HL Deb 20 July 1936 vol 102 cc75-86

Amendments reported (according to Order).

Clause 16 [Recovery of annuities from owners of land]:

LORD HASTINGS moved to insert the following: ( ) For all the purposes of the enactments relating to rating and Land Tax, five-sixths and no more of each instalment of an annuity shall be allowed in any year of assessment as a deduction in respect of that year from the gross annual value of the lands in respect of which the annuity is charged.

The noble Lord said: My Lords, this Amendment has not appeared on the Paper before and it raises a point which apparently had not occurred to anybody at an earlier stage, but it would appear on the face of it that as the Bill is drawn rates will be deducted twice over from the tithe-payer. Your Lordships will be aware that he is going to pay rates upon tithe in a fashion in which they were never paid before by reason of the raising of the period of redemption from forty years, as proposed by the Royal Commission, to sixty years, the sixty years having been arrived at for the purpose—I was going to say of enabling the tithe-payer to pay the rates, but perhaps it would be more correct to say of extracting the rates from the tithe-payer. He will be paying rates upon land which is non-agricultural land, and he will also have deducted from him, owing to the method in which the Bill is drawn, a further charge for rates in respect of the period of redemption having been raised from forty to sixty years; so that in the case of the rate and tithe-payer, who will be paying tithe at the rate of £105 on non-agricultural land, it would appear on the face of it that he would be paying rates twice. I put the Amendment on the Order Paper because the point has caused anxiety to some who have not discovered it before, and I hope the Government will be able to explain exactly what is proposed to be done in respect of the case I have outlined.

Amendment moved— Page 18, after line 43, insert the said subsection.—(Lord Hastings.)


My Lords, the noble Lord is quite right in what he says. It certainly does appear on the face of it that there is an injustice here, but I think, on further examination, that the noble Lord will see—and this is possibly why an Amendment has not been moved before to deal with this matter—that his fear is really based on a misunderstanding of Clause 13 (6) of the Bill. The position really is that the noble Lord is suggesting that for ordinary purposes—he did not mention Land Tax but this applies to Land Tax as well—five-sixths and no more of each instalment of annuity should be allowed as a deduction from the gross annual value of the land in respect of which that annuity is charged. This proposal is obviously framed on Clause 13 (6) which provides that five-sixths of the annuity shall be allowed as deduction for Income Tax purposes from the annual value of the land as assessed under Schedule A. The case for the proposal may be that at present, for Land Tax purposes, a deduction from annual value is allowed in respect of tithe rentcharge, and that in future a deduction should therefore be allowed for interest included in the redemption annuity. The noble Lord has mentioned the question of rates, and he desires that it should be done in the case of rates. Actually Clause 13 (6) is purely a matter of machinery, and that is where the misunderstanding arises.

In the case of a redemption annuity, consisting of definite proportions of interest and capital payable to a private person, there would be no need for Clause 13 (6) at all. The landowner who had paid Income Tax under Schedule A on the full annual value of his land would deduct Income Tax from the amount of interest included in the annuity; but the redemption annuity is payable to the Crown, which is not liable to Income Tax and would therefore be entitled to claim repayment of any Income Tax deducted from the interest. In order to prevent the unnecessary work involved in deducting tax from the interest payable to the Crown and a subsequent repayment claim by the Crown, this purely machinery proviso has been put in. I have gone into this Amendment at some length in order to show that there is in fact no real differentiation between that position and the position regarding Land Tax and rates; but there is a further very important point, and that is that the alteration which the noble Lord suggests would, in fact, mean a complete revision of the existing law as regards Land Tax and really it could not be dealt with in this Bill. The proper place, if the noble Lord desires to have the matter raised, would be to get his friends to raise it in another place, although I would not like to suggest to the noble Lord that the proposal will necessarily be accepted.


My Lords, I suspect the noble Earl is right. This is a very intricate and difficult point, and there was not very much time to consider it. We have had an explanation, which I shall not say is satisfactory, but which disables me from following up the Amendment.

Amendment, by leave, withdrawn.

Clause 18 [Ascertainment and registration of owners of land]:


My Lords, the next Amendment, a manuscript Amendment, is purely drafting. The wrong word slipped in.

Amendment moved— Page 24, line 40, leave out (" appropriate ") and insert ("prescribed").—(Earl De La Warr.)

On Question, Amendment agreed to.

EARL DE LA WARR moved, after Clause 32, to insert the following clause:

Limitation of personal liability of trustees, etc. as owners of land.

