Sitting of 12 August 1909

Preamble
Mr. SPEAKER took the chair at a Quarter before Three of the clock.

PRIVATE BUSINESS.
Shrewsbury Corporation Bill [Lords].— Ordered, That the Shrewsbury Corporation Bill [Lords], be re-committed to the former Committee.
Ordered, That Standing Orders 236 and 237 be suspended, and that the Committee have leave to sit and proceed forthwith.—[The Deputy-Chairman.]

IMPERIAL DEFENCE (NAVAL POLICY).
Copy ordered "of Report of the Sub-Committee of the Committee of Imperial Defence to inquire into certain questions of naval policy raised by Lord Charles Beresford."—[Mr. Hobhouse.]
ORAL ANSWERS TO QUESTIONS.

  Galway County Council (Cost of Extra Police).
  Mr. MOOREasked the Chief Secretary for Ireland if he is aware that the demand made upon the county council of Galway for the cost of extra police amounts to £13,809; that the county council's account is overdrawn to the extent of £20,000; and if the Government intend to remit or modify the amount of their demand?
  The CHIEF SECRETARY for IRELAND (Mr. Birrell): The outstanding claims against the Galway county council for extra police amount to £10,804. I am informed that the council's bank account is overdrawn by over £18,000, but this is no doubt due to the fact that the rates for the half year ending 30th September, which usually amount to about £35,000, are practically all collected in August and September. The answer to the concluding paragraph of the question is in the negative.
  Mr. MOORE: May I ask the right hon. Gentleman, considering that this extra ex-
  632
  pense for extra police has been incurred through the policy of the Government in this county, will he reconsider the matter?
  Mr. BIRRELL: No, Sir.

  Belfast Assizes (Trials for Riots).
  Mr. MOOREasked the Chief Secretary if he will state how many persons were tried at the last Belfast Assizes for riot, assaults on the police, and kindred offences committed within the week ending the 15th July in the neighbourhood of the Falls-road; how many were convicted on such charges; what were the sentences imposed; how many of those so convicted were Protestants; if he is aware that the riots in question were carried on in the Nationalist quarter of the town, in an exclusively Roman Catholic district, and were solely directed against the police without interference from any other party; and if it is proposed to take steps to further strengthen or augment the police force in this part of West Belfast?
  Mr. BIRRELL: Nineteen persons were tried at the last Belfast Assizes for riot in the neighbourhood of Falls-road during the week ended 19th July last. Seventeen were convicted of riot and two of riot and assaults on the police. Fifteen were sentenced to 12 months, and three to eight months' imprisonment with hard labour, while one (a boy) was discharged on his father's bail. I understand that none of those charged were Protestants. The statements in the remaining portion of the question are correct. The responsible police authorities do not consider that there is any present necessity for increasing the police force in West Belfast.

  Orangemen and Hibernians (Caledon, Galway).
  Captain CRAIG (for Mr. Lonsdale)asked the Chief Secretary for Ireland whether he is aware that on the night of 10th July the flag was stolen off Brantry Church, county Tyrone, and that with the view of avoiding disturbance an arrangement was made with the sergeant of police at Caledon that, on condition that Orangemen would refrain from taking their drums past the local Hibernian Lodge, the Hibernians would be prevented from parading past the church and Orange Hall; whether he is aware that this arrangement was honourably kept by the Orangemen but broken by the Hibernians: and whether he has any

  633
  explanation of the action of the police in this matter?
  Mr. BIRRELL: I am informed by the constabulary authorities that a flag was stolen from Brantry Church as stated. This caused some ill-feeling, and the local sergeant of police saw the leader of the Hibernians on the subject, and understood him to promise that his party would not parade past the church or Orange Hall until this feeling had subsided. The Orangemen then agreed not to go near the Hibernian Hall on the 30th ultimo, for which night a drumming parade had been arranged. The leader of the Hibernians, however, denied that he had given the undertaking attributed to him, and the Hibernian party accordingly marched past the church on the 2nd instant, but without any disorder. As the route had frequently been used by both parties the police refrained from using force to prevent the passage of the Hibernians.
  Mr. LONSDALE: Is it not the duty of the police to respect an arrangement come to with the object of preserving the peace?
  Mr. BIRRELL: Well, I really do not know that the police were concerned in this internecine strife. So far as they can, they do their best to see that the peace is preserved, but misunderstandings sometimes arise, even in this House, between Whips and the opposite party.
  Mr. MOORE: Can the right hon. Gentleman explain how it is that when an understanding, honourably acquiesced in by the police, is broken it should invariably be broken by the Nationalist party?
  Mr. BIRRELL: No, Sir, I cannot; neither do I accept the statement as true.
  Mr. CULLINAN: Is it not a fact that the Hibernians had proceeded past this place without any disturbance, and that there was no reason for the interference of the police?
  Mr. BIRRELL: Well, I have answered the question. No disturbance occurred, and I should have thought the matter might be forgotten.
  Mr. MOORE: Inasmuch as the Hibernians were denounced by Cardinal Logue as an irreligious and political body, would it not be well to take that fact into consideration?
  Mr. BIRRELL: Neither the hon. Member nor myself have anything to do with Cardinal Logue.
  Mr. LONSDALE and Captain CRAIGrose—
  Mr. SPEAKER: Order, order. It is making a mountain out of a molehill.

  Congested Districts Board, Ireland (Permanent Officials).
  Mr. MOOREasked the Chief Secretary to the Lord Lieutenant of Ireland if the permanent officials to be appointed on the new Congested Districts Board under the Irish Land Bill will be subject to the Civil Service rules as regards age and superannuation?
  Mr. BIRRELL: The permanent members of the Congested Districts Board will, under the provisions of the Bill as drafted, be paid out of the funds at the disposal of the Board, but their individual salaries will not be borne on the Votes. They would not, therefore, be Civil servants, and would not be subject to Civil Service rules as regards age or superannuation.
  Mr. MOORE: Is it a fact that under the Bill dealing with this matter introduced by the right hon. Gentleman in November last that such officials were to be Civil servants, and subject to their rules; if so, what is the need for the change?
  Mr. BIRRELL: I do not know that that is so. The Bill as at present drafted is in accordance with the answer I have given.
  Mr. MOORE: But the right hon. Gentleman in a former reply to me stated that in the Bill of last November Civil Service conditions would apply?
  Mr. BIRRELL: Another alteration has taken place.
  Mr. MOORE: Can the right hon. Gentleman say why?
  Mr. BIRRELL: No, Sir.

  Firing from Excursion Train, Newry.
  Captain CRAIGasked the Chief Secretary for Ireland whether he is aware that on Sunday evening, 18th July last, on the return of the Hibernians from Dundalk, where they had been attending a demonstration, they fired several shots out of the train when passing Altnaveigh Orange Hall, which is situated about a mile from Newry, convenient to the railway line; whether he is aware that, on the same occasion, shots were also discharged from the train into the waiting-room at Bessbrook Railway Station, and it was only

  635
  by accident that someone was not shot; and whether he can state if the matter was brought to the notice of the police and if any arrests were made?
  Mr. BIRRELL: I am informed by the constabulary authorities that on the occasion in question two shots were fired from an excursion train while passing at full speed near the Orange Hall, outside Newry, and that another shot was fired while the train was leaving Bessbrook Station. No arrests were made and none were possible. The matter was subsequently reported to the police, who examined the part of the station where the shot was fired, but could find no trace of shot or bullet.
  Captain CRAIG: Is there any restriction whatever on the carrying of arms by these Hibernians when they go for their holidays?
  Mr. BIRRELL: No, Sir; I am not aware that there is.
  Mr. CULLINAN: May I ask the right hon. Gentleman whether he will see that when the Orange party are travelling they will not be allowed to discharge firearms in Catholic quarters?
  Captain CRAIG: Is the right hon. Gentleman aware that the Orange party has not fired a shot this year?

  Sedition in India (Gwalior Native State).
  Mr. REESasked the Under-Secretary of State for India whether the Government has any information regarding the measures taken by His Highness the Maharajah Sindhia to stamp out sedition in the Native State of Gwalior?
  The UNDER-SECRETARY of STATE for INDIA (The Master of Elibank): The seditionists made efforts to excite disloyalty to the British Government in Gwalior, but His Highness the Maharajah, who, as the House is aware, is one of the most important loyal and efficient of Indian princes, at once took effective steps to cope with the situation. Thirty-nine persons have recently been tried by Courts of the Gwalior State, apparently as members of a secret society in Gwalior engaged in a conspiracy to use criminal force. Of these 33 were sentenced on the 4th instant to various terms of imprisonment ranging from seven years to three months, two were pardoned, and four acquitted.

