HL Deb 14 June 1932 vol 84 cc867-78

LORD STRACHIE rose to move to resolve, That this House regrets that the Finance Bill does not repeal the valuation and Land Tax imposed by the Finance Act, 1931. The noble Lord said: My Lords, at this time of the day I shall not go very much into the merits of the case, but deal rather with the Parliamentary situation as regards the Motion standing in my name upon the valuation and Land Tax. What has happened in regard to this matter? Up to December of last year the amount expended under the Finance Act of 1931 was £120,000, and 700 officials were engaged. A debate was raised upon the question upon a Motion which I placed on the Paper last December. I did not move my Motion, but we had a debate upon it, and the Government were then asked to state their attitude with regard to repealing this Land Tax valuation in the future. The noble Lord who replied for the Government said he could give no authoritative answer. Of course he could not do so, for he was not a member of the Cabinet. The Leader of the House, who I understood was sitting upon the Bench opposite, did not think it worth while to say what the intentions of the Government were.

One may take it that the Government last year absolutely refused to give any indication as to whether they were going to repeal that Part of the Act or not. What has happened this year? This year in the House of Commons the Finance Bill was again introduced with this most objectionable clause providing for valua- tion and a tax upon all land. It was debated at considerable length in the House of Commons and when a Division was taken the figures were very interesting. There voted against the repeal of the Land Tax Clause 298 and for the repeal 71. That is to say, there was a majority against of 227. What was most remarkable was that more than half the House of Commons refused to vote on the question. Members abstained to the number of 317, showing that evidently there was no great support for the Government in this matter, although no doubt a number of new members did not care to oppose the Government at that particular stage.

I should like to draw your Lordships' attention to another remarkable fact. No Conservative member, with one exception, spoke in favour of this tax. Colonel Acland-Troyte moved the rejection of the clause. A very distinguished agriculturist and a very old member of the House of Commons, Sir George Courthope, denounced the clause and said he regretted that his leader refused to repeal it. Another prominent agriculturist, Mr. Michael Beaumont, asked for its withdrawal. Then before the Lord President of the Council replied Mr. Gordon Macdonald quoted a long statement made by Viscount Snowden. I regret that the Lord Privy Seal is not in his place. What did Mr. Gordon Macdonald say? He quoted a long statement from Viscount Snowden, with which I will not trouble your Lordships at length, but at the end the noble Viscount said that this was one further stage towards the emancipation of the people from the tyranny and the injustice of private land monopoly. Mr. Gordon Macdonald was followed by Mr. Baldwin, who made a remarkable statement. He described what Mr. Gordon Macdonald had said as "the beautiful words which the hon. member quoted from the Chancellor of the Exchequer in the Labour Government." I will not comment upon that statement. I will leave it to the landed interests outside this House as well as in it, the bulk of whom supported Mr. Baldwin at the General Election, to comment upon those words.

Mr. Baldwin made the further statement that the valuation and the land tax were in a state of coma for the present Parliament. Is it not possible that they may wake up from that state of coma? It is not unusual for a patient in a state of coma suddenly to revive and come to life again. I rather think that there may be some intention that the patient may come to life again because I was very much interested, and at the same time surprised, to see it reported that the Financial Secretary to the Treasury, Major Elliot, made this statement at the annual meeting of the Property Owners Association: Lord Lloyd might also have spoken of the taxation of land values which was postponed to a period when the country could afford to pay better. The Financial Secretary to the Treasury did not say that when they had time or when there was no longer a National Government or in another Parliament they were going to repeal the land valuation and the Land Tax. He only said they were waiting to put it in force until there were better times and the country could afford to pay it.

There was a still more remarkable statement made yesterday in the House of Commons. I quote this passage from the OFFICIAL REPORT: Lieut.-Colonel ACLAND-TROYTE asked the Chancellor of the Exchequer what sum of money has been expended since 1st January in carrying out the provisions of Section 28 of the Finance Act, 1931? Mr. CHAMBERLAIN: About £2,000. Lieut.-Colonel ACLAND-TROYTE: May I ask what use it is to come down here and preach economy, and allow this waste of money to go on? Mr. CHAMBERLAIN: I do not think it is a waste of money. What does Mr. Chamberlain mean by saying it is not a waste of money? It must mean that on some future occasion he intends to put into force this valuation and this Land Tax. Otherwise it is a waste of money to spend £2,000 a year—or no doubt more—to keep alive this valuation. Then I notice that Mr. Baldwin said it was in gratitude to Viscount Snowden that they had maintained this provision for valuation and the Land Tax upon the Statute Book. I would not fat one moment depreciate the great value of the part played in the General Election by Viscount Snowden, but on the other hand I cannot understand why there should be a special form of gratitude to Viscount Snowden.

