Lords Sitting of 14 July 1931

Preamble
The House met at a quarter before four of the clock, The LORD CHANCELLOR on the Woolsack.
AGRICULTURAL MARKETING BILL.
Brought from the Commons; read 1a; and to be printed.
SEATON URBAN DISTRICT COUNCIL BILL.
Read 3a, with the Amendments, and passed, and returned to the Commons.
SHEFFIELD GAS BILL.
Read 3a, with the Amendments, and passed, and returned to the Commons.
DARLINGTON CORPORATION TROL LEY VEHICLES (ADDITIONAL ROUTES) PROVISIONAL ORDER BILL.
Read 3a (according to Order), and passed.

FINANCE BILL.
Order of the Day for the Second Reading read.
THE LORD PRESIDENT OF THE COUNCIL (LORD PARMOOR): My Lords, this is a Bill which has been certified as a Money Bill by the Speaker of the House of Commons, by whose decision, of course, we are governed. I am not aware whether we are to have a Second Reading Division. We never have yet had one in my recollection on a Finance Bill certified as a Money Bill, and whatever happens, although there may be a question of delay, there can be nothing more, and that would mean keeping us here in August, which, so far as I can see, would serve no very useful purpose. This is, of course, a matter for the other side. I am called the Leader of the House, but I have not a compact majority behind me.
In this Bill there are two points to which I should like to call attention
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shortly, and then proceed to discuss the matter which I know many of your Lordships will be interested in and upon which, if I can, I will throw a little light—I refer to the Land Value Tax. The House is no doubt familiar with the more general facts of the financial situation. I should like just to quote one passage from the speech of the Chancellor of the Exchequer in another place, because I think it admirably summarised what is the real position. This is what the Chancellor said:
"It says much for the soundness of our national financial position that, in a year of unparalleled industrial depression, we have not only been able to pay our way, but to make such a substantial reduction of the Debt."
That "substantial reduction" is no less than £43,500,000—that is for the last completed year—representing a balance of total income over total expenditure. At the same time, the Chancellor of the Exchequer has always felt, as we all feel, that you must look with anxiety to the future so long as conditions remain as they are at present. The general purpose of the Government in framing their financial proposals which are enshrined in the Finance Bill that is now before your Lordships, has been to avoid as far as possible—I think we have completely avoided it—the imposition of any serious tax on the industry of the country. Everyone will feel that is a very important point indeed; in fact nothing could be more important. No new duty is imposed this year, and the only increase that has been made is a small increase in the duty on oil, raising it from 4d. to 6d. a gallon. The Chancellor of the Exchequer, when he was announcing this increase, anticipated that there would be a reduction in the price of petrol, and a reduction of 1d. a gallon has actually taken place, with the result that the price to the consumer is at the present time slightly less than after the imposition of the original duty by the late Government.
Perhaps your Lordships would wish me to call attention, before I come to the Land Tax and the land values questions, to Clause 37 of the Bill, which provides that the collection of Income Tax, which is already in the hands of the Board of Inland Revenue in Scotland and in certain areas in England and Wales, shall be transferred to the Board of Inland

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Revenue for the rest of England and Wales, except the City of London. The City of London, in this as in other matters, has a special position and influence. No difficulty whatever has arisen in the areas in which this change of collection has already been made and it is not anticipated that there will be any difficulty whatever in the future.
There has been no change in the standard rate of Income Tax but it has been possible to secure a gain estimated at £10,000,000. I think your Lordships would like to follow exactly how that arises. It is by altering the dates of collection in the current year by the modification of a concession made in 1915. It is not a new matter. The concession made in 1915 was that Income Tax under Schedules B, D, and E should be collected half-yearly instead of the liability arising at the beginning of each year. The change that is made is that three-quarters shall be collected in the first half of the year and a quarter in the remaining half. It has been discussed as though it were a novelty, but it really is a modification of an arrangement made in 1915, which no doubt is less favourable to the taxpayer than the arrangement made in 1915 was. The amount involved is considerable because the Chancellor of the Exchequer has estimated that by the change he will gain £10,000,000.
I should like to pass now to what I think is by far the most important proposal in the Bill—what is called the Land Value Tax in Part III of the Bill. I think it will be convenient at the outset to make one or two general statements in order that there need be no repetition and that the arguments I shall shortly address to your Lordships may be more clear. It has been suggested that the Land Value Tax means the taxation of the same subject matter two or three times over, and I should like to state exactly how the matter stands so far as existing methods of taxation are concerned. There has been a reference to betterment. I recollect the discussion of the subject of betterment being begun more than fifty years ago in the new streets then proposed through the central parts of London. Betterment is really nothing more than a part of our compensation law. Betterment means that if you take land for local public purposes,
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and land of the same owner is improved in value by the taking of land by the local authority, there is a reduction in compensation, and the increased value given to other land than that taken should be in the nature of a reduction of the price paid, or, perhaps I should rather put it in most cases, not a reduction in the price paid, but a power given to the local authority to recover against the owner the value of whose land is enhanced by the amount in question.
For instance, by a new road front land may be taken and back land may be turned into front land. That is a very common cause of increased value to the same owner. In the same way you may take land for the purpose of laying out an open space, and there again you may have betterment. Not only under our compensation law is it the general principle now to have a set-off in the case of lands taken but also in the case of lands injuriously affected. I will not go into it at any length, but I want to emphasise the fact that it has nothing whatever to do with any method of taxation; it is merely a provision that the full value, and no more than the full value, should be paid as between the local authority and any particular landowner. I think it is an admirable provision. I have advocated it often enough. It has nothing to do with the question of burdens on land or the taxation of land.
There are two other matters which have been mentioned. One is the Income Tax. No doubt the Income Tax affects everyone. The landowner does not escape it any more than any other of His Majesty's subjects. It does not specially affect land. And, whatever the Income Tax may be, it will be a continuing tax, quite irrespective of whether this land taxation proposal is adopted or not. The third point which has been mentioned is the question of rates. Rates, of course, are a question of occupational value. There again the basis of the tax here proposed is entirely distinct from anything heretofore to be found in any of these methods of taxation, rating, or Income Tax, to which reference has been made. And I do not think that anyone who really appreciates and understands what these different matters are, how they are applied, and what their influence is, can draw the conclusion for a moment

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that the Land Value Tax, whether good or bad, is other than an entirely new tax imposed under entirely new conditions. As regards the suggestion that it has been imposed before or collected before, I do not think anyone who really knows what these previous Acts have been to which attention has been called can suggest that.
VISCOUNT BERTIE OF THAME: Would the noble and learned Lord say what the new conditions are?
LORD PARMOOR: I am coming to that point. I am much obliged to the noble Viscount for reminding me, and I think I can show quite clearly that, whether you approve of this tax or not, these other matters to which I have referred have nothing to do with it, either one way or the other. What is the new Land Value Tax or the valuation proposed under this Bill? The charge of tax will be found in Clause 10. It is very clearly stated. Although it appears complicated, I think the drafting of this Bill is wonderfully complete, and really wonderfully easy to follow, to anyone at any rate who has had a good deal to do with questions of this sort. The tax is at the rate of one penny per each pound of the land value of every land unit. We have defined what is the land value of every land unit. I may say at the start—because there is no question about this and I do not want to complicate difficulties—that every piece of land in separate occupation may form a land unit. There is nothing special in the land unit, except that you must have the same principles applied to all Land Tax values, wherever the land may be situated, subject, of course, to a suggestion which I shall have to make by-and-by as regards agricultural land.
Now for the valuation. It appears to me to be very easy to follow. The land value of every land unit is:
"the amount which the fee simple thereof with vacant possession might have been expected to realise upon a sale in the open market on the valuation date"
upon certain assumptions. There is no mystery about that. You have to find the fee simple value upon the assumptions which are very clearly laid down in the Bill itself. The first assumption—and that applies, of course, to developed land—is that there were not upon the land or in the unit
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"any buildings, erections, or works, except roads."
Roads have to be included in order that you may have what I may call an item capable of valuation. You must have some access to land in order to make it capable of valuation. It is a surveyor's point not a legal point. Other works are included
"in so far as they are necessary for the reclamation of land or the protection thereof from flooding or for maintaining the stability of the unit."
I think that is a very clear statement of the general principle.
One of the questions raised in another place was as regards the application of a principle of that kind to Oxford Street. There would be no difficulty in estimating the present fee simple value of land in Oxford Street denuded of buildings. That is an extreme case, but it is not in the least more difficult than many questions of valuation upon matters of this kind and similar matters which have been performed through the Surveyors' Institute and its members over a large number of years. Then it is said that the sale price has to be computed without taking certain things into account. You do not take minerals into account. You do not take the felling value of any trees or the value of any shooting or fishing rights into account, and the unit is regarded as free from incumbrance except tithe, which, of course, will be a continuing incumbrance, and certain incumbrances mentioned in the First Schedule of the Act. I think there has been a misapprehension about the inclusion of those incumbrances. Their inclusion in the First Schedule of the Act of course is all in favour of the owner. They have all been put in so as to ensure as far as possible that nothing in the nature of an undue valuation for the purposes of this taxation is made under the Land Value Tax.
It is rather important that the next item should be considered. It is not intended either to value agricultural land for this purpose or to impose any Land Tax upon it. Therefore, you have in subsection (2) a very simple provision. You find out what the cultivation value of any particular agricultural land may be. The cultivation value is, of course, what in the ordinary sense we call the agricultural value. If there is no prospect of a change