  Egyptian State Railways and English Manufacturers.
  Mr. STAVELEY-HILLasked the Secretary of State for Foreign Affairs whether his attention has been called to the complaint of English manufacturers that samples supplied with the tenders for the supply of ironmongery for buildings and furniture for the Egyptian State railways are of French manufacture, and consequently offer difficulties for English manufacturers to work to; and whether he can suggest to the Egyptian Government a method by which English manufacturers shall no longer be under any disability in tendering?
  The SECRETARY of STATE for FOREIGN AFFAIRS (Sir Edward Grey): I have not heard of the complaint to which the hon. Member alludes, but if he will give me particulars I will inquire.

  Bengal Deportations.
  Dr. RUTHERFORDasked whether the Government of India has yet reported to the Secretary of State regarding the nine gentlemen deported from Bengal in December last; and whether he is now in a position to inform the House when these subjects of the King, who have never been charged or tried, shall enjoy their freedom?
  Mr. J. D. REES: Before the hon. Gentleman answers that question, may I ask I him if he is in a position to tell the House to what use these gentlemen are likely to put their freedom when they are allowed to enjoy it?
  The MASTER of ELIBANK: The Secretary of State has not yet received a report from the Government of India on these cases. He is not yet in a position to make any statement as regards the latter part of the question.
  Sir WILLIAM COLLINS: May I ask the hon. Gentleman whether these deported persons have yet been enabled to utilise the powers secured to them under the Ordinance of 1818 for making representations as to the grounds of their deportation by being informed of the grounds?
  The MASTER of ELIBANK: I am afraid I can add nothing to the statement made in this House by the Secretary of State, and also to the statement made in my own speech on the Indian Budget.

  Shiré River, Nyasaland.
  Mr. REESasked the Under-Secretary for the Colonies whether it is the intention of the Government of Nyasaland to maintain in a navigable condition the Shire River between Port Herald and Villa Bocage; whether he is aware that during the dry season barges have practically to dig their way through to Port Herald; whether £4,000 a year is collected in taxes as road and rives dues; and what proportion of this amount is spent on the river between Port Herald and Villa Bocage.
  The UNDER-SECRETARY for the COLONIES (Colonel Seely): The Secretary of State has no recent information as to how this matter stands, but will cause inquiry to be made of the Governor of the Protectorate.
  Major ANSTRUTHER-GRAY: How long will it take to complete the consideration with regard to the magistracy in view of the turbulance?
  Colonel SEELY: That is our difficulty. We do not know the precise nature of the turbulance.

  Tristan da Cunha.
  Major ANSTRUTHER-GRAYasked the Under-Secretary if he can state what is the latest news he has received from Tristan da Cunha as to the condition of the inhabitants; whether it is his intention to appoint a magistrate there; and whether any arrangement can be made for periodical visits of ships to the island?
  Colonel SEELY: Information has been received up to April last, from which it appears that the health of the islanders had not been very good and the attempts to open up trade with the Cape had not so far been successful. Some trouble has been caused by certain turbulent persons on the island, and the appointment of a magistrate is under consideration. Further attempts are being made to open up trade, and, if successful, a vessel will no doubt be able to visit the island at more or less regular intervals.

  Native Labour in New Hebrides.
  Mr. LEVERTON HARRISasked whether British settlers in the New Hebrides have been expressly forbidden to engage native married women; and whether, consequently, large numbers of male native labourers are now lodged in
  638
  compounds in those islands without their wives?
  Colonel SEELY: In reply to the first part of the hon. Gentleman's question, I may refer him to the answer which I gave on Tuesday last to the hon. and gallant Gentleman the Member for St. Andrews Burghs. In reply to the second part, it is expressly provided that the wives of native labourers may accompany their husbands; native labourers in the New Hebrides live on their employers' estates, but not in compounds. The total number of men recruited for employment by British subjects last year was 230.
  Mr. LEVERTON HARRISasked whether French settlers in the New Hebrides are permitted to engage native married women, with the consent of their husbands and under the terms of contract regulated by the New Hebrides Convention?
  Colonel SEELY: I have nothing to add to the answer which I gave on Tuesday to the hon. and gallant Gentleman the Member for St. Andrews Burghs.

  Old Age Pensioner (Walsall District).
  Mr. HAZLETONasked the Secretary to the Treasury whether he is aware that Thomas Greghan, of Newtown, North Walsall, Staffordshire, has been refused an old age pension on the ground of want of proof of age; and whether, seeing that evidence is forthcoming that he was married 51 years ago, the question of granting him a pension will be reconsidered?
  The FINANCIAL SECRETARY to the TREASURY (Mr. C. Hobhouse): No claimant of the name of Thomas Greghan can be traced at Newton in the Walsall district. If the hon. Member will give me additional particulars of the case further inquiry will be made.

  Customs Boatmen's Pension.
  The EARL of RONALDSHAYasked the Secretary to the Treasury whether he will state the special circumstances in the case of the Customs boatmen which induced the Treasury to allow them the privilege of counting their full unestablished service for pension while denying the similar privilege to clerks and assistant clerks in the Statistical Department of the Customs who have complied for years past with the practice laid down by the Secretary to the Treasury, that practice being

  639
  to count for pension any temporary service followed by established service so long as such service was continuous with and similar in character to the pensionable service that followed it?
  Mr. HOBHOUSE: I beg to refer the Noble Lord to the answers which I gave to questions on this subject by the hon. Member for Exeter on 15th July, 28th June, and 27th April last.

  Fishery Research.
  Sir JOHN RANDLESasked the Secretary to the Treasury what is the total amount of money provided from Imperial funds for fishery research through English committees and Irish or Scottish boards; and what percentage of this total reaches the county of Cumberland?
  Mr. HOBHOUSE: The answer is a long one, and, if the hon. Member will allow me, I will circulate it with the unstarred answers.—[See Written Answers this date.]
  Sir JOHN RANDLESasked whether it is intended to carry out the recommendations of the Treasury Committee to form a Central Council for Fisheries on which Ireland and Scotland will each have two representatives; and, if so, will there be representatives of the north-western counties of Cumberland and Lancashire on the council?
  Mr. HOBHOUSE: It has not been found at present possible to carry out the recommendations of the Committee on Fishery Investigations in favour of the establishment of a Central Council for Fisheries.
  Sir JOHN RANDLES: Is the proposal dropped?
  Mr. HOBHOUSE: No, I do not say it is dropped, but it is exceedingly difficult, and for the moment impossible.
  Mr. W. W. ASHLEY: Will the right hon. Gentleman say why Lancashire and Cumberland should bear the whole expense, while other places on the sea board receive a grant?
  Mr. HOBHOUSE: I must have notice of that question, but I cannot admit the allegations contained in it.

  Fine for Trespass.
  Mr. JOHN JOHNSON (for Mr. Burt)asked the Secretary of State for the Home Department whether his attention has
  640
  been called to a case tried before the magistrates at Blyth on 27th July in which H. Collins, J. Malone, J. Kelley, and R. Bolsbridge were charged with trespassing in a hayfield; whether he is aware that the defence set up was that the defendants saw a boat capsising with 12 occupants, and that their sole object in running across the field was to give aid to persons in danger; that a fine of 2s. 6d. each with 6d. damage was imposed; and whether he will take steps to have the fines and costs remitted?
  The SECRETARY of STATE for the HOME DEPARTMENT (Mr. Herbert Gladstone): I have inquired into the circumstances of this case, and I find that a defence upon the lines indicated in the question was set up. The justices, however, who had the whole of the evidence before them, were satisfied that wilful damage had been committed, and that the excuse put forward was untrue. There was no question of anyone being in the slightest danger. In the circumstances, I scarcely feel justified in taking any steps for the remission of the fines or compensation for damage. No costs were imposed.
  Mr. BYLES: Did these men commit an offence by going into the field?
  Mr. GLADSTONE: That is a question of law. I understand there was wilful damage.

  Inspection of Laundries.
  Mr. T. L. CORBETTasked how many laundries have been inspected under The Factory and Workshop Act, 1907, and in how many cases the managers of such laundries have requested that no inmate should be examined except in the presence of one of the managers?
  Mr. GLADSTONE: I understand the hon. Member's question to refer to institution laundries under Section 5 of the Act of 1907. There are 358 of these on the registers of the Department, all of which have been inspected. One hundred and eighty-one of them have made the request mentioned in the last part of the question.

