§ [SECOND READING.]
§ Order of the Day for the Second Reading read.
LORD HAMILTON OF DALZELL
My Lords, the effect of this Bill will be that during the year commencing on Whitsunday, 1909, a valuation will have to be made of the capital value of all land in Scotland, and that this will have to be entered in the Valuation Roll in a special column which will be provided for that purpose. A similar entry will require to be made every succeeding year. 24 Of course, if the land has not changed in value nothing further will require to be done, but if there has been any alteration, the entry will have to be altered accordingly. That is all that this Bill provides. It is simply a valuation Bill. Indeed, the fourth subsection of the first section of the Bill provides that until Parliament otherwise determines no person shall be liable to be rated or taxed in respect of the entry prescribed by this Act. I do not mean to say that it is not intended that this valuation shall eventually be made the basis upon which rates shall be levied. That is, undoubtedly, the intention, but special legislation will be necessary for that purpose. There is nothing of that sort in the present Bill.
The Bill is founded on the recommendation of the Select Committee of the other House of Parliament to which the Scottish Land Values (Taxation) Bill of last year was remitted. That Committee recommended that that Bill should not be further proceeded with; and that a new Bill should be introduced making provision for a valuation being made of all land in the burghs and counties of Scotland, apart from the buildings and improvements upon it, and that until the amount of that valuation is known and considered no assessment should be determined upon. That seems a very prudent course to follow, and that is the course which is followed by this Bill.
It is interesting to trace the Parliamentary history of the various Bills dealing with this matter. A Bill on this subject has been introduced in the other House of Parliament every year for the last six years. All those Bills differed from this one in that they combined rating with valuation. In 1902 the Urban 25 Site Value Rating Bill was introduced and was rejected on Second Reading by seventy-one votes. In 1903 the Land Values Assessment and Rating Bill was introduced, and was rejected on Second Reading by eighteen votes. In 1904 a Bill with a similar name passed its Second Reading by sixty-seven votes, and in 1905 another similar Bill passed Second Reading by ninety votes, so that it would seem that even during the time in which the Party of noble Lords opposite had a majority in the House of Commons there was a steady trend of Parliamentary opinion in favour of this principle. In 1906 the Land Values Taxation (Scotland) Bill passed its Second Reading by a majority of 258 votes. That is the Bill which was referred to a Select Committee, to the Report of which I have already alluded. In addition to the Report of that Select Committee a very interesting and valuable contribution has been made to this subject in the Minority Report of the Royal Commission on Local Taxation, which was signed by Lord Balfour of Burleigh, the late Lord Kinross, Sir George Murray, Sir Edward Hamilton, and Mr. Stewart. I claim that that Report contains recommendations which cover almost the whole of the ground covered by this Bill.
LORD HAMILTON OF DALZELL
I have several passages which I propose to quote in a moment. I do not think your Lordships will be surprised that I, or anyone else who has to introduce a Scottish Bill in this House, should wish to claim Lord Balfour of Burleigh as a supporter, and I shall quote a few passages from that Report which seem to me to show that at that time the noble Lord was not altogether unfavourable to this principle. The Scottish edition of the Report of that Committee contains a similar Minority Report to the one in the English and Welsh sections, and is signed by the same gentlemen. The final paragraph runs as follows—For the reasons explained in the former Report, we conclude that a separate valuation of sites, apart from the structure upon them, should be made, and a rate proportioned to the site value alone should be levied for urban improvement purposes in the larger burghs. 26 It should be divided equally between occupiers and owners. All existing contracts should be absolutely respected, but in the case of future contracts the owner should be entitled to deduct from any rent, feu duty, or ground annual payable to a superior, the amount of the rate in the £ upon the value which attaches to the site at the date when the contract is made; a like right of deduction being given to any intermediate parties against their superior. The rate should apply to unoccupied property and uncovered land under the conditions laid down for England.It will be observed that in that passage it is distinctly laid down that in the larger burghs a separate valuation of sites apart from the structures upon them should be made, and to that extent I claim that we have the support of the noble Lord. The paragraph goes on to suggest certain rates which should be levied in respect of that valuation, and it also suggests the purpose to which those rates should be applied. As I have already said, this Bill does not provide for the striking of any rate whatever, but I have no doubt that when Parliament comes to consider that question the recommendations of the noble Lord and his colleagues will receive the weighty consideration to which they are entitled. As regards the recommendation that all existing contracts should be respected, I would point out that the Prime Minister stated on 20th June that this would be absolutely done, that the Lord-Advocate made a similar statement as long ago as last year on the Second Reading of the Bill of that year, and that the Chancellor of the Exchequer, in the course of a speech in another place on the Report Stage of this Bill, made a similar declaration only a few days ago. A letter appeared in The Times of last Saturday week from Lord Balfour of Burleigh in which he protests against his being quoted as being in favour of the principles of this Bill on account of his having signed that Minority Report. I do not claim that the Minority Report supports the extension of this system of valuation to rural districts—that is one of the points which the noble Lord makes in his letter—but this is what it says about urban districts. On page 169 of the English Report of 1901 this passage occurs—On the whole we are disposed to think that a valuation of sites, sufficiently accurate for the purpose and not inferior to the present 27 valuation of hereditaments could be made without undue labour and expense.That is a very valuable assertion with regard to the possibility of making this valuation, and I may add that it exactly indicates the opinion of the authors of this Bill, and that, further, they are of opinion that it would be just as easy, and no more expensive, to make a similar valuation in rural districts. But, of course, until the experiment has been tried all these matters must be very largely matters of opinion, and it is with the object of testing how far this system is practical and workable that this Bill is introduced.
As to the cost of this valuation, the most divergent views have been expressed. One of the opponents of the Bill in another place gave it as his opinion that it would cost anything from £2,000,000 to £4,500,000 to do it. Our opinion is that that figure is enormously exaggerated, and as an indication of what we think it is likely to cost I may say that the official surveyors of Edinburgh and Glasgow have given it as their opinion that a valuation on this system of the land in those two cities might be made for the sum of £10,000, and I need hardly say that on that basis the cost of the valuation throughout the whole of Scotland would not amount to more than a very small fraction of the £2,000,000 to which I have alluded. Then there is another point. In many parts of Scotland these valuations are made by the Inland Revenue surveyors of taxes free of charge to the local authority, and there does not seem any reason why these same surveyors of taxes should not make this new valuation. In that case there would equally be no cost to the local authority, and in any case the expense would not fall altogether upon the local authority. In that connection I would like to call Your Lordships' attention to a passage in the speech which was made by the Lord Advocate in reply to a deputation representing the Association of County Councils of Scotland. This was on 20th July, and the Lord Advocate then said—I have therefore thought it my duty to represent this matter to the Chancellor of the Exchequer, and I have now his authority for announcing to you that if it should be found—as I think it will be found—that such an addition shall be made to the duties of those assessors as really to be in a reasonable 28 sense a fair addition to their duties, worthy of estimation and worthy of consideration by the Exchequer, the claims by the local authority, on which the initial charge for the first year will thus heavily fall, will receive fair and favourable consideration from the Exchequer, with a view to granting what, in the opinion of the Treasury, is a reasonable subsidy.That, I think, disposes of the idea that any unfair and excessive expenditure will be forced upon the local authorities, and I may add that it does not seem likely that, as a general rule, any considerable expense will be involved on individuals. With regard to that, I may say that my friend Mr. Munro-Ferguson, who is generally recognised as an authority on matters relating to Scottish land, and whose authority I think will appeal to the House, has given it as his opinion that on any estate where a factor is employed no expense will be incurred at all.
LORD HAMILTON OF DALZELL
I have a factor on my own estate. I think what Mr. Munro-Ferguson meant was that in every estate office there would be facilities for making out these-returns without expense, or, at any rate, with but trifling cost. The object of this Bill is to create a new basis for rating. Under the existing system the rates are imposed on the annual letting value of a subject; that is to say, the value of the land and the value of the improvements are taken together and their annual letting value entered in a valuation roll. The objection to that system would seem to be that so far as it imposes a rate of importance, to that extent it is a discouragement to landlords from improving their property. I think that very striking examples of this may sometimes be found in country districts, because it is not difficult to imagine the case of a piece of land which is lying waste and which by drainage and other reclamation works might be made into an agricultural subject, but where the fact that perhaps a very heavy rate will be levied on the improved value in many cases makes such an 29 undertaking hardly worth carrying out. I know there are such cases. A system of rating on the unimproved value of the land, on the other hand, would seem to encourage improvement and not to discourage it as the present system does. There is one other advantage of this system—namely, that it would discourage what is known as the holding up of land in towns for speculative purposes—a process which is rather encouraged than the reverse by the present system of rating.
There is a further point in the Bill with which I must deal, and that is the change which it is proposed to make from annual value to capital value as the basis of valuation. That change by itself is not of very great importance. I will explain what I mean in this way, that a 1s. rate taken on the annual value of property would be broadly the same as a halfpenny rate taken on capital value. The same amount would have to be paid in each case. Of course, where the difference would come in would be if a hypothetical capital value is placed upon subjects which make little or no annual return. That is an important part of this question; and the question of how far it is justifiable to do this is one which will have to be most carefully considered when the imposition of rates on this valuation comes to be discussed in Parliament. I will confess that my own idea of what is fair and just does not carry me beyond a certain point in this matter. Of course, in this matter I do not occupy the fortunate position of the noble Earl who addressed us recently from the cross benches on another matter affecting Scotland, and who was able to tell us that it was a matter which did not affect him personally. This is a matter which does affect me, and it is possible that my judgment may be warped by that fact. But, however that may be, the question will have to be most carefully considered, and I have not the slightest doubt that the scales will be fairly held between private interests and public necessity in this matter.
As far as the Bill goes, I do not think there is much in it for me to explain. The fifth subsection of Section 1 provides that the valuation Appeal Court shall in future consist of three Juges of the Court of 30 Session instead of two, as has hitherto been the case. That is a change which I believe has been contemplated for some time, and it has been thought convenient to introduce it into this Bill. The advantages of the new arrangement are, I think, obvious. They are those which invariably attach to having an odd instead of an even number of Judges to try a case. Section 4 contains the modifications in the existing Valuation Acts which are considered to be necessary for the purpose of this particular valuation, and Section 3 is the definition clause. That clause is an important part of the Bill. It is very fully set out, and, unless noble Lords raise particular points, which will be better considered, perhaps, in Committee if the Bill is allowed to get into Committee, I do not propose to enter further into that now.
In conclusion, I would like to again allude to the letter which was written by Lord Balfour of Burleigh to The Times. In that letter the noble Lord says it is not unfair to the authors of the Bill to presume that their object is to obtain information which may be turned to account for the furtherance of what he describes a few lines before as "predatoy schemes." In regard to that I will only say that I am convinced that if any schemes which can be fairly deseribed as of a predatory nature are introduced into Parliament it will not be done on the authority of His Majesty's present advisers, and I am confident that the information and data which will be made available if this Bill becomes law will be used, not for the purpose of making an attack upon any individual, or class, or interest, but for the purpose of making an honest and straightforward attempt to improve the system of valuation in Scotland, and it is on that ground that I ask your Lordships to give this Bill a Second Reading.
§ Moved, "That the Bill be now read 2a."—(Lord Hamilton of Dalzell.)
* LORD ROBERTSON,
who had given notice, on the Motion for the Second Reading, to move to resolve "That this House declines to proceed with a measure which would have no operative effect, except to cause fruitless expense and to 31 unsettle and prejudice important questions as to taxation and rating, which it makes no attempt to solve," said: My Lords, I congratulate the noble Lord upon the clear and pleasing way in which he has presented this difficult subject to the House, and I am sure we shall welcome on all occasions his intervention in debate. I must congratulate him also on the cheerful optimism of his view on the situation. He seems to think that it is a very reasonable proposal, first of all to alter the valuation roll, and, secondly, to add incidentally that it is proposed to go further and alter the law of rating.
