HL Deb 26 March 1908 vol 186 cc1494-523

Order of the day read for resuming the adjourned debate on the Amendment to the Motion for the Second Reading, viz., "that the Bill be read 2a this day six months."


My Lords, I think that one of the most interesting features of the debate yesterday afternoon was that, after gently chiding the noble Viscount, Lord Ridley, for irrelevancy, the noble and learned Lord on the Woolsack proceeded to give a very interesting account of the rating of land values in London, where the system, certainly of land tenure, and, I think, also of rating, is utterly different from the system in Scotland. I wondered if at the back of the mind of the Government there could have been any idea of the vivisection of poor Scotland to prepare the way for a future successful operation on London. If the noble and learned Lord did not intend to convey any such hint, I think it shows how difficult it is to speak absolutely to the point on a Bill which, although it contains very little in itself, leads to considerably greater things beyond.

Since this Bill was before your Lordships' House in the autumn of last year, much has been done by way of public meetings in Scotland, on both sides, to explain the measure and its probable effect. My noble friends, Lord Camper-down and Lord Balfour, Mr. Younger, the Member for Ayr Burghs, and others have done great service in helping to expose the fallacies which underlie its principles, showing that your Lordships were amply justified in rejecting this Bill in the closing hours of last session, for the reason, if for no other, that it gave the country more time to consider and understand its purport. The question now is, has anything occurred in the interval to induce your Lordships to reconsider your former decision? I fully recognise the conciliatory tone of the speech of my noble friend in charge of the Bill and of the noble and learned Lord on the Woolsack, and I rather gathered from what they said that concessions would be made should the Bill reach the Committee stage. I venture to suggest that these concessions will have to be pretty substantial and pretty drastic in order to satisfy the reasonable objections of the opponents of the Bill.

Perhaps one of the least important objections to the Bill is that of its probable great cost, but it is a very real objection on the part of the ratepayers; and as one of the objects of the Bill is claimed to be to obtain information for the Government, it is so far satisfactory at least to Scotland that the Government have admitted that, at any rate, part of the cost shall be charged to the Treasury and not to the overburdened ratepayers. I submit that this Bill should be most carefully considered and threshed out in this House, for I apprehend—and my apprehension is borne out by what the noble and learned Lord said yesterday—that your Lordships may not be able to amend the inevitable rating Bill which will follow. Therefore, I do think that we are entitled to ask what are the intentions of the Government with regard to the rating of these land values when they are ascertained through the operation of this Bill.

It has been said that this Bill is the first step in carrying out the proposals contained in the Report of the Solicitor-General's Committee on the Glasgow Bill. I think we may ask whether this is so. It will be remembered—the noble Lord who moved the Second Beading of this Bill reminded us of it—that the Government have already repudiated one of the most important proposals in that Report—namely, the proposal to tax existing fen-duties. Do they also propose to repudiate the most important proposal all—the proposal to change the basis or rating from the annual value of the land and buildings to the value of the land apart from the buildings? The noble and learned Lord on the Woolsack says he does repudiate that, but I have not heard another member of the Government say "Ditto." Or does the Government propose to keep to the present system and impose an additional rate on land values, as was proposed in Mr. Sutherland's Bill, which, you will remember, the Committee emphatically condemned. If the basis of local taxation is thus to be changed, I submit that it would work a hardship on the poorer ratepayers in the country districts and in the smaller burghs difficult to calculate. In the smaller manufacturing towns there are often flourishing industries which have grown up from small beginnings far from the railway. At the present time the owners of these factories pay a considerable proportion of the local rates, as the annual value appearing in the valuation roll has, as a rule, been calculated on a percentage upon the cost of the valuable buildings erected on these sites. If the sites were cleared of buildings they would be practically worthless, and would only fetch at least the market value of ground in the immediate vicinity.

Who, then, is to make up the loss in rates which must inevitably arise from the annual value of these buildings being excluded from rating and only the site values assessed? Surely, not the lord of the manor, for what would be the value of his park with mansion, cottages, stables, and gardens eliminated? In my opinion the difference would have to be made up for the most part by shopkeepers, who in these days of co-operative societies have a hard struggle to make a living in the smaller towns, by villa residents, and by artisans and the better class workmen who live in their own cottages with gardens, which the excellent foiling system in Scotland does so much to encourage. If this Bill is to pass, I submit that to prevent this possible injustice to the ratepayers in the smaller burghs, an Amendment must be inserted making it optional to the town councils to adopt the Act or not as they think fit. Surely this is not too much to ask. Or has the Government the same curious mistrust of the Scottish town councils as we know they have of the Scottish county councils?

This Bill applies to all land and heritages in Scotland, with the exception of railways and canals. Let us see how it would affect agricultural land. I believe it would be found, in the case of most of the small and moderate size farms in Scotland, that the land value, after deducting the cost of the buildings, equipment, fences, and the like, would work out at a minus quantity. Therefore, if there is no land value, and if the rate is to be only at the land value, half of the agricultural land in Scotland will pay no rates. As a landlord, I might thank the Government for their dole, but, as chairman of my county council, I should be at my wit's end to know how the business of the county was to be carried on. Surely this shows the futility and absurdity of making the Bill apply to agricultural subjects. Another difficulty occurs to me. The smaller manufacturing towns in Scotland are increasing very slowly as a rule. Some are going back, the tendency being for new factories to go to the great cities and the larger towns, partly, no doubt, for the obvious reasons of market, of labour, and of transport, and partly, I think, because the difference in rates in favour of the smaller towns is not what it used to be although the land is cheaper. There is a considerable quantity of land within these burghs waiting to be feued, but in the meantime let as agricultural land. How is this land to be valued under this Bill when it may not be feued for years, perhaps not for generations?