  Prison Commissioners and Contracts.
  Mr. HUDSONasked the Secretary of State for the Home Department whether he is aware that the Prison Commissioners recently tendered for the supply of brushes and brooms to a London gas company; that this tender, being the lowest, was accepted, and thus cut out the

  641
  fair firm employing ordinary labour which previously held the contract; if he will state what steps, if any, the Commissioners took to find out, before tendering, what the ordinary market price for the district was so as not to tender below that price; and whether he will take steps to prevent the Prison Commissioners in future tendering for contracts, in view of the risk involved of undercutting the market prices?
  Mr. GLADSTONE: It is the fact that the Prison Commissioners recently tendered for the supply of brushes and brooms to a London gas company. Out of the eight items included in the tender, the Commissioners received the contract for one only, representing in value less than £30, the contract for the other items being given to private firms. The Prison Commissioners, in tendering, are most careful to fix fair and reasonable prices, and, in this, they have experience to guide them, as well as special inquiries. In view of the great importance which is attached by all competent authorities to the finding of suitable occupations for prisoners, in order that their period of imprisonment may have the reformative effect which is desired, I cannot absolutely prohibit the Prison Commissioners from tendering; but the greatest care is taken, and will be taken, to tender only at fair prices, which will not have the effect of under-cutting market prices.

  Farm Servants' Rights (Scotland).
  Mr. KEIR HARDIEasked the Lord Advocate whether his attention has been drawn to a decision by Sheriff Macaulay Smith, in the Berwickshire County Court, in which it has been held that a farm servant is only free to attend a hiring fair for the purpose of securing employment when he can do so subject to the convenience of the farmer by whom he is employed; and whether, seeing that this deprives the farm servants of Scotland of an immemorial right to attend these fairs which is the recognised method of obtaining employment, he will say whether he proposes to take any, and, if any, what, action in the matter?
  The SOLICITOR-GENERAL for SCOTLAND (Mr. Arthur Dewar): The Lord Advocate has made very full inquiry into this decision and he found that the Sheriff substitute and the Sheriff both accepted the proposition in law that a farm servant is entitled to have the opportunity of seek-
  642
  ing fresh employment by attending a hiring market. But they both held—and rightly held—that this right must be exercised reasonably and with due regard to the interests of the employer. They further found, after hearing and considering the whole evidence, that the servant in this particular case did not exercise his right in a reasonable manner. In these circumstances the Lord Advocate considers that the Sheriffs have correctly laid down the law which regulates hiring fairs in Scotland, and decided on the facts that the servant did not exercise his rights reasonably. He does not consider that the decision deprives farm servants of any right or that any alteration in the law is necessary.
  Mr. KEIR HARDIE: Is the hon. Gentleman aware that these fairs are held only every year, and if the servant is prohibited from attending the fair on that particular day, he is deprived of his chance of finding employment, and was not that the case on this particular occasion?
  Mr. A. DEWAR: I do not think the hon. Member is quite accurate. No doubt the fairs generally occur once a year, but they are held on different days in different places in Scotland; but the real point in this case is that the master had engaged a threshing mill for Monday; the man knew that, but, on Monday night, after these arrangements had been made, he sent for his master and said, "I am going away to-morrow." The master said: "You cannot go"; but the man insisted on going.
  Mr. KEIR HARDIE: Did not this man give his master notice that he was going to the Highland fair on that day, and why did the master, knowing the fair was on, engage the threshing mill for that day?
  Mr. A. DEWAR: I do not know whether the hon. Member read the case. If he did, he would see he is wrong in his facts. The master was informed at seven o'clock on Monday evening, but the threshing mill was put in earlier. The servant might have given the information a week before. The hon. Member will agree with me that the sheriff was in a better position to know the facts than he or I.

  Torpedo-boat Construction (Apprentices).
  Mr. STEPHEN WALSH (on behalf of Mr. T. F. Richards)asked the First Lord of the Admiralty whether he can now state

  643
  the result of the inquiry into the number of apprentices being employed by Messrs. Cammell, Laird, and Company, Birkenhead, in the construction of torpedo-boat destroyers?
  The FIRST LORD of the ADMIRALTY (Mr. McKenna): My hon. Friend the Member for Birkenhead has also made representations to me on this subject, and inquiry is being made of the firm. I will communicate with both the hon. Members interested in the matter as soon as I know the result.

  Losses at Sea (Kelway Sound-locating System).
  Mr. CROOKSasked the right hon. Gentleman whether, in view of the numerous losses in fog, by stranding, collision, and delay to naval and mercantile shipping on the South and South-East Coasts of England, he will cause the withdrawal of the Admiralty restrictions to the use on those coasts of the Kelway sound-locating system, whereby it is claimed that such losses may be prevented or considerably reduced in number?
  Mr. McKENNA: I know of no Admiralty restrictions on the use of the invention in question on the coast. The provision of sound signals on the coasts of the United Kingdom is not controlled by the Admiralty.
  Mr. CROOKS: Having regard to the extreme importance of this invention, can the right hon. Gentleman tell me who the authority is that is preventing this system being put into operation?
  Mr. McKENNA: The authority is Trinity House, but I must not be understood to say that Trinity House has stood in the way.

  Royal Arsenal, Woolwich.
  Mr. CROOKSasked the First Lord of the Admiralty whether he has overlooked the findings of the Conference appointed by the Government in 1907 in order to consider whether any article not now made in the Royal Arsenal, Woolwich, could appropriately be made there; whether he is aware that page 9, paragraph 38, of the Report of this Conference stated that heavy gun-mounting work could be carried out there with slight modification of the equipment in the Royal Carriage Department, and that full consideration should be given to the resources of the
  644
  Arsenal in distributing orders; and, seeing that the superintendent in his evidence said they could do this work economically, does he now see his way clear to place an order at the Arsenal?
  Mr. McKENNA: The reasons which, in 1907, led to not adopting the proposals contained in this Report still hold good. It is not at present intended to place orders with the Royal Arsenal for heavy gun-mountings, but every endeavour is made to place as many orders as practicable with that factory.
  Mr. CROOKS: I am not concerned about the orders. What I am asking is whether the right hon. Gentleman will use the facilities which are at his own service rather than go outside? You are neglecting your own opportunities.

  City and South London Railway (Conciliation Board).
  Mr. WARDLEasked the President of the Board of Trade whether any representations have been made by the employes to the City and South London Railway asking for the formation of a conciliation board; if such a board is to be formed; and, if not, can he state the reason for the delay.
  The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. H. J. Ten-nant): As I stated in reply to a question by the hon. Member for Newcastle on 20th May last, a request for the formation of a conciliation board was received from the employes on the City and South London Railway. The Board communicated with the railway company, and received a reply of which I am forwarding the hon. Member a copy. No further representations have since been made to the Board of Trade, or, I understand, to the railway company.

  London and Brighton Railway (Length of Passenger Trains).
  Mr. WARDLEasked the President of the Board of Trade whether his attention has been called to the danger to the travelling public arising from the length of trains under the charge of one guard on the London, Brighton, and South Coast Railway; whether there is any regulation limit to the length of a train in charge of one guard; and whether, in the event of there being no such limit, he will take steps to secure powers to fix such a limit or endeavour to make an arrangement with

  645
  the company by which trains beyond a certain specified length shall be under the charge of two guards?
  Mr. HUDSONalso asked the President of the Board of Trade if his attention has been called to the length of passenger trains composed of from 20 to 25 vehicles, and in some cases of more than 25 vehicles, worked by only one guard on the London, Brighton, and South Coast Railway; and whether his Department has power to fix or suggest any limit to the number of vehicles which shall compose one train carrying passengers as a means of safety to the travelling public and the men working the trains; and, if so, what action he proposes to take in the matter?
  Mr. TENNANT: The railway company inform me that trains on their line which are worked by one guard are those calling at only one or two stations or non-stop trains, the number of vehicles averaging, as a rule, 16 or 18, and occasionally during busy times as many as 20 or 21. The company state that in deciding whether one or two guards shall be employed they have regard mainly to the amount of station work to be performed, and that they are unaware that their system is different from that of other railway companies in the United Kingdom. The Board of Trade have no regulation on the subject, and I am advised that there is no good reason on grounds of safety for requiring the employment of more than one guard.