Now I want to put a challenge to whoever speaks for the Government next on this one point. I can quite understand your asking us to accept this Bill as it stands; that is to say, as a Bill for altering the valuation roll. I quite understand your proposing a change in the law of rating so as to rate real property on the capital value divested of holdings. But I would ask your attention to this, that that last is a large proposal, that this is the 26th of August, and that it is contemplated to prorogue Parliament the day after to-morrow. The Committee stage to which Lord Hamilton of Dalzell so hopefully referred will occupy some time, and how that time is to be screwed into to-morrow and what will remain of Wednesday before the prorogation it is for His Majesty's Government to say. But I notice that a curious hesitation and alternation of view on the Bill has charactised the speeches of Ministers and their procedure from the very commencement. This Bill was introduced into the House of Commons under the ten-minutes rule, and it was read a second time on, I think, 12th July. This Bill, if it is regarded as a question of rating, makes a stupendous change. The Bill, if it touches rating, is a stupendous change not merely in the law of rating but in the law of property in Scotland, and I am surprised at the levity with which Ministers have passed from one aspect of this Bill to the other as if it was a mere matter of taste and choice on the part of anyone reading the Bill which view he takes. What actually does the Bill propose to do? It proposes to add—and this is all—one column to the existing valuation roll. Now the noble Lord spoke as if the existing 32 valuation roll was a sort of repertory of miscellaneous information. The valuation roll is a much more definite and a much more serious thing than that. It is a carefully-framed instrument for rating, and it proceeds upon a perfectly definite theory. The preamble of the Act points out as the theory upon which it proceeds that the real, actual rent or value of the land is to be the criterion of rating. That is the theory of the Act setting up the Valuation Roll.
Now the present proposal, as I have said, on its face, does nothing more than this very moderate proceeding. It sets up a new column which is to set forth the capital value of those same parcels of land, but the capital value of the land divested of all buildings and improvements. Now, my Lords, I observe upon that—strictly adhering to the merely formal view of the matter—that that new column kills all the other columns. It is totally inconsistent with them. The theory upon which it proceeds is the theory that you are not to tax or rate the actual value of the land as it exists, but that you are to conjure up the idea of the land with no buildings and no improvements upon it, and make that the basis of your valuation. I cannot help thinking, although the noble Lord went through it with appropriate gravity for an official, that the draftsman of this Bill is a wag, because he lets the cat out of the bag in in a very remarkable way in the 4th Subsection of Clause1—Until Parliament otherwise determines, no person shall be liable to be taxed or rated in respect of the entry prescribed by this Act.So that here your mighty change, which the heart of Scotland is set upon, is a change for putting in a new column which is not to be acted upon! I think that anything more silly than to make up a Valuation Roll and then to go to a great deal of expense, as we shall show, and then to say that there is no use to be made of it, is hard to imagine. It is about as inept a proceeding as the Legislature was ever invited to cooperate in. The primary answer to this Bill is this: Unless and until you make up your mind on the question of rating it is wasting time and money to make up a Roll, and it is really—literally and in the proper sense of the 33 term—a preposterous proposal. It is putting the cart before the horse. Unless you can make up your mind to this momentous change in the law of rating this is mere idle and superflous machinery.
I have said that the suggested change—I will not say the proposed change, because it is not proposed, but the suggested change—in the law of rating is a momentous change, and I want to say upon that subject, in the meantime, only this—that this Bill, so far as it relates to the law of rating, is an attempt to evade that momentous question and to commit Parliament by implication to its adoption by turning round next session and saying: "You never would have been so foolish as to make up this roll unless you had assumed the change now proposed." I say that that is not fair to Parliament, and that for Parliament in the expiring hours of this session to adopt that course would be to commit itself to momentous consequences which it would have to work out in subsequent sessions and of which it has not the remotest conception. In the view which I take of this Bill it is not necessary—nay, I would say it is not relevant to the present question—to consider the merits of the proposed change. It is enough to say that it is a change of capital importance, it is a change which would enormously alter the incidence of rating and gravely affect the value of property. If that be conceded to me, and I do not think that anyone can avoid conceding it, then my conclusion arises at once. Make up your mind upon the merits of that question before you rig up the machinery which is to carry it out.
I have endeavoured to condense what I was going to say, because I think that is a duty which a Member of this House owes to his fellow Members at this period of the session, but there are one or two observations which I should like to offer to those who may be beguiled by the innocent appearance of the Bill as being a mere matter of machinery and arrangement. I cannot see why, if the Government are anxious for information, they require an Act of Parliament to get it. They can move for any number of returns, 34 they can get experimentally all the information which would enable them and Parliament to judge of this proposal, and my objection is what I have stated and re-stated—that in passing this Act of Parliament you inevitably commit yourself to the theory which is shadowed forth in the Bill. It is said: "But this new column, at all events, is cognate information to what the valuer requires for all valuations." That I deny, and I will give noble Lords opposite, with their leave, my plain and frank view of this eighth column. Your Lordships know that some of the newspapers have lately taken boldly to the plan of interpolating advertisements into even the Parliamentary debates. I was struck last week in reading some of the very able speeches of the President of the Board of Agriculture on some of the questions about small holdings. I thought that for once there must be a flaw in the reasoning, for I found myself reading a copious laudation of a cure for baldness. Now, my Lords, that is exactly what is proposed to be done in this case. There are certain Radical patent remedies for which it is wanted to get a semblance of authority, and it is to be done in this way—that you are to put in the eighth column the nostrums of the Radical Party and accustom the people of this country to deal with them as if they were realities I object to that. I have a long acquaintance with the Valuation Roll, and have come to have, as I think many people in Scotland have, a sort of affection for it. It came of good respectable Whig parentage, and I should be sorry to see it, in its old age, turned into a sandwich-man for Mr. Henry George and sent out, while it is still able to work, to do the dirty work of Scotch Radicalism. No, my Lords, I must own that I think this new plan of foisting remedies which are not boldly and frankly offered to Parliament is one which should be sharply discouraged.
Now, the noble Lord, as cheerful in this as in other things, has said that there is a great deal of nonsense talked about the expense which would be incurred. Has he carefully considered this—that whereas in an ordinary case the present valuer, or assessor as he is called in Scotland, goes to a shopkeeper or a 35 farmer and asks him about matters of fact and forces him to give information about matters of fact which are feasible and accessible, in the case of this eighth column what the assessor has to do is to call upon the man to exercise his power of imagination. Take a matter-of-fact shopkeeper in Glasgow who is the owner of his shop; he is asked by the assessor: "What is the value of the site of your shop divested of the shop and buildings?" If the assessor were to go to that man during business hours, I think he would be apt to get the answer which the wounded American gave to the missionary on the field of battle: "Oh, stranger, this is no time for conundrums!" In like manner if the farmer were asked: "Imagine your farm divested of all improvements, all the steadings, and all the buildings," he would say that he knew nothing about it, and he would think the man was laughing at him. I mention that for this reason: that in default of the power of ingenuity and skill, you must call in people who are either skilled or profess to be skilled. I dare say that in many instances the kind of ingenuity you want is very much the same as is successful with "Limericks," but if you aspire to working out this conjuring trick you will have to go to the expense of getting somebody who will at all events give a written report or a sonorous name to his view, and I dare say he would not be much wiser than the man who answered first. But remember this also—the noble Lord's estimates are probably more reliable than mine—but I have seen in the public newspapers and elsewhere the assertion made that there are somewhere about a million-and-a-half of these separate entries which will have to be made. Observe, they are not taking from a book or from a list the figures which you want, but they are exercising those powers of imagination and conjecture which would so largely be called upon for this new enterprise. I do not approve of honest citizens being subject to fine for failure to give any such returns. And a curious intimation of timidity in the Bill is that they are given a very long time to make up their returns, which, I think, indicates that it is, as I have said, a somewhat difficult enterprise.
36 I hope I have not wearied the House, but I want to ask, with some urgency, another question of His Majesty's Government. This is a Scottish Bill. Why Scottish? Just let me remind your Lordships of the proposal which is adumbrated. It is that you should abstract and eliminate from rating all buildings, and, therefore, the bare ground is what is to be the sole contributory to the rates. In plain English, that means an enormous reduction of the assessable value and accordingly an enormous heightening of the rates on land. It has been said—and I wonder whether noble Lords on the other side have any clear views about this matter, and whether they can give me a contradiction upon the subject—that in many places the rates which would fall upon vacant ground would be twenty shillings or even more in the pound. I said that this was a momentous change, and your Lordships will observe that if that, or anything like that be the truth, while the proprietor is to be left with the formal title to the land, the beneficial ownership of the land is to be with the community. That is, in short, neither more nor less than the nationalization of land and sites. I want to ask, is that the policy of His Majesty's Government, and, if so, why for Scotland and not for England? Is there anything in the chemical composition of the Scottish soil which calls for extraordinary treatment of that kind? Is there anything in Scottish conditions of life and industry, in its history, or in its law, which justifies that distinction? Am I not right in saying that it is merely because you think you can "try this on" in Scotland—that you cannot try it on in England, but that you can in Scotland, because you will swell the sails of this paltry little Bill with large talk about Liberalism and progress? Those are questions which the House of Lords must ask at this stage of the proceedings. It is certainly a Second Heading question which I have argued to your Lordships; and I regard this Bill as merely a maladroit and puzzle-headed proposal, with a side eye to get Parliament committed to what it does not understand, and is not even asked formally to consider. I object to it on that ground, because it is paltering with rights which ought to 37 be treated with, the greatest respect, and the neglect of which would bring about, certainly in Scotland, and in my opinion in any other part of the country, the ruin of industry. I beg to move the Resolution which stands in my name.
To leave out all the words after 'that' in order to add 'this House declines to proceed with a measure which would have no operative effect, except to cause fruitless expense and to unsettle and prejudice important questions as to taxation and rating, which it make no attempt to solve.' "—(Lord Robertson.)
§ * THE FIRST LORD OF THE ADMIRALTY (Lord TWEEDMOUTH)
My Lords, the noble Lord has, as he always does, put the case which he had to make with the greatest advantage and very pleasantly to your Lordships; but I do not think he made any serious case against the Second Reading of this Bill. He began with the usual charge made in this House against His Majesty's Government, whichever party is in power, at the end of the session. Your Lordships must remember that all Governments suffer in the same way—they all find that measures have to be largely introduced in the House of Commons, that they have to be dealt with in the House of Commons, and that, therefore, they must necessarily come to this House at the latter end of the session. A change in the procedure seems to me to be the only relief from this state of affairs; and I must say, speaking in the interests of your Lordship's House, that it would be a very good thing if, in the future, we could carry on the Bills that come to this House at the end of the session and deal with them at the beginning of the next session. That seems to me to be a most reasonable proposal, and one that would get rid of those charges that we mutually, from year to year, throw at one another.
This Bill, which my noble and learned friend (Lord Robertson) so greatly condemns, seems to me to be but a very small matter. I do not think it raises the important questions which the noble and learned Lord endeavoured to raise upon it. He said that a great deal of danger was going to be caused to property owners in Scotland because 38 an additional column was to be added to the Valuation Roll setting out the value of the bare ground itself without the buildings and other improvements which are upon it. If the noble Lord thinks that that is a very novel thing, I do not think he is right; and I imagine that he will have to settle considerable differences with his noble friend Lord Balfour of Burleigh. This Bill is not a rating Bill at all; it is a pure valuation Bill. And it is fortunate for this House that it is merely a valuation Bill, because, if it were a rating Bill, your Lordships would only be able to deal with it by throwing it out on Second Reading, whereas now you can amend it in any direction you like without coming into conflict with the other House.
We say that this Bill is founded on three assumptions—that it is reasonable to make such a valuation, that it is possible to do so, and that it is desirable to do so; and I think those assumptions are certainly borne out by the various inquiries which have taken place during the last few years on this particular subject. The last was the Committee which reported to Parliament in December, 1906. What does that Committee say in its Report? It says that it considers that the new system of rating based upon the yearly value of land apart from buildings and improvements upon it is sound and would prove advantageous; that, to set it up by estimating the value of land apart from buildings is practicable; that in making valuations, regard must be had to all restrictions imposed upon the land and to recent expenditure; that exemptions such as are proposed under Clause 6 of the Bill are proper, but that to those exemptions railways, canals, docks, piers, and harbours should be added in the same way as was laid down in the Valuation Act (Scotland), 1854. But now comes a curious fact; there was a Minority Report of the Royal Commission who sat for nearly five years on local taxation, and my noble friend (Lord Hamilton) has already spoken of the Report of that minority. I would again remark that the minority was composed of Lord Kinross, who was a very distinguished Scottish legal authority 39 was long in the House of Commons and was Lord President in Edinburgh. Then there was my noble friend Lord Balfour of Burleigh, who has lived in local government in Scotland and than whom nobody is a greater authority on the subject. Then there were two very distinguished Treasury officials, Sir Edward Hamilton and Sir George Murray; and there was Mr. James Stuart, who has been a professor and a politician, who has been long in the House of Commons, and who is now at any rate a very successful commercial business man. What did that Minority Report say? In the first place it dealt with the question of the valuation of sites in urban districts apart from the buildings on them, and it concluded by saying that such a valuation ought to be made, and that a rate for certain purposes should be imposed on that valuation.