". In proceedings taken against any person for the enforcement of a personal liability to pay any sum imposed by this Act on that person as being the owner of land, if be proves that the ownership of the land was vested in him in the capacity of a trustee or personal representative, and that his lights of indemnity are, otherwise than by reason of negligence or default on his part, insufficient to provide for his reimbursement in respect of that liability, the court may give such directions for the limitation or release of that liability as the court thinks just and equitable."

The noble Earl said: My Lords, the noble Lord, Lord Cranworth, had an Amendment on the Paper on the Committee stage to deal with the question of the position of trustees, and on that occasion the noble Viscount the Leader of the House told the noble Lord that there was, in fact, a valid point to be dealt with and that on the Report stage he would suggest appropriate words. The words of this Amendment meet the point. They also, I think, meet the point raised by the noble Earl, Lord Donoughmore, as to whether the new clause should not extend to executors as well as trustees. I am glad I can satisfy the noble Earl on that point, at any rate. Another point was raised by the noble Marquess, Lord Lothian, who wished to be reassured that trustees would not one day wake up and find that they were responsible in respect of estates for tithe which they were unable to pay and that they were personally responsible in their own estates for payment of the tithe. I can assure the noble Marquess that such trustees are safeguarded by this proposed clause.

Amendment moved— After Clause 32, insert the said new clause.—(Earl De La Warr.)


My Lords, I beg to thank my noble friend very much for giving us this small grain of comfort. It will remove a sense of apprehension, very real and obviously well founded, from the minds of a body of men of whom it is very desirable there should be a considerable number. With regard to the word "may," in the last line but two of the Amendment, I would like to ask the noble Earl whether I am right in understanding that "may" is all right and is really put there in a legal sense?


My Lords, I think the word "may" was put in merely in order to be polite to the Courts who might not like us putting in "shall."


My Lords, may I ask whether the words "trustee or personal representative" include the word "administrator" in Clause 17 (5)?


My Lords, I should have made it clear that these words include "administrator."

On Question, Amendment agreed to.

Clause 46:


46.—(1) In this Act, unless the context otherwise requires, the following expressions have the meanings hereby respectively assigned to them, that is to say:— agricultural land" means agricultural land as defined in Section two of the Rating and Valuation (Apportionment) Act, 1928, and buildings (including dwelling-houses) occupied together with such land and used primarily in connection with agricultural operations thereon;

LORD HASTINGS moved, at the end of the definition of "agricultural land,"to insert" and includes agricultural property as defined in paragraph (g) of subsection (1) of Section twenty-two of the Finance Act, 1894." The noble Lord said: My Lords, this Amendment is drawn in the same form as on the Committee stage. It was not then pressed because my noble friend the Leader of the House undertook that he would look into the matter and see if there was anything that could be done to meet objections to the way the Bill was drawn. The point can be explained in a very few words. It was at a late stage of the negotiations agreed that non-agricultural land should pay tithe at the prevailing rate of £105 for every £100 of commuted value of the tithe. When I say "agreed," it is quite literally correct both that the representatives of the landowners as a body did agree that this was a proper gesture of friendliness to make to the tithe-owner, and that there was no case for paying less tithe upon non-agricultural land; but it never occurred to those bodies which I have been quoting that there was the slightest risk that land in agricultural centres should be compelled to pay tithe at the higher rate. We had in mind that it would be absurd for Piccadilly, and perhaps less important thoroughfares, to be relieved of tithe on the ground of agricultural pressure, but it did not occur to us that it would apply to the non-derated lands in the rural areas. Unfortunately it does.

For the convenience of the scheme—I quite grant that it is very convenient—lands which are not derated as agricultural lands are taken to be non-agricultural lands. That sounds reasonable, but in fact it is not so reasonable. In the country there is a limited area of land which is not derated as agricultural land, and in almost all, but not quite all, cases it consists of a mansion house, and is in the form of a park, or whatever you like to call it. In some areas the local authority, that is to say, the rating authority, does not give to these lands the benefit of any doubt there may be, and in some areas these lands are not derated. Their owners feel that it is very hard that they should not only be hit by the fact that the local authority does not derate their land as agricultural land, but that what one may term the default of the local authority or the non-complaisance of the local authority causes them now to pay higher tithe as well, so they get caught both ways. It seems only equitable, particularly in view of the fact that this non-agricultural land clause was inserted by way of agreement, that the grievances of this particular small class of the community should be met. For this reason I put this Amendment down, and I hope the Government may find it possible to accept it.