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in the conditions, if either under restrictive covenants or for any other reason the land is likely to remain of agricultural value, then it has what is called a cultivation value and no tax is imposed upon it. lf, as is the case where agricultural land may surround large populations, there is a chance of a change from its agricultural position to that of developed land for building or industrial purposes, then the difference in value between what is called the cultivation value and the enhanced or industrial or building value is the amount on which the Land Tax will be assessed. So that every precaution is taken so far as agricultural land and agricultural values are concerned that they shall be quite outside the provisions of the present Bill.
I think I have explained as far as I have gone quite clearly what it is. Then on page 8 you will see that you are always to take the valuation under conditions as they are at the time. The noble and learned Viscount, Lord Hailsham, will know that the expression rebus sic stantibus is the basis of our whole rating law. You take conditions as they are, without any estimate of what they might be or might have been, at the date of the valuation. That, of course, is a provision that the valuation shall be sound and it makes the valuation much more easy than it otherwise would be. The Commissioners are to keep a record, and I need not trouble your Lordships about that.
So far as appeals are concerned the principle is just the same as that in the Lands Clauses Act. You first of all go to one of the referees appointed to deal with valuations of this kind. If you want to carry the matter further, or if any question of law is involved, you can have a case stated for the opinion of the Supreme Court. When matters are of less importance as regards value you can go to the County Court. Therefore, it is enough for me to say that the appeals are on the same principle as those under the Lands Clauses Acts. Every one who knows the effect of the Lands Clauses Act is aware that under a series of great principles laid down in old days in your Lordships' House by Lord Cairns, Lord Selborne and others, all legal points have been ascertained and it is seldom if ever that any question of that kind comes to the front at all now.
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The next matter of importance is Clause 19. It was felt, and I think rightly, that where land had been developed and the owner or his predecessors had erected and maintained developments some concession should be made as regards the assessment of land value. The method was adopted, no doubt, as a compromise—a procedure which. I think, is right in matters of this kind if you can possibly manage it. It is that you should deduct from the land value four times the annual value of Schedule A, or an amount equal to seven-eighths of the land value of the unit as the case may be. You will understand that what you are dealing with here is not a penny but the land unit, and certainly it appears to me to be a just compromise. Of course, it is not what Lord Ernie called the other day "arid logic" (arid logic means added impossibilities very often), but it is a just compromise having regard to the conditions and it meets a point which has been justly raised, both in dealing with these matters in other cases and now—that where you have land developed by existing owners or their predecessors they are partners in the development. The development, as in the case of undeveloped land when it becomes ripe for development, is not due to the action or influence of the community or certainly not entirely so. So far as the partnership between the two is concerned, if that is the right expression to use, that is recognised in Clause 19 and in the proposals to which I have referred.
Our position is very curtailed altogether; we cannot deal with matters of detail, but that is the principle. The main principle of the Bill, of course, is that these values, which it is now intended to tax by a Land Tax, are in the main, not entirely, the product of community action or community work. That is the basis of it, and I think that it is right. It is the principle which has been recognised again and again in discussions upon questions of this sort, but this particular method of putting it into operation has never before been evolved, I think.
The next thing to which I should like to call the attention of your Lordships is the subject of exemptions and relief. You will find that exemption and relief may be partly due to ownership of land

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and partly due to the user of land. That is dealt with in Clause 24. The result generally—I do not think I need trouble your Lordships by reading through the clause—is that where the public element comes in, not private gain, exemption is granted either in the case of ownership or in the case of user. There has been considerable discussion about the use of the words "playing field" in subsection (2) (a). Your Lordships will find those words defined in the definition clause. If you look at that definition I think you will feel that it rightly includes a playing field used and dedicated for outside exercise, and there is provision which does not carry the matter beyond that. Of course in the country we all of us know the village playing field which perhaps has been used for years. No one proposes to interfere with that and if the owner wants to be exempt from the taxation of land under the Land Valuation Act he can do it at once because the definition in Clause 32 says:
"'Playing field' means land used mainly or exclusively for the purposes of open air games or recreation other than horse racing.…"
and so on. If you have a playing field under those conditions which is dedicated either for a period of time or is certain to go on from year to year, it escapes the imposition of the Land Value Tax. The person upon whom the Land Tax falls is, of course, the owner, and the position is that he cannot pass it on to the tenant, but if there is a lessee in possession who has been a lessee under a lease granted for more than fifty years he takes the place of the owner as regards the tax.
EARL PEEL: May I ask if that is irrespective of the date at which the lease was granted?
LORD PARMOOR: I think so, provided there is a lease in operation extending beyond the period of fifty years. I have not got the reference to it at the moment, but that is my recollection of what it is. It is governed by the words in Clause 31. I am very glad the noble Earl asked the question, but he will find it answered in Clause 31 (1) (a) which states that the expression "owner" means:
"In relation to any land subject to a lease granted for a term exceeding fifty years
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which has commenced, the estate owner in respect of the term, or, if there are two or more such leases, the estate owner in respect of the term which will first expire;"
That is, the lessee under those conditions is the estate owner. Then subsection (1) (b) says:
"in relation to any other land, the estate owner in respect of the fee simple of the land."
Therefore you either have the lessee over a long term or you have the estate owner himself.
I do not think there is any other special matter to which I need call the attention of your Lordships. I know it is rather wearying to go through these details, but I have tried to put the matter as explicitly as I can and if your Lordships have followed me I think you will have come to the conclusion that, if a Land Tax is to be levied, the methods and arrangements and provisions of this Bill present no difficulty and are really easy to understand by anyone who is accustomed to deal with matters of this kind. I do not think there is much more to say except this. We have heard the word "confiscation" suggested.
SEVERAL NOBLE LORDS: Hear, hear.
LORD PARMOOR: Of course, in one sense any tax which permits a new burden on a particular class of property may be called confiscation, but if the tax is in itself a tax which can be upheld the word "confiscation" is quite inapplicable. I want to say that I feel rather strongly on this point. Personally I would not for a moment bring before your Lordships any provision which I thought implied confiscation. Fifty years ago I laid down that principle in a law book for which I was responsible on arbitration. I do not know whether any noble Lords here to-day were present at the hearing of the case of the Attorney-General and De Keyser's Hotel, Black-friars. If they were, they will remember the very strong words that were used. I happened to be one of the Law Lords who heard the case and I well recollect the very strong words which were used against any idea of confiscation. May I. say one word about that? What we call the law of compensation is generally called in other systems the law of eminent domain. That means that the State is entitled to take any land it wants for public purposes but always on the basis

