petitions referred to the Committee, with leave to the petitioners praying to be heard by counsel against the Bills to be heard as desired, as also counsel for the Bills.

PETITIONS.
  EDUCATION.
  Petitions in favour of maintenance of existing religious teaching in Church of England schools—;of parents and guardians of children attending schools at Worsley; Manchester (2); Astley (2); West Houghton (2); St. Marks; Monton; Eccles; Swinton; Farington; Hoole; Darwen (2); Goosnagh; Blackpool; Blackburn (2). Of teachers in schools in Westhoughton (3); Eccles; Swinton; Astley; Glodwick; Swinton; Hoole; Blackpool; Lytham; Darwen; Goosnagh; Blackburn (2). Read and ordered to lie on the Table.
POISONS AND PHARMACY BILL [H.L.]
Petitions for amendment of; of persons signing; in Loughboro'; Lincoln; Nottingham; Sheffield. Read, and ordered to lie on the Table.
RETURNS, REPORTS, ETC.
  BOARD OF EDUCATION (SPECIAL REPORTS ON EDUCATIONAL SUBJECTS).
  Volume 16. School Training for the Home Duties of Women. Part II. Belgium, Sweden, Norway, Denmark, Switzerland, and France.
  ALIENS ACT, 1905.
  Return of alien passengers brought to the United Kingdom from ports in Europe or within the Mediterranean Sea daring the three months ending 31st March 1906, together with the number of expulsion orders made during that period requiring aliens to leave the United Kingdom.
  TRADE REPORTS—;MISCELLANEOUS SERIES.
  No. 649. Gold Mines of Formosa.

  ANNUAL SERIES.
  No. 3579. Persia (Arabistan).
  No. 3580. Netherlands (Java).
  No. 3581. Persia (Bushire).
  Presented (by Command), and ordered to lie on the Table.

  LUNACY.
  Report to the Lord Chancellor of the number of visits made, the number of patients seen, and the number of miles travelled by the visitors of lunatics from the 1st October, 1905, to the 31st March, 1906. Laid before the House (pursuant to Act), and ordered to lie on the Table.
  STANDING COMMITTEE.
  Report from the Committee of Selection for the Standing Committee, that they have added the Lord Hamilton of Dalzell, the Lord Granard (E. Granard) and the Lord Fitzmaurice to the Standing Committee; read, and ordered to lie on the Table.
  POISONS AND PHARMACY BILL [H.L.]
  Reported from the Standing Committee with further Amendments. The Report of the Amendments made in Committee of the Whole House and by the Standing Committee to be received on Friday next, and Bill to be printed as amended. (No. 76.)
  PUBLIC TRUSTEE BILL [H.L.]
  Reported from the Standing Committee without further Amendments. The Report of the Amendments made in Committee of the Whole House to be received on Thursday next.
  PATENTS, DESIGNS, AND TRADE MARKS (REGISTRATION OF PATENT AGENTS) BILL [H.L.]
  Reported from the Standing Committee with Amendments; and to be printed as amended. (No. 77.)
  POST OFFICE (MONEY ORDERS) BILL.
  Reported from the Standing Committee without Amendment; and to be read 3a on Thursday next.
  SOLICITORS BILL [H.L.]
  House in Committee (according to order). Bill reported without Amendment. Standing Committee negatived; and Bill to be read 3a on Thursday next.

  STANDING ORDERS RELATING TO PRIVATE BILLS.
  THE CHAIRMAN OF COMMITTEES (The EARL of ONSLOW): My Lords, this is an Amendment of the Standing Orders

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  relating to generating stations for electrical purposes. There is considerable apprehension on the part of His Majesty's Office of Works that the erection of these enormously powerful generating stations may have a serious effect upon some of the national collections, and possibly even upon some of the public parks; and under those circumstances they desire that your Lordship's House and the other House of Parliament should amend the Standing Orders, so that before any Bill authorising the erection of generating stations is passed they may have the opportunity of reporting upon it, and the Committee considering the Bill may have that Report in front of them, before they agree to recommend that the Bill be passed into law.
  Moved, that Standing Orders No. 106, be amended by inserting after "trade" in line 4, "and His Majesty's Office of Works."—;(The Earl of Onslow.)
  On Question, Motion agreed to.
  Standing Orders amended accordingly, and to be printed as amended. (No. 78.)

  LOCAL TAXATION.
  THE EARL OF DENBIGHrose "To call attention to the present system of local taxation, whereby the greater part of the accumulated wealth of the country contributes comparatively little to local charges; and to the system of compounding whereby a large number of those who elect the local authorities are insufficiently informed as to their share in the growing burdens imposed upon the ratepayers."
  The noble Earl said: My Lords, Your Lordships will remember that in 1896 a very important Royal Commission was appointed for the purpose of considering the great and complex question of local taxation, and that after a certain number of interim Reports, the final one was issued in 1901 after the Commission had taken a great deal of evidence, and gone into the whole history of the subject and its working in a most minute and exhaustive way. A considerable number of recommendations were made, but I do not know that any one of them has been acted upon, except that which dealt
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  with clerical tithes. The question of local taxation is always with us, and it is daily becoming more and more acute. I do not know that there is anything people grumble more at than the steady and constant rise in the rates. I should like, by way of emphasising that fact, to call your Lordships' attention to a few figures. Looking at the rates from the point of view of the average increment per annum, I find that in the year 1881–1882, compared with six years before, the average increment per annum was £548,000. In the year 1890–1, compared with eight years before, the annual increment was £1,515,000. In the year 1902–3, compared with 1899–1900, the average increment was £2,398,000, and the increase of 1902–3 over 1901–2 was £3,888,834. Then, again, look at the increase in local expenditure. The total expenditure for 1902–3 was no less a figure than £128,968,743 in England and Wales alone, and if you take the amount of loans into consideration as well—;and, after all, these loans are an annually recurring figure and it is perfectly fair to take them into the calculation of the annual expenditure—;the full amount equals between £150,000,000 and £160,000,000, or rather more than the national expenditure. The population, between the years 1898 and 1903 increased by 5·9 per cent.; the rateable value by 13·3 per cent., but the public rates increased by 33·8 per cent., whilst the loans of the local authorities rose by no less than 41·5 per cent.
  1 think these figures make one reflect on this matter. At the same time, it is curious to observe the general ignorance of the complexities and details of this great question outside the ranks of those whom I will call professionals and experts. The ordinary individual very rarely studies the question at all, and confines his observations and thought on the subject of rating to language of a more or less emphatic kind when the rate collector calls with his demand note. I daresay that comparatively few people realise what I pointed out to your Lordships a moment ago, that the total local expenditure is very considerably in excess of the national expenditure. Of the total annual local expenditure of £152,000,000 nearly £58,000,000 is raised by rates, £16,246,000 by Government contributions, and £40,000,000 by loans. Ther