§ * LORD TWEEDMOUTH
Yes. Then the Report states that a valuation of sites sufficiently accurate for the purpose, and not inferior to the present valuation of hereditaments, could be made without undue labour and expense; and it then went on to say that such valuation had been in operation in the Australian colonies, and to quote the Reports laid before Parliament upon the working of the taxation of improved value of land in New Zealand, New South Wales and South Australia. Then my noble friend (Lord Balfour of Burleigh) had also, before the time of this Commission, given his adherence to the same views on other Commissions with which he has been connected; and in the Report of the Commission on Local Taxation of 1901, I find it is stated that a site would have value—
LORD BALFOUR OF BURLEIGH
The noble Lord is mistaken. I was on only one Commission. I do not want to interrupt the noble Lord, but in the earlier part of his quotation he seemed to think that I was upon the Committee of the House of Commons which dealt with the Glasgow Bill; I am sure he does not intend to imply that; but the Minor- 40 ity Report of the Local Taxation Commission is the only one I was ever concerned with.
§ * LORD TWEEDMOUTH
At any rate, in their final Report they say that the site would have value if cleared of buildings, and that a valuation of sites sufficiently accurate for the purpose, and not inferior to the present valuation of hereditaments, could be made without any undue labour and expense.
§ * LORD TWEEDMOUTH
Yes, on the annual value. I think that the real fact of the matter is, that this new column of the valuation roll would really lead up to a future system of rating. But because that column is added to the valuation roll it does not at all bind the Government now or in the future to any particular course; it simply gives to the Government one further item of information, which may be valuable with regard to any particular rating. The rating in Scotland at the present moment is very uneven indeed. I have taken out some figures to show how differently it falls in Glasgow and in Edinburgh, and I find that in Glasgow it falls in the proportion of 10½d. on the owner and 2s. 7½d. on the occupier, so that the owner is rated about one-third of what the occupier is.
§ * LORD TWEEDMOUTH
That is what I say—2s. 7½d. on the occupier, and 10½d. on the owner; so that the 41 occupier pays about three times as much as the owner. In Edinburgh the rate on the owner is 10½d., the same as in Glasgow, and the rate on the ccupier is 1s. 9½d., or about twice as much on the occupier as on the owner. That is, I think, a state of things which is not very satisfactory, and which shows the necessity and the justice of making some change in the rating law of that country. I must say that I think it is a very natural thing to endeavour to arrive at a valuation of the bare land without counting in the buildings. The principal statistical officer of the London County Council, with whom I worked for ten years, and whom I know extremely well, made a calculation that he would be prepared to give a valuation of the land separate from the buildings in the county of London for a sum of £25,000 for the first year, and to continue it annually, he thought, would not cost more than £5,000 a year. I believe that such information is desirable to the Government, that it would help the proper adjustment of rating, and would lead to the proper apportionment of the rates as between different holders of property holding under different conditions throughout the length and breadth of the land. I do not think there is anything in this Bill which leads to Socialism or to robbery from the landowner, and I hope, my Lords, you will not accept the view taken by the noble and learned Lord (Lord Robertson).
LORD BALFOUR OF BURLEIGH
I am extremely reluctant to intervene at this early time in the debate; but both the noble Lords upon the Front Bench opposite have made such pointed allusions to me that I think the House will probably extend to me its indulgence when I endeavour to show, as I think I can show, that they are entirely wrong in assuming that in the Minority Report to which they have made frequent reference your Lordships will find the slightest shade of a shadow of support for the proposals in this Bill.
The noble Lord who introduced the Bill talked about its principles. I do not know what those principles are. There is, at any rate so far as the Bill is concerned, no 42 actual proposal to make a rate. But the very essence of the Minority Report to which both the noble Lord and Lord Tweedmouth referred, is that while we admit that there is a certain prima facie case for a change—which I will explain to your Lordships in a moment—we say in emphatic language, over and over again, that there should not be a change made until Parliament lays down the conditions upon which it should be made, and says what use is to be made of the new rate to be levied.
I notice just in passing that the noble Lord who has just spoken exercised a wise reticence about the challenge of the noble and learned Lord (Lord Robertson). He made no response to the question why this Bill was introduced only for Scotland. With regard to the time at which we have arrived, I agree very largely with the noble Lord's idea—I wish we could carry over this Bill. I think it is deservng of very considerable discussion—much more considerable and detailed discussion than we can possibly give to it when we are within forty-eight or sixty hours of the end of the session. The noble Lord who has just sat down (Lord Tweedmouth) talks of this as a "small matter"; he says that it is merely an additional column to the well-known valuation roll, and that it is only a valuation. But, if it means anything at all, it prepares the way for an absolute revolution in rating, and it introduces a new principle into the system of valuation and of rating. It prepares the way, if it prepares the way for anything at all, for a proposal to rate on capital value and not on annual value, as we have hitherto been accustomed to do. The only other preliminary remark which I shall make is this: that, in regard to the amount of the rates which the noble Lord quoted with regard to Edinburgh and Glasgow, these figures are no doubt very interesting to him, but, unless he tells us of what those total sums are made up, they really can have no interest for your Lordships. When you compare the rate between owner and occupier in places like Edinburgh and Glasgow, you are bound to consider what are the component parts of those rates, and whether they include purely beneficial rates in the case of the occupier, such 43 as water rate, gas rate, and so on, which depend entirely on the amount of consumption, and which could under no circumstances, with any shadow of justice, be placed upon the owner. I do not press that question, unless the noble Lord is prepared to answer it. But I do ask your Lordships to dismiss entirely from your minds any comparison of the amount of rates falling upon the owner and the occupier, even so far as they concern the matter which we are now discussing, which is not the case to any great extent, because the data and the details of the calculation were not given to your Lordships.
The first question I want to address myself to is this. In the Minority Report to which the noble Lord (Lord Tweedmouth) has referred, I and those who signed it with me committed ourselves to the statement that it was desirable for certain purposes to have a separate valuation of site from the structure, but it was to be on the annual value; and there is not the possibility of quoting a passage out of that Report which in any way lends colour to the idea that we thought it fair or expedient to change the valuation, still less to change from annual to capital value. As regards the cost, there is certainly much difference of opinion. Personally, I am inclined to think it is possible, feasible, and even desirable, to have a separation of the valuation between the site and the structure in urban districts. And those who signed the Report along with me thought that the weight of evidence tended towards the conclusion that a separate valuation was feasible and could be done at no great cost. But the estimates of cost put before us varied very much; and the noble Lord (Lord Hamilton) I think, very much underrated it, because, especially if you are going to put a new column in the valuation roll which is to deal, not with capital value but with annual value, you will have a great deal more matter for conjecture, and a great deal more difficulty, than in dealing with the mere valuation of what is actual rent paid and what is actual rent received.
If I may diverge for a moment—and I will not occupy your Lord- 44 ships' time longer than I can possibly help—we thought there were certain difficulties and anomalies in the existing rating system which could only be cured by a separation of the value of the site and the value of the structure; but I say that when this Report, with such authority as attaches to it, is quoted, such a sentence as this should not be overlooked—We should be sorry to lend any countenance to the crude and violent theories which some witnesses have put before us on the subject of the taxation of land, but a cause which is reasonable in itself ought not to be prejudiced by the excesses of the unreasonable advocate,; and a careful consideration of the particular circumstances of urban local taxation has led us to the conclusion that a moderate rate proportioned to site value ought to be imposed as part of another scheme for the readjustment of the burden of local taxation in urban districts.And we give an instance which is very short and which, I think, I may usefully quote to your Lordships. We give an instance of a hereditament consisting of a small house on a valuable site and with the same gross value as a larger house on a less valuable site. The same deduction is allowed from the gross value of each hereditament for repairs, insurance, and so on. For example, if a property has a gross value of £900 a year, made up of site value, £600, and structural value, £300, at present a deduction of one-sixth of the gross value, namely, £150, would be allowed, and the rateable value would be £750. But, obviously, the proper deduction of the one-sixth should not be on the whole but on the structure, that is one-sixth of £300 is £50; and the rateable value should be £850. We have never committed ourselves in any way to taxation upon the capital value. We say, however, that there is an increase of value in all urban districts due to the expenditure of public authorities upon improvements, and to that extent alone we say that it is desirable that there should be some change in the incidence of rating. But this Bill proposes to depart from annual value altogether, and you will find not the least support in our Report for the idea of departing from annual value and rating on capital value. We give in-stances of show unfairly it might work. 45 We quote the opinion of Mr. Cross, the valuer, of Manchester, who says—To assess land from which little or no annual rent is derived upon its dormant or undeveloped value, would be the introduction of a new principle in rating, and would lead to the assessment of unproductive capital.And the evidence put before us—and I venture to say the evidence put before the Select Committee of the House of Commons, upon which this Bill professes to be founded—is absolutely overwhelming against the proposal of rating upon capital value. I say without fear of contradiction that that opinion has been and is practically universal and unanimous upon the part of those who have had' any practical experience at all in the matter. It is important to remember this great distinction. We never proposed to have any regard to capital value, and we believe and say that along with the present system of rating upon annual value any idea to rate upon a percentage upon capital value is impossible and absurd. If this Bill means anything at all it means to prepare the way for that great revolution, and I say that it is not dealing fairly with Parliament—it is not dealing fairly with this House or with the other—to bring in a small instalment of a change such as this without stating much more definitely than the Government have clone what their real object is.
I venture to say that this Bill deserves all that has been said of it by the noble and learned Lord (Lord Robertson). What are the objects aimed at I do not know what objects are aimed at by the Government, because they have not said what their objects are, but the objects aimed at by many of their supporters are perfectly clear and distinct, and they are set forth in the Majority Report of the Select Committee of the House of Commons of last year. They are to create a new basis for rating and for taxation, and I think I may venture to say without fear of contradiction that, though kept in the background at present by the Government, the real issue is to attempt to establish a basis on which local authorities shall at some time or another get power to acquire land compulsorily, or, if not so, at any 46 rate by taxation to confiscate the whole value of the property.
My Lords, let me ask you to consider the history of this movement. It has been my duty, as chairman of that Commission to which reference has been made, to give some study to it, and the great impetus to this movement dates from the time when Mr. Henry George was in this country. There is an English League for the taxation of land values, called the Land Reform Union, and their programme sets forth that it is their desire to advance the principles laid clown by Mr. Henry George in "Progress and Poverty," for the restoration of the land to the people; and to schemes of that kind we in our Report did not intend to give any countenance or support. There has been a Scottish League with a similar programme, and the movement has been going on in Glasgow and the west of Scotland for ten or fifteen years. In 1895 a recommendation that land values—that is, the capital value—should be taken as the basis of valuation was adopted by the Glasgow Town Council. That became the basis of what is known as the "Glasgow Bill," which was the Bill sent to a Select Committee of the House of Commons last year, which Committee by a majority reported that it should not be proceeded with. The course of the evidence of those who were promoting that Bill made it perfectly clear that the taxation that they hoped to get an opportunity of levying was to be increased from time to time so as ultimately to absorb the interest of the owner, and I venture to say that the Government have largely themselves to thank for the suspicion with which this Bill is regarded, and I say here without fear of contradiction that their method of treating the subject has done grave injury to many interests. Last year some of their Members, notably the Solicitor-General, had a sort of campaign over Scotland, in which they laid down proposals, and advocated them, for what is nothing more nor less than a wholesale breach of contracts. It is true that during the present session the propaganda of the Solicitor-General has been disavowed by the Prime Minister and by the Chancellor of the Exchequer, but 47 it did almost incalculable harm in Scotland before these disavowals were made.