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of paying a fair measure of compensation. Of course, there were times, when the land was nominally at any rate in the hands of the King, when the compensation principle was not in force, but in modern times I think there is no case—none that I know of—where a title to take land has been established without it being accompanied by a proper method of compensation.
VISCOUNT HAILSHAM: That is why you call this a new tax?
LORD PARMOOR: That, my Lords, is provided in the Bill as it stands. I wish we could have what I may call an effective argument, but I want to say most certainly that in my view—it must be a matter of opinion—the basis of this tax is perfectly sound and the payment of it entails no hardship beyond what every tax necessitates. We none of us like paying taxes—I know I do not, and I do not think any one does—but apart from that if it is necessary under existing conditions to get new revenue without in any way interfering with industry and without interfering with commerce, I suggest that this is one of the ways at any rate to which we must look for sufficient revenue in future. I commend the provisions of the Bill to the attention of your Lordships and I hope that you will feel that there is nothing wrong in this. We may have different views, but words such as "confiscation" and "double taxation" and so on have no place in this discussion. I beg to move.
Moved, That the Bill be now read 2a.—(Lord Parmoor.)
EARL PEEL: My Lords, the noble and learned Lord the Leader of the House who has introduced this measure to your Lordships told us that the Bill was certified. We are very familiar with the consequences that are the result of that statement and that action. But the noble and learned Lord also knows equally well that not only does that not prevent discussion but it lays, I think, an obligation on your Lordships' House to discuss the provisions of the Bill. We have around us a great many noble Lords who are extremely competent to discuss these financial questions and it would be unfortunate if we were to pass this Bill through your Lordships' House without
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its being submitted to your Lordships' investigation.
LORD PARMOOR: I am in entire agreement with the noble Earl on that point.
EARL PEEL: I am much obliged and I dare say the noble Lord will agree with other observations of mine later. I wish to call your Lordships' attention to a very serious matter. This is a very complicated Bill with a number of clauses and Schedules, but, if you examine the extent of the attention paid to it in another place, you will find it wholly inadequate. Only ten days were allowed for Committee, ending each day at 10.30 p.m., and only three days for Report, ending at 11 p.m. There were, of course, very competent members of the Opposition who took charge of the criticism of the Bill and did their best to bring forward salient points for discussion in that House. But I am informed by those most competent to give an opinion that there were dozens if not scores of Amendments of a most pertinent kind placed upon the Amendment Paper, which were never discussed at all through the rigid limitation that was placed upon discussion.
I was reading only this morning an interesting statement by Sir Charles Harris, who was the Permanent Financial Secretary of the War Office, dealing with administration, in which he made some interesting observations on this point., quoting Sir Austell Chamberlain and other past Chancellors of the Exchequer, who said that really now the responsibility and the control of our finances was passing away from the House of Commons and that the only people to whom one could look to criticise or to control them were the Treasury officials. As he pointed out, the Treasury officials are the officials of the Chancellor of the day. They can only make recommendations; they cannot insist upon their views.
It is a very serious matter that the House of Commons, which is traditionally regarded as, and which has been in the past, the guardian of our finances, should be depraved of the opportunity even of discussing these new and difficult matters, and that the country should be deprived of the opportunity of hearing them discussed and of sifting

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the Amendments. That is important from more than one point of view. Your Lordships, as we have already been told have been deprived of the powers of dealing with financial proposals in the Budgets of this country. That is a very serious matter, but if, in addition to that, the other place, which is left the sole and only guardian of the finances of this country, is also to be deprived of its power of discussing these matters, what is to stand in the way of the Executive in dealing with these financial proposals and in forcing upon the country proposals utterly uncongenial to it?
There is no doubt that if these particular valuation proposals had been brought forward in a Bill by themselves they would have been open to criticism and amendment in your Lordships' House. It is only because they have been inserted in a particular way in the Finance Bill of the year and have thereby necessarily attracted the Certificate of the Speaker of the House of Commons that, by that manoeuvre on the part of the Government, your Lordships' House is deprived of your powers and of your statutory rights under the Parliament Act and must acquiesce in the proposals in the Finance Bill. On this ground I protest most strongly in the interests of the whole country against the procedure that the Government have decided to follow in another place.
I do not wish this afternoon to confine myself at all to the question of land taxation. That seemed to be the only matter which interested the noble and learned Lord, but, after all, however interesting this Land Tax may be, it does not affect, except to a very small extent—namely, the cost of valuation—the finances of this year. It is only to operate some two or three years hence if it operates at all. Therefore, in considering the financial situation of the present moment we must consider many other matters besides Land Taxes, which contribute nothing at all to the finances of the year. There are two points in the general taxation to which I would like to refer. I know that the previous reputation of the Chancellor of the Exchequer, like those of other Chancellors of the Exchequer before they took that office, was that of great financial purity. It is rather unfortunate that the present Chancellor of the Exchequer and the Government have resorted to all sorts
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of curious financial expedients in a desperate attempt to make the Revenue balance the Expenditure.
The noble Lord has referred to one of them and seemed to think it perfectly right. That was the expedient of making the unfortunate payers of Income Tax under Schedules B, D and E pay an extra quarter. That has only to be expressed to be seen, because, if you pay half in January this year and the other half in July and then pay three-quarters, advancing a quarter, next January, it appears clear that you are paying not four quarters but five quarters. The Government are thus laying a very heavy charge on classes of people who have not got broad financial backing and who find it difficult to meet this extra expenditure. Under Schedule B are included the profits from the occupation of land. I am sure, whatever the profits from the occupation of land by the farmers have been in the course of the past year, they will not find it very easy to find that extra quarter of Income Tax in January to which they are condemned by the Chancellor of the Exchequer. Everyone knows that at the beginning of January a very heavy expenditure falls on everybody. A useful Amendment was moved in another place proposing that that taxation should be moved from the 1st of January to the end of the month in order that it might fall with a little less weight on this unfortunate class of people.
Another resource of the Chancellor of the Exchequer was to take £20,000,000 of dollar credit from the account by which we manage our payments to the United States. That, of course, was taking £20,000,000 of capital money for the Revenue of the year, using your capital in order to swell your Revenue. The noble and learned Lord took great credit for the fact that very little taxation was put on this year. He said that the petrol and oil taxation was extremely satisfactory because the prices of the articles themselves have fallen for reasons with which we are very familiar. It is rather interesting that the Russian exporters have really come to the aid of the Government in that matter. I should myself have thought it was a great pity, if extra taxation had to be put upon a very cheap article, that the