At a meeting of the Edinburgh Town Council held last week it was stated that there were no less than 3,800 acres of such land within the city of Edinburgh waiting to be feued, and which cannot be all taken up for upwards of 200 years. How is that land to be valued under this Bill? I cannot see how the capital value can be ascertained, even approximately, unless it is put up to auction. Can it be the object of the Government to make the owners of such land pay more in rates than they receive in rent, in order to compel them to feu it at the agricultural rate, and so, by a side wind, abolish what is known as the unearned increment? That course would be confiscation, or any other opprobrious term your Lordships would like to apply to it. How else is this policy going to cheapen land, as the Government boast it will do I Perhaps I am unduly suspicious. I would, if I could, be reassured by the obvious sincerity of the noble and learned Lord on the Woolsack. Individually, I admit, the members of the Government, at any rate in this House, are like lambs; but collectively, if I may say so, there are some of us on this side who think that they sometimes show decided predatory instincts. But, seriously, my Lords, I submit that bona fide agricultural land within an urban area, when it can be shown that it is not to be held up for an exorbitant price later on, should, in all justice, be valued, as at present, at the actual annual rental, and not, in addition, on its prospective capital value, as is proposed in this Bill, and which would be impossible of ascertainment without the merest guesswork.

I believe that there is practically no holding up of land in Scotland, at any rate, not in the smaller burghs; and, if there is, surely a very different Bill from the present could be devised to remedy the evil without penalising innocent people. Land, no doubt, is kept vacant in the center of towns for the purpose of preserving the amenity of better-class houses, but these much-needed open spaces will be swept away if you carry out the policy which this Bill must lead up to. There is one other point. What is to become of the unfortunate owner of a site in an important street like Princes Street, Edinburgh, who has not the means to erect buildings equal to the most up-to-date buildings in that thoroughfare? The Solicitor-General, in a recent speech, indicated that such an owner was not at the present time paying his proper proportion of the local rates, and in future will be made to do so. Surely, my Lords, this is penalising the man who may not have the means or the inclination to pull down and re-erect his property at intervals of years according to the caprice or speculative activities of his neighbours. I conceive that to be an unwarrantable interference with the liberty of the subject.

If this Bill is to be read a second time I submit that there are at least three Amendments which are absolutely necessary to make it tolerable. The first is that it should be confined to urban areas, the second that it should be made optional, and the third that bona fide agricultural land within an urban area, which the owner is willing to feu when applied for at the current rate, should be exempt. This Bill carries out to the letter the recommendation in the Report of the Solicitor-General's Committee to which I have already alluded. The recommendation is as follows:— That a measure be introduced making provision for a valuation being made of land in the burghs and counties of Scotland apart from the buildings and improvements thereon. But, my Lords, I submit that the arguments and proposals in the Report which led up to that recommendation are, for the most part, so futile and so impossible that we are entitled to know at this stage, not only what the rating proposals of the Government are, but if they are prepared to consider favourably the Amendments, among others, which I have indicated. If the answer is in the negative, I hope your Lordships will decline to read the Bill a second time.


My Lords, I do not propose to detain your Lordships for more than one moment, as I wish to speak only upon one point. I think noble Lords who are opposed to this Bill were very much reassured by what fell from the noble and learned Lord on the Woolsack yesterday, when he said that it would not be proposed in any future Bill to place the whole of the rates upon land, as was originally thought to be the intention, instead of upon the combined subject of land and houses. But while we were reassured on that point, there was another statement which the noble and learned Lord made which was not at all reassuring. I allude to his reference to the rating of vacant spaces as if the laud were budding land; and it is in that connection, and especially with regard to the small burghs in Scotland, that I wish to make one or two remarks. These burghs have a considerable amount of agricultural land around them, and in some cases there is a quantity of waste land that produces nothing. If this vacant land is to be valued as though it were prospective building land, it will be quite impossible for the owner of such land to pay rates upon that valuation. Much of this land is hundreds of yards from any existing road, and it is not until the owner has, at great expense, constructed roads and made the land fit for feuing that any recoupment can be obtained, and even then it may be many years before he is recouped for his outlay in road making and so on. Therefore, I hope that in any proposals which may be made in the rating Bill that is to follow this Bill, those areas will not be included as building land until they are so available. If the Bill goes into Committee great care should be taken with regard to this particular point, and rules should be laid down by which land which is not at present available for building should not be treated as a prospective building site.


My Lords, I think, although I suppose the noble Earl who resumed the debate this evening would not agree with mo, there is a considerable amount of agree-in the House that the main provision suggested, but not enacted, in the Bill—namely, that there should be a separate valuation of site and structure—is one which deserves further consideration. But the real objection to the measure is one which is not dealt with by its provisions—namely, the objection to rating which is supposed to follow upon this legislation. If I am asked to say whether the Bill is intended to facilitate the discussion of the subject of rating, I would admit that it is so; but, on the other hand, I concur with the Lord Chancellor in repudiating the extreme theories which are attributed to those who support the Bill. When these theories exist, however, and if the object is to avoid them, it seems to be not unnatural that further information should be acquired; and the Government therefore propose the plan suggested in the Bill because we think that this information may be so acquired.

I could not exactly follow the argument of the noble Earl with regard to the valuation of agricultural land. I understood him to argue that if the Bill passed, the agricultural land of the country outside the burghs would not be valued at all, and that the county councils would in consequence be reduced to straits. I do not see that this conclusion follows from the provisions of the Bill. I cannot help thinking that the difficulties of expenses are exaggerated. I think the question of expense depends very much on the precision of the information enforced. If absolute precision is enforced, then no doubt there might be very largo expense, but it is not enforced by this Bill. What is required in this Bill is very much what was laid down by the Commission on Local Taxation. That Commission said— On the whole, we are disposed to think that a valuation of sites sufficiently accurate for the purpose, and not inferior to the present valuation of hereditaments "— and I dwell upon that phrase— could be made without undue labour and expense. Such a valuation could obviously be made only by professional experts, although the data could be understood and criticised by anyone possessed of common sense and knowledge. I am quite aware that the Commission were concerned with urban values only and that this Bill applies to all sites, but I think the opinion I have quoted might be applicable to both sides of the question.

