HL Deb 13 May 1908 vol 188 cc1067-101

Order of the day read for the House being put into Committee.

Moved, "That the House do now resolve itself into Committee."—(Lord Herschell.)

VISCOUNT ST. ALDWYN

My Lords, think it may be of advantage to the House, and it would enable us to consider the Bill in Committee with greater facility than we can at present, if before we are confined in our discussion to the particular Amendments that may be proposed we should obtain from his Majesty's Government some general idea, at any rate, as to the precise grievance which they mean to remedy by this Bill, and the reasons why they have chosen this method for remedying it. I say that because this Bill comes to your Lordships under somewhat peculiar circumstances. It is recommended in another place and outside Parliament by the Scottish Law Officers of the Crown as the first step to a very grave and important change in the law of rating and taxation in Scotland. We were practically told, and the country was practically told, that the object of obtaining the information, as it was called, with regard to ground values under the system proposed in this Bill was that the whole amount of local taxation, and I assume, of income-tax as well, levied in Scotland should be charged upon ground values instead of, as now, upon the composite value of the hereditament—namely, the building and the ground; that practically buildings should be relieved from all taxation. And it was stated that proposals of this kind, if accepted by Parliament for Scotland, would later on be extended to England. I think your Lordships generally viewed that proposition with considerable alarm and repugnance, and I feel very certain that if any intention of the kind had not been entirely repudiated by the noble and learned lord on the Woolsack, and by other Members of His Majesty's Government in the debate on the Second Reading of this Bill, it would never have reached a Second Reading in this House at all. But it was repudiated, and therefore the Bill must be taken as not having any object of that kind in view, but as simply establishing another head in the assessment roll upon which in future rates may be levied as well as upon the heads now existing in that roll.

What was the grievance put forward by the speakers on behalf of His Majesty's Government which this Bill was intended to remedy? I listened to, and I have since carefully read, the speeches of the noble Lord who introduced the Bill, the noble and learned Lord on the Woolsack, and the noble Earl the Secretary of State for the Colonies. I find that according to the noble Lord who introduced the Bill the grievance is this, that agricultural land in of near a burgh may be largely increased in value by the expenditure of the burgh authority and so made available for building, and that, when so made available and largely increased in value, it can at present only be rated in its actual state as agricultural land. It was contended that on this account such land does not adequately contribute to the rates of the authority whose action has increased its value, and that, in fact, the other ratepayers suffer heavily by its only being rated at its present figure. The noble and learned Lord on the Woolsack went rather further. He pointed to the very great increase of rates in the towns, accompanied by an increase of land values and rents in the centre of the towns, and he expressed the opinion that the high rates tended to increase the land values in those centres, and that both were due to the concentration of people in the heart of the towns. The result was that there was excessive overcrowding, and it was practically impossible for the working classes to obtain proper sanitary accommodation in the centres of the towns at economical rents; whereas all the time the land on the outskirts was kept back from building by its owners, largely because it could only be rated at its agricultural value, which might be very low indeed. I think that practically was the grievance put before your Lordships by the Lord Chancellor.

The noble Earl the Secretary of State for the Colonies carried the matter a little further, because he suggested to us that the proposal in the Bill ought necessarily to apply to agricultural land as well as to land in towns, because of the desire of His Majesty's Government to show some special favour to agricultural land in the question of rating. Well, that is a quite novel idea on the part of His Majesty's Government and their supporters. They have shown no symptom of the kind hitherto, and I think it did great credit to the noble Earl that he urged this reason with so much gravity. So far as, I think, the more serious arguments went, the Bill was recommended to us as intended to cure what is purely an urban grievance, and it is said to be a grievance, without any proof being alleged that it is, in fact, a grievance, owing to the withholding of land from building by the owners of sites available for building. The noble and learned Lord on the Wool sack quoted largely from the Reports of Commissions which had dealt with this subject in London and other great towns in England, but, as was pointed out by the noble Earl, Lord Rosebery, at the time, he had no instance whatever of any similar withholding of land from building in Scotland, when such land had become ripe for building.

If this be the only grievance which it sought to remedy, my question to His Majesty's Government is this, Why cannot it be remedied by a much simpler and smaller change in the law than is proposed by this Bill? If you consider it necessary to separate the ground value from the value of the buildings upon the ground, why, in the first place, must you change what has always been the basis of rating in this country—the annual value? Why are you to take the basis of capital value, with what seems to me the almost necessary concomitant of prospective value, which, as I think was clear in the debate on the Second Reading, may, under this Bill, be prospective to an almost illimitable extent, and afford the fullest play to the imagination of the assessor. If His Majesty's Government desire simply to remedy the grievance which they themselves put forward, why could not they have devoted their attention to an Amendment of the law with regard to rating at the present moment in Scotland? The law is, I believe, to this effect, that in estimating the yearly value of lands and heritages the same shall be taken to be the rent at which, one year with another, such lands and heritages might, in their actual state, be lot from year to year. Such a simple Amendment as that suggested by Lord Balfour of Burleigh might have remedied the grievance by extending the words "in their actual state," and "from year to year," so as to include any other purpose for which the lands could immediately and reasonably be devoted on a larger tenure than a yearly tenure besides that to which they were actually devoted at the moment of assessment. I do not know whether your Lordships would have been disposed to receive that Amendment favourably, but, at any rate, it would have been a simple Amendment in the law of assessment and would not have involved the very serious changes proposed by this Bill, which I think have properly created in the country alarm for the future with regard to the intentions of His Majesty's Government.

I have no intention of detaining your Lordships at any length in asking these questions, but I would say this, I think the promoters of this Bill ought to prove the case for it by actual instances. When they were challenged to do so, the noble Earl the Secretary of State for the Colonies said— We are asked to tell you when and where land has been held up from building. It is always held up. That was his answer. Well, any one might have said in reply— It is never held up. And one assertion, I venture to say, would have been just as good as the other. What we ought to have in this matter is argument rather than assertion, and proof that the argument is well founded. But if no such proof is put before us, and I suppose there is no such proof available because it has not been put before us yet, then I cannot under stand why His Majesty's Government insist on proposing that the change in law which they suggest should be made applicable to the whole of Scotland. Unless the case is proved, why, if you are to pass a Bill altering the law of assessment, cannot you allow your scheme to be tested by leaving it optional to the local authorities to adopt it instead of forcing it upon a local authority like the council of the great city of Edinburgh, which has declined absolutely to have anything to do with the proposed change in the law? Those are the points on which, I think, it will be for the advantage of the House that we should have some clear and definite statement from His Majesty's Government before we proceed to the discussion of the particular Amendments to the Bill. First, will they clearly tell us what is the grievance which they intend to remedy, and what are the proofs they have of the existence of that grievance; and, secondly, why, if that grievance exists, it requires so great and far-reaching a change in the law of assessment to enable it to be properly remedied?

