HL Deb 14 May 1908 vol 188 cc1264-92

House in Committee (according to order).

[The Earl of ONSLOW in the Chair.]

Clause 1:

*LORD BALFOUR OF BURLEIGH

had on the Paper an Amendment to subsection (2)— (2) Subject as hereinafter provided, there shall be entered under the last-mentioned heading the capital land value of the several lands and heritages required by the Valuation Acts to be entered in the valuation roll, not, being lands and heritages falling to be valued by the assessor of railways and canals— to leave out from the word "roll" to the end of the subsection; or alternatively, to leave out from the subsequent word "heritages" to the end of the subsection and to insert the words "belonging to railway, canal, harbour, gasworks, waterworks, tramway, electricity, or other statutory companies or corporations, where the use of the land is limited by Statute to the purposes of such companies or corporations." He said the Amendment had been put down in an alternative form owing to the extreme difficulty, having regard to the speeches of the Law Officers of the Crown for Scotland, and especially of the Solicitor-General, of understanding what was the intention of the Government in this matter. The Solicitor-General had over and over again stated that the intention of the Government was to substitute one standard for the other, and to put the whole of the rates on the new standard. That had been disavowed by His Majesty's Government, and therefore the first of his Amendments was obviously inapplicable. But if the object was only to remedy the suburban grievance of holding-up land, the second Amendment was applicable to that particular point.

THE EARL OF CAMPERDOWN

did not desire to interrupt the noble Lord, but wished to say now, in order not to be precluded from doing so later, that if Lord Balfour proposed to abandon his first Amendment, he (Lord Camperdown) would move it.

THE CHAIRMAN OF COMMITTEES

Lord Balfour did not finish what ho was going to say, but I gathered that he does not propose to move the first of the two alternatives. Therefore, if Lord Camper-down intends to move it, he would come first.

LORD BALFOUR OF BURLEIGH

said that, so far as he was concerned, he thought the first Amendment inapplicable in the position in which they were now placed.

THE EARL OF CAMPERDOWN

then moved to delete from subsection (2) the words "not being lands and heritages falling to be valued by the assessor of railways and canals." He explained that his object was to bring railways and canals into the Bill. As the clause stood they were excluded, and their valuation would not be inserted in the additional column. As Lord Balfour had pointed out, the Bill left it quite uncertain whether the Rating Bill which was going to follow on this Bill would institute site value as the basis of rating generally, or only of a supplementary rate. The Solicitor-General for Scotland, and the extreme Members in the other House, had declared that the intention was to extend it to all rating. The Lord Chancellor, on the other hand, had assured them that that was not the Government's intention. But the Com- mittee had to deal, not with intentions, but with what they found in the Bill. As the Bill stood railways would not appear in the additional column, and supposing, for the sake of argument, that the Rating Bill would be limited to a supplementary rate, then railways would not be rated for the supplementary rate at all. Why should that be? If there was to be a supplementary rate, there was no reason for exempting railways and canals, still less the other undertakings set out in Lord Balfour's alternative Amendment. If some land was to be entered in this column then all land ought to appear there, without consideration as to whom it belonged. That was the way in which the matter presented itself to his mind, and that was his reason for moving to leave out these words.

Amendment moved— In page 1, line 14, to leave out from the word 'roll' to the end of subsection (2)."—(The Earl of Camperdown.)

THE LORD CHANCELLOR (Lord LOREBURN)

said the effect of the Amendment would be to bring in railways and canals to be entered in the new column of the Valuation Bill.

THE EARL OF CAMPERDOWN

Hear, hear.

THE LORD CHANCELLOR

said the Committee should remember what the new column was; it was now a new column of yearly value, and not capital value. The subject of rating railways was a very difficult one, but a system had grown up which was as accurate a method of valuation on yearly value as could be found. Accordingly his view was that the best course would be to leave railways as they were, instead of putting them into a valuation column the purpose of which, as altered through the effect of their yesterday's Amendment, he did not at present apprehend.

THE EARL OF CAMPERDOWN

said that if it was the case that railways would appear on their yearly value he would withdraw his Amendment.

LORD HENEAGE

asked if there were to be two sets of ratepayers or only one. Were the ratepayers who were to pay the ordinary rate to be the occupiers, and those who were to pay under the supplementary column to be the owners, or were the owners to pay all the rates?

THE LORD CHANCELLOR

said he could not be expected to say what would happen under the Bill as altered by their Lordships. He could only say what the Government intended the Bill to do—which was to set up a column in the valuation roll stating the capital value, and that afterwards, in another Bill, the incidence of rating should be stated and enacted.

THE EARL OF HALSBURY

said that, if the purpose of the Bill was as the Lord Chancellor described, the Amendment already carried by the House had negatived that purpose.

THE LORD CHANCELLOR

I think that is so.

Amendment, by leave, withdrawn.

*LORD BALFOUR OF BURLEIGH

moved to leave out all the words after "heritages," and to insert "belonging to railway, canal, harbour, gasworks, waterworks, tramway, electricity, or other statutory companies or corporations, where the use of the land is limited by Statute to he purposes of such companies or corporations." The Lord Chancellor had stated over and over again that the real object of the Bill was to get rid of the suburban grievance—that was, the holding-up of land in and about growing towns. Therefore, it seemed to him that the Amendment he was now moving was absolutely necessary. The noble and learned Lord had stated yesterday that the Bill was intended to remedy a purely urban grievance—

THE LORD CHANCELLOR

said he had stated quite explicitly on the Second Reading the full purpose of the Bill as he understood it. What he had said was on record, and he did not wish it to be summarised in a sentence. He did not think he had made the statement that the grievance was confined to urban areas. At any rate, he had not intended to, for he believed the evil existed outside urban areas as well.