Why is not the same form of gratitude applied to Sir Herbert Samuel? I should think Sir Herbert Samuel gained as many votes for the Government as Viscount Snowden, but how is gratitude shown to Sir Herbert Samuel? Reference has already been made to a very remarkable state of things when you get one Cabinet Minister rising from the Government Bench and reading a statement in favour of import duties and another Cabinet Minister denouncing him for making it. I venture to suggest that Mr. Baldwin might have shown gratitude to Viscount Snowden by treating him exactly as he has treated Sir Herbert Samuel, by telling him: "You have a perfect right, of course, to get up in the House of Lords and denounce me because I have repealed the land valuation provisions and the Land Tax which my Party dislike very much indeed." It seems to me that that would have been a reasonable way to do it. What is good for the House of Commons might be applied here, although of course it might be applied here under more difficult circumstances.

There is another point to which I should like to refer, and that is the way in which this clause is actually at the present moment discouraging the development of land and discouraging employment. I hold in my hand a memorandum which was given to me by a member of your Lordships' House, who is well known to most, people. This memorandum says: A lay-out for the development of about eleven acres in the London area had been negotiated at the moment of the introduction of the 1931 Budget, a year ago last Easter. The scheme provided for the construction of a length of about 3,400 feet of roads, severed and drained, and the construction of eighty-four houses, of a type suitable for the neighbourhood. Arrangements in detail had been made, as necessary preliminaries to the scheme, the burden of which fell directly upon the owners and the promoters. The terms for the carrying out of the constructional works were settled between the two parties and the formal agreement was about to be entered into, but owing to the uncertainty created by the Finance Bill, 1931, as to the valuation of the land and the placing of the Land Value Tax thereon, both parties were in accord that the development scheme could not be proceeded with, and since that time the promoters have not been able to make any progress in the matter; consequently, the opportunity of a considerable capital out-lay in the construction of the roads and the houses with the resultant loss of employment, has been rendered impossible. That is a very strong statement indeed and shows what an unfortunate effect is being caused by the state of coma in which the Land Tax and land valuation are being maintained by the Government at the present moment.

There is no doubt that, if the Government cannot make up their mind to show their gratitude to the noble Viscount, Lord Snowden, in another way than by keeping the Land Tax and valuation in a state of coma, they will discourage more employment, more development, and more capital being put upon the land. This legislation has a paralysing effect on anyone who desires to put more capital into the land. If we put more capital into the land, we shall have our valuation raised and have to pay increased taxes on what we spend. The real object of this Land Tax, which was imposed by the Labour Government, was simply land nationalisation in the future. I cannot do better than quote the statement made by the Lord Privy Seal, when he was Chancellor of the Exchequer, last May: By the measure we assert the right of a community to the ownership of land. If private individuals continue to possess a nominal claim to the land, they must pay a rent to the community for the enjoyment of it … The taxation of land values may be described as a rent paid to the community for the use of the land. That is how Lord Snowden justified his Land Tax, which he pointed out was merely a step towards land nationalisation. We ought to leave it to Mr. Baldwin's supporters to protest against this first step towards land nationalisation.

It is interesting to notice that at a later date Lord Erskine, one of the Somerset members, said: This is a method, not of imposing an equitable tax, but of confiscating the land, making it worth nothing and then nationalising it.

Mr. MACLAREN

Hear, hear!

Lord ERSKINE

Then why not say so?

Mr. MACLAREN

I do say so."

I see the Leader of the House is amused at that. I hope that he is going to say that he is not in favour of land nationalisation. I can assure him, having spent a great many years in the House of Commons and having fought many elections, that he will find at the next General Election that there are a large number of landowners like myself who did all they could to support the Government but will not support a Government which is helping half way towards the nationalisation of land.

Moved to resolve, That this House regrets that the Finance Bill does not repeal the valuation and Land Tax imposed by the Finance Act, 1931.—(Lord Strachie.)

VISCOUNT HAILSHAM

My Lords, the noble Lord who has moved this Motion said that I showed amusement at a quotation which he read to your Lordships. The amusement, which I confess I felt, was at suggesting that the quotation, which certainly represented the opinions of a Party as far removed from my own as it is possible to be, had any relevance to the subject which your Lordships are engaged in debating this evening. My difficulty is that at this late hour I have to choose between dealing with the Motion and dealing with the noble Lord's speech. It is difficult to do both and impossible to do both at the same time.