THE LORD CHANCELLOR (Lord LOREBURN)

My Lords, I did not come prepared with statistics such as the noble Viscount requires, because I was not aware until a minute or two before the noble Viscount rose that he proposed to enter upon this subject before the House went into Committee. I have very little difficulty, however, in answering his first question. What, he asked, was the grievance? On the Second Reading of the Bill I endeavoured to explain what appeared to me to be the grievance that called for amendment. It is that under the present system the real value of property is not fairly rated as between the ratepayers. One ratepayer owning property to the value of £1,000 would be rated at £50 a year; a ratepayer next to him, owning property worth as much, but which happens to be unbuilt upon, would be rated at £3, £4, or £5. No statistics are required to establish that fact. It is well known.

The noble Viscount asked me to furnish statistics to show that there were such cases in Scotland. I quoted English statistics because I had them available, and I should have thought everyone recognised that the conditions, as regards towns particularly, in England and Scotland are substantially the same. If I had known that any distinction would be made in regard to English and Scottish figures, I would have tried to get the Scottish figures; but I am not aware that Scottish figures are so readily available or so accurate. I also dealt with the second grievance of the noble Viscount in the Second Reading debate, and dealt with it substantially in the terms of the Minority Report of the Royal Commission, of which Lord Balfour of Burleigh was a member—namely, that land itself was not rated in regard to the benefits it received by reason of improvements in the town or neighbourhood. It is a very difficult subject. I endeavoured to place my views before the House on the last occasion, and I do not wish to enlarge upon what I then said.

The noble Viscount also questioned whether all this elaborate machinery was required for the purposes of the Bill. I cannot help thinking that the machinery is simple enough. At any rate, I do not think it could be more simply done; and if there is anything wrong in that respect we can consider it in Committee, if the House allows the Bill to go to Committee. The noble Viscount seemed to think that there was some short, expeditious, and very simple method by which this result could be achieved in a few sentences. I am not aware of it, and I am afraid that if the noble Viscount had to draft a Valuation Bill, he would find it could not be done in so simple a method as he imagines. We are willing to consider any improvements in the way of making it clearer. I think I have answered the questions put to me by the noble Viscount. So far as the Amendments on the Paper are concerned, I venture to think the subject is largely one of detail when once the principle is established that there ought to be some valuation of land values so as to do justice to the ratepayers by enabling those who own property to be rated according to the value of the property they own.

*LORD BALFOUR OF BURLEIGH

My Lords, I hardly think the noble and learned Lord has succeeded in disposing of the question raised by the noble Viscount, and he certainly has not succeeded, in my opinion, in justifying in any way the enormous change which is proposed in this Bill from the standard of yearly value to that of capital value. The noble and learned Lord referred to the Minority Report of the Select Committee, and I would point out that on page 174 the question is dealt with without in the slightest degree even suggesting that it was necessary to make this violent change to capital value. In advocating the change, we expressed the opinion that the definition, even as it stands, ought to cover the rent which a tenant would give for land for building purposes. But we went on to say— The Courts of Law have, however, decided against such a view, on the ground that land must be valued on hypothesis that it is to be used for the same purpose for which it is at present used, or in its present state rebus sic stantibus. What our proposal amounts to is, in effect, the removal of the limitation thus put upon the definition of value. I shall not intervene for more than a minute or two before the House goes into Committee, but as the question has been raised I do suggest that the noble and learned Lord on the Woolsack has given an extremely inadequate reason for this tremendous change in the whole system of valuation. In England, from the time of Elizabeth, the standard has been what the hypothetical tenant would give. In Scotland annual rent is the main criterion provided for, so long as that rent is not fixed for a longer period than twenty-one years; otherwise, if such a lease as that is shown to the assessor then the standard in Scotland is similar to that of the English hypothetical tenant.

I venture to say that neither capital nor selling value can possibly give a fair criterion of the revenue which a man is receiving or his ability to pay taxation. I do not suppose I need quote works of authority on political economy to establish the wrong which would be done by rating on capital value. It is all very well to take capital value as a test for such a thing as death duties, but there is no single instance, either in England, Scotland, or Ireland, of a rate being put upon capital value. Our whole point is that this is a change which it is not necessary to make for the purpose of remedying the particular grievance alleged. Personally, I think there is a distinct grievance, though it has been very much exaggerated for political purposes by the Scottish law officers of the Crown; and the sort of speeches which they have delivered have made a moderate reform very much more mistrusted than it would have been if they had not made those speeches. I agree that their statements were disposed of in explicit terms by the noble and learned Lord on the Woolsack and by the Secretary of State for the Colonies, but, valuable as those speeches were, speeches in this House are not fully reported all over the country and are not generally read.

The Solicitor-General for Scotland has been going through a campaign for the last two years, and I have in my hand extracts from some of the more than thirty speeches which he has made all over this country and in which he has over and over again asserted as the intention of the Government the very policy which the noble and learned Lord on the Woolsack described, in one dissyllabic word, as "nonsense." At Boness, in January of last year, the Solicitor-General, speaking as a member of the Government, stated, almost in so many words, that in this point he is a disciple of Henry George, that he intended to carry those principles into effect in this Bill, and that it was the intention of the Government to do so. When that sort of language has been used month after month in Scotland, and in England as well, I think the noble Viscount on the Front Opposition Bench was justified in raising the question and endeavouring to get a definite and explicit interpretation of the meaning of the Government.

I venture to say that the Lord-Advocate has not been much better than the Solicitor-General, because he has held out visions of the most extraordinary amount of revenue he is going to get from this new form of taxation. Speaking in the House of Commons, he said that the unbuilt-on land in Edinburgh was rated on a value of £2,750 per annum and only brought in £344, whereas if it were rated at 4 per cent. on the capital value it would bring in £27,500. I have gone into the figures. There are 3,200 acres of vacant land in Edinburgh, and if it were rated at £10 an acre it would yield a little more than the figure mentioned. But at the rate Edinburgh is extending it will be more than 150 years before the last of these 3,200 acres is built upon, and therefore the injustice of rating this land at the figure stated is obvious. When both of the law officers of the Crown have been making such calculations and holding out such hopes, we are justified in being very careful how we allow new principles in rating to be established. My point is this, that if your grievance is as stated you can do all you want by a slight extension of the definition of yearly value, and there is no reason to make the change to capital value. I think we are fully justified in making quite sure that we are not, without knowing it, being committed to principles to an extent of which even His Majesty's Government themselves are not aware.

THE SECRETARY OF STATE FOR THE COLONIES (The Earl of CREWE)

My Lords, I am very anxious not to stand between the House and the process of going into Committee, and I need, therefore, only say a few words in reply to the point raised by the noble Lord who has just sat down. I am all the more relieved from speaking at length, as we have it on the authority of the noble Lord that our speeches are not reported and are not read in Scotland. I am not surprised that mine are not, but I should have hoped that those of my noble and learned friend on the Woolsack, who is a Scotsman, would have received due attention north of the Tweed.

*LORD BALFOUR OF BURLEIGH

I said they were not so widely reported as those of the Solicitor-General, because he has been making them all over the country.