  Trade and Navigation (Monthly Returns).
  Mr. S. ROBINSON (for Mr. Chiozza Money)asked the President of the Board of Trade, with reference to the monthly Returns of Trade and Navigation of the United Kingdom, if he can see his way to introduce into the summaries of imports and exports a further classification of manufactured articles, dividing them into, first, partly or wholly manufactured articles mainly for use by manufacturers, and, second, wholly manufactured articles mainly for retail consumption?
  Mr. TENNANT: I will refer the suggestion contained in my hon. Friend's question to the Departmental Committee of the Board of Trade and the Customs, which meets annually to consider proposals for alterations in the form and scope of these Returns. The next meeting of the Committee will take place during the autumn.
  Mr. HORATIO MYER: Will the right hon. Gentleman also recommend the inclusion in this compilation of goods that cannot be manufactured into anything else?
  Mr. TENNANT: I must consider that. I should have thought that goods which cannot be manufactured into anything else ought to be considered wholly manufactured.

  FINANCE BILL.

    VALUATION RETURNS (FREEHOLD GRAVE).
    Mr. STAVELEY-HILLasked the Chancellor of the Exchequer whether the owner of a freehold grave would be required to make valuation returns under the provisions of the Finance Bill, which require a complete valuation of all land?
    Mr. HOBHOUSE: If I may reply by a misquotation—de mortuis non curat lex.

    INCOME TAX (TEMPORARY CLERKS).
    Mr. HUGH BARRIEasked the Chancellor of the Exchequer whether it is proposed to aid in the carrying out of the Budget proposals as regards Income Tax by employing temporary clerks in surveyors' offices?
    Mr. HOBHOUSE: My right hon. Friend is not aware of any proposal of the kind referred to by the hon. Member.

  Crown Lands (New Leases).
  Mr. STAVELEY-HILLasked the Chancellor of the Exchequer whether his attention has been called to the practice of the Commissioners of Woods, Forests, and Land Revenues only to grant in certain cases new leases to tenants of Crown lands on condition that a largely increased annual rent is paid, a large fine is agreed to be paid, and considerable sums spent on building; and whether, having regard to the views of the Government upon this system, he can say what steps it is proposed to take to amend this procedure of letting Crown properties.
  Mr. HOBHOUSE: My right hon. Friend is aware of the practice of the Commissioners of Woods in granting new leases. That practice is in accord with the provisions of the Acts relating to the management of the Land Revenues of the Crown, and it is not proposed to alter it.
  Mr. JOYNSON-HICKS:Is it not a hardShip on the tenant to have to pay upon the commercial value?
  Mr. HOBHOUSE: If the hon. Member had been in the House yesterday at Question-time he would have known that the valuers of the Crown have to make a declaration that the value they put upon the property is the value of the day. I cannot see any hardship upon the tenant paying upon the commercial rate.
  Mr. JOYNSON-HICKS: Then what hardship is there on the tenant paying upon the commercial value under an ordinary landlord?
  Mr. SPEAKER: That question does not arise.

  Export Coal Duty.
  Mr. FELLasked the Chancellor of the Exchequer what would have been the revenue which would have been received from the Export Duty on coal if it had not been taken off during each of the past three years, and supposing such export had not been affected by such duty?
  Mr. HOBHOUSE: Under the conditions specified the revenue that would have been derived from the Export Duty on coal during the years 1906 to 1908 inclusive is estimated at:—

  £

  Year 1906

  …

  …

  …

  2,500,000

  year 1907

  …

  …

  …

  3,150,000

  year 1908

  …

  …

  …

  3,100,000

  Mr. FELL: £8,000,000 or £9,000,000? Would that not be the amount required for the construction of "Dreadnoughts"?
  Mr. KEIR HARDIE: Can the right hon. Gentleman say what the reduction in wages will be on the East Coast of Scotland?
  Mr. HOBHOUSE: It is impossible for me to answer questions on these hypothetical details.
  Mr. LEVERTON HARRIS: What is the amount of the fall in the miners' wages since this tax was taken off?

  Small Houses (Committee of Surveyors).
  Mr. FELLasked the Chancellor of the Exchequer if he will consider the advisability of referring to a small committee selected from the principal surveyors in the country the question of the cheapest method of providing funds for the erection of small houses; and whether the rents charged for leasehold houses are less than those charged for freehold houses, and generally which system will provide the best accommodation for tenants at the lowest rent?
  Mr. HOBHOUSE: My right hon. Friend will take this suggestion into consideration.

  State Sick Fund.
  Mr. LEVERTON HARRISasked the Chancellor of the Exchequer whether, in view of the fact that the Government are going to establish a Sick Fund and pay probably four millions towards it, and would give a million a year towards insurance against unemployment, he could say when legislation to give effect to these promises would be introduced?
  Mr. HOBHOUSE: No legislation of this kind will be introduced during the current Session.

  Surveyors of Taxes (Clerical Staff).
  Mr. HUGH BARRIEasked the Chancellor of the Exchequer what steps are being taken to carry out the establishment of the clerical staff of the surveyors of taxes; and whether these are being recruited from boy clerks, local and registered?
  Mr. HOBHOUSE: The Treasury have sanctioned the establishment of 200 out of the 629 clerks employed in the Tax Surveys, and 199 of them have actually been placed on the Establishment. The surveyors' unestablished clerical staff is recruited from Civil Service boy clerks and local boy clerks already in surveyors' offices; failing a sufficient supply of qualified men from these sources then from Civil Service boy clerks from other Departments, and occasionally, when none of these are available, from outside sources.

  Civil Service Examinations (Intermediate Scheme).
  Mr. HUGH BARRIEasked the right hon. Gentleman whether he is aware that at the last examination but one for posts under the intermediate scheme, where there were 27 vacancies for posts in other Departments and one vacancy for an assistant surveyorship of taxes, the Civil Service Commissioners had to go down as far as the sixtieth candidate who qualified before they could get one to accept the assistant surveyorship of taxes, and whether he will cause an inquiry to be made into the complaints of the surveyors of taxes as to the state of pressure of work that results in such difficulty to get candidates to accept the positions in the Tax Department?
  Mr. HOBHOUSE: The facts are not as stated in the first part of the question, and the second part does not therefore appear to arise.

  Questions to Ministers.
  Captain CRAIGhad a question on the Paper asking the Prime Minister whether he will make arrangements to ensure the regular attendance of Ministers at Questions.
  The HON. MEMBER: I shall not put this question now, because there has been sc much improvement since it appeared on the Paper.
  The PRIME MINISTER (Mr. Asquith): On behalf of my colleagues and myself, may I thank the hon. and gallant Member for his quite unsolicited tribute.

  Chantrey Bequest Trust.
  Mr. MIDDLEMOREasked the Prime Minister whether he will consider the advisability of introducing legislation or otherwise dealing with the Chantrey Bequest Trust, in view of the dissatisfaction that has been felt at the manner in which that trust is administered, and of the fact that the walls of a building which is national property is being used to exhibit pictures, many of which the trustees of the trust in question have purchased from themselves?
  Mr. HOBHOUSE: Any legislation on the subject of the Chantrey Bequest would appear to be of a controversial character, and I doubt therefore whether it would be advisable to attempt it in view of the terms of the original bequest. With regard to the latter part of the question, I wish to point out that the House of Lords Committee in 1904 distinctly stated their belief that there is no ground for any imputation of corrupt or interested motives against the trustees of the bequest.
  Mr. MIDDLEMORE: I understand, then, that the Government are able to do nothing?
  Mr. HOBHOUSE: They are not inclined to do anything.
  Mr. LEIF JONES: I should like to ask whether the Government could not give to the trustees of the Tate Gallery some power in regard to the selection of the pictures they hang there—
  Mr. SPEAKER: The hon. Member should give notice of that question.

  Procedure.
  Lord ROBERT CECILasked the Prime Minister when he proposes to move the appointment of a Committee to consider the Procedure of this House?
  The PRIME MINISTER: I am afraid that it would be difficult at this late period of the Session to secure the regular attendance of those Members whom, I am sure, that the House would wish to serve on a Committee of this character, and I propose accordingly to defer its appointment to next Session. The interval will enable the House to judge of the effect of the recent Amendment of the Standing Orders upon the acceleration and general conduct of business.
  Captain CRAIG: May I ask the right hon. Gentleman whether his phrase, "the late period of the Session," indicates that the Session is now drawing to a close?
  The PRIME MINISTER: Yes, I hope so.
  Lord R. CECIL: Will the right hon. Gentleman carefully consider whether it would not be desirable, at any rate, to set up the Committee this Session, even if it does no work? I quite recognise there may be a difficulty in its doing work, but this is a Session when one does not know what may happen next Session.
  The PRIME MINISTER: I will consider it.