I ask your Lordships to consider the contents of this Bill. Just look at the sort of conundrums which would have to be answered by the unfortunate valuers. There are no definite rules laid down, and the noble and learned Lord (Lord Robertson) said there would be nothing at all to guide those who ought to have definite and distinct rules laid down. Just look at this provision. I do not know whether your Lordships know what is meant by tenement houses, but they are something analogous to what we know in the metropolis as "flats," and here is one of the provisions in this Bill—Where the same lands and heritages are' under the Valuation Acts, entered in the valuation roll in respect of more than one occupancy, the entry prescribed by this Act may, unless a separate capital land value can be ascertained in respect of each ccupancy, be made opposite such one of the occupancies as the assessor considers most appropriate.Of course the assessor would take advantage of that alternative, and the result of it would be that if there was a large garden attached to any one of these tenement houses, or as I should call them, flats, the assessor might, if he chose, debit the whole capital value of that open space to an occupant of any one of those flats. And look at the provisions regarding agricultural land. It is obvious that the Government have not thought the matter out. When they introduced the Bill they said that land was to be valued divested of buildings, erections, and improvements, fixed and attached machinery. That is all very well as far as the building is concerned, but if your idea is to relieve industry and to get at the capital value, or any value, of unimproved land, how can you do it in an old country like this? How are you to separate the cost of draining, of fencing, of any sort of improvements that may have been made any time during the last 100 years? I venture to say that the thing is impossible, and the force of the arguments brought to bear on the Government showed them that it was impossible, and alterations have been made in the Bill which would reduce the value of this new column in 48 the Valuation Roll almost to nothing. But this valuation upon the capital value, or dormant value, is the worst possible fallacy. It has been tried, for example, in the United States, and has resulted in making it almost impossible for anyone to keep up an open space. I will give an illustration which will be know to all your Lordships. Take a place like Holland House. According to the present system of valuation it has an annual value which is enjoyed by the owner and entered upon the Roll. But if you are going to assess the capital value of all places like Holland House, and rate upon a percentage of that, you will make it absolutely impossible for anyone to keep up any open space within any urban district at all. Again, there is no logic in the method by which railways are to be valued under this Bill. What is the difference, in essence, between the land that a railway occupies and the land occupied by a gas company, a brewery, a dock, or anything of a similar nature? Of course railways, like landlords, do not get much consideration in these days, but if it is the unimproved value of land which has to be rated, what is the reason for keeping up the present system of rating of railways? That may be right, or it may be wrong, but it would be obviously unjust, if you are going to relieve the structure of a brewery, a gas company, or something of that sort, and not to relieve the railway of the rating on what is the product of its industry.
Another objection I have to this Bill is that you have no right to put upon an unwilling local authority the expense and cost of getting information for you. If Parliament wants this information, I agree with the noble and learned Lord (Lord Robertson) that it should be paid for out of the funds set apart for Parliamentary purposes. I confess I should like to see this Bill tried. I should have liked, if there had been more time, to have suggested to the Government that it was not fair to put this proposal upon the 150 or 200 rating authorities in Scotland—that it would be much better to allow those who would like to do so to try it—and if there were time to do it, I should prefer to leave it to those who are, in my opinion, 49 foolish enough to wish to try it, in order to see what they would make of it. Local authorities are in close touch with their constituents, and if any constituency would like to see its local authorities go to the expense and trouble of such a valuation as this, then I think they might be fairly allowed to do it. I am confident enough as to the futility of the proposals suggested by this Bill to feel sure that experience would show that they are impossible, and I am obliged also to say to your Lordships that I think, until some such experiment of that sort is made, you will never prove to the ordinary rank and file of the people that these proposals are in themselves unjust.
I repeat that if this Bill is not intended to lead to absolute revolution in our whole system of rating, it has no meaning at all, and I suggest to your Lordships that it is not reasonable or right to expect Parliament to pass a Bill of this kind until it has before it the real intentions of the Government in much greater detail than they have been put before Parliament either in the other House or in this House to-night, and therefore, although I would have prefer ed to see the Bill made voluntary, I am bound to say that I think the case put before your Lordships on behalf of the Resolution moved by the noble and learned Lord (Lord Robertson) is absolutely unanswerable, and at any rate it has not been answered by the noble Lord on the bench opposite (Lord Tweedmouth).
* THE EARL OF MAR AND KELLIE
My Lords, I think the objection to this Bill is not so much what it does as what it is intended to lead up to—namely, the taxation of land values. In discussing this Bill, although, as the noble Lord the First Lord of the Admiralty said, it is not a rating Bill, it is impossible to avoid touching, upon the whole system of rating in Scotland which it threatens to revolutionise. The present system of valuation and rating in Scotland has grown up during a long series of years and under various Acts of Parliament; with the result that at the present day we have a system which on the whole is essentially a fair one, although of course there may be some anomalies. And, if I may do so without 50 presumption, I should like to remind your Lordships, very shortly, of what that system is. Rent is the basis of all taxation in Scotland, and the rates are divided into two classes—there is the landlord's or owner's rate, and the tenant's or occupier's rate; and when the occupier and the owner happen to be the same individual, of course he pays both classes of rates. In the country districts the owner's rate is invariably higher than the occupier's rate. In the towns the reverse is the case. In the agricultural districts the rates are exacted on the actual rents paid and received; and in the towns, where the letting value cannot be ascertained, the value is ascertained by taking 5 or 6 per cent. on the cost of the buildings, with some deductions, the most important of which is for depreciation. Take the instance of a farm in the country districts in my own county with a rent of £100. On that £100 the landlord pays the owner's rate of £8 4s. 4d.; the tenant pays half the occupier's rate, £2 18s. 4d., and the Government, under the Agricultural Rates Act, pays the other half, £2 18s. 4d., making a total rate of £14 1s. per cent.; and that in a district where the rates are by no means high as rates go. I could give instances of farms situated in special water districts where the water rate alone is half as much again. Then, the owner has to pay income-tax; there is invariably the minister's stipend and the Heritor's assessment; and the upkeep of the building. And yet the Prime Minister says that more can be got out of the land; and this Bill is obviously intended to prepare the way. Coal and mineral rents pay rates in exactly the same way, but I only mention that in order to refute a very general but erroneous impression that royalty owners pay no contributions to the rates.
We all listened with great respect and sympathy to the eloquent speech of the noble and learned Lord on the Woolsack in introducing the Small Holders (Scotland) Bill, when he pointed out the evils of overcrowding in towns and the duty of all Scotsmen to do their utmost to alleviate it. I think this appeal would have been more convincing had it not been the fact that His 51 Majesty's Government were furthering this Bill which, if it is passed into law with its corollary of taxation of land values, must and will accentuate that evil by raising the rates in the towns generally.
There appear to me to be two reasons for overcrowding—one is an unfortunate love of squalor among some of those who are found to practise overcrowding, and the other and greater reason is inability to pay rent, the causes of which are too many to enumerate. That is why overcrowding still goes on, in spite of the fact that many of the cities and towns of Scotland are at the present time largely over built, and that empty houses, many of the tenement class, can be counted by the hundred. I have knowledge of property in a certain provincial town in Scotland where the feu duty is one penny Scots, which, in present coin of the realm, is exactly half a farthing; and even there it is impossible to build tenements to comply with modern sanitary requirements and building laws, to pay 5 per cent. on the outlay, at a less rent than £9 or £10 for a flat of three rooms. Therefore, if the site value is to be rated, obviously the landlord will protect himself by putting up the rent, and I cannot conceive any legislation which can prevent him from so doing. Again, many workmen in the smaller towns in Scotland feu ground for the building of cottages for themselves with a piece of garden, but if the workmen are to be penalised with respect to their gardens then gardens will be dispensed with, and the result will be congestion of houses in places where there would be ample air space if the workmen were not afraid, as they are not afraid at present, to take off sufficient ground for a garden. Again, it sometimes happens that for the extension of a factory or public works land has to be bought at a very high price; and it is presumed that under this Bill the price of that land will be taken into consideration in determining the site value. Thus an enterprising firm will be penalised in respect of its success in business.
Then, coming to the actual Bill itself, there seems to me to be two main objections; one is that it lays on the assessor 52 an almost impossible task, namely, to determine whether or not the capital value of the land has been returned at a proper sum; and it will cause enormous extra expense and trouble in the preparation of the valuation roll, and very likely with no result. And this must fall exceedingly heavily on the rates. Considering the farreaching character of the Bill, I maintain that it was inadequately discussed in another place. It is considered by many of the assessors of the most important counties in Scotland to be quite unworkable, that it will cause enormous expense both to individuals and to the rates, and that in fact it is vexatious and inequitable in the highest degree.
I feel that I have only touched the fringe of what is a very difficult and a rather tedious subject: and, if I have been somewhat discursive and sometimes not to the point, I apologise to your Lordships' House. But I think that at any rate I have been able to give a few reasons which have not been given in the debate by other noble Lords why this Bill should not be proceeded with, and why my noble friend's (Lord Robertson's) Amendment should be accepted.
I think your Lordships have heard several most excellent reasons why we should not read this Bill a second time, but I think we have not heard a single argument, which is worth being called an argument, from His Majesty's Government in its support, or why it should have been introduced into your Lordships House. I do not propose to detain your Lordships many minutes, but there are just one or two things to which I should like to draw your Lordships' attention, and perhaps the first is the statement by my noble friend who introduced the Bill (Lord Hamilton) that the cost of the assessing for the purposes of this Bill would be about £10,000 for Glasgow and Edinburgh. That is perfectly true, but that is simply the cost to the assessor of checking his return; the real cost which falls on the proprietor is very much greater. He has to investigate his title, he has to ascertain 53 the exact area of his property, he has in many eases to get a surveyor to value the property, and he has to do so as if it were a property for sale by a willing seller to a willing buyer; and that valuation is to be of the land denuded of all buildings and improvements. It is almost impossible to do that at a small cost; and I think that the estimated cost has been put down for proprietors as about two guineas per site. Now, there are something like £2,500,000, which are the estimated rents for the valuers, and you can imagine for yourselves what that would work out to. The expense which comes on the proprietors is something enormous. Then a great deal of the cost of this valuation would fall upon the ratepayers. In the valuation roll of Glasgow there are 212,762 entries; and in the valuation roll of Edinburgh there are 87,000 entries. Including other burghs, in the whole of Scotland there are about 1,200,000 separate entries; and the cost of the valuation in Glasgow alone is put at about £500,000. If you take the 87,000 entries in Edinburgh, the cost of the valuation would be about £200,000; and in Aberdeen and Dundee about £100,000 each. That is an enormous expense for such a Bill as this, because it is not a Bill to enable you to make a rate, it is not even a Bill showing what the rate is, or what it is for, or anything else; I think it is really a very bad Bill indeed. There is no doubt that the Bill is the first step to carry out the idea of the late Mr. Henry George, known as the "single tax." In evidence which was taken before the Committee, Mr. Burt, one of the witnesses from Glasgow, stated that his intention was to tax the sites up to 20s. in the £, which was clearly the object of the Glasgow Bill, and must of necessity be also the object of any Bill which is brought in to succeed this. There was another gentleman, Mr. Henry, of Glasgow, who gave evidence before the Committee, and I think his evidence was chiefly in favour of the Glasgow Bill, but at the end of it he acknowledged that the expenses involved were so enormous that if a a Bill passed for the taxation of land values in Scotland it would take a generation before it came into operation. I 54 fail to see what object there can be in bringing in a Bill for such a purpose as that.
Then, if we turn to the feus, I happen to be the owner of a very large town called Fraserburgh; and there, for instance, many of the feus, which were given off as long ago as 1300, are for about Id. or 2d. to 6d. a site. In the course of the increase of the town these various sites have become of the greatest value to the harbour board, the town council, and other public bodies—sometimes I think there is not even a shilling upon those sites—they form a part of the streets for the harbour. Still, they pay their feu duty of Id. per annum. To value such a site as that is impossible—it may be worth £3,000 or £4,000, but if you rate upon the value, which it would be valued upon, the tax would come to a very great deal more than 20s. in the £. Then again, suppose you were to have a brewery or a factory of any sort or kind occupying, say, 50 acres of ground, and you were also to have a farm close by or contiguous to it, and the buildings on the farm were valued at, say, £600, under the present system of rating each property is rated on the full annual value of the building, and the lands are all included and that is a very fair way of rating, but, under the proposed system they would be rated equally, because of course the land is of equal value. And the result is that the farmer, or the small lard-owner, or whatever he is, would be rated out of all existence simply for the purpose of assisting his richer neighbour.