Amendment moved— Page 45, line 29, at end insert the said words.—(Lord Hastings.)


My Lords, I should be very glad if I could support the Amendment which has been moved by the noble Lord, because, owing to his treatment of the subject, he has said what he had to say with great moderation, courtesy and consideration, and it would be a pleasure to be able to fall in with his views on this particular matter. It may not seem to be a very big thing, but there are two reasons why I hold that the House will feel that the Amendment ought not to be made. One is the reason that I put forward last week when I pointed out that it would make the administration of the Bill when it becomes an Act a very difficult matter on the dates which are put down, and almost impracticable. In a sense nothing is impossible, but still it would be very difficult for Queen Anne's Bounty to be ready at the dates at which they are required to be ready.

The noble and learned Lord, Lord Roche, thought I was mistaken in saying that the substitution of a definition in one Act of Parliament, for a definition in another Act of Parliament was not a simple matter. This is not quite so simple. What has to be done first of all is to ascertain what land is derated. This is done by a reference to the rate book, and is not a difficult matter in itself. But the definition in the Bill goes further than that, and says that the lower rate of tithe annuity is to be chargeable on a farmhouse or buildings provided that they are used in connection primarily and mainly with agriculture. Therefore those who have to collect tithes on the 1st of October have to go to each holding where this might apply, and see how far the farm buildings and the farmhouse ought to be brought in so as to be included with the derated part of the land, and then to make calculations accordingly. But the definition which it is proposed to insert comes from the Act of 1894 and includes several other things. It includes parks, it includes gardens which are used for amenity purposes, it includes a mansion house, it includes land which is used exclusively for sporting rights. All these, according to the Amendment, are to be included in the land which is to have the lower rate.

It will be necessary to send to every estate to which this might apply—and there are 300,000 persons from whom tithe is collected. Although in the case of a certain number of them we may know straight away that this question will not arise, still, in the case of a large proportion of them, it will arise. All those persons have to be gone to. Someone has to go with the tithe apportionment and tithe map in his hand, and he has to decide, after inquiry from the person concerned, whether his land is used for agricultural purposes or not. If he finds that it is used for agricultural purposes then the tithe has to be collected at a lower rate in respect of that used for agricultural purposes and the rest at the higher rate. He has then to send the information to headquarters in London, who have to collect it at the rate of £91 11s. 2d. instead of £105. All these things would add much to the work and expense. I think it would be unreasonable, unless there was a very strong case indeed, to ask that this change should be made. It would be extremely difficult to be ready as the parties have to be ready, on October 1, to make their calculations, and before October 31 to put in their claims to the Tithe Commissioners. All that is very difficult to do in the time.

The noble Lord suggests that the reason why this Amendment is to be put in is that otherwise you may be including in the higher rate of tithe land which it was really thought would naturally be included with agricultural land. Is it so in the case of those matters to which I have referred? If any part of a park is used for agricultural purposes—and of course a very large number of parks are—that becomes under the Bill as it stands agricultural land, and no question arises about it on that ground. It will be on the lower rate. But if it is exclusively used for something else, for purely amenity purposes, or as a sporting right or anything of that sort, is it reasonable that the concession which is allowed to agricultural land because it is agricultural land and is used for farming, should also apply to this other land because it happens to be in a part of the country where a good deal of the land is not urban but rural?

As the noble Lord pointed out, there are two Amendments introduced into the Bill which are connected with one another. One is that the land which is not agricultural land shall pay tithe annuity on the higher rate of £105 per £100 commuted value, and the other is that the existing interests should be secured. The money which will come from this concession in respect of the non-agricultural land has been included. It amounts to a certain sum. It has been decided that that shall be divided between the existing interests of incumbents, the existing interests of Ecclesiastical Corporations, the interests of the Clergy Pensions Board. And these calculations have been carefully made. If this definition comes in the difference may not be considerable, but it will still be something more off the tithe-owners. Further calculations will have to be made, and fresh consideration given, and the sum total will have to go in this, that, or the other direction. I submit that at this stage it is not really quite the right thing to impose a further reduction upon the tithe-owners. I do not think there would be very many cases in which there would be any hardship in retaining the definition as it is in the Bill. My impression is that most cases to which it would apply are cases in which there is no question that they should be brought within the higher rate of tithe, and the matter ought to be left to be dealt with by the definition already in the Bill which is the definition in the Derating Act of 1928. On those grounds it appears to me that the Amendment should not be accepted by the Government.