  Housing, Town Planning, etc., Bill.
  Lord ROBERT CECILasked when the Committee stage of the Housing, Town Planning, etc., Bill will be taken?
  The PRIME MINISTER: I am afraid that I cannot at the moment say when the Committee stage of this Bill will be taken.
  Mr. J. C. WEDGWOOD: May I ask whether, in view of the change that the proposal for a complete valuation will make in the Housing and Town Planning Bill, the Bill itself cannot be postponed until next Session, when we can take advantage of this valuation?
  The PRIME MINISTER: No, Sir.

  Sittings of the House.
  Mr. F. B. MILDMAYasked the Prime Minister whether, in view of the fact that the courts of law are no longer in session, he will consider the desirability of

  651
  arranging that the House shall meet for business at an earlier hour of the day, as an alternative to sitting throughout the night?
  The PRIME MINISTER: I am sorry that I cannot accede to the suggestion of the hon. Member.

  Aldershot Command (Infantry Battalions).
  Mr. W. W. ASHLEYasked the Secretary of State for War what was the establishment in non-commissioned officers and men of the infantry battalions of the line stationed in the Aldershot Command on 31st July; and what was the actual strength on that date?
  The SECRETARY of STATE for WAR (Mr. Haldane): The figures for the rank and file are as follows:—

  Establishment.

  Strength.

  12,960

  13,025

  Mr. ASHLEYasked how many noncommissioned officers and men serving in the infantry battalions of the line in the Aldershot command were under 20 years of age on 31st July?
  Mr. HALDANE: The figures for the rank and file amount to 5,437.
  Mr. ASHLEY: Do I understand there are 5,000 odd men under 20 out of the total?
  Mr. HALDANE: I should imagine they include men of 18 years.
  Mr. ASHLEYasked what was the establishment and strength in non-commissioned officers and men of the Royal Engineers serving in the Aldershot Command on 31st July; and what number were under 20 years of age?
  Mr. HALDANE: The figures for the non-commissioned officers and men, excluding 36 trumpeters, buglers and boys, are as follow:—

  Establishment.

  Strength.

  under 20 years of age

  1,714

  1,440

  183

  Mr. ASHLEY: As these are men who will form part of our striking force, how can they go anywhere at a moment's notice?
  Mr. HALDANE: I suppose the hon. Member knows there is such a thing as the Reserve?
  Mr. ASHLEY: Is our striking force any use without calling out all our reserves?
  Mr. HALDANE: Of course, it never was.

  Commander-in-Chief in the Mediterranean.
  Mr. ASHLEYasked what are the developments in organisation which have caused the position of High Commissioner and Field-Marshal Commanding in-Chief in the Mediterranean to assume increased importance, and whether all troops outside the British Isles and India will be included in the command; and, if not, what countries are excluded?
  Mr. HALDANE: The result of the Imperial Defence Conference has been to show that an opportunity exists for a better and more comprehensive organisation of the military forces of the Crown wherever they may be stationed. Without going into details, it has become evident that there is more work to do locally than can be done by the authorities at headquarters, including the Inspector-General of Forces. It is therefore important that the various sub-divisions of the problem of Imperial Defence as a whole should be studied on the spot by officers of high standing and wide experience, who have time at their disposal fully to consider the questions involved. Moreover, in the case of the Mediterranean command, there is the inspection of the regular forces throughout Africa, and the giving of military advice to the local authorities. It is not possible at present to foresee or define the extent to which such duties may expand in the future, but the Defence Conference has so modified the situation that large possibilities of work and organisation are opening themselves up. All troops outside the British Isles and India will not be included in the Mediterranean command, the duties and limitations of which I have already indicated in general terms.
  Mr. ASHLEY: Are we to understand this command is to have the whole of the troops in Africa under its power instead of having only the Mediterranean, as in former years?
  Mr. HALDANE: The hon. Member cannot have listened to what I have said. I was referring to the work of inspection. That was the expression I used. This Commander-in-Chief will inspect the Regular Forces.
  Mr. ASHLEY: Do I understand Lord Kitchener will inspect the forces in South Africa?

  National Grants for Agricultural Purposes.
  Mr. B. STANIERasked the hon. Member for South Somerset, as representing the President of the Board of Agriculture, if he can give the sums voted for agricultural education in the following countries: Great Britain, Ireland, France, Germany, United States, and Denmark; and what proportion this is to their respective populations?
  The TREASURER of the HOUSEHOLD (Sir E. Strachey): The possibility of making a comparison of the nature suggested was considered by the recent Departmental Comimittee on Agricultural Education, and information was obtained by them as to the condition of agricultural education in some thirty countries. The Committee, however, reported that they had designedly refrained from printing the figures as they were of opinion that, owing to the different circumstances of the countries in question, the figures were not directly comparable. The Board agree with the conclusion at which the Committee thus arrived.
  Mr. STANIERasked the hon. Member for South Somerset if he can give the amount voted for agricultural purposes by the following Governments: Great Britain, Ireland, France, Germany, United States, and Denmark; and what proportion this is to their respective populations?
  Sir E. STRACHEY: The conditions vary so considerably in the countries named that any figures which we could give as to the expenditure incurred for agricultural purposes would not be in any way comparable. An article on "State Aid to Agriculture in Foreign and Colonial Countries" was published in the "Transactions of the Highland and Agricultural Society of Scotland" for 1908, which may, however, be of interest to the hon. Member in this connection.
  Mr. G. L. COURTHOPE: Will not the hon. Gentleman give the figures asked for, quite irrespective of whether they are comparable or not?
  Sir E. STRACHEY: I am informed they would be of no use.
  Sir FRANCIS CHANNING: Is not this a new departure on the part of the Board of Agriculture? We have had other similar Returns from the Board of Agriculture before, and I would ask the hon. Gentleman to reconsider the question.
  Sir E. STRACHEY: I will certainly reconsider the question, but these figures would not compare with the figures already given.
  Mr. STANIER: If I put the question down again, would the right hon. Gentleman see his way to give the figures asked for?
  Sir E. STRACHEY: I can only inform the hon. Member that the Board have gone very carefully into this matter and say the figures would be of no value.
  Mr. J. CULLINAN: Will the hon. Gentleman, in reconsidering the question, bear in mind that to give the proportion of expenditure to population would be most misleading?
  Mr. COURTHOPE: May I ask on what ground the hon. Gentleman says the figures are of no value?
  Sir E. STRACHEY: They cannot compare them owing to the different conditions of agriculture in the various countries.

  Red Water in Cattle.
  Mr. STANIERasked the hon. Member for South Somerset whether he can give the number of cases of red water in cattle reported in 1907 and 1908; if he has any official information showing that the University of Cambridge has discovered a drug which will destroy the disease; and, if so, will the treatment be fully described by the Board?
  Sir E, STRACHEY: Red water is not scheduled as a disease under the Diseases of Animals Acts, and no information is available as to the number of cases that occur. The Board are not in a position at present to give official information as to the treatment of affected animals with the drug to which the hon. Member refers, but the subject has for some time past been engaging the attention of their veterinary officers.
  Mr. STANIER: This is of great importance both to this country and South Africa and other Colonies. Would the Board take it up and go into the matter?
  Sir E. STRACHEY: I quite agree it is a matter of importance, but the funds at the disposal of the Board of Agriculture are not sufficient. We hope, however, when the Finance Bill passes to get these funds.