Besides that, the Bill is consistent with the present practice, and, indeed, follows the present practice. May I remind your Lordships what the present practice is? In the first place, the assessor sends out to every owner in the county or burgh a notice for particulars. In the second place, the owner returns those particulars filled up. In the third place, the assessor, after such consultation and correspondence with the owner as is necessary, makes up and sends out his notices of the proposed entry in the valuation roll. Then the owner can appeal, but he appeals to the valuation committee of the county or burgh, and the hearing takes place before the Committee. Sometimes evidence is led, but I think seldom at great length, and the decision is, generally speaking, accepted. But if, thereafter, the owner or assessor is dissatisfied with the result, then, and then only, is there an appeal to a Court, where, of course, the usual legal questions are raised. Now I venture to maintain that in all this procedure, up to, at any rate, the last, no great expense is involved. What now is required under this Bill? There is no alteration whatever in procedure, as will be seen by Section 2. No doubt the assessor will have to put some additional questions and the owner will have to return certain additional answers. But as regards the information on which those answers can be given I agree with the opinion of the noble Lord who introduced this Bill last year, that it is generally on record or known. In large estates it is known by the factor, and in small estates it would certainly be well known to each individual owner.

I think that in most cases the cost of buildings is pretty well known, and further that evidence might generally be obtained by reference to the insurance policies taken out on the buildings in question. I admit that other items under the subsection stand in a different position. Although in the case of improvements, as in that of buildings, the original cost must be on record somewhere, still it is only the unexhausted benefit that comes in question. But the principle of unexhausted benefits of improvements is now well known and acted upon under the Agricultural Holdings Acts, and I cannot help thinking that there also, even without legal or professional assistance, it would be quite possible to put forward a statement of the particulars required without great expense. We have also the fact that all these questions will be dealt with by the same assessors and the same valuation committee. So much as regards expense.

I should wish to say a word with regard to another point on which opinions may differ. I appreciate entirely the distinction between capital value and annual value. I suppose under normal conditions the capital value to be the capitalisation of the annual value, and the annual value the annual return on capital invested. I admit that if we are to separate site and structure cases must arise where it is difficult, perhaps impossible, to assign a separate annual value to the site. On that I will only say that I admit entirely the inexpediency of rating undeveloped or unproductive capital. But how are you to avoid it? Is it avoided by confining the proposition to urban districts? flow can we define urban districts? I venture to think that to define them by the ordinary boundaries would be unfair and unjust. I could from my own experience quote cases in which it would be manifestly unfair. But again I venture to maintain that the examination which we shall be able to make following on this Bill, should it be passed, will clear away many of the difficulties. If the theories are unsound, the knowledge that we shall gain will explode and not confirm them, and in these circumstances I hope the Bill will be read a second time.


My Lords, if the noble Earl who has just sat down has a difficulty in understanding the argument of the noble Earl who resumed the debate this evening as to the value of land in counties if separated from buildings, he must be more fortunate as a landowner than most of us who sit in this House. Take the county of Kent. If you were to make a valuation of the land apart from the value of the buildings and improvements upon it and the land was then only to be taxed, there would be nothing left in the county to pay rates upon. I am equally unable to appreciate how the noble Earl, who is a large landowner, can have any difficulty in understanding that. The noble Earl said, at the end of his speech, that he recognised the injustice of rating undeveloped or unproductive capital; but how, he asked, are you to avoid it. The way to avoid the injustice of taxing capital value is to stick to the present system of rating and not to fly to one which would work injustice to landowners and not have the effect which the extreme gentlemen think it would have. How can you tax the land value of a house? What this Bill is wanted for is to get landowners to say that their land is worth nothing at all. I quite admit that there are difficulties with regard to some places where land is held up, but, in regard to most of our large towns, the owners of the surrounding land are anxious and willing to sell, and are only now regretting that in consequence of the present bad state of affairs in the building trade throughout the country that is impossible. If you are going to rate as building land, land which is not worth more than agricultural value and will not be for many years to come, you will oblige landowners to give away their land because it will not be producing sufficient money to cover the rates charged upon it. That is an injustice which I feel sure your Lordships' House could not permit. I hope the Bill will be read a second time with the object of improving it in Committee.


My Lords, I rise to express my full agreement with the noble Viscount who moved the rejection of this Bill yesterday, and to state very briefly my reasons therefor. I listened with great interest to the eloquent speech of the noble and learned Lord on the Woolsack, and I was one of those who welcomed his assertion that His Majesty's Government did not desire to rate land, and land only. Still, His Majesty's present Administration are a Government of many voices, all of them charming, and none of them, I am sure, more alluring than the voice of the noble and learned Lord. He dealt at length with the intentions of His Majesty's Government; but we have it on very high authority—on that of the noble Earl the Lord President—that intentions of Governments are not interesting, but that what are interesting are the actions which those intentions produce. Your Lordships will pardon my referring to such uninteresting things as intentions, but many of us feel that it is precisely with the intentions of His Majesty's Government that we are dealing when we are considering this Bill, because, although the noble and learned Lord carefully explained that it is permissive, it leads up to a larger policy. There was one point, at all events, which I think was rather glossed over by some of the speakers in favour of the Bill—the question of urban areas. I am sure there is no one in this House or in the House of Commons who would not admit at once that, where there is land in an urban area preventing the proper development of the town, that land should bear more taxation. I am quite in agreement with that. But the moment you proceed to rate such land at a higher figure than at present you will find that it will immediately decrease in value. It is evident that if laud is worth a certain amount, and a Bill is brought in rating it at a higher figure, that land will depreciate, and the owner will not receive full value for the land. I hardly think this fair, and for the reasons I have stated I desire to record my protest against the Bill, and to assure my noble friend that I am thoroughly with him in his Amendment to reject it.