I do not wish to weary your Lordships by saying anything more, but I think it is a very surious thing that during the whole of the last autumn we have seen the Solicitor-General parading all over Scotland making speeches in favour of, I think it was, the Glasgow Bill, or at all events the taxation of land values; and almost directly afterwards we have seen the Lord Advocate, who repudiates entirely what the Solicitor-General pleads for, and also the Prime Minister who in turn gives away the Lord Advocate. I do not understand it, but they still seem to be each of them members of His Majesty's Government, although 55 they are all at loggerheads between themselves; and how they can recommend a Bill of this sort to your Lordships when they are at so great differences themselves I simply cannot understand. I hope your Lordships will support the Amendment.
THE EARL OF CAMPERDOWN
My Lords, I hope not to detain your Lordships many minutes, but I cannot avoid saying a few words in regard to this Bill. Ever since I have been in this House, I do not remember any instance in which a Bill of so much importance has been brought in so late in the session. This Bill was only introduced into this House on 24th August, and now we are called upon to read it a second time within twenty-four hours of the Prorogation, and I suppose it is expected that your Lordships will in that short time be able to give ample consideration to its provisions.
This Bill is a very important Bill. It is true that the noble Lord who introduced it said that in itself it was unimportant, but he admitted quite freely that it was only a preliminary to what was to come. Although in itself it provides merely machinery for valuation, the intention is that at no distant time the assessment in Scotland shall be imposed according to the principles which are laid down in the Bill. Lord Tweedmouth appeared to take a rather different line. He deprecated the importance of the Bill, and preferred that your Lordships should look at it from a literal point of view, and not with regard to its spirit.
This Bill was introduced, the noble Lord told us, in consequence of a Committee of the House of Commons on what is known as the Glasgow Bill of 1906. What was the decision of that Committee? Out of fifteen Members who were appointed to that Committee, one of whom subsequently retired, no less than eight out of the remaining fourteen were vice-presidents of the league in Glasgow which was created to promote the principles of Mr. Henry George. I can only say that if a subject such as the rating of land were referred by your Lordships to a Select Committee, I feel certain that the composition of the Committee would be very different indeed from that. What can you expect 56 from a Committee of which eight members have already pronounced their views but a Report in accordance with their well-known opinions, resulting in a Bill such as this with which we have been called upon to deal? The Solicitor-General for Scotland was the Chairman. The Solicitor-General is most advanced in his opinions. Indeed, he has gone so far that I think he has rather alarmed some of his colleagues. He has been repudiated lately by the Prime Minister and by the Chancellor of the Exchequer, but still he goes on repeating these opinions constantly whenever he has the opportunity, and at all events, it seems to me that with a prominent officer in His Majesty's Government repeating these advanced opinions it is not likely that public confidence will be increased in the fairness of the system which is to be adopted.
What is the Bill? There is not one single item of fact about it. It is hypothesis from beginning to end. Everything is non-existent. Just let us look at it. "Capital land value" means the sum which lands and heritages—might be expected to realise if sold by a willing seller in the open market at the time of the valuation if:—(1) divested of buildings, erections or improvements, of whatever nature on, in, or under the soil, woods, fixed or attached machinery, and work of drainage and of re clamation, making up, levelling, and the like, where the benefit thereof is unexhausted at the time of valuation.From beginning to end there is nothing but hypotheses. In the first place, the value of these lands is said to be what they may be expected to realise "if sold by a willing seller in the open market." There has never been such a thing as a "willing seller." No one has ever proposed, or was ever foolish enough to propose to pull down all his buildings and sit down and calculate what the site might be worth. And, pray, is there anyone who would be fool enough to buy such a site under such conditions? And as for "market," there never has been any, and never will be any. They say that no buildings, erections, or improvements are be taken into consideration. What to happens? Why, you get back to the days of the Picts and Scots, and your valuation will be such a one as the Picts 57 or Scots would have made, and your Lordships know that if they had been called upon to take a valuation they would have taken a very short road indeed, but I believe very nearly resembling that which is in the minds of some members of His Majesty's Government. And then all these things are to be "sold free from all burdens, public and private." What on earth does that mean? Private burdens. Does that mean feu duties, or what does it mean? I am perfectly unable to understand. And here you put upon the proprietor a duty which he cannot possibly fulfil. How in the world is a proprietor to arrive at any approximate estimate of what his land is worth when everything has been removed from it, and when it is entirely unlike anything which is in existence, entirely unlike his property as he knows it? And then look at the assessor's duty. I do not know what in the world these Scottish assessors are to do. They have already met, and they have said that they do not know how to conduct the valuation proposed under this Bill. Lord Hamilton said that every factor would be able quite easily to do this. I think he said his own factor could do it. I congratulate him on his factor, because he not merely knows the noble Lord's property, but he knows what is not on it, and he knows in exactly what state it was before the noble Lord was born, or any of his predecessors, and before any of them had it. He is more than an assessor, he is more than a valuer. He must indeed be one of the most able men in the world if he is able to calculate with anything approaching precision what at the present time the value of this property is.
Several questions have been asked in the course of this debate, and no answer has been given to any one of them. It seems to me that that is the course which is always pursued by His Majesty's Government when dealing with land questions, and more especially, I regret to say, when they are dealing with land questions connected with Scotland. The noble and learned Lord (Lord Robertson) asked why this benefit was to be confined to Scotland and to Scotland only. No answer of any sort or kind has been vouch- 58 safed. It seems to me that wherever anything—I will not use the word predatory or confiscatory, or anything of that sort, but whenever any very novel propositions are under consideration, Scotland is always the corpus vile on which the experiment is to be tried. It is only the other day that it was proposed to place the whole of Scotland under a Land. Court, and Scotland was also to have a set of Agricultural Commissioners. Why are all these benefits reserved for Scotland? It is said, I suppose, that Scotland is more advanced, and therefore is more able to imbibe these advanced notions than comparatively ignorant, but more fortunate England. But whether the Government succeed in dealing with Scotland or not, depend upon it, England's turn is coming, and it is merely that Scotland leads the van.
There is another question I should like to ask about agricultural land. Why is agricultural land brought under this Bill? I will answer that question myself, and I will tell your Lordships why it is, because although we have not been informed, I can guess, and in fact it does not take any prophet to understand that. It is because His Majesty's Government have in their mind the intention of taxing agricultural land which is in the neighbourhood of towns. They assume in their calculations that all such land is worth in capital value exactly the same. I do not know how far that calculation extends; but they will draw a great ring round a town and say "Oh, this land is worth so many hundred pounds an acre." So it may be when the land is becoming ripe for building; but in the meantime what will be the result? There are many cases where land is let at from £2 to £3 an acre, and it is perfectly impossible to get more in the vicinity of a town. Yet they would say: "Oh, this land is worth £500 an acre, and as the interest on that is £20, we will tax you on £20 an acre." You would reply: "But I cannot get more than £2 10s." Oh," would be the answer, "that has nothing to do with it whatever. What you have got to do is to look forward to this great advantage which you are going to get at 59 some unknown time, and in the meantime you will pay us on £20, although you are only receiving £2 10s."
Now with regard to counties, why is agricultural land—or rather, how can agricultural land—be brought under this Bill? Mr. Shaw, the Lord-Advocate, gave this reason. He said—If we exclude counties there will be an absence of information which the county has a right to expect.Really the dicta of these law officers with regard to agricultural land questions betray their very great ignorance. Just let us see what agricultural land is. Let us imagine, for instance, a farm which has no buildings, no erections, no improvements of any kind or sort, in, on, or under the soil—that is to say, no drainage, no reclamation, in which nothing has been made up, levelled, and the like. Imagine what a valuable possession that is. and then think what is the value of that for the purposes of rating! Why, it is zero. I am not sure that it is not a minus quantity. And how, under this system, are you going to collect your rates, if you start rating from zero? I certainly have seen no attempt on the part of anyone as yet to show us how the assessment of agricultural land is to be carried out in future. But remember, it is not merely the land, but all the houses upon it. There is not one of your Lordships' houses which will be subject to valuation in future—that is to say, unless His Majesty's Government bring in a Privilegium to tax the houses of peers. They are quite capable of it, but if they do not, all I can say is, there is no country house which will be liable for rating.
Now, my Lords, who is in favour of this Bill? That is what I want to know. The county councils and municipal authorities have had no opportunity whatever of pronouncing their opinion upon it. His Majesty's Government are always talking of their respect for the opinion of the people and so on. The parish councils, the town councils, and the county councils, I suppose, are the nearest approach we can get to the "opinion of the people." But when these town councils and other councils pronounce in favour of 60 His Majesty's Government, then they are righteous judges—they are great people. But if they do not, then their opinion is to be entirely disregarded and set aside, or even, as in this case, not asked for.
Now, as to the petitions. I have been at a little trouble to inquire with regard to the petitions which have been addressed to the Houses of Parliament in reference to this Bill. I cannot find that there is one in favour of it; there are not many of any sort, it is true. I can only find petitions from two counties—the county of Forfar and the county of Perth. They have both petitioned against the Bill. But then there is a very remarkable case, that of the town of Greenock. The town of Greenock was very much in favour of taxing feu duties, and so long as it was supposed that this Bill was to include feu duties, Greenock was very strongly in favour of it, but when the Prime Minister announced that feu duties were not to be included, that appears to have worked a change in the opinion of Greenock, because it then turned round and petitioned against the Bill. And even in the case of Glasgow, I am not by any means certain that after the recent decision the opinion of Glasgow is so much in favour of the Rill as it was.
There is one further question which I should like to ask, and that is, why are railways and canals not included in the Bill? If you are not to reckon improvements—if you are to encourage outlay, and industry, and all these other virtuous things, why are railways not included? There is not one single bit of a railway which is not the outcome of industry. Every mile of railway has been laid down with spade labour. It is nothing but one piece of industry and utility from beginning to end. Why are you not to take into consideration the capital value of a railway? And so with canals. You cannot say that a single bit of a canal is not the product of industry. Why should not improvements be reckoned in the case of railways and canals, although they are in the case of everything else? I can tell your Lordships. First of all I will give you Mr. Shaw's reason. He says it would be rash to introduce a differentiation here in a 61 system which has gone on for half a century. I wish Mr. Shaw had thought whether that remark might not also apply to the general valuation roll. But as a matter of fact the reason is that he knew perfectly well that if he was to abolish the rating value of railways and canals he would be injuring three-fourths of the parishes in Scotland, and he did not dare to propose such an important alteration.
Now, my Lords, I know that we have a good deal to do, and at this late hour I will not occupy your Lordships' time any longer. I can only say that your Lordships will, as I think, do very unwisely if you allow what is professedly a Bill for machinery to pass before you know what the system is which this machinery is intended to carry out.
§ EARL CAWDOR
My Lords, I am sure that all your Lordships who are interested in valuation and in the question of rating will agree, at all events, that those questions are of a most complex and of a most important character, that they should never be tampered with lightly or thoughtlessly, and that any changes with respect to either the valuation or the rating of land should be dealt with with the utmost care and after the greatest consideration. There are many things with respect to valuation and rating upon which, if we had had an opportunity of discussing this Bill, many of us would like to have spoken. One is that great point which we should like to eliminate from valuation if we could—namely, the element of uncertainty and of hypothesis. That is a matter of vital importance. We cannot, under the present system, entirely or even nearly get away from it, but the system suggested under this Bill would accentuate and increase the difficulty a thousandfold. And yet it is taken up lightly, as if it were a mere matter of triviality that did not signify at all.
It has been rather interesting to hear the statements made on the other side of the House. I am bound to say that so far as statements are concerned, though many of us have spoken on this side of your Lordships' House, we have not been favoured with very much by way of answer. Some distinct and clear 62 questions were put, and no attempt of any sort or kind was made to answer them. The First Lord of the Admiralty talked of this Bill as simply and only a Valuation Bill, and as being merely intended to give the Government an opportunity of considering hereafter what they are to do with the question of rating. But the noble Lord who introduced this Bill went a little further, and admitted, in that frank and clear statement which he made to your Lordships, that there was something to follow. He did not plead for a moment that it was nothing whatever but a clear and clean Valuation Bill. He said there were things to follow, and I think your Lordships must have been struck with what he said after all, for he was very careful to guard himself against anything that might come out of this Bill as an operative part of the Bill. He knew, and he admitted, that this Bill was bound to be followed by legislative enactments fundamentally altering the rating system, and he guarded himself in advance against anything that might be suggested in the future.