THE EARL OF CREWE

The noble Lord who has just sat down has asked us why it is that we desire to make the great change of rating on capital value instead of an annual value. That is of course, in a sense a great change; but the really great change is not the change from rating on annual value to capital value. It is the change of rating from present and existing value to real or future value; and whether that process is arrived at through taking the number of years' purchase or taking the capital value does not seem to me to be very important. The noble Viscount expressed in perfectly clear terms what our object was in proposing this addition to the Scottish Valuation Roll; and I may say, in passing, that principles which are good for Scotland are undoubtedly good for England as well. We do not desire or propose to transfer the whole burden of the rates from buildings and improvements to the land, but we certainly do desire to transfer a certain proportion of that burden, and our intentions in that respect have never been concealed. Consequently, as I say, the real change is the abandonment of the present value of the land, whatever it may be, as a basis for rating, in favour of what, if you choose, you may call the hypothetical value. I asked the noble Lord on the occasion of the Second Reading whether he and his friends took up the position that under no circumstances ought rates to be placed on the land for anything except the actual rent received at the moment by the land-owner, and to that we have never received any reply. If noble Lords opposite admit the principle that some such charge may be made, it simply becomes a question of the amount of the charge, mid what is the fair proportion which ought to be laid on the value which might be received from the land. There is no sanctity which we can see about the principle of rating on rental. Rating on rental may be, as noble Lords opposite know perfectly well, of an absolutely misleading character. I imagine that some of the most valuable and most luxurious houses in England have a very small letting value, simply because they are so expensive to live in that people would not pay a large rental; but I do not think anyone would say that a house of that kind should escape rating altogether, which it would do if the purely letting value were taken as the basis for rating. I think the noble and learned Lord on the Woolsack fully answered the questions put to him by the noble Viscount, and I hope we may now proceed to go into Committee.

*THE MARQUESS OF LANSDOWNE

My Lords, I only interpose for a moment to point out that it is not quite the case that the noble and learned Lord on the Woolsack has answered the question put to him by the noble Viscount. We have been endeavouring ever since these discussions began to elicit from noble Lords opposite some information as to the basis of ascertained fact upon which these proposals are founded. We have been told again and again that there were cases in which land was held back by the owners in an obstructive manner, in such a manner as to arrest the proper development of our cities, and at the same time to elude the rates to which property of that kind should be liable. We have asked again and again to be supplied with concrete cases in which such abuses have taken place, and although we have tried again and again to get to close quarters with the elusive figure of this obstructive landowner, he invariably escapes our grasp.

The only tittle of evidence which the noble and learned Lord on the Woolsack, as I understand him just now, was able to produce was derived from the Royal Commission on Housing of 1885; but even those Royal Commissioners merely stated that in their view it was probable that there was building land which produced a smaller return than it would produce if it were let for building. I cannot find in that report any specific evidence of the kind which I think your Lordships are entitled to demand. But we have had an item of evidence within the last few hours which, I think, deserves the attention of the House. If it is true that there are some owners of sites who are reluctant to put them on the market, is it not reasonable to assume that their action is due, to some extent at all events, to a very natural and proper caution on their part? Now only last night Mr. John Burns, when explaining to the House of Commons a very important measure dealing with the question of town planning, mentioned incidentally the fact that there were in London at this moment between 50,000 and 60,000 empty houses. Is there not a moral to be drawn from that? Is it not clear that, with 50,000 or 60,000 empty houses in London, the owners of vacant sites in the Metropolis might think twice before they forced their land upon the market? And if the owners of the sites very often unable to foresee the future demand for houses, is it not probable that these assessors to whom you are going to entrust the duty of rating unoccupied sites, or sites which are not fully developed, will be just as fallible as the landowners?

It is a somewhat singular fact that His Majesty's Government should at one and the same moment have laid before Parliament two measures—one of them designed to prevent the hurried and haphazard and unmethodical development of building sites in the neighbourhood of great cities, and the other, designed to force everyone, whether he likes it or not, to put his land on the market and cover it with buildings, whether they are wanted or not. I shall have something to say later on with reference to the question of capital versus annual value. The noble Lord opposite told us frankly what his object was in preferring capital to annual value. He says he wants to get at the real value, and what he means by the real value is the future value. That is what fills us with apprehension. It is these excursions into the regions of prospective value which seem to us so dangerous. If annual value is not necessarily the ideal basis for rating, it has, at any rate, this great merit—that it is founded upon simple and easily ascertainable facts. You can find out what rent a man is paying for his premises, and you can also find out, supposing the premises are vacant, what promises of a similar kind are let for in the neighbourhood; and having ascertained that you have a reasonable clue as to the means of the person upon whom you are going to levy the rate. But once get away from that, once go into these questions of remoter or prospective value, and you find yourself in the region of hypothesis and conjecture, you find yourselves at the mercy of the officials to whom the administration of this Bill will be entrusted, and you find yourselves, I am afraid, within measurable distance of doing a very great wrong to the individuals concerned.

*LORD STANLEY OF ALDERLEY

My Lords, I venture to intervene in this debate because I stand before you as the culprit, if there is a culprit, who drafted the paragraph in the Report of the Commission on the Housing of the Poor which contemplated that land in the neighbourhood of towns might fairly be rated upon its selling value and not upon its yearly product. I still hold that in suitable cases you have a right to look beyond what the land is actually fetching at the moment, its temporary value, in order to consider what its real value is. I think the measure should be, not what the land may hereafter be worth, but what it is worth at the present moment.

I will give an illustration from the old succession duties to show how very inadequate the yearly value may be in testing the real value. I remember that when I first began to study law in the sixties the estate of Lord Sefton, near Liverpool, came to be dealt with. He had unbuilt-upon land, a disused brickfield, but land which, the moment the builder took it, would become of very high value. Within a short time after the then Lord Sefton's death the land was disposed of for building, and the Crown claimed succession duties on the improved value. The Court, however, decided against the Crown on the ground that succession duties were calculated on the value at the moment of death. The more recent law as to death duties has altered that and taken the capital value at the time of death; and in the case of building land near a town capital value is estimated at what the land would yield if put to proper use in the market.

I think the noble Lord opposite has himself recognised, in the Minority Report, that there is propriety in certain cases in looking behind the actual letting value to consider what burdens should be put on the land. Therefore I am anxious that we should go into Committee on this Bill, because I think it is necessary to come to close quarters with the vague terms of the Bill in order to see what can be done consistently with justice, and how far the vagueness of the Bill opens the door to dangerous spoliation in the guise of taxation. I think everyone must see that, as the Bill is drawn, there are two things which will have to be dealt with. One is the treating of all possible building land, particular plots of which, if chosen, might have a high value, as all of the same value. To say, because the owners of a thousand acres near a town are able to sell one acre at £1,000, that therefore their thousand acres are worth £1,000,000 is quite ridiculous. Every one of your Lordships who deals with suburban estates knows perfectly well that an owner would take a much smaller sum per acre for a large portion of land than he would be willing to take if only a small portion were purchased.