My Lords, the noble Lord who introduced this Bill yesterday, in a very temperate and conciliatory speech, was good enough to quote to the House some words which I used, on the memorable evening in August last when, after an all-night sitting of the House of Commons, this Bill was laid on the Table of this House, and it was suggested to us that we might pass it into law within the few hours that then remained of the session. We then thought that His Majesty's Government treated the House with somewhat scant courtesy in making that proposal, and we have thought since that the supporters and some of the colleagues of noble Lords opposite treated us with even less courtesy when they made our rejection of the Bill the occasion for violent denunciations of this House for thwarting the will of the people.

I readily admit that the circumstances this evening are entirely different from the circumstances on that occasion. We have now abundant time to examine this Bill in detail, and it seems to me to contain many proposals which stand greatly in need of such examination. They are proposals with which I do not think we can really get to close quarters until we arrive at the Committee stage, and it is for that reason that I desire to associate myself with my noble friends Lord St. Aldwyn and Lord Balfour of Burleigh in recommending the House to give the Bill a Second Beading. I am very far from taking upon myself to say that there is no room for improvement in the present system of rating, but I wish to know a good deal more than I know at present of the particular mode in which His Majesty's Government desire that improvement to be effected. Now we are told—and truly told—that this is not a rating Bill, but I am afraid we can scarcely accept it as being a measure involving nothing more than the col- lection of a few innocent statistics. The noble and learned Lord on the Woolsack has very frankly admitted that this Bill is introduced as a preliminary to ulterior legislation, and we therefore have a right to ask for some information as to the character of that ulterior legislation. We have had some very interesting announcements both from the noble and learned Lord and from the Secretary of State for the Colonies as to what that legislation is not to imply. I welcome those admissions. The noble and learned Lord imputed to us that we were somewhat uncharitable when we expressed our apprehension that behind this Bill might lurk proposals for transferring the whole of the incidence of the rates to the site value of the land. I do not know whether we are open to a charge of uncharitableness, but I think we had, at any rate, some reasonable grounds for the apprehensions which we expressed. The noble and learned Lord told us indeed that it was an impracticable and foolish dream to put all the rates upon the site, and he said that to do that would obviously eat up the land value altogether. With that I entirely agree. But do not lot it be forgotten that this Bill I owes its origin to the pressure put upon His Majesty's Government by gentlemen who do dream those foolish dreams and hope to see them realised.

This Bill originates in the Report of a Select Committee of the House of Commons which sat in the year 1906. I noticed the other day a very interesting admission made by a member of the Committee as to the manner in which that Committee was composed. He told his hearers that it contained fifteen members. One absented himself, and of the remaining fourteen, eight were pledged to the eyes to support the principle of the Bill, and three, including the Solicitor-General, who was, unless I am mistaken, chairman of the Committee, were vice-presidents of the League for the Taxation of Ground Values. That league, we are told, was established to promote the doctrines of Mr. Henry George, and the root and groundwork of the Bill could be found in his theories. The noble and learned Lord repudiates the doctrine of Mr. Henry George, but there is something a little suspicious, if I may say so, in the fact that this Bill proceeds from a quarter in which the doctrines of Mr. Henry George were notoriously accepted.

I only want to say a few words as to the consequences which this Bill by itself might have, entirely without reference to ulterior legislation. In the first place, there is the question of expense. The noble Lord who moved, gave the House a very plausible argument to show that we were altogether wrong in anticipating that the setting up of this machinery would be expensive to the public or to any one else concerned, and he gave us an estimate of the cost of establishing this valuation in some of the great cities. The noble Lord's estimate was extraordinarily low and entirely unlike any other estimate that to the best of my belief has been put forward by those most competent to judge. A gentleman, the assessor for Roxburgh-shire, was cited by the noble Lord, who was ready to do the whole county for, £300. I daresay he was, but I am afraid that does not inspire me with any great confidence in his judgment as arbiter of the financial fortunes of the people who reside in the county of Roxburgh. Surely, if this work of valuation is to be done at all, it ought to be done in a very thorough, careful, and patient manner. The noble Lord who spoke just now told us that in his view great precision was not necessary. I rather shudder when I am told that work of this importance is to be done in a rough-and-ready and haphazard fashion. When he told us that, under the present system of valuation, some such proceedings were admissible, I think he rather left out of account that the great difficulty in the present case would lie in the duty which will be imposed upon these officials of dissecting the value of the premises and dividing that value between the site value of the land and the excrescences in the way of improvements and so forth upon the surface of the land.

Then I think the noble Lord left out of account the great expense which this operation must necessarily involve to the owners concerned. The owner will have to make minute researches into the records of his estate in order to satisfy himself in regard to improvements. I shall be very much surprised if any proprietor will come forward to say that facts of this kind could be collected without an investigation which will be extremely laborious and somewhat expensive besides. There is also the further point that it is quite conceivable that the finding of the assessor may not agree with the conclusions come to by the owner and his advisors, and that may lead to very troublesome and perhaps costly proceedings before the matter is finally adjusted. But, at any rate, I cannot bring myself to believe that, if this process of revaluation is, as we are told it is to be, applied to other parts of the country—for example, to the great City of London—the expense which will be occasioned will be a negligible item.

The noble and learned Lord has told us, not for the first time, that this Bill does not in itself effect any alteration in the rating system of the country. He said that for this purpose further legislation would be necessary, and he indicated that this House would have an opportunity of considering such legislation.


Of course the Bill contemplates a future rating measure, and if a future rating measure comes up there will, of course, be opportunities of considering it. I do not enter on the constitutional question, but there is no doubt the House will have opportunities of discussing such a measure.


I am very glad the noble and learned Lord has said that; but what I desire to insist on is that we are entitled to an assurance that this House will have a real and full opportunity of discussing these new proposals whenever it is attempted to put them into force. I accentuate the words "real and full opportunity," because there have been cases lately of important financial measures, involving questions of high policy, being introduced, which this House has not had a full opportunity of discussing. The Lord President of the Council will understand that I am alluding to the £100,000 grant for school buildings, in our view a very irregular proceeding, which it was sought to legalise by tacking the proposal on to the Appropriation Bill, so that the House of Lords had either to throw out the Appropriation Bill or allow a very doubtful measure to go forward. That is not what I call a full and real opportunity.