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  water, gas, trams, tolls, and the various side shows and speculations indulged in by the municipal authorities of a more or less lucrative character, such as river steamboats and the like, bring in £36,000,000 gross, out of which you have to deduct the working expenses and provide many millions for interest and sinking fund on the enormous total of local loans, which amounted three years ago—;the last date in respect of which figures are available—;to £437,000,000.
  I would like to point out that the total of £152,000,000 in 1902–3 is nearly double the figure for 1892–3, ten years previously, when the total was £82,000,000. The £58,000,000 raised by rates every year is nearly double the amount raised ten years before, when it was £34,700,000, but the Government contributions from the Exchequer for local relief only vary to this extent, that they are £16,246,000 now as against £10,600,000 ten years ago. We have heard a great deal in past years of the increase in national expenditure and how that has been responsible for much of the slackness of trade and want of employment in the country, and the platforms frequented by noble Lords opposite have re-echoed during the past year with denunciations of the expenditure of the late Government, to which has been mainly attributed the existence of the unemployed problem in a somewhat acute form. But it is rather curious that, with the exception of a general growl, one very rarely sees an accusation on this point raised as regards the increasing rates. I suggest to the House that if it is true, as no doubt it is, that money taken in taxation from a man reduces the amount available by him for the purposes of employment, it is only a question of detail whether you take the money for national or local purposes.
  I have no intention of going into the general question, because it is a very large one indeed, and if I had the hardihood or ability to attempt it, I am afraid I should have to emulate the example of the Deputy in the Hungarian Parliament, who spoke for over twenty-four consecutive hours just to keep the ball rolling in regard to the subject under discussion. I hasten to say that I only propose merely touching the fringe of the subject. I shall deal more especially with two particular aspects of the question to which much attention is
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  being directed. The reference which I have on the Paper as to whether the general wealth of the country pays a proper share of taxation deals, of course, with that much argued point as to whether realty should pay as much as it does to local taxation: in other words, whether a man should be rated more with regard to the premises which he occupies than with regard to his general ability to pay.
  There is a very interesting history of the subject given in the Report of the Royal Commission at which I would invite your Lordships to glance for a moment. After the dissolution of the monasteries the parish was recognised as the unit of area for the collection of money for the relief of the poor, and for a time contributions were voluntary; but, at the same time, the local bishop was empowered to employ pressure which nowadays would come under the description of "peaceful persuasion," and if the parishioners did not contribute according to their ability they were sent to prison. Then in 1601 came the great Act of Elizabeth, which is the foundation of our rating system. Payments to the Poor Fund were made obligatory, according to the ability of the parish or locality to pay. The idea at that time seems to have been that this contribution should take the form of a sort of local income-tax, but there was no general method for ascertaining a man's income. There was a great deal of legal controversy as to whether a man was rateable in respect of his stock-in-trade and other personal property, and a variety of decisions were given to which it is unnecessary for me to refer; but towards the end of the eighteenth century the rating of stock-in-trade was certainly practised in the cloth and woollen districts of the south and west of England. The result of that was to destroy these local industries, and to compel them to migrate to other parts where they were not so rated, a course which is taking place to-day in regard to many of our large industries.
  The crisis arrived in 1839, when it was definitely decided that stock-in-trade was assessable for local taxation. So much dissatisfaction was caused that a special Act was passed in 1840 for the purpose of exempting all personalty and stock-in-trade. It was to remain in force until the end of 1842, and it is interesting.

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  to note that the Commission call attention to the fact that this Act is kept in force now by the Expiring Laws Continuance Act which comes before Parliament every year. Yon know well that as modern requirements increased and society developed it was felt to be very unjust that real property should boar the entire burden of maintaining services necessary and beneficial to the whole community, and a system of grants-in-aid and subventions was gradually introduced, which was afterwards changed in 1888 by the Act passed by the noble Viscount Lord Goschen when he substituted for that a system of what is known as assigned revenues. Other revenues were assigned in 1890, and in the year 1902–3 £16,000,000 came from these revenues as against £58,000,000 raised in rates.
  I have heard it said that the noble Viscount's system does not work perhaps quite as well as he had anticipated. I have seen accusations against it that it has introduced a complexity into accounts which none but an expert can deal with, and that it wants reconsidering. I will not venture to express any opinion on that question in the presence of the noble Viscount himself, although possibly the matter may be referred to by other noble Lords in this debate. However, the broad aspect of the question is that in spite of what has been done, and in spite of the great difficulty which the Royal Commission admits exists of finding the true relation of personalty to realty, the Report emphatically states that non-rateable property does not as yet bear anything like its full share for those public services which can be regarded as more national than local. Then the Report deals more minutely with the question, and states that poor relief comprising the various services administered by boards of guardians and the police, and criminal prosecutions, are certainly national matters. They state that education is national in a high degree, and that the main roads are becoming more and more national in view of the increasing mobility of the population and the invention of new methods of locomotion.
  There are some interesting Tables set out in the Report. Although we are cautioned to use them with the very greatest care and not to generalise too
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  much from them, still they give some very useful information on the relative positions of personalty and realty in this country. There is a Table on page 15 which deals with taxes incidental to the ownership, occupation, and transfer of property. As regards Imperial finance the amount chargeable to rateable property is 17·6 of the whole, and to non-rateable property 21·4 of the whole. But, my Lords, when you come to local finance the position is very much reversed. On rateable property the percentage is 82·8 of the whole, and on non-rateable property—;that is, personalty—;it is only 6·1 of the whole. Then there is another interesting Table on page 20 of the Report, which shows the amount of the different descriptions of property coming under the Death Duties, with a view of establishing some idea of the proportions of real and personal property in this country. This Table points out that in the three years 1898, 1899, and 1900, out of the total duty that was paid, 75 per cent. was on personalty and only about 25 per cent. on realty, showing that the amount of personal property is apparently very much in excess of real property.
  Without going more into detail, I would like to draw the especial attention of the House to what the Commissioners state. They state that for national purposes people should be taxed more with regard to their ability to pay. What the Commission consider a just grievance they say cannot be remedied without a direct contribution from the Exchequer, or an extension or development of the system of assigned revenues as brought in by the noble Viscount in 1888. I wish to draw the especial attention of noble Lords opposite to this matter, because I consider it has become really pressing in view of the Government's proposals to tax land values. That will be a subject for separate debate, and I am, therefore, not going into it to-day. I am not going to argue whether or not the expected revenue will be obtained, nor whether the tax which they anticipate putting on will not ultimately fall on the occupier in places where there is competition to obtain houses. But this fact is perfectly clear, that on whomsoever it falls it is an additional tax on real property, and, therefore, any dealing with