There is another point in the Bill which I think will lead to hopeless confusion and expense. I refer to the attempt, in cases where houses and buildings already exist, to sever the value of the land from the buildings and the improvements. The question really of interest to the ratepayers is, What is the land worth now and what will it yield? I think that to rake up ancient questions of how the land acquired its present value and sever it from its improvements is quite useless. With regard to the rating of large mansions, however, I think the low rating of some of these has been a scandal. The reason put forward for the low assessment is that there are very few people rich enough to be able to rent these big houses. Where an owner spends £200,000 or £300,000 in improving his mansion, I think a fair way would be to treat the owner as a hypothetical tenant and rate him on a fair rent.

On Question, Motion agreed to.

House in Committee.

[The Earl of ONSLOW in the Chair.]

Clause 1:

*LORD BALFOUR or BURLEIGH

moved an Amendment that the additional column under the heading of "Capital Land Value" should be inserted in the valuation roll of "any county" instead of "each county." The effect of this amendment, he said, would be to do away with the compulsory character of the Bill and leave it to the option of each valuing authority concerned as to whether or not they would put it in force. He would like to remind their Lordships very shortly of what it was in this connection that he himself was committed to by the Minority Report of the Royal Commission, upon which so much discussion had taken place. They reported that there were certain grievances in regard to the rating of urban land. They strictly limited their recommendations to urban land. On that basis they concluded that a valuation of sites could be made, and they then dealt with the question of how that valuation should be utilised for purposes of taxation. They discussed and dismissed the scheme, which had now been disavowed by His Majesty's Government, of putting the whole of the rates upon that site value so ascertained; and no one could find the slightest support in anything they said either for abrogating existing contracts or for confiscating what was known as the unearned increment. But they did say, and he still agreed, that here and there site value was enhanced automatically by extraneous causes and was depreciated by others.

To some extent the increase of site value was the direct outcome of the outlay of the ratepayers' money. That was much less so in Scotland than it was in England, owing to the method in which rates were levied in the two countries. For most of the matters which went to improve sites under the Scottish system the whole of the rates were levied upon the owners already. This Bill proposed to make an effort to ascertain the site value as distinct from the whole value of a subject not only in urban districts, but all over the country. He did not object to that, provided they knew what the object aimed at was to be. But he hoped it would not be alleged that anything in the Minority Report committed them to that particular suggestion. Having regard to the conditions of valuation laid down for agricultural land in the Bill, he put it to noble Lords that what would be left as the value would not be very great.

The point of difficulty in his mind upon the matter was two-fold. In the first place, he thought that noble Lords opposite were enormously underrating the cost to which they were going to put not only the local authorities but the owners of the land; and, in the second place, he did not think that any really useful purpose would be gained, commensurate with the expense, by making it compulsory for a series of years and over all the country. No rating could take place upon it until a rating Bill had been passed. Therefore it was surely sufficient that it should be done once for all, and not every year, until it was going to be used for rating purposes. This was a now experiment, and he suggested that, having regard to the difficulties involved in it, it would be wise to leave those local authorities who were mainly interested in the subject to say whether they would put it in force.

As to the cost, he had endeavoured to find out something about the number of entries which appeared in the different valuation rolls. In the city of Glasgow there were 217,000 entries, in the city of Edinburgh 87,000, and in all the counties throughout Scotland there were nearly 600,000 entries. The difficulty of the task which was sought to be imposed on the assessors and the local authorities was one of enormous magnitude, and he suggested that it would be wiser to do it as an experiment in some places rather than make it compulsory all over Scotland at once. He understood that the Government had offered to pay some part of the expense. He ventured to suggest that the only means of getting fairly at what the local authority and the Treasury respectively should pay was to put the local authority in the position of being able to make a bargain as to whether or not they would put the Act in force. The necessity, in his opinion, for making it applicable to counties as well as to burghs, arose from this, that in the case of many of the most growing burghs the valuation authority was the county. That was why he did not think the Amendment of the noble Lord on the bench behind would meet the case. The valuation authority in Scotland was either a county or a burgh, but the only burghs which had authority in rating were what were known as Royal and Parliamentary burghs. An Amendment was down in his name that only the larger and the growing burghs should have the option of putting the Act in force. There were about 120 burghs in Scotland know by the name of police burghs, which had not authority for valuation; and therefore, unless the option was given to the counties as well as to burghs, it would not be possible even to have an experiment made in the case of many growing places. Therefore he held most strongly that if the Government gave the option at all they must give it to all valuation authorities. He would call their Lordships' attention to the definition in the Bill under which land was to be valued. In the case of agricultural land it was to be— 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 reclamation, making up, levelling, and the like, where the benefit thereof is exhausted at the time of the valuation. That was no slight task for the unfortunate assessor. To do his duty he would have to find out if every drain under agricultural land was still working. He would like to see the Bill put into force, because in regard to agricultural land it would show the futility of the transaction upon which the Government had embarked. The absurd result of the definitions in Clause 3 would be that rich agricultural land in Mid Lothian and East Lothian would appear in the valuation roll at not much more per acre than the highest hilltop of a deer forest in Sutherland.

Amendment proposed— In page 1, line 7, to leave out the words 'each country and,' and to insert the words 'any country or'"—(Lord Balfour of Burleigh.)

LORD HERSCHELL

said there appeared to be several objections to the Amendment which had just been proposed. In the first place, the object of the Bill was to ascertain information concerning the whole of the land of Scotland. They could not take a certain number of examples and from those draw deductions regarding the remainder of the land. The local conditions, which differed in different burghs and counties, would make any such deduction practically valueless. Before proceeding further with this point, he would like to look for a moment at the Amendment on the Paper, to which the noble Lord alluded, defining the word burgh. It read as follows— For the purposes of this Act the word burgh shall mean and include only those burghs in Scotland which under the Valuation Acts are constituted a separate authority for valuation purposes, and contained at the last census a population of not less than 100,000 persons. This confined the word burgh exclusively to Royal and Parliamentary burghs, for police burghs for valuation purposes came under the county. So that the police burghs were not to be given the choice of adoption.

*LORD BALFOUR OF BURLEIGH

The Bill does not give them any power by themselves.

LORD HERSCHELL

said that might be so, but under the Bill they would all be valued. They would be valued by the county. The point he wished to make was that, although they were most important and very large communities, they would not be in a position, under the Amendment, to have a choice of adopting the Bill, except in so far as they were represented on the county council. The fact remained that they would have no individual choice in the matter. The main point really was this. The Bill they were considering was a Valuation Bill, and the principle of adoption did not seem quite applicable. The object of the Bill was to secure information with a view to the consideration of future rating proposals. Once this information had been secured, it would be perfectly possible, should subsequent rating proposals be introduced, to make the adoption of those proposals optional. But this being purely a Valuation Bill, there would not appear to be very much inducement to burghs and counties to adopt its Provisions, even though they might heartily and entirely approve of them. Would not the tendency rather be for each valuation unit to leave the preliminary to others, in the belief that if and when subsequent rating proposals were introduced everybody would be placed on the same footing? As the object of the Bill was to secure a national valuation, this, in the opinion of His Majesty's Government, could only be obtained by making its provisions apply generally.