I have been a good deal struck during this discussion by what I cannot help describing as the weakness of the foundation of fact on which the Government proposal rests. What we are told is something of this kind. Land is being held back by the owners, and the result of that is to diminish the amount of land available for building, and the result of that again is that such land as is available costs more than it would otherwise cost. Hence, it is said, arise the difficulties which are encountered in the rehousing of the population of this country. That is, I understand, the way in which the case is put. Now I am tempted to ask what evidence is there that this practice of holding back land prevails to any great extent in Scotland or indeed in any part of the United Kingdom? Is it not extraordinary that, considering the way in which this Bill was challenged, His Majesty's Ministers should not have been able to tell us, as a matter of fact, that they are satisfied that in large cities land is being perversely held back by the owners in such a manner as to retard the natural and proper development of the cities adjoining which it is to be found?

The noble Lord who introduced the Bill dealt very cautiously with the matter. He said the existing system of rating "must" tend to land being held up and "may" prove an obstacle to the development of towns, and the noble and learned Lord on the Woolsack asked us to imagine the case of a man with a great property which could be built over but who kept the land back. But we are not told where these cases are to found, and I hope the noble Earl opposite who will follow me will be able to show us that there is at any rate some foundation of fact for these statements. My Lords, I go so far as to say this, that if you could show me that in this City or in any other city some obstructive millionaire was to be found who was holding back a large area essential to the proper development of the city, for his own selfish purposes, I should agree that we must find some means of dealing with him, though I should not, perhaps, admit that the particular mode suggested was the most proper one to adopt. But my view is that such cases, if they exist at all, are of rare occurrence. I cannot help believing that the much commoner case will be the case where the proprietor of building land has laid out his estate in such a manner as to provide a reasonable amount of space, air, and light round the buildings If, however, that is the case at which this Bill is aimed, I say you are causing, not a benefit, but a very great disadvantage to the community.

I think it is clear from the statements made from time to time by members of His Majesty's Government that what some of them, at any rate, have in their minds is that you should mulct, not only the owners of undeveloped land, but also the owners of land which is not fully and sufficiently developed up to some standard of which we are not yet aware and about which I shall have a word to say in a moment. Observe what was said by the Solicitor-General for Scotland— The second effect would be that man who were misusing their property, who held valuable sites upon which the buildings were allowed to fall into dilapidation and decay, or sites carrying buildings obviously unsuitable, who did not get the full value from a site—from these men there would he required an increase over the rates they paid at present. The question arises, what is a suitable amount of building development? I want your Lordships to consider how this process advocated by the Solicitor-General might, and probably would, work. You have a proprietor of a building site on which stands a building six storeys high. You have another proprietor of a similar site on which there are no buildings at all, and you have a third proprietor who has built on his site a building only two storeys high. I want to know whether the man who has built only two storeys high is to he mulcted because he has not built up to the six-storey standard which has found favour with his neighbour? That is a bare and somewhat crude illustration of my meaning, but I hope it will make it intelligible to the noble Earl. If, as I rather anticipate, the noble Earl will toll me that His Majesty's Government do not intend anything of the kind, then I ask him to tell us what it is they do intend, because they must have in their minds some standard at which their new system is intended to aim. If we cannot got a full explanation on that point to night I hope it will be pushed home when we got to the Committee stage.

Then one word as to the question of overcrowding in the great centers of population. I am afraid I must say that I am unable to see how these proposals would really produce any appreciable effect on that most difficult problem. If they are to produce any effect you must show two things. You must show that there really is building land available which might be brought in and built upon, and you must also show that by building upon it you would make it easier and cheaper to rehouse the population under economic conditions. I doubt very much whether either of those propositions can be made good. The case of rehousing the population does not depend so much upon the question of site values as upon the great expense of building and upon other circumstances. I was given the other day an illustration, which I believe to be a reasonable one, of the extent of relief which this new system would afford. I take a tenement in Glasgow or some other great city, the occupant of which would pay 5s. a week for it. I am told that, if it is possible to disentangle the site value, you may very fairly charge one tenth of that 5s., or 6d., to site value. Supposing the result of the Bill was to bring down the rates in Glasgow by 33 per cent., what is the measure of relief the occupant of such a room would get? About one-third of 6d. a week—that is to say, 2d. a week. That is surely not a result for the sake of which it is worth while to revolutionise the whole system of rating.

I am afraid the real difficulty of re housing lies far deeper than that. It arises from the fact that the waifs and strays of the population, the persons who cannot get regular employment, drift into the towns and swell that throng which the President of the Local Government Board described not long ago as an aggregation of aimless, helpless, hopeless, unemployable people who cannot pay rent for a decent class of building. You may spend your rates and erect rows of improved buildings, but people of that class cannot afford to live in them. I remember when on a visit to Glasgow last autumn I was much struck by what I found there. Glasgow, as your Lordships know, is one of the cities in which the congestion of population is most serious, and yet at the time I refer to I believe I am right in saying that there were no fewer than 15,000 empty houses in the city. That shows that the difficulty is not one of finding accommodation, but of finding accommodation suitable for the class of people you want to benefit.

Before I leave the question of overcrowding, let me say that in my opinion there are other directions in which this Bill, far from diminishing the evils of overcrowding, would tend greatly to increase those evils. Observe that your proposal is to penalise the man who does not cover every square foot of his property with bricks and mortar. What a comment that is on the movement now in force for providing public parks, open spaces, garden cities, and so forth. I read the other day a very interesting observation made by Mr. Justice Neville, who is, I understand, the chairman of the Garden Cities Association. This is what he said with regard to the proposal to tax site values— No conceivable device could be hit upon more certain to make the overcrowding of the present time as nothing compared with the overcrowaing of the future. And he went on to say that his association could— Not give any support whatever to any proposition which would impose a penalty upon those who were desirous to leave land available for building unbuilt upon so that there might be better breathing space for those who were more or les, crowded together for the purposes of their business and for the purpose of access to the great centers. The noble and learned Lord on the Woolsack relied last night on the Report of the Housing Commission of 1885. But I am told, on what I believe to be good authority, that that Commission had not before it any evidence with regard to the withholding of land available for building owing to selfish considerations. I find moreover, not in the Report itself, but in the appendix, this remarkable statement by the late Lord Salisbury as to the proposal to tax site values— It would operate as a penalty on all open spaces except those belonging to a public authority. Urban or suburban gardens would especially suffer. I believe that to be absolutely true.