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Government should not have considered the case of sugar. We have had, of course, the question of Preference for the West Indies pressed very strongly upon us in discussions in this House. My noble friend Lord Plymouth has urged that strongly upon your Lordships in connection with the condition of the West Indies, and so has Lord Olivier, and in that way, without any pressure at all upon consumption in this country owing to the fall in the price of that article, it would have been possible, I think, to have given some relief to the hard-pressed West Indies.
But even when you take into consideration these methods of balancing the Budget and getting the Revenue to meet Expenditure, you find that the Budget does not balance. The Chancellor of the Exchequer took an extremely hopeful view of matters, and I think everybody will agree that a credit balance of £134,000 only on a Budget of over £800,000,000 is from a commercial or business point of view a mere nothing as against the risks of an increased Expenditure or a falling off in Revenue, which might easily happen on a Budget with the immense range of £800,000,000. I can add to that. Since the Budget was introduced we have been told by the Chancellor of the Exchequer that £300,000 or £400,000 will be the cost of land valuation during the present year. You therefore get a further deficit, but there is even a more formidable sum than that, which upsets the balance, and it is in connection with the transitional benefit, because I understand that since the very large estimate stated in the Budget for the cost of transitional benefit, amounting to £30,000,000, that expense has gone up another £5,000,000 to £35,000,000. So you get a further £5,000,000 not budgeted for and outside the Budget, which prevents the Budget from balancing.
I have dealt, for the moment, with one or two points on the Revenue side. Let me deal with one or two on the capital side. The Chancellor of the Exchequer congratulated himself upon retaining the Sinking Fund at its present figure, and that was a point of great self-congratulation on the part of the noble and learned Lord opposite,, who said that last year something like £43,000,000 had been devoted to the extinction of Debt.
LORD PARMOOR: £43,500,000.
EARL PEEL: I beg the noble and learned Lord's pardon. I should have said £43,500,000. Since then we have had a Bill coming forward for fresh borrowings on the Unemployment Insurance Fund, and therefore the scruples which the Party opposite have had with regard to borrowings appear to have almost disappeared. At the present moment we have got this sum up to £115,000,000, borrowed on the Unemployment Insurance Fund. I think it was a year ago that both Lord Londonderry and myself laid stress upon the fact that when borrowing on this Fund had got beyond a certain point it was no longer borrowing on a specified Fund but a charge on the general Revenue of the country. That becomes more clear because I do not suppose there is a single member of your Lordships' House who is so sanguine as to believe that a debt of £115,000,000 can ever be paid off out of the resources of the Fund itself. We have also to remember that the Government have not shown the slightest desire—except in a small Bill about anomalies—either to carry out the Report of the Commission that they appointed or to stem that constant borrowing of money, which is piling up at the rate of about £1,000,000 a week. Therefore I submit to your Lordships that when you are talking about the amounts paid off by the Sinking Fund, it is ludicrous not to take into account this enormous debt, which is piling up against the Unemployment Insurance Fund at the rate of £1,000,000 a week, and affording an instance of that financial fault for which in the days of our youth we all Condemned William Pitt—paying off debt with one hand and borrowing with the other.
There is not only the Unemployment Insurance Fund, but a good many other funds too. I know that they were started under different circumstances, but large borrowings have been made on the security of those funds, and if you are reviewing the general finances of the nation you ought to bring into the Budget all those funds, because they are charges on the nation although secured on different funds which make up the general wealth of the nation itself. I do not know whether I ought to ask any inconvenient questions, but I am afraid that a terrible vision of a great deficit in next year's finance is already loom-

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ing before us. I have heard it put by competent authorities at from £50,000,000 to £80,000,000, and therefore when the Chancellor of the Exchequer is for the moment congratulating himself that he has not put any fresh taxation on this year, except the oil tax, I think he is not looking to the future. Really, considering not only what effect there will be on our finances this year but also the tremendous charges which are going to fall upon us in the following year, I am afraid that we do not see much hope of saving in that particular direction. One of the three great principles of the Liberal Party is that there must be economy and saving. I do not know whether it is of any use appealing to them.
May I now ask a question as to the Land Taxes, upon which the noble and learned Lord dwelt so lovingly? Might I ask what is the product of these taxes, because we know that when anybody wants to put on fresh taxes the first thing which we ask is what is to be their product. I do not think that we have had any very luminous answer in another place with regard to that, and I should be very glad if the noble and learned Lord opposite would give us an answer on that point in his reply. I would like the question put in double form, because we know quite well that in the passage of the Bill through another place a good many exemptions were granted, some of which have been enumerated by the noble and learned Lord. I would, therefore, like to ask what he estimates will be the profit in the first year, and in subsequent years of this tax, both on the basis of the tax as introduced, of which they have calculations, and also for the tax less the exemptions, which no doubt will reduce to some extent the receipts from the tax. There are certain sceptical persons who are inclined to think that, though the Land Tax will cause a great deal of trouble and difficulty, yet the product for the Revenue of the State will not be very great.
I do not wish to confuse the Land Taxes put on by the Liberals in 1909 with these taxes. The distinction between them has been clearly stated by the Liberals themselves, especially by Sir John Simon. I should, however, like to recall to your Lordships that the estimated cost of the valuation, assessment
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collection, including litigation, of the three principal Land Taxes before they were repealed amounted to £5,000,000, and that the total receipts from the three duties was £1,329,000, leaving a balance to the bad and a loss to the Exchequer of £3,671,000. So far, therefore, as you can judge by the experience of the past, apart from the damage that is done, the productivity of these taxes cannot be very great.
I was not quite clear in my mind when I was listening to the noble and learned Lord dealing with the difficult and delicate question of double taxation. He seemed to waver between two things. First he said we have always had double taxation on different articles, and consequently this was not an entirely new tax; and then that we have not had complete double taxation. I think I might on this point, in order to clear my mind, appeal to the Liberal Party, because they will enlighten me no doubt upon that subject. I understood that a very strong stand was taken by the Leader of that Party, Mr. Lloyd George, as to the iniquity of these taxes, certainly as they were introduced, because they involved the great principle of double taxation. I understood that the Liberal Party were prepared to go almost to any length in order to resist the iniquity of this double taxation, but, according to the noble and learned Lord, we have had double taxation for years, and, therefore, their indignation would probably not have been so great had they agreed that we had already enjoyed the benefits of double taxation for a great many years.
I should like to ask, if I might, for information on this further point. I know that there was a great deal of change in the attitude of the Liberal Party on this point. I am not quite sure whether it was change, but it appeared to other people to be a change. I think they maintained that they had kept their old position. I certainly would not criticise them for making any very great change in their view, because I understand that they had to sacrifice either a Liberal principle or to admit annihilation. Of course when you are fighting for your life and self-preservation, some of your principles may have to be sacrificed for the greater aim of preserving your existence. I do want to ask this in all simplicity. I want to know, now that the

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sacrifice has been made by the Liberal Party, whether they think that sacrifice worth making. I know they may have had a certain loss of credit, which, of course, must be inevitable when a Party strongly insists upon a principle and then gives it up, but do they think that there is an offset to what they have done in their having preserved their existence for another few months? Do they think, on the whole, that they have gained, and that the loss of credit can be washed out by the great gain to the country of their having maintained the Liberal Party for a further few months? I ask that in the interests of the future historian, who, I am sure, will be extremely interested in that particular point.
I should like now, if I may, to deal with some of the difficulties that we feel about giving a very hearty assent to the Land Taxes themselves. The noble and learned Lord asks us whether we think that this Bill is a matter of confiscation, and he told us, with a certain simplicity which I think veiled a certain duplicity, that certain persons had said—I suppose they were very ignorant and uninformed persons—that this amounted to confiscation. I must say I rather belong—though I may have been shaken by the argument of the noble and learned Lord—to that class of ignorant and uninformed persons, because it did seem to me that this taxation was of an extraordinarily unfair character, as it fell only on one particular class of investments and on one way of investing people's money. I would remind the noble and learned Lord that a great many trusts impose the condition that money must be invested in land mortgage. This tax takes priority of existing debentures and mortgages, and, therefore, must necessarily lessen their value.
We were told—I suppose it was a rhetorical passage—by the Chancellor of the Exchequer that in some sense the land was as God made it, and belonged to the people, and that it had been got hold of in some nefarious way by the Dukes. I was rather relieved myself to find that the lower orders escaped the fulminations of the Chancellor of the Exchequer. Anyhow, we have this remarkable situation, that if you are fortunate enough to own land up to £120 in value, your theft of land is con-
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nived at and condoned, and you are left alone. But what is even more remarkable is this, that if you have land worth £121 you are not allowed to escape, and you are charged not on £1—there is an enormous difference between people who have land worth £120 and people who have land worth £121—but you are charged on the whole value of your land. The noble and learned Lord wanted to compare these taxes with betterment taxes. There is no relation between the two.
LORD PARMOOR: That is what I said.
EARL PEEL: I am extremely familiar, if I may say so, with betterment taxes. I have had to deal in a great many cases with these questions of betterment, and they have to do only with a part of the value—that part which is definitely shown to be due to public improvements.
LORD PARMOOR: I quite agree. What I said was that betterment was quite distinct altogether from this. It is a compensation question.
EARL PEEL: The noble and learned Lord is again trying to agree with me apparently. What I was criticising was that, there was no comparison between a tax on betterment and these taxes. These are taxes which are laid upon the whole value of the land, quite irrespective of betterment or whether the value was contributed by the community or whether the value was contributed by the owner himself. In a, great many of these eases you cannot say—nobody wants to say or has to say—that any of this taxation is due to betterment. The simple test is what is the value of the land. You may have two pieces of land closely adjoining one another. The owner of one has done nothing whatever as regards roads and development, while the owner of the other has done a great deal in that respect, but the man who has spent his money and done this work is assessed at a higher amount than the man who has done nothing. There is a definite penalty placed upon the man who has decided to develop his land which, I suppose, he ought never to have possessed.
There is a further serious criticism that I want to bring against these taxes. Three years ago the Government, of which I then had the honour of being a member, brought in a measure for re-