*LORD BALFOUR OF BURLEIGH

said that, at any rate, one main object of the Bill was to put a penalty on those who capriciously, and for their own profit, held up land. There wore no doubt other objects hoped to be attained by means of this Bill by supporters of His Majesty's Government. But one of its main objects avowed by the Government was to put a penalty on those who held up land which it was thought might be put into the market for the benefit of those urban districts; and one of the penalties they were going to impose was to rate the owners on something more than the annual value which they were putting into their pockets. It was clear that the companies and corporations dealt with in his Amendment had no power to do anything of the kind. Vacant land such as that to which his Amendment referred should certainly be exempt from this form of penalty, because the companies and corporations concerned could not realise their land for budding purposes, nor did they hold the land for the purpose of profit in the case of resale. Take the case of the Clyde Trust. This trust had duties up and down the whole of the Clyde, from Glasgow to Greenock. It was rated in two or three counties, in six or eight paishes, and in some burghs, and it paid rates amounting to something between £35,000 and £40,000 on an assumed income of £150,000 a year. It was clear that that body, even if it did hold vacant land, could not turn that land to any use except for its Own purposes; and certainly they could not in such a case test the price between a willing seller and a willing buyer because the land could not be sold. The Report of Mr. Ure's Committee in explicit terms recommended that the exemptions from the Bill should include railways, canals, docks, and harbours. The only exemption which he proposed to give to these companies and corporations was that they should not be valued, because it certainly would not be fair to rate them where the use of the land was limited by Statute to the purposes of such companies or corporations.

Amendment moved— In page 11, to leave out from the word 'heritages' to the end of subsection (2), and insert the words belonging railway, canal, harbour, gasworks, waterworks, tramway, electricity, other statutory companies or corporations, where the use of the land is by Statute to the purposes of such companies or corporations.'"—(Lord Balfour of Barleigh.)

THE LORD CHANCELLOR

said that the arguments which had been adduced by the noble Lord, and from which he did not dissent, were those which had led the Government to exclude railways from the Bill. The Bill excluded railways, and the Amendment also excluded them, but he thought it did so in a more complete form; and, if the noble Lord preferred his words to theirs, so far as he was concerned he had no objection. He would have objected to the inclusion of railways if the Bill had remained as it was; it was doubly desirable to exempt railways from the operation of the new system of yearly valuation.

LORD BALFOUR OF BURLEIGH

The object of the Amendment is to make sure of the exemption of docks.

THE LORD CHANCELLOR

Quite so.

THE EARL OF CAMPERDOWN

did not quite follow the argument. He had understood from the noble and learned Lord that every sort of land would appear according to its yearly value. Railways undoubtedly had a special mode of valuation of their own. Docks and other undertakings had also a separate mode of valuation. He apprehended that all were to be dealt with alike, and would appear in the third column in the way in which they were valued at the present tune.

THE LORD CHANCELLOR

said the Amendment was an enlargement of the provision in the Bill. The provision left railways as they were now in regard to rating. The Amendment secured that clocks and similar undertakings should also continue to be rated exactly in the same way as they were now. He admitted that the object aimed at was secured more clearly under the Amendment than under the Bill.

On Question, Amendment agreed to.

Consequential Amendment agreed to.

Clause 1, as amended, agreed to.

Clause 2:

Consequential Amendment agreed to.

Clause 2, as amended, agreed to.

LORD BALFOUR OF BURLEIGH

moved to insert, after Clause 2, a new clause which he explained was consequential upon the Amendment made by their Lordships in Clause 1 the previous day.

Amendment moved, After Clause 2, to insert the following new clause: 'Within six months after the passing of this Act, the clerk of every council of a county or a burgh shall convene, with not less than one month's notice, a special meeting of the council to consider the desirability of adopting this Act in that county or burgh, and if the decision of that meeting, upon a vote taken, is in favour of such adoption, this Act shall have force within that county or burgh.'"—(Lord Balfour of Burleigh).

On Question, Amendment agreed to.

Clause 3:

*LORD BALFOUR OF BURLEIGH,

in moving an Amendment defining "yearly land value" in reference to any lands and heritages as meaning— Such part of the rental or yearly value of any lands or heritages or common interest in land as is fairly attributable to the ground if devoted to any purpose to which such land can presently be devoted, subject to all building restrictions and servitudes imposed thereon, said that perhaps the most convenient course would be that he should, as shortly as possible, state what the point of difference in regard to this Amendment was, not only between him and His Majesty's Government, but, as he thought, between hint and the noble Lords on the Opposition Benches who desired to amend his Amendment. He thought ho was not wrong in saying that the first part of the Amendment down to the words "if devoted" was really consequential upon the alteration made in the Bill the previous day, substituting yearly for capital value, because if they made that change it was necessary to insert a definition of yearly value. The definition of capital value would not run when applied to yearly value, and therefore his proposal was to omit the definition appropriate to capital value and insert one appropriate to yearly value. He went on, in the course of the Amendment, to suggest an extension of the yearly value as it now existed—an extension for this particular valuation. The alteration would not apply to the ordinary column of the Valuation Roll, but to the value of land as it appeared in the new column proposed to be added to the Valuation Roll.

He did not wish to re-argue the question of the relative advantages of capital and yearly value. They had not, of course, converted His Majesty's Government. His desire in framing this Amendment as applied to yearly value was really to afford to those who thought there was a grievance at the present time a means of remedying that grievance. It was, he quite admitted, a somewhat difficult and intricate question. They had it argued yesterday as a grievance that land was capriciously held up from the building market—it might be either on the outskirts of growing towns, it might be as waste pieces within towns, or it might be in one or two other ways. It was said that the land in question, while ripening for building, was occupied for agricultural or accommodation purposes; and, being rateable, it had now to be valued at a rent which a tenant might reasonably give, and this had been interpreted to mean the value to the occupier in its existing state. Here he, for one, was fully prepared to admit that there was a certain difficulty and a certain grievance. He thought the grievance greatly exaggerated in many quarters; it had been deliberately exaggerated for the purpose of getting up an agitation in favour of the taxation of land values and the confiscation of that particular thing known as the unearned increment.