One word as to the new basis of rating which, we are told, is to be set up. The noble Lord who spoke last for His Majesty's Government told us that he had no doubt as to the inexpediency of rating undeveloped capital. That is a very valuable admission, though I wish the noble Lord had not qualified it immediately afterwards by telling us that that was exactly what His Majesty's Government proposed to do. What we are asked to do is to abandon the present system of rating, which, though it may be a rough and ready one, works well and is intelligible to everyone, for a system which has not been tried, and which, I fear, will not prove intelligible or easy to work. At present the owner of real estate pays in proportion to his stake in the district and in proportion to the services he obtains at the expense of the rates. You rate him on what you know, or approximately on what you know he has got. But in the future you are going to rate him on something which somebody else thinks that he may get some day. That is a very different thing.

The noble Lord who moved the Bill told us that what he wanted to get at was the real ground value. But the real ground value is something to be fixed for you by an assessor, who is, after all, a very human and fallible person, and who has got to project his mind into the future and conjecture a purely imaginary transaction between imaginary parties; and, as a result of that conjecture, you are given the basis on which everybody is to pay his rates. I have not that blind confidence in all public officials that His Majesty's Ministers seem to have, and my confidence in them is not increased by the fact that I find oven His Majesty's Ministers themselves putting forward what seem to be fallacies of the most extraordinary description. Here is one which I have taken from the same source—it is a fertile source—the utterances of the Solicitor-General for Scotland. He announced not long ago that land— Owes its value, not to the exertions or the expenditure of individual owners, but to the industry, energy, and enterprise and to the expenditure and rates of the community. That is, if I may be allowed to say so, a most wild and extravagant doctrine. Will the noble Earl who is to follow me contend that the man who builds a house at the cost, say, of £20,000, owes the whole value of his property to the expenditure and rates of the community: I hope the noble Earl will toll us whether that is a doctrine that commends itself to him and his colleagues. If it docs not, the sooner lie brushes it on one side the better.

I have mentioned those points as points in regard to which we desire to get to close quarters in Committee, and it may be convenient to the noble Earl who will reply if I enumerate one or two of those as to which, I think, we are entitled to information either to-night or on some future occasion. In the first place, we shall ask for an interpretation of the standard of valuation laid down in Section 3. Do noble Lords opposite adopt the Solicitor-General's formula that the basis of every one's rates is to be the best use that he can make of his property—that is to say, the use which he would make of it if he screwed it up to to the very highest point by covering it with buildings of all sorts—or are they prepared to take into account what I may call the reasonable use of the property by an owner who has, perhaps, not attempted to develop it quite to the fullest extent.

Then, I think, we shall have to ask that, if this Bill becomes law, ample time should be given in which these valuations are to be made. It would obviously be improper that they should be hurried through with too great haste, and I hope, also, we shall be told that cither in the Bill or in some supplementary regulations rules will be laid down for the guidance of the officials concerned. It seems to me most important that we should endeavour to secure uniformity of system and that this process of valuation should not proceed in a haphazard fashion, variously interpreted by various officials. And, lastly, although I do not think I need press for this, I hope we shall be told again that it is the intention of His Majesty's Government not to interfere with existing contracts.

Those are points which, I think, we shall have to press, and there are two others which are very well worthy of consideration. Is it intended to confine the operation of this Bill to limited areas, or do you desire that it should apply to the whole of Scotland? Your Lordships will not forget that the Bills which have already passed on this subject dealt merely with urban areas, and I think my noble friend behind mo, Lord Mar, gave your Lordships a very appropriate description of the manner in which such a system would affect purely agricultural districts in which the unimproved value of the hind might be a minus quantity and where, consequently, the whole, or the greater part, of the burden of the rates would be transferred from the purely agricultural part of the area and thrown upon those who are so unfortunate as to dwell in the towns and villages. And then I think we ought to consider very carefully whether some extent of local option should not be allowed to local authorities before they are compelled to put in force the provisions of the Bill. Your Lordships have seen the weighty protest that was received the other day from the city of Edinburgh, and it does seem to me that great hardship would be involved if, in such a case, a system of this sort were to be imposed on an authority that was reluctant to accept it. Upon all these points we are far from satisfied. We are glad to give the Government the opportunity of convincing us. That opportunity will most properly arise when we get into Committee. We shall then be in a much bettor position to deal at close quarters with all doubtful points and to decide whether this measure is one which your Lordships should send down to the other House.


My Lords, the noble Marquess stated very truly that there was a marked difference between this debate and that which took place on 26th August of last year. At that time the rejection of the Bill was moved by Lord Robertson, and it was thrown out without any protest on the part of noble Lords opposite. The noble Marquess stated that we had made a somewhat unfair use—I think that was the gist of his observations—of that rejection to attack your Lordships' House. Well, was the Bill rejected last year on the ground of date or on its merits? Lord Robertson moved the rejection of the Bill in a very powerful speech, in which he had not a good word to say for the Rill. It is perfectly true that at a later period of the debate the noble Marquess opposite called attention, as he was perfectly entitled to do, to the fact that the Bill arrived at an unconscionably late period of the session. That we fully admitted, and we expressed our regret that it should be so; but it was not stated at the time that that was the ground of objection, and certainly during the whole of the autumn and winter we were under the impression that the Bill was rejected because your Lordships considered it to be radically bad.