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lieving industry, and the way in which industry was to be relieved was by letting industries off three-quarters of the rates. Now I suppose that the Government want to return to the charge and to penalise industry, because it is quite obvious that the tax must fall upon the land of those industries which it was intended to relieve by the taxes to which I have referred. What is more remarkable is this, that if your business requires a considerable amount of capital, and you employ a considerable amount of labour, then you pay very heavily. The tax is entirely irrespective of the amount of income or profit you get from those businesses. Therefore there is a complete abandonment of the old principle of paying according to your ability. A heavy charge is laid upon the industry of this country, and heaven knows that it can ill bear it at this moment.
I wish to point out very shortly what an extraordinary number of inquisitorial powers are given to the Commissioners under Clauses 27 and 28. Some of them seem to be wholly unnecessary for the purpose for which they are devised, and some seem intended merely to get a quantity of information on irrelevant subjects, which I suppose might be of value for other purposes. Then the Government have changed their minds in an extraordinary manner in regard to the rights of appeal. The noble and learned Lord brushed this aside rather summarily, and told us, "After all, you are only going back to the procedure under the Lands Clauses Acts." The noble and learned Lord knows much more about the procedure under the Lands Clauses Acts than I do, but I was under the impression that under the Lands Clauses Acts there was at any rate an inquiry before an arbitrator or somebody, witnesses were heard and cross-examined, the whole thing was held in public, and there was a great opportunity of establishing these facts by the ordinary legal processes in some form of open Court. Now there is nothing of that kind here at all.
LORD PARMOOR: I beg the noble Earl's pardon. The referee here stands just in the same position as the arbitrator. He will ascertain the facts in an ordinary legal manner, and if any question of law arises it can go to the Courts.
EARL PEEL: Well, I think that sheds an extraordinary light upon the position. Because I have not asked the noble and learned Lord as to the expense of valuation. I think there are about 1,000,000 or 1,200,000 ownerships in this country, and the liberal allowance made to the gentlemen who are going to value them is about 2s. per unit of valuation. I do not think that the work is likely to be done very thoroughly or carefully for so magnificent a remuneration as that. Therefore, I suppose these cases will constantly arise, and if the noble and learned Lord tells me that you are going to have an investigation before a referee, with witnesses and solicitors and counsel on both sides I do not see what is going to be the limit of the cost of this valuation. Some promise was given, especially as regards Scotland, that there should be appeals, not only on questions of law but on questions of fact also. But I think the noble and learned Lord will agree that under the Bill there is no appeal on questions of fact. Is not that so?
LORD PARMOOR: I really think the noble Earl has got a wrong idea of what is going to happen. First of all, the matter goes before the Commissioners, then there is an appeal to the referee raising any questions of fact—one does not suppose there will be an enormous number of them—and then, just as under the Lands Clauses Acts, the referee decides questions of values. But you begin with the Commissioners, of course.
EARL PEEL: You begin with the Commissioners. The question is where you end. But I really do not think that affects my argument. If you are going to have inquiries of this kind the figures that have been given for the cost of the valuation are really almost ludicrous.
There are two further points I should like to put to the noble and learned Lord, and they are grave points indeed. I am very anxious to know whether the noble and learned Lord can give us any information as to the arrangements that have been made as regards Germany and the financial conditions there, because everybody knows the very grave financial situation in which we stand, and perhaps he may be able to give us some reassuring statement on these points. The second and larger point I wish to put in regard to the Budget is this. I

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think I have shown, and everybody indeed knows, that there is not a chance of the Budget balancing this year, not only because of the Expenditure which we already know of, not only because of the falling off of Revenue, but also because of other and larger considerations. I need only refer to Mr. Hoover's proposals, and I do it for the purpose of pointing out that, as a result of those proposals, a very much larger expenditure—something like £11,000,000—will fall on the Budget this year. One would like to know what proposals there are for meeting so heavy an additional expenditure.
Recent statements have also been made by the Prime Minister as to Indian finances. They were, I think, in a somewhat indefinite form, and I am not quite sure I completely understood them, but they do appear to suggest that L. large contingent liability might rest on the finances of this country as a result of that statement. I do not know whether they amount to a guarantee of Indian loans. And the Prime Minister, I think, further stated that the specific liabilities would be put before Parliament if any money had to be voted, or any security or guarantee given. That is not much consolation to me, because we know that the Executive has entire charge of Parliament, and Parliament will no doubt vote whatever the Executive wishes. At any rate, you have there a large addition to your Budget, and I would suggest to the noble and learned Lord that the Government, in view of these facts, should reconsider the whole of the Expenditure for this year. It is based on the idea of a revival of trade, which unfortunately is not beginning to show itself. Therefore, it seems to me that the whole of the presuppositions and assumptions of the Budget are being upset, and it will be important for the Government to reconsider the whole financial situation, and perhaps in these unprecedented circumstances to bring in another Budget.
THE MARQUESS OF LOTHIAN: My Lords, I feel sure that you will share the regret which I feel that the noble and learned Marquess, Lord Reading, who was due to address your Lordships on the Finance Bill this afternoon, is not able to be present. He is unfortunately in-
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disposed—I am glad to hope not very seriously—and is unable to be here to speak on the subject on behalf of those who sit on these Benches. I was only informed of that fact at twelve o'clock to-day, and I therefore crave your Lordships' indulgence for the very brief remarks which of necessity I have to make in regard to this Bill. This Budget, as I see it, is a Budget of mingled hope and necessity. Its hopes are based on that economy for which the Liberal Party has always stood, of which the Geddes axe is the greatest example in history, and of which the late Chancellor of the Exchequer, Mr. Winston Churchill, was not, so far as my recollection goes, a conspicuous practitioner. We can only hope when the Report of the Commission on Economy is published that the Liberal policy in that respect which has been pressed on the Government—the appointment of the Commission I venture to suggest was the result of it—will appear.
The necessity stands clear. The Chancellor of the Exchequer hoped for a recovery of trade and hoped for economy. On the basis of that hope he produced a Budget. with a minimum of extra taxation. I confess that when I view the national and international situation the future is dark. There is a certain sense of unreality even about the Budget in its present form. When one looks at the falling Revenue, at the falling trade, at the at any rate not falling Expenditure, and when one looks at the crisis which is acute in Germany to-day and at the situation in Australia, I think any intelligent and farsighted man must realise that by next March we shall be faced with a situation totally different in kind from that which has faced the Chancellor of the Exchequer of this country for many years past or which faces the Chancellor of the Exchequer to-day. What measures will be required at that time it is not necessary for me to consider to-day, but I venture to think that the Budget of next. year will be passed in circumstances very different. from the somewhat easy circumstances in which this Budget has passed another place and has come before your Lordships' House.
In my view, not the least serious aspect of our present budgetary policy is the taxation of capital and its. use for revenue purposes. There is a good deal to be said for the view that the State can