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  that question without considering the whole question of rating is fundamentally unjust in view of the Report of the Royal Commission that real property already bears far more than its just proportion of local, but at the same time really national burdens. I cannot do better than call your Lordships' attention to what was said on this matter by the noble Earl whose absence we deplore so much—;Lord Spencer. The noble Earl spoke last year on this question, and he was very strong indeed against touching it without dealing with the whole question of rating. He condemned what he called "peddling and tinkering" with the matter, a course to which he said he had the greatest possible objection.
  I now wish to direct the attention of the House to another matter which has excited great interest all over the country amongst actual ratepayers—;I refer to the system known as compounding, under which an owner of property below a certain value either arranges voluntarily, or is compelled by the local authority to make himself responsible for the rates which he includes in his rent. He hands over that amount to the local authority less a certain commission or composition which is allowed him for his trouble and risk in collecting. It was stated before the Commission that something like from two-thirds to three-fourths of the owners of property in the Metropolis pay rates direct, and in these cases the actual amount of the rates is never brought under the notice of the occupiers who have the voting power. Not only is there the case of small properties under the compounding limit when the system can be enforced by the local authority, but the system also holds good in the many flats and tenements which are springing up all over London and our large cities, and in which the tenant pays a rent inclusive of rates and outgoings. There is no denying the fact that this is a very convenient system. It saves a great deal of trouble to the local authorities, and it makes them more secure as to the rates than if they had to be collected individually from small occupiers, many of whom in the poorer districts live from hand to mouth and are given to perpetrating what are known as "moonlight flits" whenever it is likely to be financially inconvenient for them to pay their rent.
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  Compounding is also very popular with many landlords. As I have pointed out, they allow for the full rates which they collect, but they can receive a composition up to 30 per cent. according to the conditions arranged for. That is a considerable advantage to the landlords, but it is a great loss to the rates of the district. There are two systems. For the poor rate compounding is only enforced by the local authority in the case of properties of a certain valuation laid down by the Poor Rate Assessment and Collection Act, 1869, and the Municipal Corporations Act, 1882. For the general district rate compounding is frequently regulated by means of local Acts. Lord Spencer referred last year, in the speech to which I have already alluded, to an eloquent speech by Mr. Gladstone, who defended compounding on the score of convenience; but Lord Spencer spoke very strongly, and pointed out how necessary it was that all electors should take an interest in, and full responsibility for, the public services. He said that it was a very serious matter indeed that hundreds of thousands of electors did not know how much of their rent went in the payment of rates. Here is an extract from the evidence given by the late Lord Farrer. Lord Farrer said—;
  "Facility of collection is no doubt a great advantage to a governing body. But this facility should not be such as to make the taxpayer unconscious of the burden. Otherwise a great security for economy and good administration is lost. Those who pay the piper call the tune, and in calling the tune they should not only pay the piper but feel that they pay him."
  I do not think the point could be put better than that.
  I suggest to your Lordships that this is not a Party matter. I have seen the strongest condemnation of the present working of the compounding system in some of the most advanced organs which support His Majesty's present Government. This is a question upon which both Parties can meet. I do not think that the desire for good and sound administration, the desire that people should be certain that they get proper value for their money, and the desire to make those having the voting power appreciate more the duties and responsibilities of citizenship—;I do not think that these desires can be called the perquisite of any one Party. As matters

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  stand, a great many ratepayers never see the rate collector from one year's end to the other. They never realise what the expenditure is. I do not suppose the majority of them even know what the rate in the pound is which is levied in their district; but when they have to face an increase in the rent owing to a rise in the rates they simply put it down to the grasping rapacity of the landlord.
  I think there is a remedy for this state of things, but I believe the only possible remedy is to be found in the lowering of the compounding limit and having a more uniform system than prevails at the present moment. In London the compounding limit is £20, in Liverpool it is £13, and in Birmingham and Manchester £10. In other places throughout the country I think it is £8, but there is no reason at all why these limits should not be reduced so as to compel direct rating in a great many more cases than at present. It is not possible, I believe, to do away with compounding altogether, because in the case of very cheap and small occupations the amount, if collected weekly, fortnightly, or monthly, would be so small as to make the direct collection of it impracticable, and the abolition of compounding altogether would cause great loss on the rates by reason of the number of defaulters. But, at the same time, the loss would not be so great as is imagined, for although collecting direct from small occupiers would mean a great deal more clerical work and more collectors, yet you would save the large amount of money which is now lost to the ratepayers through the composition allowance to landlords who pay direct.
  I have had an interesting correspondence with a gentleman at Manchester, who deals rather exhaustively with the question, and he sends me some figures with regard to North and South Manchester, excluding the central portion of the city. He points out that the rateable value is £1,760,000. The compounding property represents a rateable value of £441,000, or 25 per cent. of the whole, and the composition allowed to the landlords is £31,600, which sum is therefore lost to the ratepayers. This gentleman makes a suggestion which is well worthy of consideration. He calculates that if there were 160 more collectors, and they were told off
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  to collect from 500 houses each, the work could be done, and after paying them and allowing for loss from defaulters, he works out that there would be a balance of £15,000 for the benefit of the rates. I think there is a good deal in that suggestion, and I do not see why it should not be carried out in those localities where a high rate of composition is allowed at the present moment.
  Then there is another suggestion, that landlords should be compelled by law to show the rate separate from the rent on the demand note when they collect their rents. This movement is beginning. I have here two sample cards designed for the purpose of showing the rent and the rate to be collected, and I think that if that were done generally it would at all events bring home to the occupiers the exact amount of the rate they were paying, and show how much of what they paid was rent and how much went to the rating authority. It would have to be made obligatory. It would, of course, put landlords and their agents and collectors to a certain amount of extra trouble, and, therefore, there is no hope of expecting it to be carried out generally unless it is ordered by statute, and I do not see any reason why that should not be done.
  Before I conclude I should like to point out one great anomaly that exists at the present moment, though it has really no place among the subjects of which I gave notice. I allude to the extent to which limited companies are rated, and the fact that they are not allowed a single vote in regard to the administration of the money which they have to pay. There has been a huge development in joint stock enterprise of recent years. In 1894 the capital of limited companies believed to be carrying on business in this country amounted to £1,000,000,000. In 1904 the amount was nearly double, and reached £1,900,000,000. Of course, it is impossible to exactly estimate the amount of rates paid by limited companies, but railways alone pay from £5,000,000 to £6,000,000 in rates, a tax which works out at some thing like £273 per mile per annum. That can only be regarded as a very great burden. It is a very great injustice that they should have to pay this amount and that none of those companies should have a single voice in the administration of it. The present system is a relic