  South Africa Bill (European Descent).
  Mr. RAMSAY MACDONALDasked the Under-Secretary for the Colonies what meaning the Government attaches to the words of European descent used in the South Africa Bill [Lords]; whether the meaning of the words was discussed with the official representatives from South Africa, and with what results?
  Colonel SEELY: The term European descent has been used in various Acts of Parliament passed by the Legislatures of the South African States and in official documents used in this' country. There was a judicial decision in the Transvaal in 1905 as to the interpretation of the word "white" which was regarded as substantially identical with the term of "European descent," and administrative decisions have been given in this country, but it is not possible to state in precise terms what exact meaning will be attached to the words in the Bill, which may possibly become the subject of judicial decision. I would refer my hon. Friend to the report of W. P. Swarts, A. Swarts, and D. Appel versus the Pretoria Town Council, T.S., 1905, 621, to regulations for entry of naval cadets (Monthly Naval List for July, page 856), to Army Form E.536, and to "Regulations under which Commissions in the British Army may be obtained by Officers of Colonial Military Forces," page 15, note (e). The reply to the last part of the question is in the negative.
  Mr. RAMSAY MACDONALD: May I ask whether, in the event of a judicial decision in this matter, there will be an appeal to the Privy Council?
  Colonel SEELY: That is a matter of law, which is made plain, I think, in the South African Bill, but I presume that would be the case. I quoted from similar words in our own official documents, because it seems quite possible that ultimately the question might come before the Judicial Committee of the Privy Council here.
  Mr. W. P. BYLES: Is a person with only one European parent entitled to claim to be of European descent?
  Colonel SEELY: Everybody has two parents. This question is one of great difficulty, and I cannot say what the decision would be in such a case. It is not clear, from cases already decided, how many parents are required to establish the qualification for European descent.

  Post Office, Collinstown.
  Captain CRAIGasked the Postmaster-General whether he is aware that the Collinstown Post Office is being fixed, after all, in the pig-sty outside the town; and whether he intends to take action in the matter?
  The POSTMASTER-GENERAL (Mr. Sydney Buxton): The post office will not be placed in that portion of the premises which the hon. Member describes as the pig-sty.
  Captain CRAIG: Is it not the fact that a much better site was offered in the village—one which won the Leinster Cup for the best cottage in the distric—whereas this pig-sty is a long distance from the village. Why was the site refused, and people thereby compelled to travel a quarter of a mile beyond the village on bad road?
  Mr. BUXTON: There was a great deal of difficulty about the site, but we have done our best. The post office has nothing to do with the pig-sty.
  Captain CRAIG: Were not two cottages offered at a rent of £5 10s. a year? Surely the post office could afford that.
  Mr. LEIF JONES: Cannot the Department find some buildings in Ireland other than public-houses and pig-sties in which to place post offices?

  Telegraph Messengers (Conditions of Employment).
  Mr. HILLSasked whether any increase in the proportion of telegraph messenger boys provided with permanent employment in the Post Office has taken place since the investigation conducted for the Royal Commission on the Poor Laws; and what was the total number discharged during 1908?
  The HON MEMBERalso asked if the suggestion made by the investigator to the Royal Commission on the Poor Laws, Mr. Cyril Jackson, that the length of the messengers' period of service should be increased so as to prevent the necessity for discharges has been considered; and what valid objection is there to such readjustment as would put the boys in the position of apprenticeship, so that, as in the skilled trades, only such numbers are admitted as will supply the adult service?
  Mr. BUXTON: As the hon. Gentleman is aware, the difficulty which confronts the

  657
  Post Office in regard to their boy messengers—to which I have more than once called public attention—arises from two facts. On the one hand, the public increasingly demand services of a nature which is suitable for boys. On the other hand, under an arrangement of many years' standing, made by the Government of the day, half the postmen and assistant postmen places have to be allocated to ex-soldiers or ex-sailors, instead of being available for the boy messengers. This, unfortunately, involves our parting each year with a considerable number of boys, as there are not sufficient openings in the Post Office service available for which they would be suited. The total number of boys so discharged during the year ended 31st March last was 4,300. The proportion of boy messengers who are provided with permanent employment in the Post Office is steadily increasing, and arrangements have recently been made whereby further openings to such employment will be available for them. The reason for parting with the boys at 16 instead of keeping them to a later age is that it appears easier for them to obtain outside employment at that age than if kept to a later age. The suggestions made by the Royal Commission and by others have received, and do receive, consideration; and I have lately been reviewing the question afresh, as I should much like to see my way still further to reduce the number of boy messengers whose services we are obliged to dispense with.
  Mr. HILLSasked how many places in the various departments of the Post Office were filled by open competition during 1908; what reason is there to prevent the messenger boys being trained for these posts; what care is taken to obtain boys suitable for such training; and is the number stated by the Postmaster-General in his Memorandum to the Royal Commission on the Poor Laws to be discharged for idle and unsatisfactory habits due to bad selection at the beginning or to the effects of the messenger service?
  Mr. BUXTON: The number of posts filled by open competition in the Post Office in 1908 would not assist the hon. Member, since a very large proportion of these are filled on qualifications entirely beyond the reach of telegraph messengers. Every care is taken to obtain boys of good character and some education; but it would not be feasible to recruit telegraph
  658
  messengers on qualifications high enough to ensure their usefulness in widely different employment later in life, and to enable the superior appointments from being recruited from them exclusively. The number of places open to them by limited competition has of late been increased. As regards the last sentence of the question. I do not for a moment admit that the selection of telegraph messengers is careless or that the effects of their employment are bad.

  Great Eastern Railway (Liability for Blind Travellers).
  Mr. WARDLE (on behalf of the hon. Member for Sunderland, Mr. Summerbell)asked the President of the Board of Trade if the Great Eastern Railway Company are now compelling blind people to sign a document freeing the company from all liability as to any injury or damage while travelling on the railway, and also to provide a guide to see them safely in and out of the train, and, failing the latter provision, the company may refuse them permission to travel; and, if so, what action, if any, it is proposed to take in regard to the matter?
  Mr. TENNANT: The form of agreement which the company at present require blind passengers to sign only purports to relieve the company from liability for accidents arising from the passenger's defective sight. The requirement as to guides is as stated by the hon. Member. The Board of Trade have had this question under consideration for some time, and they have now informed the company that, in their opinion, blind passengers might reasonably be allowed to travel unaccompanied at their own risk.
  Mr. P. SNOWDEN: Is it not the fact that by this agreement the company ask to be relieved of all liability for accidents to blind travellers?
  Mr. TENNANT: No, I understand they only ask to be relieved in the case of accidents arising from the passenger's defective sight.
  Mr. SNOWDEN: I think if the hon. Gentleman will refer to the agreement he will find it is not so.

  Territorial Force, Salisbury Pin in (Fatal Disaster).
  Captain CRAIGasked the Secretary of State for War, in regard to the report of

  659
  a serious accident at Salisbury, involving the death of seven Territorials and injuries to 20 others, if he had any statement to make to the House?
  Mr. HALDANE: I know nothing of this very unfortunate and sad occurrence, except from the headlines of the papers contents bill. I have telegraphed for information, but have not yet received any reply. If the report is true it is a very serious and deplorable thing.

  DEPUTY-CHAIRMAN OF WAYS AND MEANS.
  Lord ROBERT CECIL: I desire to give notice that on an early day I will call attention to the conduct of the Deputy-Chairman of Ways and Means in his official position, and move a Resolution.

BUSINESS OF THE HOUSE.
Mr. BALFOUR: Perhaps the Prime Minister can tell us what his views are with regard to the course of public business in the immediate future?
The PRIME MINISTER: The Government think it will be for the convenience of the House if we postpone till Tuesday next the consideration of the Report stage of the Finance Resolution passed yesterday which appears as the first Order today, and thus enable the time which might be occupied by the Resolution to be entirely devoted to Clauses 13 and 14 of the Finance Bill, which should pass at today's sitting. On Monday, the 16th, we propose to get the Second Reading of the South Africa Bill. On Tuesday the first Order will be Report of the Finance Resolution, and we shall after that is disposed of resume the Committee stage of the Finance Bill. Wednesday also will be given to that Bill. On Thursday we hope to take Report and the Third Reading of the South Africa Bill. The business for the following Friday will be announced early next week.
Lord ROBERT CECIL: Does the Prime Minister contemplate finishing the Committee stage of the Finance Bill next week?
The PRIME MINISTER: I am not sanguine enough to think that.
Mr. BALFOUR: Seeing that we are to take the omission of Clause 12, which
660
raises points of very great importance, the whole of Clause 13 and the whole of Clause 14 to-night, may I ask the Government whether, under these circumstances, they can, with decency and propriety, proceed at noon to-morrow with the Third Reading of the Appropriation Bill?
The PRIME MINISTER: Clause 12, as everybody knows, is going to be postponed or omitted, whatever the precise form may be, in order that at a later stage a different proposal may be submitted to the Committee. Clause 13 is one which raises very narrow, if any controversy at all, and therefore I should imagine that most part of the sitting would be devoted to Clause 14, which I should hope would be disposed of. We attach great importance to the passing of Clause 14 this week. If it turns out to be impossible—I hope it will not be —then I am afraid we shall be confronted with the unwelcome necessity of a Saturday sitting.
Mr. AUSTEN CHAMBERLAIN: May I ask the Prime Minister whether he will try to avoid for the future the unfortunate practice of varying at the meeting of the House the business which he has announced the clay before would be the first Order? He announced yesterday that he would take the Report stage of the Finance Resolution to-day.
The PRIME MINISTER: No.
Mr. AUSTEN CHAMBERLAIN: If the right hon. Gentleman says "No," of course I will not pursue the matter.
The PRIME MINISTER: I thought it was a private undertaking, but I am always most anxious to preserve both private as well as public undertakings. I did not announce to the House that we should take it to-day. It is only for what I believe to be the general convenience that I am postponing it till next Tuesday.
Mr. AUSTEN CHAMBERLAIN: If you will allow me, Sir, I should like to say I regret that it was a confidential communication. I thought it was given for the information of myself and my Friends. Otherwise I should not have mentioned it.
Mr. E. G. PRETYMAN: May I say that I do think it is somewhat unreasonable for the Government to suggest—
Mr. SPEAKER: Order, order. That is not a question.
Mr. PRETYMAN: I apologise, Mr. Speaker; I forgot I ought to put it in