If anyone who cared to do so would take the trouble to look at the Report of the Royal Commission on Land Taxation, of which he was chairman, they would see, whether they agreed with the Commission or not, that the question was fully and thoroughly argued; and, as he understood it, the conclusions to which they came wore on this particular point accepted by His Majesty's Government. But they proposed to remedy the grievance by valuing on capital value in the future. His contention was that that raised difficulties and dangers which were far in excess of what was necessary for remedying the particular grievance in question, and that the easiest way—a perfectly simple and reasonable way—of doing it was to make such a difference in the definition of yearly value for this purpose as to alter the decision of the Courts when they gave effect to the motto which, for short, was described as "valuing land in its present state and fur the purpose to which at the moment it was applied." The Commissioners said that in respect of site value of all uncovered land which was intended to be let or could be let on a covenant for immediate building, it was fair to rate at a certain amount in excess of the value actually obtained by the owner, provided the owner could immediately obtain it; and the advantage they claimed for the scheme was that the charge must necessarily be moderate in amount, and that it would avoid the injustice of taxing owners and occupiers of agricultural land upon a capital value which could not be realised.

On the question of the alleged holding-up of land, the Commissioners said— It cannot be disputed that land is sometimes withheld from building; but, on the whole, though it is very difficult to obtain definite and exhaustive information, we are inclined to believe that merely speculative holding-up does not occur to any great extent, or for very long periods. The cases in which speculation might appear to be the motive will often be found to be complicated by other anti less simple considerations. e.g., if an estate is being developed as a high-class residential neighbourhood, the owner often prefers to wait a while for desirable tenants rather than grant leases for factories or small houses. He did not think anyone could say that if an owner in the development of his estate took that course he was doing anything but what was right and proper, and they should not penalise him for it. The difficulty was that noble Lords opposite would make no distinction but would rate upon capital value, even although private property were held up for perfectly legitimate purposes. But there were other cases which it was thought desirable to get at. The Commissioners went on to say— There are plots of land which may sometimes be seen in important thoroughfares, lying waste and neglected, destined for no purpose but building, yet withheld from the builder. In such cases we entertain no doubt as to the propriety of imposing a rate on the true site value, or as to the ease with which this object can be effected. Next, the Commissioners referred to land on the outskirts of towns. The Government had failed to recognise in the provisions of the Bill that this was an extremely complicated and difficult question. In the Bill as it stood there were no directions at all to the assessors. He thought it was only fair that the Government should state more clearly in the Bill what the object they had in view really was. If noble Lords opposite would read the criticisms of newspapers which supported the Government they would see that the real object in the minds of some of their supporters was to get at what was called the "unearned increment of the land." What he was anxious to do was to take care that, while remedying the grievance which existed, they should not introduce into their system of valuation or rating anything which would give colour and support to the idea that that was a reasonable proposal. He thought the words he proposed would be fair, and they had boon drafted by two of the most experienced draughtsmen in Scotland. In case it might be said the word "presently" was ambiguous, he might add that it meant in Scotland "the present time." The English meaning of "presently" was "some future time."

The Government would, he was sure, give him credit for having endeavoured to make an honest attempt to settle a real difficulty. If the words which he suggested were not considered by the lawyers who guided the House to be satisfactory, then let them insert others. The point was an extremely difficult and intricate one. It had been argued very fully in the Report for which he was responsible, and to which he adhered absolutely; he believed it to be as true and correct now as on the day it was written. But it had been used by those who wished to purloin the unearned increment on land as giving colour and support to their view. He did not think anyone could honestly say the Report went in that direction. As to rating on capital value, not only was it not mentioned in the Report, but it was not mentioned by a single witness, so far as he could recollect, who gave evidence before the Commission. They appealed to some of the best economic experts on this point and received voluminous papers in reply; but, so far as he remembered, not one single suggestion was made that capital value should be taken. He saw Lord Courtney opposite. If he could pursuade the noble Lord to unburden his mind and tell the Committee what he thought of the economic view of rating on capital value as opposed to yearly value, he would be prepared to rely upon Lord Courtney's opinion to guide him in the matter.

If it were said hereafter that the Lords had ruined this Bill by inserting "yearly" instead of "capital" value, he would road from a letter Sir Henry Campbell-Bannerman wrote him. Sir Henry Campbell-Bannerman had made some good-humoured but caustic comment on the part he took in advising their Lordships last year to reject this Bill on Second Reading. As the attack was delivered in Scotland, near his home, and in view of the high standing of the statesman making it, he wrote Sir Henry a friendly letter challenging the accuracy of some of the things said. He pointed out to Sir Henry Campbell-Bannerman that one of the objections he had to the Bill was the rating on capital instead of the yearly value. In the course of a courteous reply Sir Henry Campbell-Bannerman wrote:— Even if these proposals were all you say of them, they would still remain matters for consideration in Committee, and I may remind you that you took part in the rejection of the Bill on Second Reading—a course which prevented it from ever reaching the Committee stage. This year the Bill had reached the Committee stage, and now they were told that by substituting "yearly" for "capital" value they had wrecked the Bill. Yet Sir Henry Campbell-Bannerman said it was merely a Committee point.

To recur to what was really the main point. If one of the principal objects of the Bill was to remove the suburban grievance of the capricious holding-up of land, then he was willing to help; and he had given an earnest of his desire to do so by putting this Amendment on the Paper. His noble friend Lord Camperdown proposed to leave out the words— if devoted to any purpose to which such land can presently be devoted. If those words were omitted there would be no difference between the definition of yearly value as it stood and as it would be under the Bill. His sole object was to alter the definition to a reasonable and moderate extent for the purpose of getting rid of a grievance—the existence of which he fully admitted. It was desirable that the greatest possible care should be taken to make sure that they did, in a matter of this intricacy and difficulty, just what they wanted to do and no more. In view of Lord Camper-down's Amendment he would only move, at that moment, the first part of his Amendment down to the word "ground."