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  handed down to us from days gone by, when joint stock enterprise had not become the great feature it is to-day of commercial conditions. I contend that this is a matter which ought to be considered in connection with the rating question, for it seems unjust that the present system should be allowed to continue.
  There were some interesting figures published last year with regard to rating in Holborn. The rates raised by the Holborn Borough Council for the year ended March 31st, 1905, amounted to £341,296. Of that amount £97,400, or 28·53 per cent. of the total rate, was payable in respect of premises in the occupation of limited liability companies, public authorities, hospitals, hotels, and other promises in respect of which no names appeared upon the register of electors. In contrast to this, of the total number of names upon the current register—;11,979—;no less than 6,712, or 56·03 per cent. do not themselves pay rates; the rates are paid by their landlords. Lord Spencer, in the speech last July to which I have already referred, said—;
  "A curious instance was brought to my notice recently in the case of the Borough of Holborn. Figures were quoted showing that more than one-fourth of the sum paid in rates in that borough was paid by companies which had no voting power whatever, and that, on the other hand, more than half of the registered voters paid no rates at all. Therefore, people who paid the rates do not vote, and people who do not pay have votes. Direct taxation is the best way of showing the electors whether there is good government, and I wish sincerely that something could be done by Act of Parliament to alter the present system."
  It should not be impossible to devise some more just system. I have no doubt that one of the criticisms which will be made by noble Lords who may speak from the benches opposite will be, Why did not your Party deal with this question when they were in power? I believe there were reasons for that. However, I have no doubt that point will be dealt with by the noble Marquess the Leader of the Opposition. Probably there were excellent reasons for not dealing with it. Doubtless, one of them was the important consideration to which the Commission calls attention—;that you cannot deal with the question of further subventions and equalising the amount paid by realty and
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  personalty without heavy expense, and I believe the money was not available. Still I cannot help regretting that compounding was not dealt with.
  But this question has become much more acute than it was even last year. Rates are rising in an alarming way, and although I have said that this is no Party question, and that I believe the members of His Majesty's Government are as anxious as we are for sound economy and sound administration, there is no disguising the fact that there are a large number of the supporters of the Government who are notorious for their desire to spend public money in every sort of enterprise and are not particularly careful as to whether they get proper value for that money or not. The knowledge of that fact has undoubtedly created very considerable alarm in the minds of the ratepayers of this country. I suggest to your Lordships that it is high time that this question was dealt with. If His Majesty's Government are really and sincerely anxious to see the question of local rating put upon an equitable basis, if they wish to see sound administration and proper economy, they should find time to deal with it even though they have other large and important questions on their hands at the present moment. I apologise for having detained the House so long and thank your Lordships for listening to me so patiently.
  THE PRESIDENT OF THE BOARD OF AGRICULTURE AND FISHERIES (Earl CARIUNGTON): My Lords, the noble Earl who has just sat down very rightly said that this is a great and complex question, and I think I can congratulate him on a most excellent and interesting speech showing great knowledge and grasp of the subject. I ask for the indulgence of the House in venturing to say a few words on this question, because I know that I am speaking in the presence of many noble Lords who have forgotten more on the subject than I ever knew, and fifteen years experience on the London County Council has taught me that the more you think the question over the more difficult it seems to become. I also have to thank the noble Earl for acknowledging that the question is not a Party question. We on this side of the House are grateful to him for that statement, and we shall look with confidence

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  to the kindly co-operation, sympathy, and help of the noble Earl opposite and his friends when we come to deal with this question.
  The noble Earl put the whole matter very plainly. He gave us to understand that local taxation could be well described in this way: A, B, and C occupy similar properties; A and B may be much richer than C, but they all pay the same amount of rates, based on the annual value of the property they occupy and without any reference to the difference in their incomes. When the Final Report of the Royal Commission was issued we plunged into it to see if by hook or by crook A and B could be made to fairly and properly contribute according to their ability. On page 13 there is a suggestion that perhaps a local income-tax might help us. The Commissioners state—;
  "The Elizabethan poor rate was perhaps originally intended to be something like a local income-tax, and the practice of rating on means and substance,' which continued in some parts of Scotland down to our time, was very similar."
  But they go on to say—;
  "It is, however, clear on reflection that a local income tax—;i.e., an income tax imposed and levied by local authorities within their own district—;tends more and more to be incompatible with modern social and political arrangements."
  Therefore we are face to face with this, that a local income-tax will not work. The Report states that a tax on the incomes of the inhabitants would be more burdensome and less productive than the present rates, and that instances of the chaos that would ensue might be indefinitely multiplied. It is clear, therefore, that the first suggestion will not help us in the least and that it can be dismissed.
  It is said that one method of attaining results similar to those desired by the advocates of a local income-tax is the imposition of a special local rate on inhabited houses. But we find that there are very serious objections to this suggestion as well. A rate on dwelling houses would fall rather unfairly on a householder with a family for which ample accommodation is required, as compared with unmarried persons in receipt of a similar income. Therefore we have to dismiss the suggestion as to an inhabited house rate. Those are the only two suggestions that I can find in the Final
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  Report of the Royal Commission on Local Taxation. On page 14 of the Report we find a definite proposal to the effect that State assistance in some form is necessary. The Report states—;
  "We are driven to the conclusion that the grievances which we have set forth cannot be remedied without either a direct contribution from the Exchequer or the extension and development of the system of assigned revenues which has been in existence since 1889."
  That is the conclusion at which the Royal Commission arrived.
  I now come to the second matter touched upon by the noble Earl—;the question of compounding. Lord Denbigh's contention, as I understand it, is that if the persons whose rates are now compounded for paid them direct to the rating authority local administration would become less extravagant. We have been told that over and over again, and I suppose there is something in it. Last week a discussion took place in your Lordships' House with regard to the alleged extravagance of the Poplar Board of Guardians, and Lord Balfour of Burleigh criticised them severely for having, in their Poor Law Schools, constructed a staircase of teak and installed a roof beam which would not, he said, disgrace the finest cathedral in England. The noble Lord said he had also been informed by a correspondent that a further sum of £50,000 had been unnecessarily spent on the building. The absence of an efficient check on local expenditure is, according to Lord Balfour, largely due to what is called the vicious system of compounding.
  I remember what happened in the case of the compound householder in 1866 and 1867. The Representation of the People Act of 1867 was generally known in the country as "Disraeli's leap in the dark." They went to the country, and the result of the "leap in the dark" was that Mr. Gladstone came into power with as large a majority as we have at present. It was then discovered that there were 700,000 persons in this country who lived in houses under £10. Their rates were not allowed to be compounded for. They had to pay them direct, and the difficulties of the authorities were very great in consequence. In October, 1867, there were 25,000 persons summoned in Birmingham, and in May, 1868, there were 15,000 persons summoned in the same city, 5,000 distress warrants being

  1119
  issued. In London the difficulty was as great as in the country. In Bethnal Green and also in Mile End there were 15,000 summonses; in Hackney, 6,000; and in Lambeth 5,000. So great was the inconvenience that Viscount Goschen, who I believe was President of the Poor Law Board at that time, brought in a Bill in 1869 to restore compounding. Powers of compounding were then reintroduced, and have remained exercisable ever since.
  It is difficult to know what is best to be done. I would point out that a man who lives in a house rented at four pounds a year would, if the rates were increased one penny in the pound, only have to pay 4d. a year more. I do not think that would be any great hardship, and I doubt whether such an increase would constitute an effective inducement to a ratepayer to look more closely into local affairs. The remedy suggested by the noble Earl, that the compounding rate should be lowered, does not agree with the Report of the Royal Commission. Lord Balfour, who was very severe in his criticism of this vicious principle, states in this Report that it could not be abolished, and he goes on to recommend that the rate should be raised. The noble Earl and Lord Balfour certainly do not see eye to eye in the matter.
  The Royal Commission recommends a direct contribution from the Exchequer. I must remind the House that that was in 1901, and that things are very different now from what they were then. Without trespassing on any controversial ground, I may remind the House that the National expenditure, which in 1904 was £94,000,000, is now £145,000,000. So that it is less easy at the present to find the £3,000,000 which I believe would be necessary for this purpose. The income-tax stands at 1s. in the £, and it is somewhat difficult to raise these large sums suddenly, however necessary they may be. I may be asked, are the Liberal Party, now that they are in power, going to offer a non possumus? I am not able to make any definite statement in the name of my right hon. friend the President of the Local Government Board, but I can assure the noble Earl who preceded me that Lord Spencer's words will be fully and entirely acted up to. I can assure the House that there will be no peddling and tinkering with the matter, and that when it is taken in hand it will
  1120
  be dealt with in a comprehensive manner, and the Government will recognise the greatness of the task they have undertaken. I need only say, in conclusion, that the Government are pledged to consider this question of local taxation at an early date, and in their opinion that reform should begin with valuation.
  THE LORD ARCHBISHOP OF CANTERBURY: My Lords, I feel that the House owes a debt of gratitude to the noble Earl who introduced this subject to our notice to-night, and I confess to some trepidation in venturing to say even a few words upon a question which has may intricacies into which I do not propose to enter, because I am incompetent to deal with them; but I do desire to say a word or two upon one branch of the subject, quite limited in its scope, but of supreme importance to the general welfare of the poorest classes in our urban population.
  It has been implied in the speech of the noble Earl the President of the Board of Agriculture, that Lord Denbigh, in introducing the subject, was deprecating in a special way the extravagance of some local authorities with regard to expenditure which falls upon the rates. I did not quite understand the noble Earl to press that point; but, if it is pressed, I should not be prepared to follow in that direction. I believe there have been instances in which the expenditure of the local authorities, both urban and rural, has been somewhat reckless, but I put that as nothing compared with the advantage that very often has accrued from expenditure which has been denounced at the time as extravagant, but in the long run has proved to be the truest and highest possible economy, because of the improvement it has brought about in the lives of those on whose behalf the expenditure was incurred. Such things have taken place constantly in London. For example, the provision of open spaces, the adoption of the Libraries Act, and the provision of baths and washhouses are extremely expensive undertakings, but the expenditure will ultimately prove to have been of the wisest and best possible kind. Therefore, I do not follow any one who bases all his objections on the ground of possible extravagance on the part of local authorities.