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take a considerable proportion of the revenue of the community and expend it on public purposes better than the original owners of that revenue could have done. That has been the policy certainly of the Liberal Party and of all Parties for many years past. But we have drifted into a situation in which, on my reading of it, we take £220,000,000 of capital—that is to say, taxes either on capital direct or on savings which otherwise would be used for capital purposes—and we use of that revenue not more than £80,000,000 a year for the redemption of Debt" for housing and other purposes which can reasonably be called capital in nature, leaving something like £140,000,000 a year, to which must be added the debt on the Unemployment Fund, which is really living on capital. When, in addition to that, your Expenditure is up to the point at which you are living on capital to that extent and you envisage the situation which will face this country next March if the symptoms now in evidence remain in evidence, I do not think anybody can look forward to the next winter without realising that we shall be faced with a crisis far more serious than that which has confronted this country in the memory of living man.
I turn now to the Land Taxes and I am not sure that what I say upon that subject will receive the same measure of approval as has been expressed about some of the remarks I have made. The taxation of site values has been an element in Liberal policy, I believe in Labour policy, and in progressive policy generally for decades. There is nothing novel, there is nothing outrageous, there is nothing confiscatory about the principle of such taxation. The basis of the tax is perfectly simple. It is that land being the most limited of all commodities because it cannot be extended obtains a great part of its value not from the activity of its owner but from the activity either of the community or of his neighbours. It rises automatically as the result of the concentration of the population in towns. You have only to look at the value of land in the centre of great cities to see the process in operation, and that process is still going on. The principle underlying the taxation of site values throughout the agitation in favour of that taxation has been that
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of all taxes it is really the most just and beneficial in its incidence.
I venture to believe that the real objection to the Land Taxes to-day arises from the fact that the total volume of taxation is excessive. The core of the principle of the taxation of site values as it has been advocated in the past is that you should transfer taxation from improvements to site value. Unfortunately, in the present state of the national finances the Chancellor of the Exchequer is driven to derive every penny he can from every source he can find. It is fortunate, perhaps, that these taxes will not mature in revenue for two or three years. Let us hope that the national 'and international situation will have so far improved by that time, and such strenuous measures will have been taken to deal with it that when the land taxation comes into force it will be accompanied by that remission of other and more objectionable taxation which, on any ordinary principle of site value taxation, ought to accompany it.
The principle itself is one which I think it is very difficult for anybody to object to who studies the question in all its incidence. It is the taxation of something which is not the result of the activity of the individual owner, and the relief of such measure of the value of the improvements on the land as is the result of the activity of the owner. That, in my judgment and in the judgment of my Party for many years, is a just and fair principle of taxation. The objection, as I say, is that taxation is now so burdensome that it is very difficult for any Cancellor to carry through that other element in the process which ought to belong to it—the relief of improvements from taxation to an equivalent amount.
One word on double taxation. The noble Earl, Lord Peel, asked some questions which I am not sure that I am fully qualified to answer. I have followed somewhat cursorily, I am afraid, the discussions upon this Bill in another place. I will, therefore, try to make clear to your Lordships what seems to me at any rate and to other members of the Party to which I belong to be the central principle underlying the complicated discussions which have surrounded the Liberal Amendment to this clause. The phrase "double taxation" is a convenient

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rather than an exact one. It does not refer to such instances of double taxation as the motor taxes, with the horse power tax and the petrol tax. It is a short way of saying that if you are laying a direct tax on land values and also collecting Income Tax on the same land unit, you should not tax the man who is developing and using his land for the benefit of the State and the service of the community at the same rate as the man who is withholding his land from use. The real effect of the Liberal Amendment has been to graduate the Land Tax from one-eighth of a penny up to penny according to the measure of development. The greater the development the smaller the tax. I venture to believe that the Amendment is one which your Lordships and every other student of the problem and everybody affected by it will in fact value and approve.
In conclusion I will only repeat what I said at the beginning of these few remarks. This Budget has got to be passed because necessity drives. The real question I venture to put to your Lordships is what measures—and they are bound to be very far-reaching measures, far beyond those which anybody has contemplated hitherto, measures which may even approach in some degree the measures taken in Australia not so long ago—are you going to have to deal with the situation which is going to confront this country next winter? It is in that spirit and feeling the urgency, the seriousness and the anxiety of the times that I ask your Lordships to support this Bill.
VISCOUNT BERTIE OF THAME: My Lords, the only part of this Bill to which I wish to draw your attention is the vindictive capital levy—not leviable once only, as most capital levies are, but payable yearly. The only trade or business that has been singled out for paying this capital levy is the property-owning trade. I listened with great attention, as I always do, to the noble and learned Lord the Leader of the House, and I expected to hear from him what was the estimated cost of the valuation of these hereditaments. He made no estimate at all. But I understand that Mr. Snowden estimated that it will cost only £1,500,000. I believe that, if this valuation takes place, there are about twelve million hereditaments which will have to be valued, and if it is only to cost £1,500,000
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it follows, according to Mr. Snowden, that each valuation will cost only half-a-crown, a very inadequate sum, a very greatly under-estimated sum, because some valuations instead of costing one hundred farthings will cost £100. Suppose we take what I think is quite a fair average cost of valuations—that is, about £2—and there are 12,000,000 hereditaments to be valued, that will amount to £24,000,000 for valuation fees only apart from arty legal costs.
Then I also listened in the hope of hearing from the noble and learned Lord the Leader of the House how long he thought these valuations would take. Mr. Snowden, I believe, said eighteen months, but Mr. Lloyd George's valuation took four years, and even then under eighty per cent. of the valuations were completed at the end of that time. In any case, whether eighteen months or four years is the time, a great many valuations will be out of date at the end of that time. I do not think the noble and learned Lord told us what revenue is going to be derived, but people who are in a position to know have estimated that it will be only £4,500,000 a year. If you are going to spend £24,000,000 on valuation and only get £4,500,000 a year, it does not seem a very good financial result. As my noble. friend Earl Peel said in polite language, this malevolent imposition has been smuggled into the Finance Bill instead of remaining as it was originally in a separate. Bill. That was no doubt done, as my noble friend said, to stifle any discussion in another place owing to the operation of the guillotine and to prevent your Lordships from amending it.
I think the man in the street will be taken in again as he was by Mr. Lloyd George and deluded into thinking that only the large landowners and the wicked owners of deer forests will be hard hit. But it is the small man who is going to be hard hit, because he cannot afford to fight his case in the Courts. Of course, the bigger proprietor will also be hit harder than he is by the various legislative enactments already in force, but I suppose that people who hold the views of Mr. Snowden and his henchman, Mr. Lloyd George, think that property owners ought to be put out of existence. I will say that Mr. Snowden has the courage