Amendment moved— In page 3, lines 16 to 19, to leave out lines 16 to 19 inclusive, and to insert the words "means such part of the rental or yearly value of any lands or heritages or common interest in land as is fairly attributable to the ground."—(Lord Balfour of Burleigh.)

THE LORD CHANCELLOR

said the noble Lord who had moved the Amendment was a master of this very intricate subject, and he thought their Lordships would have realised from the noble Lord's speech the intrinsic difficulty of it, and would extend some, perhaps modified, sympathy to those who were attempting to deal with it. It was possible to take one view and to say that for all subjects of rating the present system was right, and that they were only to take what the property would let for from year to year and rate upon that. That was perfectly intelligible. But there were many—the noble Lord who moved the Amendment was one of them—who thought that was not fair. He certainly thought it was not fair. This Amendment was admittedly based on the assumption that there was something beyond the present rental value which ought to be assessed for rating purposes. His Majesty's Government thought that that was the thing which ought to be assessed—the annual interest of the real value of the property. Taking the real value of the property at £1,000, they thought it ought to be said that the annual value of that £1,000 was £40 on a 4 per cent. table, or £50 on a 5 per cent. table. Therefore, it was reasonable that something beyond the rental value ought to be allotted as the real annual value, and that was a percentage of the sum for which the property would sell to-morrow. This Bill had ceased to be a capital values Bill. It had ceased to effect the purpose for which the Government strove in the only way in which the Government thought that it was possible to attain it. Then there was an alternative. The noble Lord thought he could solve the problem of allowing something morn than the annual rental. In his opinion it was impossible to do so if they substituted annual value for capital value. It was not done by this Amendment, and he believed it was impracticable to do it. He would be most happy if he could be shown that this could be done by means of annual valuation. The real question was how to work it out. How did the noble Lord work it out? His Amendment provided that the annual land value should mean— Such part of the rental or yearly value of any lands or heritages or common interest in land as is fairly attributable to the ground if devoted to any purpose to which such land can presently be devoted. He agreed as to the ambiguity of the word "presently," and took the definition to mean— If devoted to any purpose to which such land can now be devoted. Supposing they had a piece of land which would sell for £1,000 to-morrow, but was let for £3 a year; £1,000 represented £40 a year. What rateable value was it intended to put upon that piece of land? He would put £40 a year. He did not mean to say he would tax the whole of that £40. That would be the proper sum to appear in the column, and they could settle by a subsequent Act what imposition they were going to put upon it. What did those who supported the view of an annual value propose to put upon it? Was it £40 a year or a year? He did not believe it could be put in any language if they confined themselves to annual value. It could be done if they had capital value. It was a question of enormous importance. The proposal in the Bill was not revolutionary. Repeated allusion had been made to the danger of taxing unearned increment. In one sense of the word urban land was unearned increment because it was the result of the congregation of the people. If it was proposed to take the whole of that he should object. But it was of immense importance to the inhabitants that the piece of land which was now rated at £3 should bear its fair share of the rates. How were they going to define what that share was I Their Lordships would excuse him if he reminded them that he was now entitled to take the attitude of a critic, not an unfriendly critic. He was not quite in the same position the previous day. He was then defending proposals, but to day he was criticising proposals. He did not think they could secure a definition in any language in yearly value. He did not believe that the words of the Amendment would carry out the purpose which the noble Lord had described, and he was afraid he could not suggest any words that would do so.

LORD ASHBOURNE

said the noble and learned Lord was in the difficult position the previous day of an expositor. He thought his noble and learned friend found that the difficulty of that position grew as yesterday's debate proceeded, and he had no doubt he was far happier in the new role of benevolent critic. He did not think the presentation of the case by the Lord Chancellor met the great difficulties or complexities of the situation. If the Government insisted upon capital value they must be prepared to show that it was free from the gross and obvious injustices that had been alleged against it. Annual value always meant present value. In order to arrive at capital value they had to take into account future value. It did not stand examination. The noble Earl the Secretary of State for the Colonies had admitted the previous day that the change would be from rating on present and existing value to that of real and future value.

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

I said "or future value."

LORD ASHBOURNE

said that in the majority of cases there would be no offer to purchase and the valuer would have to assess the capital value prospectively—that was to say, what it conceivably might fetch in the future. That was a strong method to apply in a Bill of this kind. If they adopted capital value the assessment would depend on prophecy, speculation, and imagination. The object of every Act of Parliament should be to arrive at justice and to do no more than justice required. The assessor might fix a value which would prove ruinous to the owner, who would be forced to sell; and in a variety of cases, like those mentioned the previous day by Lord Milner, immense harm would be done to the locality, which might thus be deprived of open spaces from which great benefit was derived. This was a very difficult problem, and honestly he did not think that the Government realised the difficulties. The Lord Chancellor had expressed the opinion that annual value could not meet the case completely, but Lord Balfour had indicated his willingness to consider any reasonable addition to those words which would achieve the desired object. Therefore the Government were bound to endeavour, with the great opportunities they had for consideration, to draft wording which would do less injustice.