661
the form of a question. May I ask the Prime Minister whether he really thinks it is reasonable and fair to ask us, in view of what has passed in the course of business during the week and to-day and the hours we have sat, and considering particularly the character of Clause 14—it is within the knowledge of the whole House that it is the most important clause of the whole Bill—and that a very large number of Amendments, also of the highest importance, have been postponed till it is reached, and we cannot enter upon it for a considerable time—it is not reasonable to suggest to the House that we should finish it?
Mr. SPEAKER: The hon. Gentleman is making a speech, not asking a question.
The PRIME MINISTER: Perhaps, Sir, I may be allowed, by the indulgence of the House, to say, not by way of making an answer to the hon. Gentleman, but by way of supplementing what I have already said, that it is the view of the Government that it is essential that Clause 14 should be passed this week, and I do not think there is any reason why, with fair discussion, it should not be passed to-night; but perhaps I may throw out a suggestion, if I may, for the consideration of hon. and right hon. Gentlemen opposite, and it is this, if it turns out to be impossible within a reasonable time, after fair discussion, to pass Clause 14 to-night, we might take it tomorrow, after the two Orders, which it is essential for the Government to get, namely, the third reading of the Appropriation Bill and the third reading of the Public Works Loans Bill. Neither of them will, I think, take much time, and if hon. and right hon. Gentlemen opposite prefer to give us the remainder of to-morrow, after these two Orders are disposed of, for the discussion of this clause—[Cries of "Oh!"]—I am only throwing this out as a suggestion; I am not pressing it upon hon. Members in the least degree, and we all want to obviate, if we can, the necessity for a Saturday sitting—if hon. and right hon. Gentlemen would be disposed to devote the remainder of the sitting tomorrow to the further discussion of Clause 14, so that we could get a Division upon it at the close of the sitting, that is a course we should be prepared to adopt.
Mr. CATHCART WASON: Would that mean the suspension of the Five o'clock Rule to-morrow?
The PRIME MINISTER: No.

PRESENTATIONS OF BILLS.
Punishment of Offenders—Bill to mitigate the Law with regard to the punishment of Offenders; and for other purposes connected therewith.—[Mr. Luttrell.]
Payment of Fines, etc.—Bill to amend the Law with regard to the payment of Fines, Damages, and Costs, and to imprisonment in default of payment thereof, and for other purposes connected therewith.—[Mr. Luttrell.]
Presented and read the first time. (To be read a second time upon 19th August.)

FINANCE BILL.
Considered in Committee [18th Day].
[Mr. CALDWELL, the Deputy-Chairman, in the Chair.]
(IN THE COMMITTEE.)

FINANCE BILL.

  Clause 12.—(Mineral Rights Duty.)
  (1) There shall be charged, levied, and paid for every financial year in respect of the capital value of minerals a duty, in this Act referred to as a Mineral Rights Duty, at the rate of a halfpenny for every twenty shillings of that capital value.
  (2) For the purposes of Mineral Rights Duty, the capital value of the minerals shall be taken to be the value adopted as the original capital value of those minerals, or where the capital value of those minerals has been ascertained under any subsequent periodical valuation thereof for the time being in force, the capital value as so ascertained:
  Provided that where the minerals are being worked the Commissioners may in any year make such allowance from the duty payable as they think just in respect of any minerals which have been gotten since the date at which the value has been ascertained.
  Mr. NEWDEGATE Mr. NEWDEGATE moved, in Section (1), to leave out the word "capital" ["There shall be charged, levied, and paid for every financial year in respect of the capital value of minerals …"].
  I am bound to say that I did not expect this Amendment to come on, because I thought the whole question of minerals was going over to a future time. It has been pointed out to me how very ridiculous it is to put down the capital value of minerals as part of the value, because it is almost impossible to ascertain it. A mining engineer who thoroughly understands

  663
  these subjects has pointed out to me that there are so many changes and chances in the mineral field that it is almost impossible to find out what the capital value is. The Government have in a light-hearted way talked about testing the value of minerals, yet it is impossible without placing numerous bore-holes all over the country to find out. You are confronted with all sorts of difficulties in regard to minerals. You may find coal at one place, but a short distance from that you may find there is a wash-out and the coal ceases to exist. In my own county of Warwickshire I know where there are four seams of coal lying one on top of the other, and there are about 22 feet of coal on that particular place, but if you go a mile away you will find that all the seams are divided, and the coal is absolutely different in quality. For myself, however, I cannot see the object of bringing the whole question of minerals under discussion, when it will not be disposed of. [An HON. MEMBER: "Why move it?"] Over and over again I have put down Amendments which have been ruled out of order, and if I am called upon to move an Amendment I hope I have pluck enough to do so. If the Government are waiting to withdraw the clause and going to put the mineral tax on a more practical footing, I am willing to sit down and say nothing more about it.
  Mr. A. J. BALFOUR: My hon. Friend was probably rather taken aback by the fact that the Amendment was called on after the Government had announced their intention of withdrawing the clause. That is because our Rules rather absurdly insist that a clause shall not be withdrawn until you get to the end of it, so that the Chairman is absolutely bound to put every Amendment on the Paper. It will be a futile waste of time to discuss those Amendments, and I should think the sooner we proceed to the Question that the clause stand part of the Bill the better. On the Motion to leave out the clause the Government will probably be prepared to make some statement of policy, and that would be a legitimate occasion for discussion and for elucidating from the Government the grounds on which they have substituted a wholly new plan for the one originally brought forward. I hope we shall proceed as fast as possible to the final Amendment, which will decide the fate of the clause.
  Amendment, by leave, withdrawn.
  Question proposed, "That the Clause stand part of the Bill."
  The CHANCELLOR of the EXCHEQUER (Mr. Lloyd-George): I understood the Prime Minister had explained the new clause, and had made quite clear what the policy of the Government was. That seems to be the general impression of all the papers, and some approve it and others call attention to the fact that we have changed our mind, and the Press to-day is full of criticism of the statement of the Prime Minister on this particular point as well as with regard to valuation.
  Mr. BALFOUR: The Prime Minister explained what the general outline of the new plan was to be, but. he never told us what we surely have some right to know, why the scheme originally brought forward has been abandoned, and in what respect it proves impracticable, and why, speaking generally and not in detail, we have a new Budget proposal to take the place of the old one. If the clause had contained the new proposal instead of the old one we should have had an opportunity on the Resolution of discussing it, and we should have only that plan before us. We have now two plans before us, and the Committee are quite ignorant now why the Government have changed their minds. The change involves not merely questions of principle, but also questions of revenue. I understand the amount expected from the new tax is precisely double what was expected from the old one. Although the sum involved may seem small, it is very large compared with the receipts from the group of these taxes which we have been so long occupied in discussing.
  Mr. LLOYD-GEORGE: I think I am entitled to point out that there will be at least two opportunities of discussing that very point. The first operation, I understand, will be the Resolution. I shall have to get a fresh Resolution with a view to enabling me to move the new clause in Committee. Upon that Resolution the whole of this policy can be discussed, and I cannot conceive of anything I could say now which I should not have to say then in defence of the Resolution, and I cannot think of anything which the right hon. Gentleman would wish to say now which would not be equally relevant when he comes to that Resolution. It is not desirable to have two discussions. It is not that we could avoid discussion even if we wished, because on two separate occasions he can discuss identically the same issue