  1121
  The single point upon which I desire to dwell for a moment is the educative advantage which comes from the tenant paying his rates direct instead of under the system of compounding. It was touched upon by the noble Earl, Lord Denbigh, but he did not dwell upon it in any detail. There are in all our great cities, and, above all, in London, landlords and land lords. A great many landlords are striving to the best of their power to enable their tenants to rise to the highest level of citizenship of which they are capable. One of the largest landowners in London is the body known as the Ecclesiastical Commissioners. The Ecclesiastical Commissioners have for many years administered the greater part of their urban properties under the guidance and management of a lady who is known all the world over for her efforts in this direction—;Miss Octavia Hill. Miss Octavia Hill is most keen and eager on this subject of compounding, and for this reason. Those who are striving to arouse in the people intelligence in public affairs, and a sense of responsibility in regard to local expenditure, are met on every side with the difficulty which arises from the law which renders it at all events possible, and in ordinary circumstances usual, that the tenant knows nothing whatever about the rates which he has to pay, or the way in which they are ultimately expended.
  In London at this moment there are twenty-nine boroughs, and I think I am right in saying that twelve of them make it absolutely compulsory on the owner of property that he shall, whether he wishes to or not, allow his tenants to compound for the payment of the rates. The tenant naturally takes little or no interest in the way in which the rates are expended, because it makes no difference to him whether the rates are high or low; at any rate, he does not find it out if it does. There are many parts of England in which this power of compounding is rarely used, and I think it will be found, if statistics are forthcoming, that in those districts where the occupier pays his rates directly there is infinitely greater interest taken in public affairs than there is in regions where compounding is practised on a large scale.
  I had to look the other day into a question connected with the borough of
  1122
  Burnley. In that borough a few years, ago there was practically little or no compounding, and I believe I am right in saying that in the municipal elections something like 93 or 94 per cent. of the possible voters at the local elections went to the poll. Contrast that with some of our London boroughs. I lived for some years in the borough of Southwark. In that borough at the present moment about 35 per cent. of the electors go to the poll on the occasion of the election of the borough council, and some 50 per cent. on the occasion of the county council election. But general interest in these elections is absolutely lacking, and I believe that to be attributable in no small degree to the fact that by far the larger proportion of the people who occupy tenements and houses in these regions pay the rates only through what they regard as an additional impost by the landlord.
  I admit that, while the present system of quarterly payments of rates is adhered to, there are practical difficulties in the way of collecting the rates directly from the poorest occupiers. It is not to be expected that a man or woman who is struggling with poverty will be able to keep untouched the growing pile of pence or shillings reserved for rates so as to be able to have the sum ready when the quarter ends. But in the poorest districts rents are collected weekly or fortnightly, and there ought to be no insuperable difficulty in collecting the rates in the same way. We are told that the expense of such collection would be prohibitive. I do not believe it. It is possible at this moment to get rents collected in the poorest districts for an expenditure on commission of 5 per cent, and these rents are probably collected in large measure from scattered houses in different parts of a neighbourhood. The authorities give a commission of from 15 to 30 per cent. for the collection of the rates when the person collecting them happens to be the landlord. You would have that money in hand in considering the extra expense involved in a fortnightly collection of rates direct from the tenant, and such collection becomes, of course, both easier and cheaper when you can collect from house to house or room to room instead of from scattered tenants.
  Those who are accustomed to the administration of large property, where

  1123
  there is a philanthropic element in the matter, and who are forced by the necessities of the case to adopt the compounding system, endeavour to educate the people by collecting separately the money required as rent and the money required in payment of rates. They have not found an insuperable difficulty in doing so, and experts have told me that there would probably be a large saving to local authorities if this were carried out on an extensive scale. I know that evidence to the contrary was given by official witnesses before the Royal Commission, and I do not wish to undervalue their testimony. But, after all, they were looking at it from one side only, and in any case it is almost inexcusable that in twelve metropolitan boroughs compounding should be made compulsory. In sixteen it is a voluntary arrangement, and every encouragement is given to its adoption. Yet it must always be remembered that the system gives full encouragement to landlords whose only desire is to get the utmost commercial value for their property. These landlords, when the rates go up 1d., add 2d. or 3d. to the rent, and there are districts in which it is positively said to be a gain rather than a loss to the landlord that the rates should go up. I would strongly urge that Clause 4 of the Act of 1869 which enables a local authority to make compounding compulsory, should be repealed, and that the system of voluntary compounding should be discouraged and reduced to a minimum. The slipshod, careless, shiftless tenant likes the plan, but it is in the highest degree discouraging to those landlords who are striving to improve the understanding capacity of those from whom they draw their rents and to increase their sense of civic responsibility.
  LORD ZOUCHE OF HARYNG-WORTH: My Lords, I rise with great diffidence to address a few words to the House on this important subject, especially after the extremely able speakers who have preceded me. There are, however, one or two points that I should like to bring forward, and I can claim some knowledge of the subject as I served on the Joint Committee on Municipal Trading. The question of municipal trading is not precisely the same as the one we are discussing to-day, but it is in some measure germane to it. Abundant evidence was given before the
  1124
  Joint Committee to which I have referred of the extravagance, and, I am afraid, the somewhat reckless extravagance, of various local bodies. Sometimes they were county councils, at other times they were borough and other councils, but the result in each case was to handicap very seriously local industries.
  The noble Earl who initiated this discussion referred to the question whether the accumulated wealth of the country contributes its fair share to local charges, and he seemed to hint at the rating of personal property. The noble Earl shakes his head. I evidently misunderstood him. This question has often been before the public, and I protest with all the strength of which I am capable against an idea of enlarging the field of local taxation by the inclusion of personal property which would only result in increasing the rates. The theory is that at present one man, so to speak, supports a burden, and that if another supporter is; introduced that burden will be lessened. On the contrary, the inevitable result would be to double it. As to the question of compounding, I should like to add my humble testimony to what has been said about the abuse of this system. We know that compounding was started as a matter of convenience, and a rebate was allowed the landlord as an inducement for him to carry out this arrangement; but I must admit that compounding, when it is associated with large rebates, does not seem to me to be a businesslike arrangement.
  I have in my hand a table showing the amounts allowed by metropolitan borough councils to owners of property in respect of compounding. In Poplar the allowances for collection were in 1904 no less a sum that £30,195, and for the year 1906–7 the amount is estimated at £37,000, which I am informed is equivalent to a rate of 1s. in the pound on the whole of the rateable value of the borough. So that, if you balance one thing against the other, I do not think there is very much gained by allowing these large rebates as an inducement or bribe to owners of property to collect the rates. I do not think it can be pointed out too strongly that as a result of this system the compounding householders never see the rate collector, and most of

