HL Deb 20 July 1936 vol 102 cc86-93

Certification of Annual Value of Land in Agricultural Holding.

1. In this Schedule the expression "charged land" means all land comprised in an agricultural holding exclusive of any part thereof in respect of which no annuity is charged.

2. If the owner of any charged land makes before the first day of March in any year to the surveyor of taxes for the parish in which the land is assessed or situate an application in the prescribed form for a certificate of the annual value of the charged land for the period of twelve months ending on the fifth day of April in that year, the surveyor shall— (a) if the charged land is land assessed for income tax purposes under Schedule B by reference to annual value for that period apart from other land, furnish to the owner and, if the annuity or annuities is or are under the management of the Commission, to the Commission, a statement in writing of the annual value as ascertained for the purposes of assessment;

LORD HASTINGS

moved, at the end of sub-paragraph (a) in paragraph 2, to insert "such statement showing separately the amount of the assessment on the house and buildings and on the charged land." The noble Lord said: My Lords, this Amendment is one of really very great importance, and it requires, I am afraid, a good deal of explanation, because it is a highly technical matter. Your Lordships will know, I think, that buildings are not titheable but land is titheable. On the other hand, Schedule B assessments take account of the value of land with the buildings upon it. Therefore Schedule B assessment is the estimated value of the land as now equipped, and, of course, the tithe is charged upon the land without any regard to the buildings. Clause 14 of the Bill, which is what we will call the Remission Clause, links titheable land with Schedule B assessment. Clause 14 provides that the maximum liability of the tithe-payer shall be one-third of the Schedule B assessment. It therefore follows, of course, that if the Schedule B assessment rises, so does the maximum liability of the tithe-payer. Now the Schedule B assessment may rise, and presumably will rise, with any added value that may be placed on the buildings. Buildings are not titheable, but yet, if the buildings rise in value, the Schedule B assessment rises in value and the Remission Clause becomes less operative than it would be if the Schedule B assessment remained fixed. So there is a sort of unnatural link created by this relationship of the Remission Clause to the Schedule B assessment.

In the countryside, particularly in the high tithe-paying areas, there has been in the past and is still a great fear of what is known as "growing tithe." This peculiar link gives an opportunity of a really very alarming kind for growing tithe. It is, of course, quite reasonable to say that the tithe will not grow by reason of the fact that the landlord has spent money upon his buildings which has increased their assessable value, but it will grow in the sense that the amount of remission that will be obtainable in hard cases will be less. It will grow in that form. If a landlord, in order to maintain his rent or even to let the farm, has to make considerable capital expenditure—on, for instance, cow byres, which are the usual plague of the day, though there are other forms of expenditure which may be necessary—he will be instantly liable to an increase in his Schedule B assessment, and if he is in a high tithe-paying area the increase in the Schedule B assessment will extend the liability to tithe which he will have to pay.

I do not think that is the intention of the Government; I feel that it would not be the intention of the House, and in some sense it would be rather an abrogation of the present law, because it makes buildings titheable which have not previously been titheable. That is the whole purpose of my Amendment, and your Lordships will observe that the limit of liability may be enormously increased by operations of the kind which I venture to characterise. There arc, of course, arguments, and I have no doubt that someone, whether it is the noble Viscount or the noble Earl who replies to me, will provide them. I am not going to put them into their heads, but perhaps when they have used them, if they think of them, I shall have the opportunity of replying to them at the end. I know that there are arguments, but I think that there are really no arguments which can subvert what I have ventured to explain: the very real risk which the tithe-payer in the high tithe areas is going to run. This Bill has been brought into Parliament, and is now very close to becoming an Act, for the purpose of satisfying that very class of tithe-payers. It would be a thousand pities if, by some unintentional method, the benefit it was intended that they should gain should be taken away from them. And it would be taken away from them if this Amendment did not find its way into the Bill. I beg to move.

Amendment moved— Page 55, line 29, at end insert ("such statement showing separately the amount of the assessment on the house and buildings and on the charged land.")—(Lord Hastings.)