There are still two lines of criticism. One is of an entirely uncompromising kind, adopted by the noble Viscount who moved the rejection and others. On the other hand, noble Lords who spoke on the Front Bench opposite have taken a different attitude. They have expressed a willingness to see the Bill read a second time, and they have not disputed the fact that the present system of rating—which presumably the noble Lord who moved the rejection believes to be the best in the world—has defects which demand attention. Lord Balfour, as we know, was a member of the Royal Commission on Local Taxation, and as one of the authors of the famous Minority Report; he has admitted the propriety of a separate taxation of sites.

Lord Lansdowne asks us what is the basis on which we propose to proceed in this matter—is it to be capital value or annual value? From one point of view the two things can be regarded as the same. If you are content to regard capital value as a certain number of years purchase, it does not very much matter which you choose as your basis. You may assume that there are three fairly similar sites, one perhaps with an hotel upon it which pays £1,000 a year, and the site may be taken as worth £30,000—that is to say, 30 years purchase. You may have a site close by less fully and profitably occupied bringing in a rental of £500 a year; that may be worth £20,000, or 40 years purchase. You may have another site bringing only in £100; it may be worth £15,000, or 150 years purchase. But I have not understood that the noble Lord, Lord Balfour, stipulates that in no circumstances in rating is anything to be taken into consideration except the rent actually paid. That is to say that if a building site is covered with thistles, that it ought to be rated only at the value which land covered with thistles brings in. Having studied that Minority Report carefully, that is not the conclusion I draw from it. I do not know what the personal opinion of the noble Lord may be, but certainly I should never have gathered that the able gentlemen responsible for that Report altogether dismissed the idea of taxation apart from the actual rent brought in at the moment.

The noble Marquess used arguments to show that from the most important of all points of view—that of housing—little good could be expected from any rating reform in the direction which it is generally assumed we shall follow. But the noble Marquess used two arguments which are mutually destructive. One is that if you place any considerable portion of the rate on the site, the rates in the center of the town will be so high that those who own the land will be compelled to place on it buildings of a much greater height, so that there will be more congestion than ever. The other argument is that the rating of unoccupied land in the suburbs will also be increased and all open spaces will be abolished. I cannot see how both things can be true, and it seems to me exceedingly doubtful whether either is.

As to the central part, it must be remembered that the most valuable sites are not inhabited by poor people at all; and as to the building of skyscrapers, you have the protection of the Building Acts; and in most cases it will be by no means economic to pull down existing houses to build taller ones on the sites. As to the suburbs, I certainly thought that it was a matter of common agreement among all people interested in land reform that nothing more michievous could be done than to force into the market, by a rate or tax, all the land that lies vacant, without regulations as to how it is to be used. It is perfectly evident that if you merely went to work and rated all unoccupied land and throw it into the market at the mercy of speculators some of the bad results indicated might very easily follow. But by town-planning and insistence on open spaces, it would be perfectly easy to provide against the evils that would follow a crude and thoughtless plunge into this question of rating.

The noble Marquess asked whether land was held up in the neighbourhood of towns. He asked whether we could name instances. Well, can he name any instance to the contrary? I put the matter in that way because it is the invariable practice of those with building estates near towns to have them nibbled off piece by piece at high values when the demand is at the greatest. If in years past landowners would have been content to sell their building land in large blocks for sums which might seem to be comparatively little compared with what would be realised, by the slow process of selling inch by inch, if they had done that and put the money by, they would often lie as well off as if they had held on to the land and sold it little by little.

I have an instance. Such a case is that of the Garden City at Letchworth. It was owing to the low price paid for it, although I have no doubt the price paid the owner very well, that it was found possible to build houses at reasonable rents. Then there is the Hampstead Garden suburb, which consists of 240 acres of land, the property of the trustees of Eton College. I have no hesitation in saying that an ordinary landowner owning that estate would have gone to work in the usual way, gradually developing it and getting, in the course of fifty years, something like £1,500 or £2,000 an acre. The Eton College trustees, anxious to encourage this experiment, sold the whole 240 acres at a price which no doubt seems low for land near London; but I believe they not only acted in a public-spirited way, but in a way which was in perfect conformity with their interests. That is my answer to what the noble Marquess said. I do not say that it is the practice to hold up land in a dramatic way, which leaves people struggling to got a square yard here and there; but the whole system of developing town properties in this country has been piecemeal and haphazard, and most mischievous in its results.

My noble friend on the cross benches asked a question yesterday as to why Scotland was chosen as the subject of this new legislation. It might be an answer, though I admit not a good one, to say that we must begin somewhere, and that the reasons for starting in Scotland are as good as those for starting in England. But I think the reasons are even better; because there exists in Scotland a complete apparatus available for complete valuation. There is a staff of assessors and everything is ready to hand. In England there are no assessors, and all that machinery which exists in Scotland would have to lie brought into existence here. That supplies some answer to the question that my noble friend asks.


My noble relative has not quite stated my question correctly. I asked why a Scottish Bill should be founded on an English argument.


My impression is that the noble Lord who introduced the Bill dealt very freely with Scottish arguments. I admit that the noble and learned Lord on the Woolsack used various English illustrations, but if they were germane, as I believe they were, to the subject, he was entitled to do so. Another question asked is, "Why apply this Bill to rural subjects at all?" and the noble Marquess asked us what explanation we gave of the basis of valuation contained in sub-section 1 of Clause 3 of the Bill. It is true that exception may be taken to the wording of the clause. When that clause was originally introduced in another place it contained, if I may use a phrase well-known in another connection, a time limit. It only applied to a date twenty years back. Exception was taken to this by Mr. Balfour on a ground which was admitted to have a certain amount of substance by those in charge of the measure, and the time limit was in consequence withdrawn. I think it is only right to mention that when the impossibility of carrying out the particular valuation under this subsection is argued as it has been by more than one noble Lord.