VISCOUNT ST. ALDWYN

said he gathered that the reason which largely influenced his noble friend in moving this Amendment was the remarkable nature of the system which the Government proposed to substitute for the present system of assessment. He had shown that it was expensive, that it would be extremely difficult for the assessors to decide on what the assessment should be, and that, so far as agricultural land was concerned, it was practically an absurdity. His noble friend's desire was that the adoption of the Bill should be optional, in order that different authorities in Scotland might make experiments and see whether this remarkable system could be made operative throughout the country. The object of the Government was to obtain information which should form the foundation of some subsequent rating Bill. Therefore, there could be no real difficulty in making the adoption of this Bill optional. It was difficult to decide upon this Amendment without knowing what course the Government proposed to take in regard to subsequent Amendments relating to the system of assessment which might be introduced.

THE LORD CHANCELLOR

said he would do his best to reply to the noble Viscount. He did not answer in detail in the discussion on the Motion to go into Committee because he would have an opportunity of dealing with the different points as they arose. He hoped the Committee would not insist upon this Amendment. It was better to have no new valuation at all than a chess-board valuation. The Government desired to obtain information for the purpose of seeing what equitable change in rating might take place. If this Amendment were carried they would not have the machinery for imposing such a change except in those parts of the country which had been included in the valuation. There were strong reasons, as it seemed to him, for doing either nothing or the whole thing. The work of valuation would not be extremely difficult, and as noble Lords who had had experience of appeals in valuation cases would be aware, the questions that would arise had been satisfactorily dealt with, and were not unusual. In regard to the expense that was supposed to attend the valuation, there was evidence given before the committee. It was stated by Mr. Harper, the experienced officer of the London County Council, that he could value the whole of London for £25,000 the first year, and for £5,000 in subsequent years, and the estimate for the valuation of Glasgow was £5,000.

*Lord BALFOUR OF BURLEIGH

said varying estimates were given and he could mention others of a higher amount.

THE LORD CHANCELLOR

thought they might regard the figures as liable to a little expansion. He admitted there was some obscurity in the words of the definition clause as it stood. Originally the improvements that were to be excluded were limited in the Bill to twenty years, but in the House of Commons Mr. Balfour objected and had the twenty years struck out—an elimination which he ventured to think was a mistake. There were words at the end of the subsection referring to the improvements to be eliminated as being exhausted improvements; but the clause itself very likely required revision, although the wound in its side was not due to its friends but to its opponents. On the Report Stage he would suggest words that would show that it was not what was called "prairie value" that was to be arrived at. He would not now go into the distinction between yearly value and capital value, but would reserve this point until it arose upon a later Amendment. For the present he would merely say that it was better to have no new system than to have a system which was only a piecemeal one. They wanted a national system, and they did not think the difficulties or the expense considerable.

THE EARL OF CAMPERDOWN

said they could only deal with the Bill as it stood; the intention of the Government was another matter. Under the Bill it would be quite possible to divert the whole rating from the annual value and place it upon the capital value. Whether or not the Government would be foolish enough to propose this was a question he was not called upon to answer, but some members of the Government had said they would be prepared to support such a proposal. He hoped the House would take care not to admit anything into the Bill that would work in that direction. The cost of the valuation mentioned in the evidence before the Committee represented only the valuer's part of the business. Each owner would have to incur considerable expense in having his property valued for the purpose of the return. Then there came the question whether the assessor would accept that valuation, and then they embarked upon appeals. To say that Glasgow could be valued for £5,000 seemed to him absolutely absurd. There were very powerful bodies in all those cities who were opposed to the principle of capital value, and was it thought that they would allow land to be valued in this way and have nothing to say? Two or three counties had petitioned against this valuation. If the Government wanted a national valuation they should carry it out themselves. In any case local authorities should not be obliged to pay the cost. He would certainly support the Amendment.

*THE LORD PRESIDENT OF THE COUNCIL (Lord TWEEDMOUTH)

pointed out that this Bill did not propose any that rating at all. It merely laid the basis of valuation, and another measure would be required before taxation could follow on the basis. In Scotland they had exceptional opportunities for assessing, for in every county they had an assessor already. Therefore the machinery for obtaining an opinion as to value was already in existence.

THE EARL OF CAMPERDOWN

Do these assessors value capital value?

LORD TWEEDMOUTH

They can value anything.

*LORD BALFOUR OF BURLEIGH

said Mr. Harper had revised the calculation of £25,000 referred to by the Lord Chancellor and had substituted £40,000; and it referred to yearly value, not to capital value, which it would be much more costly to ascertain. It had been stated before Mr. Ure's Committee by the Assessor of Glasgow that to value that city on the basis of this proposal would cost something like £16,000. There were 217,000 entries in the valuation roll of Glasgow, and, assuming that one-seventh of them had to do with land, that would give, roughly, 33,000 different entries for site valuation in Glasgow alone. He thought £16,000, which was only 10s. apiece, an extremely moderate sum. From his experience of valuation he was convinced that those who thought the valuation could be carried out for the sums on which the Lord Chancellor had relied were living in a fool's paradise. If there was any hope of the Government accepting annual instead of capital value he did not say that it would not moderate his view; but, if they insisted upon the enormous change from yearly to capital value, it would be most unsafe to rely npon the estimates put forward by the noble and learned Lord.

LORD SALTOUN,

who had an Amendment on the Paper on similar lines, stated that though he still thought his Amendment the better one he would not press it, on the understanding that Lord Balfour went to a division on the Amendment before the House. His (Lord Saltoun's) Amendment would allow police burghs to be included, but would exclude country districts. His firm opinion was that rural districts should be left out. As to the cost, there could be no doubt that tremendous expense would be thrown upon owner and local authorities under the Bill.

THE LORD CHANCELLOR

said he was prepared, in answer to Lord Balfour, to discuss capital and yearly value if the House desired, although he deprecated their doing so at this stage.

*THE MARQUESS OF LANSDOWNE

also rather deprecated l[...] it as running the risk of discussing several questions at once. There was now a distinct issue—whether the Amendment should be adopted or not. If the object of the Bill was to prevent people who now escaped their fair share of rating from continuing to do so, it was reasonable to leave it to the local authority to decide whether the Bill should be set in operation or not, as the local authority would be the first to desire that people should not escape taxation which should properly fall upon them. If it was so easy to set up the machinery of assessment, that was another argument for waiting the result of experiment before extending the system proposed all over Scotland. He was sceptical as to the cheapness of this new arrangement. They were always coming across that assessor who declared his readiness to value anything or anybody. He did not like to raise an Irish grievance during a Scottish debate; but they had a sad experience in Ireland of assessors and valuers who, on no principle and admittedly without any sufficient instructions from headquarters, were at this moment revising the whole rental of Ireland. It might fairly be asked why it was really necessary to impose this inconvenience and this expense on the local authorities and on the owners of site values, if both of them wished to be spared the necessity of accepting anything of the kind. This was another of those cases of which they had had a good deal of experience during the last year or two, where a Liberal Government was ready to deprive the local authorities of the discretion to which they were entitled. He hoped his noble friend would press his Amendment.