  1125
  them do not know how they are assessed. Yet they have votes at municipal elections, and their votes are often sufficient to swamp those of the actual ratepayers directly interested in checking extravagant expenditure.
  The people whose rates are included in their rents are as a rule more open to agitation than those who pay rates direct, and can often be induced to vote for municipal councillors who represent that they have done much for the community without asking these voters for a penny. If the matter is thought over, it will be seen that many of these councillors are in an almost impregnable position. Theoretically they are subject to the votes of the ratepayers, but it is exceedingly difficult to turn them out. Sometimes this has a rather extraordinary result. One of the witnesses before the Joint Committee to which I have referred was the town clerk of a large and important city which shall be nameless. He was detailing the various ways in which they managed their business, and he admitted the enormous extent of the local taxation. At the conclusion of his evidence he added, with as near an approach to a wink as the august surroundings would permit, that the corporation did pretty much as he told them; so that the result of the system is that the expenditure of a whole city may be in the hands of one individual.
  It is said that these people pay rates in their rent, but that is not always true, because the rent very often does not depend entirely on the rates. There are places, in which there is not a large demand for houses, where the landlord cannot recoup himself by raising rents. But in some places and in London the landlord is able to increase the rent, and I think the point brought forward by the most rev. Primate is an important one, that great hardship is being inflicted on poor people by their being charged rents higher than are necessary to cover the rates. A man who never sees the rate collector has no possible interest in bringing his influence to bear in reducing the rates, and if he is of the working class he will possibly favour undue expenditure because he thinks it will bring him more labour and extra wages. It is difficult to know what ought to be done to remedy this
  1126
  state of affairs. The fairest remedy is that municipal votes should be confined to those who actually pay rates. Taxation and representation should go together. It may be a drastic remedy to disfranchise those who do not pay rates; but whatever remedy is found the subject is one that is receiving, and will continue to receive, increased attention out of doors.
  THE UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (Lord FITZMAURICE): My Lords, it is my good fortune in this House to represent a Department of which I think it may be said with certainty that it is the only Department which is in no manner connected, directly or indirectly, with the levying of rates. I therefore owe some apology to your Lordships for venturing, to intervene in this debate; but I have been connected for a great number of years with the administration of a large county, and even the absorbing interest of foreign affairs cannot blot out of the mind of any Member of either House of Parliament who has taken an active part in local affairs the interest which he must feel from that connection.
  My principal reason for rising to say a few words is to remove a misapprehension under which the noble Lord who has just spoken seemed to be in regard to what fell from my noble friend the President of the Board of Agriculture. The noble Lord seemed to think that my noble friend had in some way identified himself with a proposal for rating personalty.
  LORD ZOUCHE OF HARYNG-WORTH: I was referring to what was said by the noble Earl who initiated the discussion, and not to what fell from the noble Earl the President of the Board of Agriculture.
  THE EARL OF DENBIGH: I should like to say that I had no intention of arguing in favour of rating personalty. All I want is a further contribution from the personal property of the country towards helping taxation which falls to such a large extent on realty.
  LORD FITZMAURICE: I am glad then to think that neither the noble Earl opposite nor my noble friend the President of the Board of Agriculture

  1127
  identified himself with that proposal. Indeed, after the interesting investigations and reports of the Royal Commission it is now almost impossible to conclude that the rating of personalty in the real sense of the expression comes within the region of possibility. Sir George Murray and Sir Edward Hamilton entirely bear out in their Report what the noble Earl who introduced this subject said so well. But one of the great misfortunes of this question is that it has become so involved in a mass of details, so obscured by one Report after another, so taken up in Acts of Parliament which partly repeal and partly amend previous legislation, that the question has become to many minds almost abhorrent, although everybody acknowledges its immense importance. We must all acknowledge its great importance. Local expenditure has, as the noble Earl pointed out, gone up enormously, and it appears likely to continue to go up by leaps and bounds. Therefore, to introduce, or to endeavour to introduce, some order and method into the great mass of detail in which the subject is involved is a matter of increasing and urgent necessity.
  I am not going to attack the late Government for not having taken up the Report, of the Commission, or rather those great Reports, and dealt with the subject of local taxation reform. I am quite willing to believe that had it not been for the important questions of foreign and colonial policy which occupied such a large part of their time and attention, they would, in all probability, have attempted to deal with the Report of the Commission which they themselves appointed. I regret that they only touched one small corner of the subject, the rating of agricultural land for certain purposes and the rating of tithe, apart from the other recommendations of the Commission. The late Government probably thought, as I imagine any Government would—;and I put this in rather as a caveat on the part of this Government—;that this question was an enormous one, which might very well occupy the whole of a Parliamentary session. If I desired to find a proof, if one were deemed necessary, of what I have just said, I would remind your Lordships that when the Local Government Act of 1888,
  1128
  which so largely altered the whole system of local government in this country, was passed, that measure did not stand by itself. It was very largely affected by the proposals in the Budget of that year, and when the great changes and reforms that were then made are spoken of they are sometimes identified with the name of the noble Viscount who was then Chancellor of the Exchequer, and sometimes with the name of Mr. Ritchie, who introduced the Bill. The reason is this, that although Mr. Ritchie was the parent of the Bill, the measure would have been quite impossible if the support and goodwill of the Chancellor of the Exchequer had not been obtained. That is our position to-day.
  This is a question which must obviously be largely settled elsewhere, because it is essentially a financial question. The Chancellor of the Exchequer of the day is master of the situation, and I may remind your Lordships that it has been pointed out in the Budget statement of the year that there are questions connected with the collection and transfer of rates under the system identified with the name of the noble Viscount which are receiving the attention of the Chancellor of the Exchequer. Any financial arrangement associated with the name of the noble Viscount must necessarily stand on a very strong foundation, because he is one of our greatest living authorities on finance. One of the most difficult duties of the Government will be to consider the strong arguments which induced the noble Viscount and Mr Ritchie to adopt that plan, and also, on the other hand, the very able arguments adduced against it by such high authorities as those who signed both the Majority and the Minority Reports of the Commission. But that something must be done we all agree.
  We have heard much in this debate about the inequality of the incidence of local taxation on real and personal property; but there is another inequality which grows year by year and which will have to be considered—;the inequality in the distribution of some of the grants from the Imperial Exchequer in aid of local taxation The distribution of the probate duty not only constitutes a very great injustice in the case of some counties, but is an admirable illustration of what the noble Earl who introduced this