Let me say a word about his speech. He began by telling us that in the Division lobby on a Motion to delete this clause there voted some 340 members and that therefore there were some 300 abstentions, which showed, he said, how unwilling the Conservative Party was to support the Government in this matter. I have looked at the OFFICIAL REPORT for that evening and I find that there was a series of Divisions on various clauses of the Finance Bill, of which this was only one, and on none of them was there a bigger attendance than in the one on which the noble Lord commented, the others having nothing to do with land taxation or land valuation in any shape or form. As to the reason why the 300 members were not there that evening, I hope that they were doing what I have often encouraged them to do when there is a big majority, as there is to-day. I have encouraged them not all to come down to the House of Commons but to spend their time in their constituencies educating their friends as to the real merits of the National Government's policy.

My noble friend suggested that the right plan was to have an agreement to differ and a speech by my noble friend the Lord Privy Seal, protesting against the decision of the Government. I doubt whether he was serious in that suggestion. The arrangement made about the tariff was one made in exceptional circumstances to meet an exceptional emergency. I for one have always disclaimed any view that joint Cabinet responsibility should be shelved or that it should be made the rule for any Cabinet Minister, whenever he likes, to dissociate himself from the Government as a whole. That would be a very unfortunate precedent to establish. The noble Lord read a letter which described how some scheme for development in London was dropped last year when the 1931 Budget was introduced. I am not in the least surprised to hear it.

LORD STRACHIE

It is still held up for the same reason because this still remains in the Budget.

VISCOUNT HAILSHAM

That is not what the letter said. I entirely accept that the reason the scheme was dropped in 1931 was that they were alarmed at the prospect of land valuation.

LORD STRACHIE

The memorandum also refers to the present state of things. It was only given to me a few days ago and the noble Lord told me that the same state of things exists as when there was a Labour Government. They are equally afraid of this Government.

VISCOUNT HAILSHAM

That only shows how foolish some people's fears are. The noble Lord's speech and the Motion which he invites this House to pass would encourage idle fears and would persuade people that the position is different to what it really is. Let me turn to what the position really is. Your Lordships are not asked under this Motion to discuss whether land valuation is a good thing or a bad thing or whether a Land Tax is a good thing or a bad thing. The noble Lord said that it is still in the Budget. Let me explain what the law is and what the present Finance Bill does, and then your Lordships can judge whether the Government is deserving of censure. Under the Act of 1931 it was provided that there should be a Land Value Tax charged annually for the year ending 31st March, 1934, and each subsequent financial year, and it was provided by the succeeding clause that there should be a valuation as soon as might be after every valuation date. That is to say, until the valuation date has arrived there can be no valuation, and the valuation date—it is important to deal with this legal phraseology as it is otherwise difficult to make the point clear—was defined in that section as meaning, with regard to the first valuation, the 1st January, 1932, and, with regard to the second valuation, the 1st August, 1936, and thereafter every five years.

That was the position which was embodied in last year's Act and what the Government have done in this year's Finance Bill is to alter that and to say that, instead of a tax being payable for the financial year ending 31st March, 1934, and each subsequent financial year, it is not to be paid until such financial year as Parliament may hereafter determine, and that, instead of the valuation dates being, as was stipulated in the 1931 Act, the 1st of January, 1932, and the 1st August, 1936, and thereafter quinquennially, under the present Bill by Clause 27 those dates are to be wiped out and there are to be substituted such dates as Parliament may hereafter determine. The legal effect of that is that there can be no Valuation Tax, no valuation date, and no valuation, because valuation cannot happen until after a valuation date, until Parliament enacts some legislation which reintroduces the Valuation Tax and the valuation date. Unless and until that is done the Valuation Tax is dead and no valuation can take place. It would be just the same if the noble Lord's proposal were adopted and the section of the Act of 1931 repealed. Any future Parliament could re-enact those clauses. In either event Parliament has it in its power to enact land valuation. Under the noble Lord's suggestion it could be done by re-enacting the clauses of the Act of 1931, and under the Finance Bill which received Second Reading a few minutes ago, it could be done by bringing in an Act or embodying clauses in an Act which would provide for such and such a valuation date. But unless and until Parliament enacts legislation the Land Valuation Tax is dead. As soon as Parliament enacts legislation which imposes a Land Valuation Tax it, of course, becomes operative whether it is done by fixing a date or by means of the re-enactment of the two clauses, and therefore to suggest that there is some subtle design, some danger in its being done in this way instead of that is to ignore facts and to seek for imaginary bogies.