On Question, that the words proposed to be left out stand part—

LORD BALFOUR OF BURLEIGH

explained that his next Amendment

There Lordships divided:—contents, 32; Not contents 119.

CONTENTS.
Loreburn, L. (L. Chancellor.) Airedale, L. Haversham, L.
Tweedmouth, L. (L. President.) Allendale, L. Hemphill, L.
Armitstead, L. Herschell, L.
Ripon, M. (L. Privy Seal.) Boston, L. Joicey, L.
Colebrooke, L. O'Hagan, L.
Denman, L. [Teller.] Pirrie, L.
Beauchamp, E. (L. Steward.) Saye and Sele, L.
Crewe, E. Eversley, L. Shuttleworth, L.
Liverpool E. Fitzmaurice, L. Swaythling, L.
Glantawe, L. Tenterden, L.
Althorpe, V. (L. Chamberlain.) Granard, L. (E. Granard.) Weardale, L.
Morley of Blackburn, V. [Teller.] Winterstoke, L.
Selby, V. Hamilton of Dalzell, L.
NOT-CONTENTS.
Bedford, D. Powis, E. Hare, L. (E. Listowel.)
Devonshire, D. Sandwich, E. Hay, L, (E. Kinnoul.)
Northumberland, D. Shaftesbury, E. Heneage, L.
Wellington, D. Vane, E. (M. Londonderry.) Hindlip, L.
Verulam, E. Killanin, L.
Abercorn, M. (D. Abercorn.) Waldgrave, E. [Teller.] Kilmarnock, L. (E. Erroll.)
Anglesey, M. Westmeath, E. Kintore, L. (E. Kintore.)
Bath, M. Wharncliffe, E. Lamington, L.
Bristol M. Langford, L.
Lansdowne, M. Churchill, V. [Teller.] Lawrence, L.
Normanby, M. Cross, V. Leith of Fyvie, L.
Salisbury, M. Falkland, V. Llangattock, L.
Goschen, V. Ludlow, L.
Amherst., E. Halifax, V. Manners, L.
Ancaster, E. Hampden, V. Meldrum, L. (M. Huntly)
Aylesford, E. Hill, V. Muncaster, L.
Bathurst, E. Hood, V. Newton, L.
Cadogan, E. Iveagh, V. Oranmore and Browne, L.
Camperdown, E. Ridley, V. Ormonde, L. (M. Ormonde.)
Carlisle, E. Ramsay, L. (E. Dalhousie.)
Carnwath, E. Abinger, L. Ranfurly, L. (E. Ranfurly.)
Cranbrook, E. Alington, L. Rathmore, L.
Dartmouth, E. Alverstone, L. Ravensworth, L.
Dartrey, E. Ampthill, L. Ritchie of Dundee, L.
Denbigh, E. Ashbourne, L. Rothschild, L.
Devon, E. Ashcombe, L. Saltoun, L.
Doncaster, E. (D. Buceleuch and Queensberry.) Balfour, L. Sanderson, L.
Barrymore, L. Seaton, L.
Ducie, E. Bateman, L. Shute, L. (V. Barrington.)
Eldon, E. Belhaven and Stenton, L. Sinclair, L.
Fortescue, E. Biddulph, L. Somerton, L. (E. Normanton.)
Halsbury, E. Blythswood, L.
Harrington, E. Brougham and Vaux, L. Somerton, L. (E. Narmanton.)
Lauderdale, E. Calthorpe, L.
Lichfield, E. Carew, L. Stanmore, L.
Lovelace, E. Carysfort, L. (E. Carysfort.) Stewart of Garlies, L. (E. Galloway.)
Malmesbury, E. Clifford of Chudleigh, L.
Mansfield, E. Clinton, L. Tweeddale, L. (M. Tweeddale.)
Mar and Kellie, E. Colchester, L.
Morton, E. De Mauley, L. Waleran, L.
Mount Edgcumbe, E. Dunboyne, L. Wenlock, L.
Onslow, E. Ebury, L. Zouche of Haryngworth, L.
Orford, E. Fairlie. L. (E. Glasgow.)

was consequential upon the one which their Lordships had just accepted.

Amendment proposed— In page 1, line 8, after the word 'Scotland,' to insert the words 'which has adopted this Act in the manner hereinafter provided.'"—(Lord Balfour of Burleigh.)

On Question, Amendment agreed to.

*Lord BALFOUR OF BURLEIGH

moved to amend the subsection—providing that in the valuation roll of each county and burgh a new column should be inserted under the heading, "Capital Land Value"—by substituting "yearly" for "capital" He said that this Amendment, although it made a very small verbal change, really raised the whole point of principle between yearly and capital value; and upon this Amendment it would probably be better to take the discussion as to whether yearly or capital was to be the standard of value. In the rating system, as it at present existed, the test of the standard value of what was to be rated was the yearly value, and he could not conceive of a more fundamental change in the system than to set up the capital value as the standard. The capital value was, in one sense, only the yearly value multiplied by a number of years purchase. But let them look at the differences of opinion which prevailed as to the number of years that ought to be taken. In Scotland there were thirty-three counties and eighty-one burghs each with its own valuer; and it was possible that, if the Bill were passed in its present form without any direction as to the number of years purchase to be taken, leaving the question entirely to the sweet will of each valuer, there would be an enormous amount of litigation which would throw the whole valuation system into confusion. The Government desired to get rid of a comparatively small grievance within and around the outskirts of some towns and cities where owners held up land from the market, and accordingly did not pay annual contributions in accordance with the real value. He admitted there was a grievance in certain cases, but to remedy it without the risk of injustice and hardship on others was not easy. It would be better to try to amend the definition of yearly value rather than to uproot our whole system altogether. The capital value of property was not really the fair gauge of taxable capacity. For such purposes as the death duties it was reasonable to make a charge on capital, but the proper criterion for rating was either the ability of the individual to bear the taxation or the amount of benefit he received. For all those rates which were known as burdensome rates, such as the poor rate, the burden ought to be laid on the shoulders best able to bear them—in other words, according to the ability of the individual. He was sorry that Lord Courtney was not in the House, because it would be very interesting to hear his view. He would be very much surprised indeed if Lord Courtney, with his reputation as an economist, would give the slightest support to the idea of rating on capital value. But when they passed to rates which were productive, such as the water rate and the sanitary rate, which were really payment for certain definite services, the absurdity would be seen of attempting to estimate them by capital value. Annual value, fairly and properly ascertained, was the only possible criterion. No reason whatever had been given their Lordships for the great change proposed in this Bill. He attached greater importance to this Amendment than to any other, and he sincerely hoped that they should keep their well-tried system of rating on the annual value and not substitute for it the capital value.

Amendment proposed— In page 1, line 9, to leave out the word 'capital' and to insert the word 'yearly.'"—(Lord Balfour of Burleigh.)