  1129
  subject so ably directed our attention to—;the difficulty and confusion of the whole question. In 1888 it was decided to make this distribution between the counties and county boroughs, and the counties that could show the larger proportion of main roads got the larger grants. It was not, perhaps, at that moment such an unfair thing. The distribution was called a temporary distribution, but it has gone on ever since, and now the retrograde counties have come into line in the matter of main roads, but still receive only their share on the basis of 1888. Thus the inequality has got worse and worse, and His Majesty's Government are perforce obliged to consider that question and cannot treat it as one that can be deferred indefinitely.
  I believe myself that it will be most difficult to abolish compounding to any large extent, because of the very great convenience such an arrangement is to the local authority. I remember the great agitation that arose at the time when the compounding householder was abolished under Mr. Disraeli's Bill. I stood at the time as a candidate for Parliament, and although there were thorny and exciting questions on foot, like the disestablishment of the Irish Church and the abolition of University tests, the only question I was asked was whether I would support the restoration of the compound householder. If we attempted again to abolish compounding we should meet with very considerable opposition. I hope the noble Earl will be satisfied with the expression of opinion to which his notice has given rise, and will not be disappointed when I say that on the whole this is a question the decision of which must lie elsewhere, and that probably the question of valuation and assessment will be found to lie at the root of the matter, and. as was intimated by my right hon. friend the President of the Local Government Board, will have to be dealt with first.
  VISCOUNT RIDLEY: My Lords, I do not rise for the purpose of pressing His Majesty's Government on a matter on which it is obvious they cannot have had time to make up their minds. Nor do I wish to follow noble Lords who are thoroughly conversant with local finance as to schemes for altering the present unfairness of the incidence of rating. It
  1130
  is from the point of view of the heavy burden of the rates on the industrial community that I wish to say a few words. The burden of the rates falls very largely on industry, and the cases of removal, of which Messrs. Yarrow's is an example, are common. The evil effects of this burden falling upon industry is experienced, not only by the employer and the employee, who loses his occupation, but with great and increasing severity by those who remain in the district.
  If the present position is compared with that of a year ago it will be found that the percentage of empty houses in the London County Council area has risen from under 2 to 4 per cent. This is obviously a serious matter, for as the proportion of empty houses increases the rates fall with greater severity on those remaining. It is not only in the case of one class of industry or in one district that the effect of the rates is to penalise British industries. Although railway companies are considered in many quarters as having no claim to consideration, they have a very considerable grievance in this matter. Within the last ten years the amount of money paid by the great railway companies in England has risen by something like 60 per cent. Whereas ten years ago they paid £173 a mile in rates, they now pay £283 a mile. Railways in other countries pay much less. It may interest your Lordships to know that in the United States the average amount paid in rates is £61 per mile, against £283 here. I do not for one moment suggest that the circumstances are precisely similar, but the fact is one which calls for careful investigation.
  I heard of the case the other day of an agricultural parish in Northamptonshire, the population of which is a little over 4,000, and the acreage 1,671 acres. This parish carried out a drainage scheme which raised the local rates from 9d. to 3s. 1d. This burden fell mainly on the Midland Railway Company, who were assessed at £7,478 a year and paid 81 per cent. of the total rates. The railway company had to bear the burden of this drainage scheme although they gained practically no benefit from it. Railway companies all the while have no possibility of being represented on the spending authorities. It is, therefore, a clear case

  1131
  of taxation without representation. It must be borne in mind that under the present system the sufferers are not merely the railway directors and shareholders. The whole of the travelling and buying public are affected, inasmuch as they have to pay higher fares and rates of carriage on account of the heavy burden placed on the companies. I was glad to hear that His Majesty's Government are alive to the importance of this question, and I hope that when they come to deal with it they will do so in a large and comprehensive spirit, remembering the very important effect which rates have on the prosperity of the manufacturing industries of the country.
  THE MARQUESS OF LANSDOWNE: My Lords, your Lordships might suppose that we who sit on this Bench are wanting in respect to the House, or in appreciation of the importance of the subject we have been discussing, if we allowed this debate to close without expressing, in a few words, the interest we take in it. It has been, as our debates not infrequently are, of a somewhat inconclusive character, but I do not think that my noble friend who introduced the subject need regret having done so, for he has elicited a very instructive and useful discussion.
  My noble friend would probably not be unwilling to leave- the matter where it was left by the Under-Secretary of State for Foreign Affairs in the speech to which we have just listened. It seems to me quite clear that we must accept as entirely reasonable the plea of His Majesty's Government for more time in which to examine this great question. It is one which has been before the public a long time, and which others have hesitated to deal with, and we can scarcely take them to task because they have not, in the first half year of their term of office, addressed themselves to the solution of the problem. It seems to me also reasonable to say that it cannot be properly dealt with unless the question of valuation is thoroughly examined, and, in addition to that, I think it may fairly be argued—;indeed, it is obvious—;that no settlement of this matter can be proposed except in connection with the financial arrangements of the year, which it must necessarily affect.
  1132
  I trust, however, that His Majesty's Government will bear in mind that, although there are wide differences of opinion, although Lord Balfour's Commission produced, if I may borrow a phrase from Mr. Gladstone, not a Report, but a litter of Reports, throughout all those Reports there runs the admission that something should be done to give effect to the views which my noble friend Lord Denbigh has expressed this evening. There may be differences as to the proper mode of giving effect to these proposals. There are two distinct schools of thought upon them. There is the school of thought which we connect with the name of the noble Viscount, Lord Goschen, who I am sorry to see is not in his place at this moment, and who, in the year 1888, dealt courageously with this question. I have no doubt he would be ready to defend the views which he then held. But, on the other hand, these Reports contain weighty arguments which go to show that if relief is to be given to the ratepayers, it can be given in some better form than by the assignation of particular kinds of revenue in aid of local expenditure.
  I have neither the knowledge nor the courage to decide between these two views. But what I do wish to insist upon is that both those who hold the one set of opinions, and those who hold the other, maintain, as indeed did Lord Spencer in the passages quoted by my noble friend, that this matter is one which requires the earnest attention of Parliament. By all means, if it is to be dealt with, let it be dealt with in the spirit indicated by the Under-Secretary of State for Foreign Affairs, who evidently feels, as indeed the Royal Commission felt, and particularly two Members of that Commission—;Sir George Murray and Sir Edward Hamilton—;that if there is to be a rearrangement of these imposts the matter should be treated, not in a hap-hazard fashion, but on a thoroughly scientific basis.
  The gravity of the problem has undoubtedly been increased by the rapid augmentation of local expenditure. To my mind, that is one of the most formidable and alarming circumstances which we have to consider in the age in which we are now living. It is not so very long since the local expenditure of this