The noble Lord said that there were some economies—at least I so gathered from his speech—to be achieved by his proposal. I can assure the noble Lord that he is quite mistaken in that. Undoubtedly since January 1, 1932, there has been an expenditure of £2,000 resulting from the aftermath of the Land Valuation Clauses in 1931. That expenditure has been incurred not by reason of any postponement or repeal of the date, but by reason of the fact that the Finance Act of last year became operative in June or July, a number of officials were appointed, and a number of liabilities were incurred which do not entirely disappear when the policy is changed. But there can be no further valuation and no further expenditure incurred on land valuation until Parliament otherwise determines. That is the plan the Government have adopted, and so far as economy and expenditure are concerned the effect is exactly the same as if the Government did as the noble Lord would have us do. That being so, there being no difference in the result, and the matter being only one of verbiage, the question may fairly be put to the Government why it chose the one way instead of the other. I doubt whether it would be quite a sufficient reason to invite this House formally to censure His Majesty's Government, which is the effect of the Motion, merely because we adopted one way rather than another, but I would like to make it clear why we have adopted our particular plan.

The reason is that we are a National Government and that we embrace in the present Cabinet four members of the old Socialist Cabinet of a year ago. Let me explain what that means. I hope it is not necessary in this House to defend or to elaborate the importance of the establishment of the National Government last August or the value from the national point of view of having established such a Government. I propose to assume that you agree with me in thinking it was worth while. Assuming that, what was the purpose of the National Government? First of all, it was to effect economies and impose sacrifices, which could hardly be done except by the general consent, of the nation; and, secondly, I think it was to endeavour to unite all political opinion and all classes of the community in support of a Government which was trying to speak for the nation and to face the great emergency and crisis we had to undergo in a national and not in a sectional spirit. If that be true, would it be wise for the Government, which embraces in its numbers four representatives of the Socialist Party who were originally responsible for this Land Valuation Tax, not merely to get them to assent to our postponing the operation of the tax and postponing the whole matter till Parliament shall hereafter pass an Act which shall re-establish it, but to ask them to accept the humiliation, for it would be nothing less, of having this year solemnly to repeal what last year they had solemnly enacted? One of the members particularly identified with this legislation was then Chancellor of the Exchequer and is to-day Lord Privy Seal. No doubt we could have invited those members of the Government either to undergo that humiliation or to break up the Government by leaving it and retiring.

LORD STRACHIE

Was it no humiliation to agree to Protection?

VISCOUNT HAILSHAM

"No humiliation" is perhaps putting it too far. It is perhaps not humiliation, but a sacrifice of opinions which they held in virtue of their consciousness of the supreme importance of the national crisis and of keeping the National Government in existence. This is an easier way, a less disagreeable way, and an equally effective way, and the only object of doing it in any other way would be that of imposing on them a public humiliation that it would be unreasonable to ask of them. I am not in the least ashamed of saying that although it has been my duty to denounce in no sparing language the policy of the Socialist Government of which these four gentlemen were members, we and the country have every cause to be grateful to them for the attitude they adopted last August. I think their courage and their preferment of national to sectional interest deserving of real gratitude from the nation. We have valued their co-operation during the last six months, we look forward to the continuance of that co-operation in the future. We regard their presence as a real strength to the Government in its work at home and in its very difficult negotiations abroad, and we believe that any attempt to weaken their position or to undermine their position in the Cabinet, or make their continuance in the Government impossible, would be a real source of weakness to the country at the very time when the Government most need to present a united front to the world as a whole.

On those grounds, although I quite agree with the noble Lord that I am entirely opposed to the policy of land valuation, and do not in the least dissent from any of the criticisms levelled against

Resolved in the negative and Motion disagreed to accordingly.

House adjourned at twenty-seven minutes past seven o'clock.

it by my Party, I think the attitude we took up is the right one. I should be very sorry if this House were to censure the Government for taking means to effect that end, which does not involve this consequence of driving from the Cabinet those who were responsible for a course of legislation with which I profoundly disagree, but who have been good enough to subordinate their views to those of their colleagues in the Cabinet, in order to present that united front which the noble Lord's Motion would seem anxious to condemn.

On Question, Whether the Motion shall be agreed to?

Their Lordships divided: Contents, 14; Not-Contents, 16.

CONTENTS.
Bedford, D. Hereford, V. [Teller.] Lawrence, L.
Newton, L.
Macclesfield, E. Banbury of Southam, L. Phillimore, L.
Malmesbury, E. Biddulph, L. Strachie, L. [Teller.]
Morton, E. Lamington, L. Wharton, L.
Selborne, E.
NOT-CONTENTS.
Sankey, V. (L. Chancellor.) Chaworth, L. (E. Meath.) Ponsonby of Shulbrede, L.
Clanwilliam, L. (E. Clanwilliam.) Redesdale, L.
Bath, M. Sanderson, L.
Danesfort, L.
Lucan, E. [Teller.] Gage, L. (V. Gage.) [Teller.] Stanmore, L.
Plymouth, E. Hay, L. (E. Kinnoull.) Strathcona and Mount Royal, L.
Marley, L.
Hailsham, V.
LORD STRACHIE

Lost by Labour votes.