It is said, no doubt with truth, that the effect of applying the Bill to rural districts would be to transfer to some extent the burden of rates upon purely agricultural land to subjects of a more accommodating character; and no doubt in rural districts that would be the general effect. But it seems to me to be strange to hoar a complaint of that kind in your Lordships' House. I have always believed that one particular grievance dwelt on by noble Lords is the hardship with which the rates fall on purely agricultural land, and I had hoped that any measure which had a tendency to relieve agricultural land at the expense of urban or semi-urban property would rather be welcomed by those to whom the interests of agriculture are particularly dear.


Even if we do not think the redistribution fair?


That, of course, must be purely a matter of opinion. We are not likely to propose anything which we consider unfair, and there will no doubt be plenty of opportunity for arguing the matter. The noble Marquess said something on the question of cost, but this point has been fully dealt with by my noble friend the Colonial Secretary. It is no doubt true that you can go to any expense you like if you choose to employ sufficiently expensive people to make the valuation; but, as far as rural valuations are concerned, there is no reason to suppose that on any ordinary estate ample material does not exist enabling the landowners to make the valuation required with little trouble or cost.

The noble Marquess referred to Amendments which he desired to see proposed. One of them dealt with this question of including rural districts, and Lord St. Aldwyn mentioned the possibility of proceeding by way of experiment and instituting a kind of local option. I do not profess to be profoundly informed on this subject, but I should have thought that there was a certain amount of danger in instituting a local option. If there were local option as to this Bill, the pressure might be put upon the authorities to apply local option to the principle upon which rating is to be carried out. That is a prospect from which I myself should shrink. I think that this ought to be a great national and uniform system, and if you begin now applying it partially you may find that the result which I have indicated, a most undesirable one in my opinion, might possibly follow.

The noble Marquess asked us what facilities would be given for the discussion of the Bill brought in to deal with the question of rating. I cannot give an answer offhand, but I can safely say that any rating Bill brought in in consequence of the passing of this measure will be brought forward in the usual way, and passed through your Lordships' House in the usual manner. I will not go into the questions that are more suitable for treatment by Amendments in Committee, such as the officials to be employed and appeal from the assessors to some superior Court. But I am able to satisfy the noble Lords opposite as to existing contracts, and to repeat the declarations made by the Prime Minister, the Lord Advocate, and the Chancellor of the Exchequer as to the preservation of existing contracts. We are gratified, as well as slightly amused, at the sigh of relief which went up from noble Lords opposite when they discovered that His Majesty's Government did not entertain in their entirety the views on land questions of the late Mr. Henry George.


Or of the Solicitor-General for Scotland.


I have no reason to suppose that the Solicitor-General holds the views entertained by the late Mr. Henry George. That sigh of relief was perhaps a little stagey, for noble Lords opposite know perfectly well that the Government do not entertain those views. If it is any satisfaction to noble Lords opposite, all those sitting on the Front Government Bench are willing to rise one after another and to make a solemn declaration to that effect. At the same time, we do believe, as my noble and learned friend on the Woolsack said, that there is a real and substantial grievance in this matter. It may not be easy to meet that grievance in its entirety, for the matter is one of great difficulty and great complication. But unless you are prepared to say that the present system is the best possible and that we should leave it alone, no other plan or method has been suggested for readjusting the incidence of rates except by something which must be founded on provisions such as those we are asking your Lordships to give assent to. It is perfectly true, we frankly admit, that a great many other things of which we do not approve might also be founded on such a measure. But that is not the point. If you are to do anything at all you must proceed, first of all, by making the valuation proposed, and that is why we ask your Lordships to read the Bill a second time.


My Lords, may I be permitted to state, in a very few words, the view I take of this Bill which we are now asked to read a second time? When we are asked to give a Second Reading to a Bill the acceptability or otherwise of the measure depends entirely upon its principle. It is on the principle of the Bill that the House gives I its verdict. What then, my Lords, is the principle of this Bill? It was described by the noble Viscount who moved its rejection as embodying the views regarding land of the late Mr. Henry George. Lord Saltoun used the same language. He told us that it was a Henry George Bill, and one of the worst projects over introduced into your Lordships' House. I hold in my hand an extract from a petition which I presented two or three days ago from the landowners of Falkirk and adjoining districts, and this is what they say as regards the principle of the Bill— The principle of the Bill is revolutionary; it revolutionises the Scottish assessment system which has been going on quietly for the last fifty years, and puts into force the principles of Mr. Henry George for the confiscation of land. Everything, I think, shows that this is the tendency of the measure. What was Mr. Henry George's policy? It so happened that some fifteen or twenty years ago I received, quite unexpectedly, a telegram from America asking, "What do you think of Henry George's policy? I did not know why the telegram had been sent to me. Possibly Mr. Henry George was standing for some position or another in America at the time. At any rate, 200 words of a reply had been prepaid. My answer to the telegram was a simple one; 200 words was quite unnecessary. My reply was— A simple appeal to the predatory instincts of primitive man. That is a true definition of the policy at the back of this Bill. We are asked to swallow a measure containing this evil principle. I for my part am not prepared to do so, and I trust that my noble friend will stand to his guns and take a division against the Bill. It is the best thing you can do for your Party and for this House, because the country will then know that they have a body of men who will stand between them and the policy of Henry George. If my noble friend, as I hope he will, divides the House, I shall have pleasure in telling with him.


My Lords, before the noble and learned Lord on the Woolsack puts the Question, may I ask leave to withdraw my Amendment? I am not convinced by what has fallen from the noble Marques on the Front Bench or from other noble Lords who have argued that you can convert this into a workable Bill, but I am of opinion that their experience is entitled to respect and that the experiment may be tried in Committee of endeavouring to make the Bill workable. But I would remind the noble Earl who has just sat down that, if the Bill is not made workable in Committee, there will be another opportunity on Third Reading for the House to express its opinion.


Do you run away from your Motion?


I withdraw it.

Amendment, by leave of the House withdrawn; Then the original Motion agreed to; Bill read 2a accordingly, and committed to a Committee of the Whole House.