But, we had another statement in another place also quite clear and emphatic upon this point. The Lord Advocate, made no attempt to conceal or to deny that this Bill was not, as it has been described this evening, simply and only a Valuation Bill. He said—This is not only a Valuation Bill; it is of course to be followed by a great deal more.If it was not he would not have been introducing it and supporting it in another House. Therefore, we have it perfectly clear that this Bill is intended simply as a stepping-stone in the direction of some great change. It is idle to suggest that it was ever introduced for any other purpose. Who would go to the trouble and expense of recasting the valuation system of this country for the purpose of introducing into the valuation roll of Scotland a column—I think No. 8—which, as the noble and learned Lord (Lord Robertson) said, simply demolished and got rid of all the other columns? Would anyone think of going into that, and then coming to your Lordships and saying: "This is all that is going to be done, and it will 63 lead to nothing else"? But we know very well from outside of your Lordships' House roughly what it is that is intended. We have asked—and so far asked in vain for any idea of the system which the Government had in their minds in bringing this suggested legislation before your Lordships' House. It was suggested by my noble friend Lord Rosebery the other day that some of these measures are not intended as legislative enactments—that they are not brought in seriously with a view to legislation, but merely in order to be used as weapons which the Government think may be used for political purposes against your Lordships in the country during the autumn session.
I was interested to note that the two noble Lords who spoke from the other side appeared to be most anxious to annex my noble friend Lord Balfour of Burleigh to their view. One of the only excuses for their Bill was that the noble Lord—whose abilities and whose knowledge of Scotland and of Scottish affairs we all recognise—had said or written something which apparently it was thought might be taken to support the Government's action in this matter. Their chief defence of their Bill was that the noble Lord had some years ago signed a very able minority Report of a Royal Commission, on which, I think, he and I sat for five years—I regret to state that at the end of those five years I was not able to concur in the conclusions of my noble friend. I do not for a moment set up my authority as anything that can compete with that of the noble Lord, but the noble Lord who spoke on the other side omitted to notice at all that in that Commission there was a majority Report as well as a minority Report, and in digging up this Commission they dug up the minority Report only.
§ EARL CAWDOR
I do not remember the quotation by the noble Lord of the majority Report, but if he quoted it I will undertake to say that he found 64 nothing in the majority Report in favour of this Bill.
§ EARL CAWDOR
That is rather inconvenient, but I will vouch for this—that the majority voted absolutely dead against the valuation of sites. I can only say that I was one of those who signed it, and I know that what I say is correct, and that it will take the noble Lord a long time to find anything in support of the proposals of this Bill in that majority Report. There is no doubt whatever that the difference between us entirely was whether we agreed or did not agree as to the valuation of sites—the separate valuation of sites and buildings—and the noble Lord signed a minority Report in favour of that separation while the majority Report was against it. If the noble Lord can show me that I am wrong I shall be much obliged to him.
I was rather amused at the evident anxiety of noble Lords opposite to annex my noble friend, and they made a great deal of his supposed support of the scheme in this Bill, but I do not think, after your Lordships had heard the reply of my noble friend, that there was much left in the contention that he was in favour of their scheme. The noble Lord washed his hands of it, and said that it was absolutely wrong from beginning to end. Therefore, as far as my noble friend is concerned, we need not place very much reliance upon the support he is supposed to have given to the Bill now before your Lordships' House.
In the course of the discussion before that Royal Commission many schemes were before us—definite schemes of how some plan of this kind could be carried out. Some of them were very moderate. But what happened to them? The members of the Commission who signed the Minority Report which His Majesty's Government 65 seem to think justifies this Bill, looked into all those schemes as members of the Commission, and in the end they described every one of them as impracticable and impossible, and my noble friend Lord Balfour of Burleigh will remember perfectly well that while he thought some of them justified what he considered a proper thing to do in the way of separation of sites and buildings on the site, he discarded absolutely every scheme which was put forward to show how the proposal could be carried out.
What is the scheme we have to-day? We have none from the Government—we have no inkling of what their intentions are—but we know the extravagant schemes that have been put forward. We know how far some of His Majesty's Government's supporters are prepared to go. We know that what they are aiming at through this Bill is simply this: That all rates are to be put hereafter on the unimproved site value. That is the aim and the object of it. Every improvement of buildings and so forth that has been put upon the land is, in their view, to be exempt from rates. And yet we are told that this is simply and only a Valuation Bill! Is it not trading a little bit on your Lordships' common sense to ask you to believe anything of the kind? Is it not trying us rather high, when we are supposed to be able to swallow an allegation of that kind. With regard to the extreme scheme which I have just mentioned to your Lordships, we might ask whoever may be going to speak on behalf of His Majesty's Government whether they would tell us if they have any scheme of their own, or at any rate whether they disclaim that extreme scheme. At all events we should then know something about the Government's intentions, and Lord Hamilton would feel that as far as he was concerned he need not be in any trepidation as to not being able to accept the Government's scheme when introduced. Surely your Lordships have a right to know something of what is proposed in dealing with this vast and important question. There can be, and there is, no doubt that what is aimed at is a fundamental change. Why should we be kept in the dark as to that change in every respect? We are to ask local authorities to go to great 66 expense. We are practically to show that we mean to move in the direction of a fundamental change in valuation and rating, and yet we are, at this eleventh hour, to be prohibited from knowing in the slightest degree what His Majesty's Government propose or intend. At all events if we get no information on this subject we shall know that we have no guidance of any sort or kind to receive from the Government, and we may fairly and justly ask your Lordships and the country not to follow blind guides who have no idea what course they are steering.
There were several questions asked by the noble and learned Lord who moved the Amendment. I do not know that any of them have been answered in the slightest degree. First of all, we should like to know, if this Bill is to be so good for Scotland, why it does not extend to England? Secondly, is it intended to extend it to England in the next session of Parliament? And last, not least, I come to the question of the date of the introduction of the Bill. I do not think the noble and learned Lord on the Woolsack will deny that this Bill is aiming at fundamental changes of very far-reaching interest and importance. If that is so—and I take it that it must be so—is it decent, is it in accordance with the dignity and respect of your Lordships' House, that on the day before the conclusion of our Parliamentary business, in a session that has lasted from February until the end of August, this Bill should be laid upon the Table of your Lordships' House? We always have been, and I hope we always shall be, able to look upon the Leader of the House and upon the noble Lord on the Woolsack, as the guardians of the dignity and independence of your Lordships' House. I ask them, do they think that in dealing with your Lordships in this way, putting a Bill of this importance upon the Table to-day, and asking us to race it through all its stages in the course of the next forty-eight hours, they are respecting the dignity and independence of your Lordship's House? I ask them to consider a little that dignity. There is nothing, I think, that can so much depreciate your Lordships' influence and the dignity of your Lordships' House as for it to be 67 supposed that noble Lords in the high position of those I have referred to think it not unbecoming to ask you to race through measures of vast importance, when it is known perfectly well to them and to the country that proper discussion and proper consideration is absolutely impossible. Must it not be the fact that this Bill is a sham? Can it be meant for anything else? The noble Lord on the Woolsack will not suggest to us, I am perfectly certain, if he is going to speak, that it is possible properly and decently to debate this subject in the course of half an evening at the fag-end of a session. Is this Bill meant as practically a Bill intended to be passed this session? If so, why is it brought up at this moment? Is it not a fact that it is meant, like some others, merely as "a filling up of the cup"—as something that will enable Party politicians to go about the country denouncing your Lordships for thwarting the people's will?
I trust your Lordships will accept the Amendment moved by the noble and learned Lord, Lord Robertson. He invited your Lordships to resolve not to proceed with a measure which would have no operative effect. My Lords, that statement is justified out of the mouth of the noble Lord the First Lord of the Admiralty. The operative effect is a thing to be thought of hereafter—not to be intimated to the country, not to be intimated to your Lordships' House. I doubt if it even exists in any shape or form of an operative kind in the mind of His Majesty's Government. This Bill would cause great expense. I am not going to argue the question of expense, but no one doubts that the expense must be very great. It would certainly unsettle the mind of the country with regard to valuation and assessment, and it would, I believe, as the noble and learned Lord's Amendment says, prejudice your I Lordships unduly in dealing with this great question hereafter. If you pass this Bill you will be said to have accepted a principle which is going to lead you no one knows where, but from which you will never be able to recede. I hope that your Lordships, therefore, will not pass the Second Reading of this Bill, but will accept the Amendment 68 which has been moved by the noble Lord (Lord Robertson).
§ THE LORD CHANCELLOR
My Lords, the most pointed question which the noble Earl put to me in the course of his speech was with regard to bringing this Bill to this House at this time of the year.
§ THE LORD CHANCELLOR
I do not quite appreciate the difference between the time of the year and the day. What I was going to say was that the general complaint had been made by the noble Marquess (the Marquess of Lansdowne) before with regard to the condition of business in Parliament. For my own part, I have always held only one opinion about it, and I will not dwell upon it, because I gave expression to it the other day. My own belief is that Parliament cannot transact properly one-half of the business that has to come before it. That I believe to be a truth of general application, and I say that this inconvenience will continue, and must continue, together with a great deal more which is not merely inconvenient, but is deleterious to the public interest, until Parliament consents, being unable to do all the business itself, to leave the business to others who have got the time and leisure to do it. I must also say—and then I will pass from this part of the subject—that the noble Marquess, Lord Lansdowne, a year or two ago, when he was leading the Government, was assailed with exactly the same reproach—I think, in an aggravated form—with just as much reason, and although he did not give the same answer that I have given, at the same time I think he will admit that he adopted what I may call an apologetic attitude. I do not reproach him, but I do not see why we should be so severely reproached now for a state of things which is inseparable from the conditions under which we have to do our work here and in the other House.
With regard to the Bill, I shall not speak upon it at any great length, though I will endeavour to meet the points which have been made as far as I can, because if rumour is not very 69 much at fault, the doom of this Bill had been predestined before this debate commenced. I deeply regret it, and my own belief is that your Lordships "will see on cooler reflection perhaps that the Bill is a necessary preliminary to any kind of rating reform that you desire. However, let me try, at all events., since apparently this bantling of ours is about to be destroyed, to ensure that there shall be no misunderstanding as regards what the Bill is, nor as regards its ulterior purpose.
In the first place, the Bill is simplicity itself, taken alone. The Bill is a Bill to add to the Valuation Roll a column which shall contain the site value—the capital value of the site—as apart from the buildings, if any, upon it. That is the Bill. It does not rate anybody, or assess anybody, or alter anyone's rights. All that it does is, I agree, with a view to ulterior legislation. I do not see why anybody should want to deny it—it is our object, with a view to ulterior legislation it proposes to value the capital value of the site. Now that being the nature of the Bill, I have not heard—except from the noble Lord, Lord Balfour of Burleigh, whose objection was that it was the capital value instead of the annual value of the site—any reasons why the valuation of a site should not be a useful thing of itself. And for very obvious reasons, your Lordships must be aware that there has been considerable dissatisfaction with the present system of rating from many different points of view. There are many persons of a most conservative disposition who disapprove of the present system of rating.