  1133
  country stood at about one-half of its Imperial expenditure. The local expenditure now exceeds the Imperial expenditure of the country; and if we consider side by side the growth of Imperial as well as local indebtedness, I think we may indeed feel that the financial position is one which cannot be too seriously or carefully considered.
  I will offer one or two observations only with regard to the question which occupied a conspicuous place in most of the speeches to which we have listened—;the question of compounding. I have never yet met any one who did not believe that in principle compounding was an undesirable system, undesirable because it inevitably tends to diminish a sense of civic responsibility. There can be no doubt about that, and it is admitted, in so many words, in the Majority Report of the Commission. On the other hand, there are unquestionably very great difficulties in the way of its entire abolition. The Commission dwell upon the practical difficulties of collecting and enforcing payment from the large number of the poorest classes in our great towns who, as they point out, are in the habit of moving freely from one part of the country or one part of the neighbourhood to another, and who are therefore not always very easy to follow up. But I am bound to say that it does seem to me, particularly after listening to the evidence laid before us by the most reverend Primate, that the question of compounding should be very seriously examined by his Majesty's Government.
  The Commission actually recommended that the compounding limit should be raised. I cannot help hoping that it may be found possible, on further examination, to lower that limit. I also think that the suggestion made by my noble friend, that in all cases where rent and rates are demanded at one and the same time, the rent and the rates should be separately shown, is one deserving of consideration. The noble Earl the President of the Board of Agriculture brushed that suggestion rather hastily on one side. He took the case of a man whose premises were valued at £4 a year, and said that if that man had to pay an additional 1d. in the £ the additional claim would amount only to 4d., which, he thought, was not likely to constitute an effective inducement to
  1134
  the ratepayer to look more closely into local affairs.
  But, my Lords, supposing that the rates are already 7s. or 8s. in the £, that they have been rising penny by penny for years past, and that the ratepayer is given a full opportunity of seeing how the burden of the rates is growing and growing, until it is likely to swamp him and the neighbourhood in which he lives, I cannot help thinking that he will then acquire more of that sense of responsibility in which he is perhaps deficient at present, and that he will realise that, desirable as may be many of the objects for which the ratepayers' money is spent, those desires cannot be indulged consistently with the solvency of the district in which he lives. We heard with satisfaction from the Under-Secretary of State for Foreign Affairs and from the President of the Board of Agriculture that His Majesty's Government are alive to the importance of this question, and propose to deal with it as soon as they conveniently can. All that we can do is very earnestly indeed to commend it to their attention, and to assure them that, so far as we are able, we shall regard it, not as one for Party dispute and recrimination, but rather as one concerning very closely the welfare of the people of this country, and one, therefore, regarding which both Parties may well co-operate to the best of their ability.
  THE LORD PRIVY SEAL (The Marquess of RIPON): My Lords, I almost feel that I ought to make an apology to your Lordships for occupying your time even for a few moments, because, after the able speeches of my noble friends behind me, there is really nothing left for me to say on behalf of His Majesty's Government. But I am anxious to thank my noble friend opposite for the very fair spirit in which he has just addressed us, and particularly for his promise of assistance in the great and difficult work which lies before any Government which attempts to deal with this question.
  Your Lordships know how long the question of local rating has been before the country. You know that many Governments have sought to deal with it and have not been successful in their undertaking, and you are well aware of the great complexity and difficulty with

  1135
  which the question is surrounded. This is in itself a sufficient reason to explain why past Governments have not desired to undertake a question of such great difficulty. But the time has undoubtedly come when this question ought to be fully considered and dealt with by the Government of the day. The late Government, although the Report of the Royal Commission was in their hands in 1901, did not feel themselves able to deal with the question in a large way. They preferred to deal with a single point of it, and they did so in a way which has always seemed to those with whom I have the honour to act as being a very imperfect, and, indeed, a very undesirable mode of dealing with the question. But the Agricultural Rates Act of last year was passed, I think, with the general understanding that it was for a limited period, four or five years, and that whatever Government was in power would during that interval attempt to come to some settlement of this question.
  Noble Lords opposite may be well satisfied that His Majesty's present Government are determined to take the matter up. I was particularly glad to hear from my noble friend that he, with us, recognised that the question of valuation was a primary one upon which the matters rest. It is to that question, as we believe, the Government ought first to direct their attention, but, of course, that will be only to lay the foundation upon which the further revision of the whole subject must rest. You may be sure that the whole question is under the consideration of the Government and will be dealt with by them. You have the statement of the Chancellor of the Exchequer, in moving his Budget this year, that he was convinced that the existing system of the assignment of heads of taxation to local bodies had been shown to be unsound, and he desired to get rid of it at as early a period as possible. My noble friend pointed out that that system was established by the noble Viscount Lord Goschen. No doubt at the time it was established there were great hopes that it would be successful in its working. The noble Viscount is not in his place at the present moment. I do not know whether he has changed his opinion or not, but it is clear from the Report of the Commission that the system has broken
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  down, and that the time has come when some other and more satisfactory system must be adopted for the purpose of aiding the local rates.
  With respect to the question of compounding, I am one of those who believe that it will be found extremely difficult, if not impracticable, to abolish that system. I well recollect those days when the compound householder first rose into prominence. Your Lordships will remember that at the time of the passing of Mr. Disraeli's Reform Bill the compound householder was abolished. Two years afterwards he was resuscitated by my noble friend Viscount Goschen, because his abolition had produced such a state of confusion. But when we hear such a speech as that which fell from the most reverend Primate to-night, when we hear how earnestly he argues against the continuance of this system and the great authorities to which he referred as being opposed to it, there is no doubt that it will be the duty of His Majesty's Government carefully to consider that branch of the subject.
  I cannot say myself, if I speak my frank opinion, that I have much hope that we shall be able to arrive at the conclusion that it can be abolished. My noble friend opposite argued in favour of the figure being reduced at which compounding commences, but the Commissioners say let the figure be raised. Therefore, it is by no means clear that a reduction of the figure would be the right mode of dealing with the subject. It has been shown by past experience to be a question of infinite difficulty, and I am quite confident that my right hon. friend the President of the Local Government Board will give to that branch, as well as to every other branch of the subject, his most careful consideration.

  MERCHANT SEAMEN'S ALLOTMENTS.
  LORD ELLENBOROUGH: My Lords, I gave my reasons for wishing that this Return should be granted when I addressed your Lordships on April 5th last. After consultation with the noble Earl who represents the Board of Trade a form of Return has been drawn up which will give all the information I ask for. I therefore beg to move for a Return in that form.
  Moved, That there be laid before the House a Return showing the number of seamen (exclusive of officers) who entered into foreign-going agreements

  Name of port.

  Number of Seamen (exclusive of Officers) who entered into foreign-going Agreements.

  Number of Seamen (exclusive of Officers) who made allotments.

  Percentage of Seamen who made allotments.

  To relatives or other persons.

  To a Bank.

  Total

  —;(Lord Ellenborough.)
  THE EARL OF GRANARD): His Majesty's Government, as I have informed the noble Lord privately, will be very pleased to grant the Return for which he moves.
  On Question, Motion agreed to, and ordered accordingly.
  House adjourned at Seven o'clock, to Thursday next, half-past Ten o'clock.