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of his convictions and says that this is the first step towards nationalisation, whereas Mr. Lloyd George does not say so. If this tax ever comes into operation, it will amount to double taxation notwithstanding anything that anybody may say as to that. I believe that the Liberal Party—anyhow that part of it which is in liaison with the Socialist Party—aver that owing to certain Amendments double taxation is no longer embodied in the provisions relating to the Land Value Tax. It was stated in another place that the members of the Liberal Party owing to the importunities of some of their constituents were obliged to appear to do something—to appear to do something, even if they did not do something. I do not think they did very much, but they said they could never consent to the principle of double taxation. I am afraid the Liberal Party is like Donna Julia:
"And whispering 'I will ne'er consent' —consented,"
for I think I shall be able to prove to the satisfaction of your Lordships that what has been termed the Liberal settlement with the Government does little or nothing to prevent double taxation.
My right hon. friend Mr. Neville Chamberlain in another place quoted certain cases and in his reply Mr. Lloyd George, in my humble opinion, showed some levity, especially when he said that Mr. Chamberlain had been badly briefed and that the properties selected as examples were cases of land which was not fully developed. Owing to the operation of the guillotine, no adequate reply could be made to Mr. Lloyd George's assertion, but the obvious and, I submit, the complete reply is that these same properties which were quoted are held on building leases with some years to run and before the leases expire further development is impossible. Sir William Brass, however, did point out in the short time at his disposal one important point—namely, that the London Building Acts restrict the size of properties so that Clause 19 cannot be brought into operation. Although the Land Tax appears to be only a nominal sum of 1d. in the £ on capital value—a speciously insignificant amount on the face of it—it does in fact, if taken as additional Income Tax, add 1s. 8d. in the £ over and beyond the Income Tax of 4s. 6d.
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I will give your Lordships a very simple example of how it works. Take land valued at £240. At a tax of 1d. that is 240 d. Suppose that land is let at 5 per cent., the income from it comes to £12. If you take £1 from that you are taking one-twelfth away and one-twelfth of £1 is 1s. 8d., so in effect you are adding 1s. 8d. to that man's Income Tax. But suppose the land cannot be let. The unfortunate owner will still have to pay without regard being had to his ability to do so. Again take the case of the owner of a house producing a controlled rent. Why should such an owner be subject to the same amount of tax as the owner of the house next door which is producing a market rental? Then consider the case of shipyard sites with large river frontages, steel works, rope works, and other extensive sites with buildings one storey high which, regardless of their being run at no profit or even perhaps at a loss, will have to pay this iniquitous tax probably on skyscraper site value. Perhaps one of the greatest injustices will occur in the case of terrace houses. One owner may be free from tax (owing to the vote-catching exemption not to tax land under £120 in value) whereas a neighbour, who has a similar house at the end of the road and who has paid a substantial amount for side, back and front road charges, will have to bear the tax not on the site only but also on his share of the three roads which he has paid for making and which have been dedicated to the public.
There is still one more injustice to which I wish to draw your Lordships' attention and that is, that sites owned by local authorities will go free so that privately owned property in those localities will heavily diminish in value. The only hope is that, before this tax comes into operation, this Government will have disappeared.
LORD DANESFORT: My Lords, may I be allowed to state what appears to me the real object of this Land Tax and the principles on which it is founded? Any one who heard the speech of the noble and learned Lord who introduced this Bill and who derived his information of the nature of the Land Tax from that source only, would not have the smallest idea of what that tax meant. We had a mass of detail but not the slightest

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information as to what she tax was intended to do. Fortunately, we have a more authoritative source of information than the noble and learned Lord as to the meaning of the Land Tax—the Chancellor of the Exchequer himself. In introducing his Budget this year, he made use of very guarded language, in which he said, "We intend by this tax to take the first step towards asserting the right of the community to the land. "Is there one syllable in this Bill or in any statement made by its authors to say that, when the State are asserting their right to the ownership of the land, there is to be one farthing of compensation paid?
According to Mr. Snowden, the community are going to resume their right to the ownership of the land without compensation of any sort. Is there any other name for this but confiscation? To take land from its owners in that way is confiscation pure and simple, if the English language has any meaning, and that is the basis of this Land Tax. The noble and learned Lord said, with a simplicity for which I envied him, that he could not bear the idea of confiscation and that he felt very strongly about that. He went on to say he could not support any proposal which savours of confiscation. Now that I have explained to him clearly the real intention of the Bill and what its author said about it, and now that I have satisfied him that the object of the Bill is confiscation, hope that, as he feels strongly about this, he will withdraw his support from the Bill and say that he supported it under a misapprehension.
My only other comment is this. The Chancellor of the Exchequer also used these words:
"The land was given by the Creator"—
that seems to me nauseating humbug and cant—
"not for Dukes but for the people of the country."
There is a sort of Limehouse ring about that which perhaps commends itself to some, of his supporters in another place. But I have yet to learn that the land of the country is owned by Dukes. I do not know that the noble Lord will make the suggestion that the land of the country is owned by Dukes to the exclusion of other people. If it is not, what is the meaning of saying that the land was
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given by the Creator not for Dukes but for the people at large? That is a sample of the way this Bill has been introduced and carried through. I am not going into the anomalies and injustices, with which this Bill reeks and which have already been exposed, but I do express the hope that, before it can be brought into operation and the tax levied, the author of it and those that support it may disappear into obscurity and that the tax may disappear with them.
LORD DYNEVOR: My Lords, I do not wish to discuss the Land Tax proposals, in this Bill, although Mr. Snowden finished up his speech on Third Reading with the words:
"The principle underlying this Bill is to' assert the right of the community to the ownership of the land."
Therefore the tax is not likely to remain at one penny in the £ on the capital value. What I wish to refer to is the valuation of the land, which has received far too little consideration. There are three phases. First, on the passing of the Bill, a form of questionnaire will be sent out to the owners of land and it may be sent to the owners who are exempt from taxation under the Bill. Then follows the valuation in January next. Then comes the third phase, two or three years hence, of the taxation of land values. Owing to closure in another place, there was very little discussion on the Valuation Clauses. In fact, the First Schedule, which is all important in this matter, was never discussed at all.
I want to ask the Government if landowners are expected to go to any expense in answering the questionnaire, because Clause 27 of the Bill says they are liable to a fine of £50 if a person wilfully omits to show in such return any particulars within his power to furnish. Does that mean that they must go to legal expense if, by so doing, the answer can be obtained? If I remember rightly, when Form IV was issued twenty years ago, owners were told that they need not go to arty expense and that they could write the words "Not known" against questions if they did not know the answer. What is the position now? Nobody knows and I hope the noble and learned. Lord will enlighten us on that point.

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The First Schedule is one of the most important in the Bill, but it was guillotined. Under Clause 27, subsection (1), paragraph (e), an owner or occupier of any land is called upon to make a return in respect of the incumbrances mentioned in paragraphs (a) to (g) of the First Schedule of the Bill. These incumbrances include easements, rights of common, liability to repair highways, liability to repair the chancel of a church, liability to repair embankments, or sea or river walls, liability to pay any drainage rate under the Land Drainage Act., 1930, or any other enactment or award and, lastly, any
"restrictions on user which have become operative, imposed by or in pursuance of any Act or by any agreement (not being a lease to which the unit is subject)."
Why restrictions in leases are to be ignored I utterly fail to know. It is obvious that all these matters have to be considered in the valuation, so that unless information is given on these points the valuer would have no knowledge thereof, as they would not be visible to the eye on inspection. These incumbrances will present the very greatest difficulty. In many instances the deeds, which alone give a record of them, will not be in the hands of the owner or occupier but in the hands of other persons, such as mortgagees, and there are instances where the owner, as defined by the Act, being merely a lessee, will not have knowledge of restrictions on user, which may be only known to the ground landlord, from whom particulars cannot be asked, for under Clause 27 he is neither the owner nor the occupier.
Then the question of drainage rates under the Land Drainage Act, 1930, is in a most confused state at the present moment. The final liability has not yet been arrived at, and it is very doubtful if it will be so by January 1 next, although it must be considered in the valuation. Then there are some units which are free from the Rent Restrictions Acts, and others which are subject to them. Possibly two adjoining units may be in this position, one subject to the Acts and the other not. There has been no discussion on this question of how they are to be dealt with in the valuation. There are also electrical way-leaves and high-power cables, the Electricity Commissioners claiming the right not only to erect towers on valuable
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building land, but to withhold consent from an agreement giving the owner the right to remove these towers. This will have to be dealt with in the valuation on January 1, and we have had no instructions from the Government as to the lines on which the valuation is to proceed.
Further, there are restrictions on user. In an agreement they appear to be an in-cumbrance within the meaning of the Act, but any restrictions in a lease to which the unit is subject are not considered as an incumbrance. Will the Government explain how estates developed on restrictive lines are to be valued? Will the Government undertake that the instructions to be issued to valuers, showing the nature of the valuation, will be laid before Parliament? The necessity for doing this is clear, for under Clause 12 of the Bill an owner is only to receive a valuation showing three things: (1) the description of the unit; (2) the amount of the land value; and (3) the amount of the cultivation value. Under the Finance Act, 1910, valuations were forwarded to an owner showing how all incumbrances, etc., had been dealt with. Is it the intention of the Government, when serving a valuation, to show what sums in the land value or cultivation value represent the incumbrances and restrictions?
Until this is done an owner will be called upon to check the valuation, but with no knowledge as to what that valuation is supposed to represent. He cannot tell how it is built up, and he will not know whether incumbrances have been included or, if so, whether those incumbrances were considered by the valuer to appreciate or depreciate the value of the unit. It will, of course be impossible, unless full details are furnished to the owner, for him to check the figures, as his awn valuer will probably be dealing with a totally different form of valuation; he having included or excluded certain easements and incumbrances, and the district valuer having taken an exactly opposite course. There has been no discussion on this most important point in another place, although the valuation is the most vital part of the whole of the land value taxation proposals. Before the Bill is placed upon the Statute Book it is the duty of the Government to give full details as to what they intend to do, and for Parliament to insist that any in-