*THE EARL OF CREWE

said he had listened with close attention to the speech just delivered by the noble and learned Lord, and could not help thinking that he had mistaken the day on which he was speaking. His speech was relevant to the substitution of annual for capital value, but it had absolutely no bearing whatever on the Amendment of Lord Balfour, with which his noble and learned friend the Lord Chancellor had dealt. The noble and learned Lord who had just spoken alluded to the few words he (Lord Crewe) said yesterday, in which he endeavoured to define what they meant by capital value. Capital value represented, in his mind, the rental of the immediate future. Therefore if the noble and learned Lord would allow him to add the word "immediate" before "future," that was the definition by which he would abide. But the question as between capital and annual value was not now before the Committee. What they had to consider was the Amendment of Lord Balfour, who desired to define annual value. That was the only matter on which the attention of the Committee Was now fixed, because capital value had been got rid of altogether at an earlier stage. Lord Balfour proposed to include such value as was fairly attributable to the ground— if devoted to any purpose to which such land can presently be devoted. These words Lord Camperdown proposed to omit. The effect of such omission, he imagined, would be that matters would remain exactly as they were at this moment, Therefore they came back to the case cited by the Lord Chancellor—the case of a piece of land worth £1,000. It did not very much matter, from their point of view, whether it was rated on £1,000 or on the interest of £1,000; but it did make a very great difference if it was only rated on the £3 rental. The noble and learned Lord who had just sat down had argued in the direction that the valuation should be on whatever the land was producing at the moment. In that case the noble and learned Lord ought to have voted against the Second Reading of the Bill, because if it was going to be maintained that under all circumstances they were never to put any rate on land except one founded upon the rent which it might be bringing in at the moment, to whatever purpose the land might be devoted at the moment, then he hold that the whole Bill disappeared, and it would have been far simpler to have voted against the Second Reading. He confessed he did not entirely see how the words which Lord Balfour used could be confined to land which was injuriously and dangerously held up for building. He thought it could not be disputed that what the noble Lord meant did undoubtedly involve the introduction of hypothetical considerations, because the purpose to which the land could be devoted was the matter in dispute. And unless they put it up for sale they could not prove that the land could be devoted to any particular purpose. So they must either take the existing rent and no more, or else they must indulge to some degree in the domain of hypothesis, and whether they did so by saying the land was worth £1,000, or by saying it might bring in £30 or £40 a year, did not seem to him a matter of the first importance. If they took annual value, it was a very simple matter to arrive at the capital value of the land. Therefore the difference between Lord Balfour and themselves did not seem to be in essentials a very great one. The difference might be that he might say that there were only certain very special instances in which such land ought to be rated; but how they were going to arrive at such special instances seemed to him a difficulty, and he did not think the noble Lord's words provided any means to that end. He was bound to say, however, that if Lord Camperdown moved the Amendment to the noble Lord's Amendment, although he did not believe the basis of annual value was the correct one to go on, he should certainly support Lord Balfour against any attempt to strike out the words to which he had referred.

*THE MARQUESS OF LANSDOWNE

thought the noble Earl who had u[...]t sat down was correct when he told the Committee that the time had passed for further discussing the relative merits of annual and capital value. The Committee had decided that question, and had substituted the word "annual" for the word "capital" in the Bill. Lord Balfour of Burleigh had proposed a kind of middle course. He objected as strongly as most of their Lordships to the introduction of what might be called future, or remote, or prospective value, but he gathered that he was, on the other hand, quite prepared to accept a basis of valuation founded upon something which was more than the actual or present value. The noble Lord was ready to accept valuation founded upon the use of the land— If devoted to any purpose to which such land can presently be devoted. He would not enlarge upon the interpretation of the word "presently." He had no doubt the Committee could arrive at an understanding as to that. But he would ask their Lordships to consider for a moment how the plan which he understood Lord Balfour to propose would work as compared with the plan proposed in the Bill. Under the plan of the Bill, an assessor in valuing a site let at the moment for a negligible sum, but with a large potential value, would, no doubt, feeling that it would be grossly unjust to rate the owner immediately upon a value which might not be attained for many years to come, assess the owner upon something less than the full ultimate value; he would discount the value which might some day be fairly supposed to be attainable. Under Lord Balfour's Amendment a valuer, taking a similar site, would endeavour to find out what in the immediate future that site might fetch in the market, if bought by a purchaser who would of course also have regard to the ultimate value, although he too would discount it so far as the immediate transaction was concerned. In each case they went beyond the actual facts and anticipated the future, although the future which his noble friend contemplated was a much less remote future than the future contemplated in the Bill. But in the one case the site was to be assessed at something less than the full ultimate value, in the other case at something more than the present value. In either case there must be a departure from the conditions actually obtaining at the moment. He confessed he did not see that the process under his noble friend's Amendment would be very much easier than under the proposal in the Bill. He sympathised with the object his noble friend had in view, and the House should be grateful to him for the patience he had exercised and the courage he had shown in endeavouring to deal with what was really the crux of the Bill. He felt with Lord Balfour that there might be cases where land that ought to be built upon was withheld from the market, or where land was covered with buildings which obviously did not turn the site to proper account, and if they could find words which would cover cases of that sort without admitting, to a dangerous extent, this element of speculative and hypothetical value, he would gaily support his noble friend. But his noble friend had made a proposal which was alarming to many of his friends on that side of the House, and had boon condemned by the Government as unworkable, and he felt, therefore, that it would be useless to attempt to insert it in the Bill. He wished he could offer some suggestion which might be of assistance to the House, but the only one he could think of was that Lord Camperdown's Amendment should be accepted, and perhaps His Majesty's Government could on reconsideration discover words which, while dealing with land wrongfully withheld from the market or not turned to proper account, would not let in that speculative computation to which most of them objected. He did not agree that with the insertion of Lord Camperdown's Amendment there would be nothing left in the Bill; there would still be the separate column and that which the Government so much desired, the dissection of land value from the value of the composite subject, and should there be a desire to strike a separate rate there would be the materials for doing so. It was, therefore, not fair to charge the Opposi- tion with demolishing the Bill by accepting Lord Camperdown's Amendment. As they had been frequently reminded, this was not a rating Bill, and possibly in in considering the question of rating the Government might suggest some changes in the law or some instructions to assessors to deal with this difficult point upon which there was a great deal to be said on both sides, but upon which no simple solution had yet been offered.

THE LORD CHANCELLOR

was extremely glad to hear from the noble Marquess that he did recognise that something more than the present rental value was a proper subject for assessment. He did not think their Lordships would desire that this matter should be treated as one of fence and parry. What was it that noble Lords were willing to accept? What was it that they meant? He did not say that if he understood that, he would attempt the work, which he believed impossible, of putting in a definition of yearly value; but at least ho would know what the difference was between them. He had endeavoured to explain what the words in the Bill meant, but what he desired to know was what the Opposition wished to have done in the application of the Amendment in a concrete case, and what should appear in the column. He certainly could not undertake to find means to supply the materials after the Government proposal had been rejected.