Let me give your Lordships some illustrations. There are sites kept in the centre of cities which are not built upon, and which are rated only at the annual valuation of what they are let for. It may be that a butcher takes them for grazing at £3 or £4 an acre. Of course there is nothing wrong in that, but the fact is that that land, as compared with the land around it, is land of very great value, and the person who owns it does not pay upon his property any annual contribution to the rates of the town comparable 70 in the least degree with that which is paid by the adjoining owners who have houses built, and who have realised their building value. That was considered to be a hardship by so eminent an authority as the Majority Report of the Royal Commission upon Housing which was appointed in the year 1885. There can be no doubt that it is a proper subject for consideration, and in my opinion—your Lordships may not agree with it—it is not fair that a man should have land, say an acre, worth £1,000, for which he only gets £3 a year rent, and should be rated on only £3 a year, while an adjoining owner will be rated upon the same amount of land at £50 or £60. The one man is as well off as the other, and I think you ought to have regard to the property, and the value of the property, which different ratepayers have. Let me take another illustration. I take the case of land which might be brought into building value, but has not been because it is being held back—it is on the fringe of a town. I am not complaining of the owner of it doing as he thinks fit, but I think that he also ought, in fairness as between the other owners of property and himself, to contribute, not upon the use to which the land is put, but upon the value of the land—the approximate value, at all events—as compared with the other land round about. These opinions of mine may be right or wrong, but at all events there is nothing revolutionary about them. What they mean is fair play to the ratepayers. But let me give you another illustration. In the first place I venture to say that for the purpose I have indicated there must, in the first instance, be some valuation of the site. Unless you have a valuation of the site you cannot, under any circumstances, adjust, as between the different owners of property, their fair shares of the burden of the rates. There is another purpose it might be used for. It might be used, for example, in those cases in which the property of a particular owner, or a particular street, has been enormously enhanced by improvements effected at the cost of the whole town. So much so, that that has been already recognised by legislation in this country. The Glasgow Act, the Manchester Act, two or three Acts of the London County Council—all 71 these have imposed charges for "betterment." These Acts have been sanctioned by both Houses of Parliament, for the very purpose of obtaining for the. community some portion of the value created by the improvements which they themselves have made. These things are not matters of speculation or doubt; they have been embodied in clauses in Acts of Parliament, because they represent the fair play and commonsense of the community. But you cannot do that easily or conveniently unless you have a system of valuation of site values as well as of the annual value; because the characteristic of valuation by annual value is that it takes the subject as a whole, and that really the nature of the buildings erected upon the land governs the value of the total subject as well as the value of the land itself.
I have now given to your Lordships illustrations of the things certainly which are in my mind concerning the use which I am contemplating this Bill may have, when I am suggesting that there shall be a valuation of the site as apart from the valuation of the buildings upon it. The noble Earl (Earl Cawdor) asked what was the plan of His Majesty's Government. Surely it is impracticable and unreasonable to ask us to give any definite plan at the present time. It is indeed difficult and impracticable to say what the particular proposals will be, beyond the one thing. It is difficult for us to say anything further until we know what the valuation is. The information that we desire is the information to be procured by this very Bill which your Lordships are about to reject. And when the noble Lord asks me to give some sort of undertaking that we will not be parties to dishonest proposals—
§ THE LORD CHANCELLOR
I did not mean that the noble Lord had said anything with conscious discourtesy; but I think he suggested that there was some sort of apprehension that we were not going to deal fairly with property.
§ EARL CAWDOR
I merely sketched out exactly what I understood to be the extreme scheme of the extreme persons 72 who wished these things carried out; I did not suggest whether they were honest or dishonest. I only asked the noble and learned Lord, when I had sketched them out, whether he disclaimed them or not.
§ THE LORD CHANCELLOR
I understood that substantially we were asked to disclaim what may fairly be called Mr. Henry George's projects; they were mentioned in particular. I will tell my noble friend my view. I have not consulted my colleagues about Mr. Henry George's projects, but I will tell him my view of them as I understand them. I believe that Mr. Henry George proposed that all taxation should be put upon land values, apart from buildings and improvements, and that they should be taxed until they were taxed out of existence. That, certainly, was the proposal of Mr. Henry George at one stage—I do not know whether it was until the end. But it. is perfectly obvious that proposals of that kind are not only unjust but absolutely absurd. If the noble Earl wants my opinion on the subject, that is it. It is ridiculous—and I should think that nobody would ever seriously ask any Government to disclaim ideas of that kind.
I have told your Lordships the views which have led us to ask for a Valuation Bill. As I have already said, the Bill itself cannot impose any rating. But, we have been asked, why not a Bill for England also? Well, why not? I do not see any reason why there should not be, and I anticipate that there will be a Bill for valuation in England. But the noble Earl may not be aware that the technical system of rating would require some alteration before a Bill for England could be introduced. But there is no intention of differentiating, or making Scotland the corpus vile. What is proposed is to have a valuation, and then we shall all learn and know thoroughly what are the values, and so be enabled to deal with them. I will only say this: that there is really no ground for apprehension that our operations will be of a predatory character.
Having explained our view, I make this comment—that really I have not heard any criticism of a hostile kind against 73 valuation per se—not a word. The noble Lord (Lord Balfour of Burleigh) whom I disclaim any intention of annexing—I never endeavoured to annex him to my opinions and I think I should be very foolish if I tried—so far from being, as I understood his speech, opposed to the Second Reading of this Bill, intimated that he would have liked to have the Bill read a second time, and then to have introduced the principle of local option, all of which is a matter of fair discussion. But if this Bill is of such a dreadful and dishonest character—or dangerous character—the noble Lord, upon whom the noble Earl (Earl Cawdor) pronounced so proper a panegyric, does not mind differing apparently from the noble and learned Lord (Lord Robertson), who has moved that this Bill shall not be read a second time, because Lord Balfour of Burleigh said that he wished it could have been read a second time. And Scotland will appreciate the fact that Lord Balfour of Burleigh wished this Bill to be read a second time, but was not allowed to have his own way.
What then is the objection? The objection is, not to the merits of the Bill itself, but to something that is supposed to be coming on. It is the belief and apprehension in their Lordships' minds, which I am afraid no language of mine will dispel—and I have not the least intention of endeavouring to dispel it because I am afraid it is an inveterate opinion—that behind this Bill is some scheme of a gross and reprehensible character—to put it plainly, some scheme of a dishonest character. That is the ground of your Lordships' objection to the Bill. There is nothing in the Bill which says so; the Bill itself cannot be open to any such construction; and your Lordships object to it, not because you think the Bill itself is wicked, but because we are wicked. That is the real reason why you are going to refuse a Second Reading to this Bill. I have no observation to make further on that subject, beyond this—that if the Bill were read a second time, no rating scheme could be imposed without your Lordships' consent and approbation. I should have thought it was time enough to take exception to the rating proposals when you saw them and that in order to enable His Majesty's Govern- 74 ment to consider the question of rating—admittedly a vexed question and one that requires legislation, because the late Government appointed a Commission on this very subject—you would have no objection in the meantime to a Valuation Bill which would give us the information which we desire. Those would have been my ideas. I do not know whether we are regarded as an assortment of birds of prey who cannot be trusted; but if that be the view, it is our demerits, and not the demerits of the Bill, which come into question this evening.
I have nothing more to say with regard to the Bill. I feel that it would have been disrespectful if I had not offered my views to your Lordships, but I am at the same time aware that it is profoundly improbable that your Lordship's views will be influenced by whatever argument I put forward. But of this I am perfectly certain, that in Scotland especially, and in England, I think, too, there is a strong sense that the system of rating ought to be altered and that it is not fair that persons who have property of great value, because it is not built upon should escape taking the fair share of the burden with others. To remedy that state of things is the main and fundamental purpose of this Bill, and I am perfectly certain that that principle will triumph, being a just principle against which no man can really argue.
§ THE MARQUESS OF LANSDOWNE
My Lords, the noble and learned Lord very naturally began by addressing himself to the complaint made by my noble friend Earl Cawdor as to the moment at which this Bill is presented to your Lordship's House; and the noble and learned Lord gave us, I think not for the first time, many reasons in justification of this procedure. He believes that under our present system the congestion of business which annually takes place is inevitable, and then he proceeds to the argument which I always expect, the argument which, speaking familiarly, I may describe as the tu quoque argument, that if noble Lords opposite are sinners we, too, have been sinners in our time. Well, my Lords, I admit it. The abuse is a long standing abuse, but I venture to say that never has it become 75 so intolerable as it has during the last year and this. I challenge noble Lords opposite to search the records of this House and see whether they can find anything approaching to the state of things which has arisen during the month through which we are now passing. Let me remind your Lordships that we have, within the compass of, I think, a week or ten days, been discussing the Evicted Tenants (Ireland) Bill, the English Small Holdings Bill, and this Bill, to say nothing of a most important measure dealing with patents, with which we struggled in the early hours of the morning two nights ago; and I may throw in the Deceased Wife's Sister Bill as a sort of extra. And I say of this present Bill in particular that I do not believe you can find any Bill of this great importance having been presented to this House within forty-eight hours of the Prorogation.
Whether our system of rating is a perfect one or not—and I am not going to say it is a perfect system—I am here to maintain that this Bill is far too serious a measure for your Lordships to read a second time at such a moment as this. The First Lord of the Admiralty extenuated the offence, if it be one, by telling us that after all this was really a small matter. I ask your Lordships to take note of those words, and we shall see whether, when the First Lord of the Admiralty takes part, as he no doubt will, in the autumn campaign with which we are threatened, he will refer to this Bill as a "small matter," and to the conduct of the House of Lords as being immaterial. Another defence was offered by the noble Lord who took charge of the Bill; it was a defence with which we are not unfamiliar as coming from the other side of the House. He assured us that his colleagues were incapable of predatory conduct. and he gave His Majesty's Ministers another of those testimonials which the President of the Board of Agriculture has been bestowing upon them nightly for some weeks past. But I am afraid we cannot be re-assured by these testimonials to the uprightness and integrity of the Government. We have to consider what this Bill contains, and also what it points to.
76 Now, my Lords, as to the contents of the Bill. I challenge contradiction when I say that it does three things—it imposes upon the officials who are entrusted with the business of these valuations a most arduous, important, and novel duty. They are to be given the task—an impossible task it seems to me—of disentangling from the value of the land the value of the buildings and other improvements which are to be found upon the land. That, in a country where the condition of land as a source of wealth has been so profoundly modified by human action generation after generation, is, I believe, an impossible task for anyone to perform, You may try, but you will have to fall back in the end upon conjecture and hypothesis. That is the duty which you are asked to throw upon a class of officials who, as my friends from Scotland will certainly tell you, are already fully burdened with official duties.
Then I challenge contradiction again when I say that it will throw upon the owners of land a very invidious and difficult duty. They are to be called upon—and remember, to be called upon under penalties—to declare the site value of the property which they own. That they should be able to do this without going to great expense, without calling in expert advice, I for one refuse to believe, and therefore I say that in the case of the owners of land great responsibilities, and probably very considerable expense, will be inevitably imposed. And, thirdly, I say that I remain altogether unconvinced by the arguments which have been brought forward to show that this will not be a very expensive measure for the ratepayers of Scotland. The noble Lord who introduced the Bill made light of the question of expense. He gave us some figures. I think he mentioned £10,000 for Glasgow and Edinburgh. I see in one of the interesting documents which have been circulated lately that in the Valuation Roll of Glasgow alone there are 212,000 entries. In Edinburgh there are upwards of 87,000 separate entries, and in the counties of Scotland nearly 600,000 individual entries will call for consideration. Including other burghs, it is estimated that at least 77 1,500,000 separate subjects which presently appear in the valuation roll will have to be separately valued. How that is going to be done at the rate of £10,000 for the city of Glasgow and the city of Edinburgh passes my comprehension altogether. Therefore, I take it that it can incontestably be shown that upon the assessors, upon the owners of land, and upon the ratepayers of Scotland, this Bill will inevitably throw a very heavy burden.
Now, my Lords, why is this to be done? All this expense and trouble will be purely vexatious unless this Bill is a prelude to a fundamental alteration in our system of taxation, and the noble and learned Lord on the Woolsack very frankly admits that it is a prelude to such a fundamental alteration. It is admitted that this new policy has not even yet been thought out. The noble Lord in charge of the Bill admitted that with great frankness. But, other people have thought it out, and there are certain conclusions to which they have come. I will venture to enumerate them in the fewest possible words. We believe that it is possible to show, in the first place, that this new policy means the abandonment of the principle that liability to taxation should be determined by the ability of the person who is taxed to pay. In the next place, we believe that the tendency of this policy will be to throw the whole burden of local taxation on one class, and that a class, remember, which is already very heavily burdened indeed. Again, we believe that this policy will tend to distribute the burden of taxation unevenly and inequitably between some members of that class and others. Further, it seems to us that this heavy blow will fall upon the present owners of landed property, because hereafter those who acquire landed property will, of course, make allowances for the new burden thrown upon the soil, and will be governed by the knowledge that that burden is likely to fall upon them in the price which they offer. And, lastly, we are convinced that this new system will substitute for a basis founded upon solid facts a basis founded upon mere conjecture. We may be wrong upon some of these points, but we believe that all these propositions are sustainable in argu- 78 ment, and therefore it seems to us that a measure of this kind, a measure, likely to lead to any such results as this, is not one that this House ought to be called upon to discuss in the few hours of the session which remain to us. Again we cannot exclude from consideration the fact that this policy was condemned by the Select Committee of 1892, again by the Royal Commission of 1901, and certainly by the majority of the witnesses who appeared before the Committee of last year. It appears to us that that policy has been supported by certain arguments which are unsound at the root. One of those is, I feel bound to say, that which fell from the noble and learned Lord upon the Woolsack just now, when he told us that ail over the country land which was ripe for building, and which, as bui ding ground, was likely to acquire a great value, was being withheld by the owners. I believe that the owners of building sites exercise ordinary prudence in the matter of disposing of their land for building—that self-interest is, after all, the motive which probably prevails with them, and that it is not the case that upon any large scale land is systematically withheld, when it is ripe for building, by the owners thereof.