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structions issued shall be laid before it. I hope the noble and learned Lord will give an answer to my questions.
LORD BALFOUR OF BURLEIGH: My Lords, I do not want to discuss the principle of the taxation included in this Bill, but I do want to call your attention to one very practical inconvenience which results from the method which has been adopted of including these proposals in the Finance Bill. There is not a single body in this country interested in the preservation of open spaces and in the progress of housing reform, which is not gravely concerned with the effect which this taxation is going to produce upon those subjects. To illustrate that to your Lordships, I have only to mention the names of the bodies which have represented this point of view to the Chancellor of the Exchequer. He has had laid before him the views of the Council for the Preservation of Rural England, the Royal Institute of British Architects, the Town-Planning Institute, the National Housing and Town-Planning Council, the Chartered Surveyors' Institution, the Garden Cities and Town-Planning Association, the National Trust, the Metropolitan Public Gardens Association, the Commons, Open Spaces and Footpaths Preservation Society, the National Playing Fields Association and the Boy Scouts' Association. I do not think that even any of the noble Lords opposite will contend that there is any political flavour about that combination of bodies, and they all view with the very greatest alarm this provision for a Land Tax.
The precise point which I wish to mention is as to an Amendment moved in another place to exempt land belonging to associations which were set up to provide new garden cities. The Chancellor of the Exchequer accepted an Amendment, or instructed an Amendment to be accepted, to exempt the property of public utility societies, the principal object of which was to provide housing accommodation for the working classes, but he refused to include in that exemption such bodies as existed, or may be set up in the future, to create new garden cities. That does seem to me to be a most extraordinary distinction to make. I am very glad he exempted the public utility societies, which are providing housing for the working classes,
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but how ridiculous to make a distinction between them and the associations which are trying to create garden cities ! It is not as though there were very many of the latter, or as if their exemption could lead to any very large loss of revenue. I cannot imagine any way in which the working classes could be more benefited than by the creation of garden cities. Nevertheless this small exemption was refused.
I am bound to point out to your Lordships that it was only refused by the assistance of the Liberal Party. That seems to me to be an extraordinary thing for the Liberal Party in another place to do. The Amendment was lost by five votes, and ten of those voting against it were Liberals. Apparently, they preferred that the Government should not be defeated on this point than that the garden cities should get some small assistance. It really is lamentable at this time of day, when the whole informed public opinion in the country is anxious to see the development of garden cities and reasonable town planning, to find the thing torpedoed in this way by this miserable combination of Liberals and Socialists. Here is the very thing which your Lordships would have soon put right had you had the power, and it does seem to me, lamentable, because it is included in a Finance Bill, that your Lordships have to give up that care which you always have for open spaces and for playing fields and for the proper development and preservation of the amenities of the country.
I am told that we never have gone into Committee on the Finance Bill, and that it is our practice to negative Committee and pass the Bill as it comes up to us. Here is a case where the procedure which is being adopted is absolutely standing between the public opinion of this country and what it would like to see done. It does seem to me, if ever there was a case for creating a precedent, you have it now. I should like to see the House go into Committee on the Bill and put in this Amendment. The noble and learned Lord opposite may say it is a small matter. It may be a small matter, but I think it is a very big principle. It is a principle which your Lordships have always cared for, and I think it is a great pity to see it go by default. What would happen? The

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House of Commons would have an opportunity of reconsidering it. The sane opinion in the House would be in favour of agreeing to the Amendment. Either the Liberals would have once more to go through the contortions of supporting the Government, or else the Amendment would be passed. I should like to see the House of Commons given the chance. I do not suppose it is a suggestion which will commend itself. We shall be told that we are infringing the Privilege of the House of Commons. That might be held to be a bigger principle, but I am bound to say I would like to see the House of Commons given a chance of reconsidering the matter for I am certain a great majority of them greatly regret what has happened.
LORD PARMOOR: My Lords, I should like to say a word or two in reply to what has been stated in the course of a discussion which, I think, has been an illuminating discussion, and has not led to any bitter interchange of political feeling between the two sides. The noble Earl, Lord Peel, asked me in the first place about the change as regards three-quarters of the Income Tax being collected in the first half of the year. Up till 1915, the whole of the Income Tax was due to be collected in the first part of the year. In 1915 a concession was made—I am not in the least finding fault with it—that half should be paid at the beginning of the year, and half half-way through the year. The only change that the Chancellor of the Exchequer has made is to go back in the direction of the old system in force before 1915, lessening the privilege which the 1915 Act had given. I do not think in the circumstances of the present time much exception could be taken to the provision by which the Chancellor of the Exchequer hoped at any rate to get the money he wished for under the most convenient circumstances.
The other really important matter to which the noble Earl referred was to ask for information about Germany and India. I cannot give that to the House. I assume when it can be given it will be given in the other place, and we shall have a simultaneous statement here. That is to my mind the right way in which information of this kind should be given. I regret that I cannot give it to
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the noble Earl at the present time. I have not got it. I made inquiries, and was informed that when there is information to be given it will be stated simultaneously in the two Houses, which is the proper formal procedure.
I do not think there is any other question in particular that the noble Earl asked me. I was very interested in the speech of the noble Marquess, Lord Lothian, who defined the proposal very accurately, I think, as a mixture of hope and necessity. Of course, it is necessary if other methods of taxation can be found that they should be found. I quite agree that the Bill is not a cheerful one. It cannot be under existing conditions and in the present unsettlement internationally. At the same time, I reecho what he said that we must keep up the spirit of hope as well as the feeling of necessity.
The noble Lord, Lord Dynevor, asked me a number of questions. It is difficult to follow all the minor points that he raised, but they will all be considered. They did not appear to me to be very formidable, as far as I appreciated them, taken one after the other. All I can say is, I will very carefully consider the form of procedure. I believe it is ample and sufficient. Nothing is sufficient if you take what I may call an unreasonable attitude, but if you are reasonable the valuer and the owner or lessee come together and talk the matter over, and I really do not think any difficulty will arise. There are the same facilities here as there are in other valuation cases, and valuation cases at the present time hardly ever raise any difficulty of any kind. The skilled valuers know so thoroughly what it is they have to do, and the owners at the same time have full confidence in what they are doing.
As to what was stated by the noble Lord, Lord Balfour of Burleigh, who seems to have left his place, all I can say is I do not quite appreciate what his point is, nor do I understand why paragraph (b) would not be sufficient for his purpose. But I do not desire to go into that. It seems to me that if this Bill becomes law, as undoubtedly it will, so far from difficulty being caused in these matters they will be facilitated. The difficulties will be overcome. I do

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not quite know whether members on the opposite side of the House think that this is likely to raise the value of land. I do not think myself it will have very much influence either way. If it lowers it, then these matters will be easier. If it enhances it, I suppose there will not be much objection on the other side of the House. I thank your Lordships for the way you have received the Bill and I have nothing more to say.
On Question, Bill read 2a.
LORD PARMOOR: My Lords, I beg to move that the Committee stage be negatived.
Moved, That the Committee stage be negatived.—(Lord Parmoor.)
On Question, Motion agreed to: Committee negatived accordingly.
LORD PARMOOR: The Third Reading will be taken to-morrow.

MARRIAGE (PROHIBITED DEGREES OR RELATIONSHIP) BILL.
House in Committee (according to Order): Bill reported without amendment.

PREVENTION OF IMPORTS OF PRO DUCTS OF CONVICT OR FORCED LABOUR BILL. [H.L.]
Amendment reported (according to Order).
House adjourned at six o'clock.