LORD COURTNEY OF PENWITH

did not propose to reply to the appeal of Lord Balfour by entering into an abstract inquiry which would be foreign to the Amendment now before the Committee. He rose to endeavour to ascertain from Lord Balfour what was really meant by the Amendment. They were now in the position that the valuation must be upon the annual value of a plot of land. Lord Balfour, in departing from the doctrine of taking as the actual value the rent which might be derived from the land according to its actual use, wished to import some rental which might be derived from a use to which it could presently be devoted. He desired to know what the noble Lord exactly meant by his suggestion to extend the rental in that way. Take an ordinary illustration of what happened in Scottish experience. If a person offered to take a piece of land to feu it—to use it for building—would a valuer take the feu rents as a measure of value? Was it enough that a person should have offered to feu, or did the noble Lord bring in the additional circumstance that, in order to get the feu rents adopted for valuation, they must also have the readiness of the landlord to let the land on feu? He thought the noble Lord could not intend the latter, because, if he did, he would be utterly powerless to avoid the evil, which he admitted occasionally occurred, of a landlord refusing to let land which might be let for building. He must, therefore, mean that the valuation to he inserted in the new column must be on the feu rents if there was any person ready to take the land on feu, and that was a circumstance which the valuer would have to ascertain. That, of course, would be considerably in excess of the actual rent of agricultural land, and it seemed to him that the noble Lord would then come round to the proposition originally made by the Government, because the feu rent would be, speaking roughly, the ordinary interest on the capital value of the land. But he hoped, before proceeding to a division, to hear from Lord Balfour what it was exactly that he meant by his Amendment. To adopt the Earl of Camperdown's Amendment would, it seemed to him, be to remain in the present position. They would, it was true, have a third column, but they would be making no advance and might as well drop the Bill. It was a fair accusation to make against noble Lords opposite that if they wore ready to support the Amendment of the noble Earl below the Gangway they were prepared to eviscerate the Bill altogether. Lord Balfour's Amendment., which was the one immediately before the Committee, might, he thought, be accepted by the Government, because, though capital value was got rid off, the Amendment brought back, in a hypothetical form, what was really the interest on the capital value, which was the proper subject of taxation.

*LORD BALFOUR OF BURLEIGH

said that to refer to feu rents was to introduce an unnecessary complication, because the feu rent included not only the value of the land as it was for agricultural purposes, but the interest on the outlay for getting it ready for build- ing. In no circumstances could it possibly be intended to rate on that. That would not have been proposed if capital value had been accepted, nor was it proposed in his Amendment. His idea was that they ought to include in the yearly value a certain amount of value for any land which could be let with a covenant for immediate building. What had made noble Lords reluctant to go as far as he proposed were the extravagant promises and claims made in Scotland by those who professed to speak for the Government. The Lord-Advocate had promised the people of Edinburgh that they should have £30,000 a year out of the unfeued land in the city of Edinburgh, some 3,200 acres That was, of course, absurd, but it had been seriously put forward by the Lord-Advocate as one of the objects of this Bill. To rate all these acres in that way would mean that they would rate some owners on money which would not come into their pockets fur 150 years; and by the time the last of those acres came to be feued, the owner, at the rate of £10 an acre—the rate necessary to bring in the £30,000 a year—would have paid, with compound interest, £12,765 before he received a penny. He agreed that the acres which could be feued within the next year or two should pay some contribution to the rates. But the grievance was that there were places inside towns which might be let tomorrow for building, and were being held up, in Glasgow, for instance, at cost to the citizens of Glasgow for policing, lighting, and watching, and so forth. It was a conservative measure in the best sense of the word to remove a grievance when they found it. His way of getting rid of the grievance might not be altogether free from difficulty but he thought the words which Lord Heneage proposed to insert, instead of the word "presently"—namely, "at the time," were sufficiently concise and plain to be free from very great danger. He frankly admitted that it was impossible to get rid of hypothesis altogether. What he complained of in the proposal of the Government was that the whole capital value was left to be ascertained by the assessor. For Poor Law purposes the old idea of rating was to rate upon the means and substance of every inhabitant—that was, stock in trade, and a number of other things; but that was found unworkable from a variety of reasons. The idea of rating on capital value was going back to means and substance, because it was not an annual revenue, but on the property of the individual. Let the House consider what a dangerous proposition that was. By a series of exempting Acts, after legal decisions, they had exempted moans and substance in the case of people who did not own land; but here they were deliberately proposing to go back upon this principle as a test for rating purposes. It was on this ground that he saw great danger in giving the slightest support to the idea of capital value. He did not think the attitude was quite a fair one of saying, "You have cut out capital value, and therefore we will do nothing at all." He thought it was possible by a definition, perhaps a better one than his own, to secure the object desired by an extension of the term "yearly value." Surely it was worth trying. He admitted the existence of a grievance and had made an honest attempt to meet it; but he most cordially agreed with what the noble Marquess had said, that to give any support whatever, in present circumstances, to the idea of capital value would be a greater mistake than to stand the grievance which at present existed. If the words which Lord Camperdown proposed to omit were deleted, their Lordships would be stultifying their action in giving the Bill a Second Reading. He hoped that if Lord Camperdown's Amendment was accepted some Amendment would be inserted in the shape of an extension of the definition of yearly value which would make it worth while to proceed with the Bill.

THE EARL OF CAMPERDOWN

expressed his agreement with the Amendment down to the word "ground," as it had been moved by Lord Balfour, and could not admit that in approving of the insertion of those words their Lordships hail done nothing. On the contrary, there would appear in this column the site value; and, as they understood from the Government, one of the main objects of the Bill was to distinguish between the site and the improvements upon it. The provision "so much as is fairly attributable to the ground," at all events gave noble Lords opposite a basis on which they could found a Rating Bill.