Then, there is another fallacy which I think I have detected in the arguments to which we have listened—I mean the fallacy that the increased value which accrues to land, for example, in the neighbourhood of great cities, is due entirely to municipal expenditure and to the exertions of the surrounding community. That argument leaves out altogether the fact that if there is increased value, it is in great measure, if not mainly, due to the expenditure of the owners of the land upon buildings and other property upon it. I venture to suggest to the House that the only justification for pressing this measure on during the last hours of the session would be that His Majesty's Government saw their way to the adoption of some distinct policy in reference to this question, and if such a policy is not within sight, there can be no immediate hurry in passing this Bill.
I will make one observation of general application before I sit down, 79 and it is this—that in my opinion, if this House is to blame, it will not be for refusing to proceed with the consideration of this Bill, but because it has, in the case of other Bills put forward by His Majesty's Government, allowed those Bills to go through under conditions which rendered it absolutely impossible to discuss them adequately. There never was a stronger case than that of the Patents Bill, to which I referred just now. There is a Bill affecting great commercial interests in this country, and we are called upon to discuss it at a moment when many noble Lords who speak with authority upon the question are not here, and when it is simply impossible for us to give adequate consideration to the views which the different branches of trade have ex-pressed, and desired to express, with regard to it.
I take note of the observation that was let fall by the First Lord of the Admiralty. He told us that in his opinion there was only one remedy for the condition of things which confronted us He said, "Let us carry over the Bills from one Session to another." That is a very important admission made by the noble Lord. I venture to think that it is only by resorting to some step of this kind that we shall be able to avoid what I cannot help stigmatising as the scandal of these inadequate discussions. I believe that it is only by the adoption of some such policy as that that the Houses of Parliament will be able to do properly the work of revision which belongs sometimes to the one House and sometimes to the other. No body of business men in this country—or in any civilised country, I believe—would attempt to deal with their own private affairs under the conditions with which we now attempt to deal with the affairs of a great country and a great Empire. Therefore, my Lords, if we refuse to read this Bill a second time this evening, I trust it will be understood that we are in reality only doing that which the First Lord of the Admiralty has suggested that we should do—deferring the further consideration of this Bill and its consequences until a more opportune moment.
§ THE MARQUESS OF RIPON
My Lords, I must congratulate my noble friend upon the extreme ingenuity of his last suggestion. He has discovered that my noble friend (Lord Tweedmouth) has invented a method of getting out of the difficulties which are cast upon us, as I maintain, by the conditions under which we have to do our work. I have never doubted or denied those difficulties. During the last few days I have often expressed my regret that they should have occurred, and I feel with my noble friend who has just sat down (the Marquess of Lansdowne) that it is highly important—nay, very necessary—that the Government and Parliament should consider the best method of dealing with difficulties of that kind. But what that method may be I cannot say. My views are not quite so much matured as those of my noble friend the First Lord of the Admiralty, but I can assure my noble friends opposite that I feel that they have a grievance. I have said so several times, and am sorry to repeat my words again, but, as far as I am concerned, I shall be very glad to consider and to concur in any satisfactory constitutional measures which may tend to relieve difficulties of this kind. If I say no more upon that part of the speech of my noble friend opposite, I hope he will not think it is because I underrate the importance of his observations, but merely because we have been discussing this question, as was most natural, upon all the Bills which have been before us during the last two or three days, and it is unnecessary that we should prolong that discussion at the present moment.
Now, my Lords, I am not an expert in this matter. I know nothing of Scottish law, or of the Scottish system of administration. I speak, therefore, with the very greatest diffidence upon the subject, and I hope that noble Lords from Scotland will be good enough to pardon me if I make any very stupid remarks. But, I do not think that my noble friend who has just sat down (the Marquess of Lansdowne) has any justification for most of the accusations which he made against this Bill. He said that it imposed an 81 impossible work upon the officials who were to carry it out. He repeated the word "impossible," and that, I think, was his statement. I do not think that that statement is borne out by the experience of other places. I believe that a valuation upon these principles has now for a considerable time been carried out in the Australian Colonies, and it certainly has not been found impossible to carry it out there.
§ THE MARQUESS OF RIPON
And if it is not impossible to carry out such a system in those Colonies, why it should be assumed that it would be altogether impossible to carry it out in Scotland is more than I can say. Then my noble friend says it will lead to a vast expense. My noble friend the First Lord of the Admiralty, in his speech made earlier in the evening, quoted the statement of a very competent person who stated that he would do this work for London for £25,000 down and £5,000 a year. That, my Lords, is not a very extravagant amount for a great, populous, and rich city like London, and if that statement be correct, as I believe it to be, I do not think you will find that the expense for Scotland would be as great as my noble friend has sketched out. But with respect to the difficulty of doing this thing, may I refer to the Minority Report of the Urban Rating Sites Value Commission, because I find there this statement—On the whole we are disposed to think that the valuation of sites, sufficiently accurate for the purpose, and not inferior to the present valuation of hereditaments, could be made without undue labour and expense.That was the opinion of those competent persons.
§ THE MARQUESS OF RIPON
That, my Lords, may no doubt be a sufficient answer, but that is the statement contained there, and those words that my noble friend has mentioned do not appear. I do not for a moment doubt that my noble friend is correct.
LORD BALFOUR OF BURLEIGH
I beg the noble Lord's pardon, but the whole tenor of the Report was dealing with the annual value, and we condemned the other system.
§ THE MARQUESS OF RIPON
My Lords, one point has been made a great deal in this discussion. You have said, Why do you not apply this system to England? We have had very lately a new phenomenon which I never expected to see, namely, Scotsmen anxious and eager to apply the English system to Scotland. I have previously found, on the contrary, that they thought everything Scottish was right and most things English were wrong. But the reason why we have not applied this Bill to England is very simple—because the whole system of valuation in this country is different from that in Scotland. Most of your Lordships who have attended to public affairs for any considerable time are aware that there has been with successive Governments for the last ten or twenty years a desire to deal with this question of valuation, and that they have never been able to do it. We hope to be able to deal with it, but it would not be possible to apply to England the exact system applicable to Scotland, nor to apply to Scotland the exact system applicable to England. I do not think there is much, therefore, in that criticism.
There has been in the course of this debate a great tendency to raise all sorts of bogies. It has been admitted, over and over again, that this measure itself is a very simple one, but that what you are afraid of is what is coming after it and what it will lead to, and we have even had hints that it is a preliminary step to the adoption of the system of the late Mr. Henry George. I have been accustomed for a long time to hear bogies of this sort put about, but they do not very much affect me. I would venture to say for myself, at all events, that many years ago I read the book of Mr. Henry George, and a very interesting and curious book it was; but I am bound to say that Mr. Henry George did not convince me either of the truth of his premise or of the wisdom of his conclusions. And, therefore, your Lordships may be satisfied that at all events 83 I have not at the back of my head any system founded on "Progress and Poverty." But I think your Lordships will make a mistake if you throw out this Bill on Second Reading. The only reason—the only substantial reason as it seems to me—the only reason that deserves consideration, that has been put before you at the present time, is the question of time. Upon that I can only make the apology that I have made, but I believe, especially after
§ the time this debate has taken and the arguments which have been employed, that the Vote given to-night will beyond question be taken by the country to relate not to any question of time, but to such improvement in the system of valuation as may follow upon the Bill.
§ On Question, whether the word "now" should stand part of the Question, their Lordships divided:—Contents, 31; Not-Contents, 118.85
|Loreburn, L. (L. Chancellor.)||Aberdare, L.||Granard, L. (E. Cranard.) [Teller.]|
|Crewe, E. (L. President.)||Allendale, L.||Hamilton of Dalzell, L.|
|Blyth, L.||Haversham, L.|
|Ripon, M. (L. Privy Seal.)||Colebrooke, L.||Headley, L.|
|Courtney of Penwith, L.||Herschell, L.|
|Beauchamp, E. (L. Steward.)||Denman, L. [Teller.]||Lucas, L.|
|Carrington, E.||Elgin, L. (E. Elgin and Kincardine.)||Monteagle of Brandon, L.|
|Craven, E.||O'Hagan, L.|
|Kimberley, E.||Eversley, L.||Saye and Sele, L.|
|Stanley of Alderley, L.|
|Althorp, V. (L. Chamberlain.)||Fitzmaurice, L.||Tweedmouth, L.|
|Glantawe, L.||Weardale, L.|
|Norfolk, D. (E. Marshal.)||Scarbrough, E.||Clinton, L.|
|Argyll, D.||Shaftesbury, E.||Clonbrock, L.|
|Bedford, D.||Stanhope, E.||Cloncurry, L.|
|Newcastle, D.||Strange, E. (D. Atholl.)||Colchester, L.|
|Northumberland, D.||Vane, E. (M. Londonderry.)||Cottesloe, L.|
|Richmond and Gordon, D.||Waldegrave, E. [Teller.]||Dawnay, L. (V. Downe.)|
|Wellington, D.||Wicklow, E.||De Saumarez, L.|
|Ailesbury, M.||Churchill, V. [Teller.]||Douglas, L. (E. Home.)|
|Ailsa, M.||Falmouth, V.||Dunboyne, L.|
|Camden, M.||Goschen, V.||Ellenborough, L.|
|Lansdowne, M.||Halifax, V.||Elphinstone, L.|
|Salisbury, M.||Hill, V.||Estcourt, L.|
|Zetland, M.||Hood, V.||Fairlie, L. (E. Glasgow.)|
|Hutchinson, V. (E. Donoughmore.)||Forester, L.|
|Camperdown, E.||Gage, L. (I. Gage.)|
|Carnwath, E.||St. Aldwyn, V.||Hatherton, L.|
|Catheart, E.||Hylton, L.|
|Cawdor, E.||Addington, L.||Inchiquin, L.|
|Clarendon, E.||Amherst of Hackney, L.||Kensington, L.|
|Dartmouth, E.||Ardilaun, L.||Kilmarnock, L. (E. Erroll.)|
|Dartrey, E.||Armstrong, L.||Kintore, L. (E. Kintore.)|
|Derby, E.||Ashbourne, L.||Langford, L.|
|Doncaster, E. (D. Buccleuch and Queensberry)||Atkinson, L.||Lawrence, L.|
|Balfour, L.||Leigh, L.|
|Eldon, E.||Balinhard, L. (E. Southesk.)||Leith of Fyvie. L.|
|Feversham, E.||Barnard, L.||Lovat, L.|
|Hardwicke, E.||Barrymore, L||Middleton, L.|
|Lauderdale, E.||Belhaven and Stenton, L.||Monckton, L, (V. Culway.)|
|Londesborough, E.||Blythswood, L.||North, L.|
|Malmesbury, E.||Borthwick, L.||Oriel, L. (V. Massereene.)|
|Mar and Kellie, E.||Bowes, L. (E. Strathmore and Kinghorn.)||Penrhyn, L.|
|Morton, E.||Ponsonby, L. (E. Bess-borough.)|
|Mount-Edgcumbe, E.||Brodrick, L. (V. Midleton.)|
|Munster, E.||Calthorpe, L.||Ramsay, L. (E. Dalhousie.)|
|Onslow, E.||Cheylesmore, L.||Ranfurly, L. (E. Ranfurly.)|
|Radnor, E.||Clifford of Chudleigh, L.||Rathmore, L.|
|Ritchie of Dundee, L.||Sinclair, L.||Templemore, L.|
|Robertson, L.||Stalbridge, L.||Tennyson, L.|
|Saltoun, L.||Stanmore, L.||Waleran, L.|
|Sanderson, L.||Stewart of Garlies, L. (E. Galloway.)||Wemyss, L. (E. Wemyss.)|
|Seaton, L.||Sudley, L, (E. Arran.)|
On Question, Amendment agreed to.