THE LORD CHANCELLOR

thought that if the Committee could get rid of the idea that what was intended was to take the whole value of the land and appropriate it for public purposes, the passage of the Bill would be easier. The whole question of annual as against capital value might well be discussed on this occasion. It seemed to him that it was really a very short point when once ascertained, but it had been confused by other considerations. He would try and put it as clearly as he could. The present system was to look at a piece of land and say what it would bring in year by year if let by the landlord to a tenant. Let them take a plot of grazing land close to a town or city. On the owner's statement that he let it at £3 an acre for grazing, that was the sum at which it was rated. But for building purposes that land was really worth £1,000 per acre, and that was the sum for which anyone would buy it tomorrow if he got the chance. What the Government wanted was to say that instead of rating that land at £3 per acre, it ought to be rated at something like £40. That would be fair play as between one ratepayer and another. It was not fair play that the owner of one acre should be rated at £40 while the owner of the acre next to him should be rated on only £3. Why did they rate the man who was the occupier of this acre at £3? Because they took the value for a particular purpose from year to year. To do that they must limit it to a purpose for which some one would take it from year to year. That was the reason why one piece of land, which was not improved or used for building purposes, was rated for a small sum and another piece was rated at a large sum. That system was not fair to the other ratepayers. The Government wanted to get the property rated as if it were let for £40. How were they to do it? The simplest way was to find the true value of a piece of land. Nobody would hire from year to year at £40. What they would do would be to find out the capital value and upon that would be paid a fair and equitable percentage.

*VISCOUNT MILNER

hoped the noble and learned Lord would not suspect him of thinking that His Majesty's Government had any confiscatory intentions because he was somewhat unconvinced by the Lord Chancellor's argument. Nor was he out of sympathy with what he considered to be the objects of this measure, in so far as it was to carry out that separation between the different interests in land, especially building land, upon the importance of which the Minority Report of the Royal Commission had, as he thought, justly insisted. But he was rather alarmed lest what he believed to be a really useful and necessary reform in rating should be, if he might use a common-place expression, choked off at first start by its being overloaded with an attempt to give effect to certain very extreme and visionary doctrines. He was not sure that this insistence upon capital as against yearly value was not connected with some influences of that kind. The noble and learned Lord had spoken eloquently with regard to over- crowding in great cities, and be personally felt great sympathy with what the noble and learned Lord had said. He believed there was public advantage in some cases in inducing landowners to give their land for building, but there was enormous public advantage in innumerable cases in keeping land free from buildings. He knew that land kept open might rapidly appreciate in value, and he was the last person to say that this appreciated value should escapeits fair contribution to the national revenue. But that contribution should be made when the landowner realised the appreciated value. They should not exercise on him year by year a pressure he might not be able to resist to put his land on the market, although he did not wish to do so, and it was in the highest public interest that he should not do so. He had no desire to save rich people from contributing their full share to the national Exchequer, nor did he desire to prevent the valuable reform of rating which would result from the separation of the permanent interest of the landlord in the site from the temporary interest of the tenant in the building. It was in order, if possible, to preserve that valuable reform that he asked the Government to consider whether it was not possible to meet this Amendment. This Bill was not one of very great extent or importance, but it was the first attempt, so far as he knew, in the direction of this reform and for that reason he would like to save it. But if the Government were determined year by year to tax landlords upon the value that unoccupied land would have if it were occupied then the case of the Bill was hopeless. Having regard to the prejudice against capital value which existed on the Opposition Benches, it would be evidence of the indifference of the Government to the fate of the Bill if they did not attempt to meet this Amendment.

*VISCOUNT ST. ALDWYN

said he was anxious to address himself to the instance which the noble and learned Lord had given of the necessity for insisting on capital value, and to the particular reasons given for that insistence. He suggested that all the noble and learned Lord wanted could perfectly well be met by altering the definition of land let from year to year, and allowing it to be assessed on what it could be reasonably expected to fetch if it were used at that time for any purpose for which it could be reasonably used. If he wanted more than that, the desire of the Government was wrong and grossly unfair to the owners of the land. He dealt with a piece of land which if put on the market would have a capital value that would bring in £40 a year. It would fetch that on account of its prospective value, and not on account of anything the owner would get at the time of the assessment. That proposition meant that they were to assess a man to local taxation and to income-tax, not on the income it was then possible for him to obtain from his property at that particular moment, but upon what might be the prospective value which somebody would give for that property, expecting that he would recoup himself in future years. That was nothing short of compelling the owner to put his property in the market in order to realise the sum on which they were proposing to assess him. That was grossly unfair. If that was the basis on which the Government proposed to go, he hoped their Lordships would not allow the Bill to become law. If what the Government wanted was merely what was involved in the argument of the noble and learned Lord as exemplifying the hardship which other ratepayers suffered, he hoped they might be able so to amend the Bill that it might become law.

*Lord ZOUCHE OF HARYNGWORTH

thought it would be conceded by the Committee that one of the great desiderata of taxation was that there should be some tangible acknowledgment of its justice, although, of course, there would always be objection to taxation. It seemed to him that the great drawback to the system of rating on capital value was that it necessarily implied a hypothetical value. There was nothing so misleading as a valuation based upon what a property might sell for under this or that condition. If they admitted the principle of hypothetical valuation, taxation and rating would at once become arbitrary. It would depend upon the ideas and will of the valuer and of the authority who appointed him. There would always be discontent and a feeling of injustice, and they would create more difficulties than they re- moved. Morever, they would forge a dangerous political weapon which in unscrupulous hands at a future time might be used to the detriment of the community.

THE LORD CHANCELLOR

said he would deal first with the criticism of Lord Milner. He did not know that the noble Viscount had said anything with which he would not himself agree. The noble Viscount was apparently under the impression that the Government would insist upon all property being valued at its full value, with the result of driving all open spaces into the market. When they came to a Rating Bill open spaces, and certainly spaces that were in any way dedicated to the public convenience, would have to be specially considered. They were not, of course, proposing any rating now. All they were doing was laying down a basis of valuation. There was an Amendment on the Paper, in the name of Lord St. Aldwyn, to insert a proviso that— In the case of lands and heritages used in a manner conducive to the well being of the community, including all lands and heritages used as a garden, park, open space, or recreation ground, and lands and heritages upon which dwellings for the working classes, or any buildings of historical or architectural interest are situate, the yearly land value shall be estimated without regard to any other purpose to which such lands and heritages could presently lie devoted. The Government would consider that Amendment with a desire to meeting it so far as that might be compatible with a Valuation Bill. The noble Viscount, Lord St. Aldwyn, seemed to be apprehensive that a prospective value might be the basis for rating purposes, but what was meant was not future value, but present value; what land would sell for to-morrow. The words in the Bill were— 'Capital land value' in reference to any lands and heritages includes the value of any common interest in land, and means the sum which such lands and heritages or common interest might be expected to realise if sold by a willing seller in the open market at the time of the valuation.

VISCOUNT ST. ALDWYN:

That includes prospective value.

THE LORD CHANCELLOR

As I understand this language, it means what property would fetch if sold to-morrow.

VISCOUNT ST. ALDWYN

Does not that mean prospective value?