EARL DE LA WARR

My Lords, this again, I know, is an Amendment upon which the noble Lord places a great deal of importance, and I only wish on behalf of the Government that I could recommend your Lordships' acceptance of it. The noble Lord has been so helpful, especially to-day, that we should have liked to accept an Amendment from him. But what is this real point before your Lordships? The noble Lord talks of the evil of growing tithe. Let us just see what this evil is. I think that the name is merely rather a misstatement of the problem. It is not a question of tithe increasing because of what the landlord does to his property; it is a matter of certain cases in which a landlord, by spending money on his property, so increases its value that it ceases to be subject to the possibility of relief under the one-third provision of Schedule B. That is a very different matter from an increase of tithe; it is a decrease of remission. If you or I are in difficulty and we go to one of our tradesmen and say we are very sorry but we really cannot meet our bill with him, and eventually he says he will take fifteen shillings in the pound, that is all right for the one year when we are very hard up; he keeps our trade. But surely that does not make a case next year, when we have had successful dealings on the Stock Exchange and are making profits, for again claiming that remission. Here, if the landlord is able to spend money on his land and increase its value, then it is very hard to say that he is entitled to this very special form of relief.

The noble Lord makes this point, that frequently landlords have to spend money on their property simply in order to maintain the rent or in order to let it. That is perfectly true, but if that is so the rent, does not go up, the Schedule B amount does not go up, and then there is no question of decrease of remission. That is really the answer to the noble Lord. He says: "Surely it is not the intention of the Government to ensure by their Bill that all expenditure on buildings should result in an increase of tithe." Our first point, if I may summarise, is that it is not so. In no case does it result in an increase in tithe. Secondly, in some cases it might result in a decrease of remission, but that would only happen when the effect of that expenditure is to increase the value of the land, and therefore the land should, in fact, no longer claim relief.

LORD PHILLIMORE

My Lords, here again the land is full of puzzling variety. I can think at the moment of a farm of some 500 acres which is having a sum of £20,000 spent upon it in the shape of buildings, and, oddly enough, this sum has not been spent by any rich person, but by a semi-charitable association, anxious to place small holders on the land. That farm is subject to tithe. I do not say that the tithe is excessive in this case, or that any claim for remissions has ever been made, but is it to be thought that that land should, in fact, pay more tithe because it is being developed in the interests of the nation as a whole by the creation of small holdings? I also know of a noble Lord, a member of this House, who has for years pursued the policy of cutting up his big farms and creating small holdings. Whatever may be said as to the object of this clause in the relief of poverty, surely we are entitled also to say that this Bill did definitely set out to reduce the charges on the land and therefore on agriculture, and if this clause operates in the way in which Lord Hastings contends, the burden upon the land and upon agriculture will, in fact, be increased. If the noble Earl in charge of the Bill could prove that in every instance it was a rich man who spent money on buildings, and he could well afford to pay tithe, that would be a partial answer, but my illustration shows that it will not always be the case, and I venture to think it would be safer to avoid an evil which it is difficult to forecast, but which, if it came to light, would create an odium to which we had all hoped the Bill would put a stop for ever. I hope, therefore, that if necessary Lord Hastings will go to a Division.

LORD CROMWELL

My Lords, this is the first time that I have ever addressed the House. I am one of those ignoble Lords who try to do what they can for the country in their own district, on the county council and in other ways, and it is on very rare occasions that I am able to attend your Lordships' House. Whenever I receive a three-line Whip I do my best to put everything else aside and come to this House, and this is one of those occasions. I am here, and I cannot recall that I have ever voted against the Government when I have been in this House, but I find myself in a position now of being unconvinced by the arguments of the noble Earl, Lord De La Warr, in saying that money which is spent in buildings would not increase the Schedule B value of the farm. I think that the case has been very clearly made out for the Amendment. Where a large property is split up, and a good many buildings are placed upon it, it will very materially increase the value of that estate. Therefore, unless I hear any other argument that convinces me between now and the Division, if it takes place, I shall feel bound to go into the Lobby in favour of the Amendment.

LORD HASTINGS

My Lords, the noble Earl, Lord De La Warr, discussed at some length the question as to whether it was really right that a man who could afford to spend money on his farm premises, and so increase the value of a farm, should be accorded the relief which was given to him before the money was spent. There is, of course, something in that argument, but those of us who are only too familiar with the high-tithe areas, which coincide almost wholly with the areas which have suffered most from agricultural depression in recent years, know that the money which has been spent upon improvements of farm premises has, in the main, been borrowed money. The money has not been out of the resources of the landowner. Of course there are exceptions to every rule, but, in the main, it is money borrowed in order to be able not to maintain the farm but to let the farm itself. So I do not think really that the argument that the man who spends money upon his farm does not, therefore, suffer from poverty is a sound one, because we can all quote instances of money being spent out of empty pockets, but yet in the expectation that one day it might be returned to the advantage of the spender.