My Lords, this is a point of some importance and I think that the speech to which he have listened from the right reverend Prelate shows that it raises larger issues perhaps than the noble Lord who moved it at first thought. As the noble Lord said, we did start a discussion on this subject in Committee. He did not repeat the points he then made and I do not think it necessary for me to repeat the points I made either, except to say that the essential part of the case against this Amendment really is that we are discussing just a limited section of the problem. Let us be quite clear that so far as any parkland is now used for agricultural purposes it definitely gets remission. What we are discussing is parkland and other property that is not used for agricultural purposes but for amenity purposes. The question raised by the Amendment is how we are to determine whether this land is to be brought in and under what definition. The noble Lord wants a definition which will include it all. We feel that that would be very unfair to the tithe-owner. Not only will this definition bring in parkland, but it will bring in buildings such as mansion houses, it will bring in land primarily devoted to sporting purposes, and it will bring in cottages, the butler's cottage, the chauffeur's cottage, the gardener's cottage. It is going to bring in a very great deal of property that I am quite sure the noble Lord did not think of when proposing his Amendment.

Therefore we feel it is very much fairer and more in accordance with such agreement as has been come to on this point that we should adhere to the definition of agricultural land as laid down in the Derating Act. That is a perfectly clear and simple definition laid down a comparatively short time ago and accepted in its main principles from the very beginning. I quite realise that in some cases there is a certain amount of dissatisfaction as to the way in which local authorities administer that Act, and, if I may venture to say so, I think that is the one point which the noble Lord can really make with some force. But I suggest that if he desires to raise that specific point the proper way to deal with it is by an amendment of the Derating Act, and not by means of this Amendment. This particular point of differentiation between two types of land agricultural and non-agricultural was decided on as a means of making some concession to the Church which it was felt had suffered under the general arrangements. There is no doubt that the Amendment would take away the full effects of that concession. I know that the noble Lord can say quite fairly that this is an unexpected result and that it was never thought of at the time, but at the same time I hope he will realise that this Amendment goes a good deal further and therefore I would ask him not to press it.


My Lords, I think that the noble Earl, even with the help of the right reverend Prelate, has not taken us to the bottom of the difficulty. It may be found yet that my noble friend Lord Hastings was wise in taking a wider view of what is and what is not agricultural land. If you turn to the clause in the Bill you will see that as far as the land is concerned it is, as has been pointed out, to be judged according to whether or not it is derated. The Bill does not say that it is to be land that is derated to-day or not derated to-day. That is where difficulty will come in. Suppose any noble Lord has deer in his park, the chances are that that land will be treated as an amenity park and as a rateable hereditament. If he gives up deer and substitutes sheep the, local authority should in reason, and probably would, transfer that item from the rateable hereditament column to the other column and that piece of land would cease to be rated. To make the point a little stronger, certain noble Lords, to my knowledge, were invited by agricultural committees during the War to plough up their parks and grow wheat. It is reasonable to suppose that when a park is ploughed up for wheat growing at the instance of the national authorities it becomes agricultural land. That may happen again. In other words, unless you take the definition suggested by my noble friend Lord Hastings, you are going to land yourselves in a condition of flux and no one will know where he stands. I think it is best to take the course suggested by my noble friend.


My Lords, I think with the greatest possible respect to the right reverend Prelate that where an injustice is going to continue for sixty years it is not the best argument to lay before your Lordships' House that the righting of that injustice would delay the operation of certain parts of the Bill. However, to leave that point, I think that my noble friend Lord Phillimore made it clear that there will be no certainty in the amount of tithes derivable from this particular source. But I admit the noble Earls point, that this is really one of setting right anything that may be wrong in the Derating Act and ensuring that the local authority shall with complete uniformity implement and operate that Act throughout the country. That is really the strong point, and I am inclined, with the permission of the House, to withdraw my Amendment—on those grounds and on no other. I would therefore beg leave to withdraw.


My Lords, I should like, in just one word, to express my gratitude to the noble Lord for what he has just said. I fully agree, of course, with what he has said as to the need for some reform in the Derating Act in this matter, and I only ask that this may not be done at the expense of the tithe-owners, who have already suffered so severely under the Bill.

Amendment, by leave, withdrawn.

Second Schedule:

Back to