THE LORD CHANCELLOR

said they seemed to be using language in different senses. Take a piece of land worth £1,000; that was the amount it would fetch if sold at once, and it could not, therefore, be called future value.

LORD BELHAVEN AND STENTON

If there is a purchaser.

THE LORD CHANCELLOR

Of course, if there is no purchaser he cannot get the money. No one would put a value on land which nobody would buy. I do not understand how it can be said that that involves prospective value.

*LORD LEITH OF FYVIE

said that the evidence of valuations in Scotland, as made by valuators upon land, was shown by the history of mortgages in the last ten years, in which the property had not only failed to bring the value of the market, but in many cases it had failed, and still failed, to find buyers for it.

THE LORD CHANCELLOR

said there must be reliance on the judgment of the valuer. The value would be tested by the amount land would fetch in the market. Greater precision than that could not be attained. In a sense it was true to speak of hypothetical value; at the present time hypothesis was constantly present in valuation. He hoped the Bill could not be used for any such purposes as had been indicated by the noble Lord opposite, but the danger could not arise under this Bill, which did not propose to tax anybody.

*LORD BALFOUR oF BURLEIGH

put a concrete case. The noble and learned Lord had said that he would rate upon what an owner could sell the land for in the market to-morrow. Would he propose to rate the site of Holland House and its garden upon the amount it would realise as building land?

THE LORD CHANCELLOR

I think the case of reserved spaces and open spaces which are in any way dedicated to the public convenience is one we ought to consider when we come to the Amendment standing in the name of the noble Viscount, Lord St. Aldwyn.

THE EARL OF CAMPERDOWN

could not follow the argument of the noble and learned Lord that it was fair o rate on purchase value. Take a piece of land not far from a town, which had coal under it, but was not capable of development at that time. The price given for that land would include what the purchaser might consider the prospective value, but rating upon such value would be rating capital not yet developed.

THE EARL OF CRANBROOK

said that a poor man, by being compelled to put his land into the market by imposing rates he could not pay, would be unfairly deprived of his property, and forced sale would lessen the value of surrounding property.

LORD BARRYMORE

gave an illustration of the effect from his experience in America. There was an estate just outside New York which brought no income to the owners, but which had a prospective value, upon which it was rated. These rates the owners were unable to pay, and the result was that the land was sold to a rich capitalist speculator able to wait until the value matured. That did not stop the holding up of that land, and, as a matter of fact, it was held up for some years. In America they already had the system which this Bill would set up, and if the Bill were passed that kind of thing would probably happen here. Other evils of the system were that houses were built much too closely together, a great deal too high, and without gardens.

*THE MARQUESS OF LANSDOWNE

said the observations of the noble and learned Lord on the Woolsack failed altogether to reassure him. It was quite true, as the noble and learned Lord said, that they had already in some cases to resort to hypothetical values. An assessor might have to put a hypothetical value on an unoccupied house, but his hypothetical valuation was based on an estimated yearly rent, and that made all the difference. The assessor had no difficulty in ascertaining what a similar house was let for at the present time. The noble and learned Lord had told them that it was not the intention of the Government that the future or remoter value should be taken into consideration, but he said the valuer would determine what the premises would sell for to-morrow.

THE LORD CHANCELLOR

At the time of valuation?

*THE MARQUESS OF LANSDOWNE

Well, at the time of valuation. What they would be selling, however, was something which was prospective, for the imaginary buyer would calculate his price by discounting the remote value. Prospective value, therefore, clearly entered into a transaction of that kind. He took the case of three buildings immediately adjoining one another in a part of London with which he was intimately acquainted: one of them was nine or ten storeys high, another consisted of a couple of storeys of stable buildings, and the third of an old-

fashioned house of four storeys. How would the assessor set to work in such a case? Was it not clear that if he based his valuation on the selling value he must take into consideration what the premises might sell for on the assumption that the site was put to the most profitable use possible? He saw no escape from that. The moment they got away from actualities they found themselves in that region of perplexity in which the House was floundering at the present time. He hoped, therefore, that they would stick to the safe and sound ground of annual instead of capital value.

On Question, "That the words proposed to be left out stand part"—

Their Lordships divided:—Contents, 22; Not-Contents, 84.

CONTENTS.
Loreburn, L. (L. Chancellor.) Liverpool, E. Granard, L. (E. Granard.)
Tweedmonth, L. (L. President.) [Teller.]
Althorp, V. (L. Chamberlain-) Hamilton of Dalzell, L.
Morley of Blackburn, V. Herschell, L.
Ripon, M. (L. Privy Seal.) O'Hagan, L.
Allendale, L. Pirrie, L.
Armitstead, L. Saye and Sele, L.
Beauchamp, E. (L. Steward.) Colebrooke, L. Shuttleworth, L.
Carrington, E. Denman, L. [Teller.] Tenderden, L.
Crewe, E. Fitzmaurice, L.
NOT-CONTENTS
Devonshire, D. Mount Edgcumbe, E. Clifford of Chudleigh, L.
Wellington, D. Onslow, E. Clinton, L.
Orford, E. Colchester, L.
Abercorn, M. (D. Abercorn.) Powis, E. Dunboyne, L.
Bath, M. Shaftesbury, E. Fairlie, L. (E. Glasgow.)
Bristol, M. Vane, E. (M. Londonderry.) Heneage, L.
Lansdowne, M Verulam, E. Hindlip, L.
Salisbury, M. Waldegrave, E. [Teller.] Kilmarnock, L. (E. Erroll)
Westmeath, E. Kintore, L. (E. Kintore.)
Ancaster, E. Churchill, V. [Teller.] Lawrence, L.
Camperdown, E. Falkland, V. Leith of Fyvie, L.
Carnwath, E. Goschen, V. Lovat, L.
Cranbrook, E. Halifax, V. Manners, L.
Dartmouth, E. Hampden, V. Meldrum, L. (M. Huntly.)
Dartney, E. Hill, V. Newton, L.
Devon, E. Iveagh, V. Oranmore and Browne, L.
Doncaster, E. (D. Buccleuch and Queensbury.) Milner, V. Ormonde, L. (M. Ormonde.)
Ridley, V. Ramsay, L. (E. Dalhousie.)
Eldon, E. St. Aldwyn, V. Rothschild, L.
Fortescue, E. Saltoun, L.
Halsbury, E. Abinger, L. Seaton, L.
Harrington, E. Ampthill, L. Shute, L. (V. Barrington.)
Jersey, E. Ashbourne, L. Sinclair, L.
Lauderdale, E. Balfour, L. Somerhill, L. (M. Clanricarde.)
Lichfield, E. Barrymore, L.
Lovelace, E. Belhaven and Stenton, L. Stanmore, L.
Malmesbury, E. Blythswood, L. Stewart of Garlies, L. (E. Galloway.)
Mansfield, E. Broderick, L. (V. Midleton.)
Mar and Kellie, E. Calthope, L. Waleran, L.
Morton, E. Carysfort, L. (E. Carysfort.) Zouche of Haryngworth, L.

House resumed, and to be again in Committee To-morrow. The Committee to have precedence of other business.