There is another very important point which perhaps I did not stress sufficiently strongly. It is that under the present law buildings are not titheable. Land is titheable, and therefore if you, by the non-inclusion of this Amendment, permit the value of the buildings to influence the amount of tithe which is paid, you go behind the existing law and indirectly make each building titheable. That is exactly what we want to try to avoid. We want to avoid putting any kind of restriction upon the spending of money on the improvement of buildings. If a landlord who is also a tithe-payer knows that in spending the money upon his buildings any additional rent which he may get therefrom will, in all probability, have to go to pay interest at the bank on borrowed money, and also have to go in paying increased tithe, obviously the incentive to spend money on buildings is greatly diminished, and tenants who will come to the landlord asking for improved buildings will, in many cases, inevitably be met with the answer: "I dare not spend money, because anything you can pay in the shape of rent will go, with more besides, in loss of the remission which I get on my tithe." I cannot think that this will upset the finance of the scheme in the slightest degree, still less the tithe-owners, because no less tithe is going to be paid than is now paid. The only effect of the Amendment is that it will prevent the amount of the remissions from getting less by reason of the expenditure upon buildings. The noble Earl on behalf of the Government has expressed his regret that the Amendment cannot be accepted. I shall have to take the decision of the House on the matter.

VISCOUNT HALIFAX

My Lords, perhaps there is one thing that the noble Lord has said which is deserving of a further word of explanation. I do not intend to reargue the merits of the Amendment, but I am quite satisfied, having been over this ground a good many times with those who have been responsible for drafting the Bill, that many of the fears that the noble Lord has in mind are in fact unfounded and for this reason. He has suggested that under the clause which he seeks to amend some new law is being put upon tithe-payers and some alteration to their disadvantage is being made against which it is the duty of your Lordships' House to protect them. In fact, that is not the position. This Bill makes no alteration whatever in the arrangements under this head with regard to tithe which have been in operation for the last forty or fifty years, and I would suggest that if he has a complaint on that ground it is not reasonable to seek to make an alteration of the existing law in a matter of that sort in a limited Bill of this nature.

I would therefore appeal to him and to your Lordships on the broadest ground. On the whole we have sought to bring in a Bill that would give substantial relief to tithe-payers. We have reduced the annual annuity charge from £105 to £91, we have doubled the remission that it is open to tithe-owners to obtain, and, in deference to the feeling expressed in various quarters of the House, not least earnestly by the noble Lord who has moved this Amendment, we have also extended, at some inconvenience to the Treasury, the arrangement by which tithe-payers are permitted to be three

CONTENTS.
Wellington, D. Bertie of Thame, V. [Teller.] Harris, L.
Sidmouth, V. Hastings, L.
Aberdeen and Temair, M. Oriel, L. (V. Massereene.)
Berwick, L. Phillimore, L.
Bathurst, E. Cromwell, L. Redesdale, L.
Grey, E. Fairfax of Cameron, L. [Teller.] St. Levan, L.
Radnor, E. Shute, L. (V. Barrington.)
Stradbroke, E.
NOT-CONTENTS.
Halifax, V. (L. Privy Seal.) Onslow, E. Hampton, L.
Plymouth, E. Heneage, L.
Northumberland, D. Rothes, E. Hutchison of Montrose, L.
Sandwich, E. Jessel, L.
Dufferin and Ava, M. Stanhope, E. Rankeillour, L.
Zetland, M. Remnant, L.
Brentford, V. Rennell, L.
Airlie, E. Swinton, V. Sandhurst, L.
Dartmouth, E. Strathcona and Mount Royal, L.
De La Warr, E. Biddulph, L.
Iddesleigh, E. Bingley, L. Wakehurst, L.
Iveagh, E. Daryngton, L. Waleran, L.
Lucan, E. [Teller.] Doverdale, L. Wolverton, L.
Munster, E. Gage, L. (V. Gage.) [Teller.]

Resolved in the negative and Amendment disagreed to accordingly.