On Question, Amendment, down to the word "ground," agreed to.

LORD BALFOUR OF BURLEIGH

said that to put the matter in order it would now be necessary for him to move the insertion of the remaining words, and he would do so in a form which would got rid of the ambiguity of the word "presently," viz., "if devoted to any purpose to which such land can at the time of the valuation be devoted."

THE EARL OF CAMPERDOWN

moved to omit the words now proposed by Lord Balfour. The objection which he took to the words was that they introduced the question of hypothesis. As to the case stated by the Lord Chancellor, the question was—Could the owner of the piece of land get £1,000 for it? The Bill did not say that the owner must be capable of getting £1,000 for the land. All it provided was that the assessor was to enter what he considered the capital value of the land, and the assessor was left without any guide of any sort or kind. Lord Balfour had told the Committee that his object was to deal with persons who held up land. He quite agreed. He was perfectly ready to deal with such persons; but, in the first place, it had not been shown that such people really existed. But granted that they did, what was the proper way of dealing with them? It was to be remembered that this was not a Rating Bill, but a Valuation Bill. The way he would deal with the matter would be this. When the Rating Bill was introduced he would say that persons who could be proved to be holding back land should be rated on the value which could be proved to be the value of the land—that was to say, on very much the same terms as their neighbours. To anything direct he had comparatively no objection, but he strongly objected to power being given in this indirect fashion to an assessor to put any prospective value he chose on land. It was not merely a question of vacant land. Take the case of the 3,200 acres of unbuilt-upon land in Edinburgh. How could they trust the assessor to say what was the relative value oft the different zones? It had been stated that there were only some ten or twenty acres which could he built upon every year, but that did not bind the assessor. It was within his power to divide the whole of the 3,200 acres into zones, and to put so much value on one, so much on another, and so on; and he might go on beyond any rent which was at present obtainable and place a fictitious value upon each zone. Then, again, in the case of agricultural land not built upon, how were they going to settle whether or not that land was ripe for building? The assessor might be of opinion that the land could he built upon. But suppose that no one had ever made an offer for the land. That would not in any way bind the assessor, and the owner would be put to all the expense and trouble of proving that the land was not fit for building, although no one proposed to build upon it. Then there was a much more awkward case still which would come before the assessor under the words which he proposed to delete—namely, the case of under-built land. He would give an instance. Suppose there were three houses together, two of them six storeys high and one three storeys. It was perfectly competent to the assessor to say to the owner of the three-storey house, "You are not putting your land to the most profitable use to which it could be put;" and although the owner might not have the money or the desire to increase the size of the house, yet there was an inducement in these words to the assessor to increase the valuation of that house. Then there was another case—that of undeveloped land which had minerals beneath it. The assessor might say, as the noble and learned Lord on the Woolsack had said: "Oh, the land would sell for £1,000, and therefore it is perfectly fair to rate it upon £40 a year." But that land, in order to become worth £40 a year, required to be developed. It was not really correct to say that local authorities suffered loss by having the time at which they received the increased value postponed. Land only received an increased value when it was developed, and only when it was developed would it be right to increase the rating burden of the landlord. He felt that the injustice, if there was any injustice, of continuing the present system, or something very like it, was far less than the undoubted injustice of imposing upon a man a charge in respect of income which he could not possibly receive at the present time.

Amendment moved to the Amendment— After the word 'ground,' to leave out the words 'if devoted to any purpose to which such land can at the time of the valuation be devoted.'"—(The Earl at Camperdown).

*VISCOUNT ST. ALDWYN

said he entirely sympathised with noble Lords who objected to the prospective nature of the new assessment proposed in the Bill. But he also felt with Lord Balfour that there was a grievance in the present system of rating. A case might happen in which it could be shown that a piece of land used for agricultural purposes, or even as waste, could be immediately utilised for building, and yet it was assessed only on its agricultural or waste value instead of on its immediate building value. That surely was a grievance to the community at large. He could not believe it was impossible so to amend the present law of assessment as to meet such grievances without bringing in the question of prospective values; and he hoped Lord Balfour would not press his Amendment to a division, so that further consideration might be given to the matter.

THE LORD CHANCELLOR

said the way to meet the grievance was the way proposed by the Bill. That was by means of assessment on the capital value of the land, not on its prospective value, but on the capital value of what it was worth to-day in the market; but that way had been discarded. The Committee had tried to apply the theory of annual value as the basis of the valuation column; but to define it, as he had said, had baffled him. He did not say that it would baffle their Lordships, and he would be most ready to acknowledge any successful efforts to make the matter clear. It was a very clear thing to say what the capital value was, and then put a percentage upon it, but the problem under the Bill as it stood was a very difficult one, and he did not think the Committee at the present moment would be able to make much progress with it. But if some means of obtaining the result at which the Government aimed could be pointed out, no one would be more pleased than himself.

LORD BALFOUR OF BURLEIGH

said he was as anxious as noble Lords opposite were to see this matter settled in some way, and he would be willing to withdraw his Amendment provided a serious effort were made by those better qualified than he to frame an Amendment to get at what he wanted.

THE EARL OF CAMPERDOWN

said he was under the impression that the Amendment before the Committee was his Amendment.

THE CHAIRMAN OF COMMITTEES

Lord Balfour's Amendment has been agreed to down to the word "ground," and the Amendment now before the Committee is to omit the words "if devoted to any purpose to which such land can at the time of the valuation be devoted."

*THE EARL OF CREWE

My Lords, I merely have to say that, so far as this particular matter is concerned, our responsibility on this side of the House is a very limited one indeed. Both the noble Marquess and the noble Viscount opposite made a point that this Amendment was not acceptable either to many noble Lords on that side of the House or to us, but, if I may be allowed to say so, that was merely a verbal point. The substance of the Amendment is, no doubt, not acceptable to noble Lords opposite, but it is more acceptable to us than the contrary. The only reason that it can be said not to be acceptable to us is the difference between capital value and annual value. But, of the two, if the noble Lord likes to go to a division, we on this side of the House should support him. I think I ought

to repeat what my noble friend behind me said by way of caution, that if noble Lords opposite, in the exercise of their discretion, decide to take the Amendment of Lord Camperdown in preference to that of my noble friend, it is not reasonable that they should look to us for assistance in further amendment of the Bill. The entire character of the Bill, as we introduced it, will have been altered, and believing as we do that the basis of annual value is not one upon which we can find any means of working, it is hardly to be supposed that we can suggest Amendments in that direction. We adhere to the belief that if the noble Earl's Amendment is accepted practically nothing of the Bill is left. The noble Marquess said, "Oh! but you have site values; you have your division between site value and building value." But how is it possible to deal with that if the simple annual rental of land at its present use is taken? What is to be the site value of an unoccupied plot of land, of which we have heard so much, let at 30s. a year for rough grazing? It reduces the whole theory of site values to an absolute nullity, and therefore I think we are right in saying that the entire inside of the Bill will have been removed if the noble Earl's Amendment is accepted. My only desire is to make it quite clear to noble Lords opposite that that is our view of the case, and, if they adopt that course, they cannot expect us to take any further part in suggesting Amendments to what we consider a complete and fundamental change in the Bill.

On Question, whether the words proposed to be left out shall stand part of the Amendment,

Their Lordships divided:—Contents, 42; Not-Contents, 87.

CONTENTS.
Loreburn, L. (L. Chancellor.) Onslow, E. Armitstead, L.
Tweedmouth, L. (L. President.) Russell, E. Balfour, L. [Teller.]
Sandwich, E. Castletown, L.
Colebrooke, L.
Ripon, M. (L. Privy Seal.) Althorp, V. (L. Chamberlain.) Courtney of Penwith, L.
Esher, V. [Teller.]
Beauchamp, E. (L. Steward.) Milner, V. Denman, L.
Carrington, E. Morley of Blackburn, V. Eversley, L.
Crewe, E. Fitzmaurice, L.
Fortescue, E. Airedale, L. Glantawe, L.
Liverpool, E. Allendale, L. Granard, L. (E. Granard.)
Hamilton of Dalzell, L. James, L. Ritchie of Dundee, L.
Harris, L. Joicey, L. Sandhurst, L.
Haversham, L. Monk Bretton, L. Shute, L. (V. Barrington.)
Hemphill, L. O'Hagan, L. Swaythling, L.
Herschell, L. Pirrie, L. Tenterden, L.
NOT-CONTENTS.
Devonshire, D. Westmeath, E. Ellenborough, L.
Wellington, D. Wicklow, E. Hay, L. (E. Kinnoul.)
Heneage, L.
Abercorn, M. (D. Abercorn.) Churchill, V. [Teller.] Hindlip, L.
Bath, M. Cross, V. Kilmarnock, L. (E. Erroll.)
Bristol, M. Falkland, V. Lamington, L.
Lansdowne, M. Halifax, V. Lawrence, L.
Salisbury, M. Hill, V. Llangattock, L.
Hood, V. Ludlow, L.
Bathurst, E. Iveagh, V. Montagu of Beaulieu, L.
Camperdown, E. Portman, V. Newton, L.
Carnwath, E. North, L.
Cromer, E. Abinger, L. Oranmore and Browne, L.
Denbigh, E. Aldenham, L. Ormathwaite, L.
Doncaster, E. (D. Buccleuch and Queensberry. Allerton, L. Ormonde, L. (M. Ormonde.)
Alverstone, L. Ponsonby, L. (E. Bessborough.)
Halsbury, E. Ampthill, L.
Harrington, E. Ashbourne, L. Ramsay, L. (E. Dalhousie.)
Innes, E. (D. Roxburghe.) Barrymore, L. Ravensworth, L.
Lauderdale, E. Belhaven and Stenton, L. Saltoun, L.
Lichfield, E. Blythswood, L. Sanderson, L.
Lovelace, E. Brodrick, L. (V. Midleton.) Sandys, L.
Malmesbury, E. Brougham and Vaux, L. Seaton, L.
Mansfield, E. Calthorpe, L. Sinclair, L.
Manvers, E. Carew, L. Somerhill, L. (M. Clanricarde.)
Mar and Kellie, E. Clanwilliam, L. (E. Clanwilliam.)
Morley, E. Stewart of Garlies, L. (E. Galloway.)
Mount Edgcumbe, E. Clifford of Chudleigh, L.
Plymouth, E. Clinton, L. Waleran, L.
Powis, E. Colchester, L. Wenlock, L.
Verulam, E. De Mauley, L. Wolverton, L.
Waldegrave, E. [Teller.] Dunboyne, L. Zouche of Haryngworth, L.

On Question, Amendment agreed to.

LORD BALFOUR OF BURLEIGH

said his next Amendment was really a drafting one. He was confident that the words "sold free from all burdens public and private, except building," must have got in by mistake in the other House, for he could not conceive any one desiring to sell land free from all burdens. It could not be done.

Amendment moved— In page 3, lines 26 and 27, to leave out the words 'sold free from all burdens, public and private, except building,' and to insert the words sold subject to all public burdens and.' "—(Lord Balfour of Burleigh.)

LORD BALFOUR OF BURLEIGH

moved to add to the clause a provision that the word "burgh" should mean and include only those burghs in Scotland which under the Valuation Acts were constituted a separate authority for valuation purposes, and contained at the last census a population of not less than 10,000 persons.

Amendment moved— In page 3, after line 36, to insert the words '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 10,000 persons.'"—(Lord Balfour of Burleigh.)

Clause 3, as amended, agreed to.

Remaining clause agreed to, and Bill reported, with Amendments, to the House.

Standing Committee negatived, and Bill to be printed as amended. (No. 66.)