  665
  as he could raise now, and I think much more effectively.
  Mr. F. W. LAMBTON: When will the Resolution be produced?
  Mr. LLOYD-GEORGE: It depends entirely when the new clauses are taken. I understand they will not be taken till the end of the Bill, but I am willing to meet the Opposition, and bring it down in the next few days.
  4.0 P.M.
  Mr. BALFOUR: I think we ought to know from the Government what they have to say in regard to this proposal at the present moment. May I ask a question in regard to procedure? When we come to the Resolution to which the Chancellor of the Exchequer has referred, I presume that references to the abandoned tax will not be in order. I do not imagine that in discussing the new tax it would be fair to exclude references to the tax which is being abandoned. I shall have to wait for the ruling of the Chairman in regard to that. But on broader Parliamentary grounds I think that, in regard to the course which has been taken by the Government in proposing this change, this is the moment when the Government should defend themselves and say why they are dropping Clause 12. When they are giving notice of a formal Motion to that effect I should have thought that that is the proper occasion on which to say something in justification of their procedure.
  Mr. J. C. WEDGWOOD: I do not think the right hon. Gentleman, the Leader of the Opposition, really objects to the withdrawal of this clause; he is only asking in explanation from the Chancellor of the Exchequer. I can assure the Chancellor of the Exchequer that a large part of his own following would like to have an explanation of the withdrawal of this clause, because they prefer the Bill as it originally stood with the Clause 12 to the proposed new tax on mining royalties. What is the effect of the change? The original Clause 12 based the tax on the capital value of minerals. It was a tax exactly similar in principle to the halfpenny tax on undeveloped land. It affected mining properties whether they were being worked or not. The change proposed is that those minerals which are not being worked shall be ruled out of the purview of the tax which is to be levied only on those owners who work their minerals. It is proposed to tax, not the
  666
  whole of the minerals, but to confine the tax to those which are being worked. In that way you must penalise the working of those minerals in a particular district where there are minerals which are not being worked, and therefore you are penalising production.
  The DEPUTY-CHAIRMAN: The hon. Member is not entitled, on the Amendment now before the Committee, to anticipate the discussion of the new clause.
  Mr. WEDGWOOD: I am not anticipating the new clause. I wish merely to state my objections to the dropping of Clause 12.
  Mr. LLOYD-GEORGE: May I say to my hon. Friend that all those objections can be stated equally well when we come to the new clause, with the additional advantage that he will be able to enter into the merits of the new proposal.
  Mr. BALFOUR: On a point of order. I understand you ruled just now that we are only to discuss the proposal to withdraw Clause 12, because the new clause is not before us. By parity of reasoning, when we come to the new clause it will be only the new clause that we can discuss, and not the old one. I wish to know whether, when we come to the Resolution which is to be brought forward soon, we will be able to travel over both the abandoned proposal and the new proposal, though apparently at present we can only touch on the old proposal.
  The DEPUTY-CHAIRMAN: It may be useful to argue now why the old proposal should not be departed from, and, in so far as the hon. Gentleman deals with that question, references to the new proposal may be allowed.
  Mr. WEDGWOOD: Shall I be justified in dealing with the change simply and solely as it affects the clause which is to be withdrawn, merely pointing out the disadvantages of other forms for the taxation of minerals except the one originally adopted. I desire that the clause should remain in the Bill, and I wish to show the disadvantages of any other mode of treating the taxation of minerals. The proposed change is that the tax shall be levied only on minerals which are worked, thereby penalising production, and in the long run transferring the tax to the consumer. That would not happen all at once; it would not happen under existing leases, but directly the new leases are

  667
  drawn up there can be no doubt that, as long as you keep within the purview of the tax only minerals which are being worked, the owners will be able to charge extra royalties to recoup themselves for the tax by getting more for the coal that is produced. That. I think, would be a calamity to bring about by this Budget. Hitherto the Chancellor of the Exchequer has said over and over again that the taxes on land values do not penalise industry in any way, but directly you arrange your tax that the price of coal will be enhanced you will be inflicting a most serious blow on the industries of this country. I do not say that that will happen immediately. It will not happen until the new leases come in force, and I hope that long before the present leases fall in we shall have an amending Act which shall bring into the purview of the tax minerals which are not being worked as well as those which are being worked. I think this is the occasion to point out to the Government that it is of the utmost importance that, at any rate, the principle of the original Clause 12 should be maintained.
  I should like to give two examples of what the change means in specific cases. The other day in a district which I know there was a pit closed down where 300 men were employed. I cannot say the exact reason why it was closed down, but the fact was that the lessee found himself no longer able to pay the royalty which had been agreed upon. Therefore, it no longer paid him to work that pit. Directly the pit was closed down, under the new scheme now proposed, there would be no tax on the lessee of the coalfield, but under the old scheme of Clause 12 as it originally stood in the Bill the lessee and the owner would have had to continue to pay the tax, and the paying of it would have acted as a direct inducement to the lessee to keep the pit open and continue to employ these 300 men. There was another case in my own constituency where a pit was closed down four or five years ago. There was a dispute, but I have not been able to discover the details of it in a form which I should like to give for publication. There you had big capitalists anxious to lease the whole pit and allow people to work the coal. They could not come to terms as to the royalty which had to be paid, and there we have had people ever since thrown out of work simply because the pit was closed down. If there had been a tax on minerals, whether worked or not, the owner of the minerals
  668
  would have had a strong inducement to lease the fields to the persons who were willing to work them at a lower royalty than the landowner was willing to accept Take the case of Lord Penrhyn. He closed his quarries for three years, and directly he ceased to work them 2,300 men were thrown out of work. He went at once to the Assessment Committee, and got his assessment reduced by £14,600. Under the proposals of this Bill, if they had then been in operation, he would have had to pay the tax on the value of the slates whether he worked them or not, and that would have been a strong inducement to him to work the quarries. Directly he threw all these men out of employment his taxation was relieved. What is now proposed is not a sound policy for a Liberal Government to take up. I know the difficulties perfectly well. The difficulties have been often stated by lion. Gentlemen opposite as to the impossibility of obtaining any accurate valuation of minerals, but that is surely not ground on which the Government can base themselves, because they are valuing for the Increment Tax.
  What is now proposed is a concession to those people who own minerals in this country, and who know perfectly well that the effect of the tax would have been to force the output of coal, to reduce the price of coal, and thereby to beneficially affect the industries of this country at the expense of the coalowner. That is a matter I can contemplate with perfect equanimity. I want coal cheaper as well as land cheaper in the interest of the industries of the whole community. The Government recognise the advantages of a halfpenny tax on undeveloped land, but they do not carry the principle right through and recognise the absolute similarity of this tax on the capital value of minerals.
  Mr. A. CLAVELL SALTER: I have no desire to follow the hon. Member for New-castle-under-Lyme (Mr. Wedgwood) in speaking in favour of a tax which the Government are desirous of abandoning. As I understand, the Government are now asking us to abandon the Mineral Bights Duty not because it is a bad duty, not because for want of some other change this would not be a desirable change to make in our law, but because they have a better change. When we are being asked to abandon this duty in favour of a better one which the Government have discovered, surely it behoves them to tell us at this stage, before we accede to their suggestion and finally part with this duty,

  669
  what are the relatively superior advantages of the new duty in favour of which they ask us to abandon this one. It behoves the Government to do so now, and to give us an outline of the new duty, because obviously it will be too late when we come to the Resolution which the Chancellor of the Exchequer referred to in relation to the new duty.
  Mr. E. G. HEMMERDE: It seems to me that the course the House is now invited to take to leave out Clause 12 cuts right across the principle of the Bill. My hon. Friend the Member for Newcastle-under-Lyme (Mr. Wedgwood) pointed out just now that Clause 12 did for mineral land what was done in Clause 10 and other clauses for undeveloped land, and in Clause 10 we find that the House has already passed these words: That for the purposes of Undeveloped Land Duty undeveloped land does not include the mineral underneath the surface of the land. It is quite obvious that they passed these words with the view of bringing in the question of undeveloped mineral lands under this clause. I am quite unable to understand how a tax upon mining royalties can in any way come in and take the place of this clause consistently with the Bill. One of the great principles of this Bill, running all through this Bill, is that whether a man is working his land or not he shall pay taxes upon its value. Now what they are going to do is to tax those who are working their mining land even more than they were originally going to tax those who are working it and those who are not. That seems to me a somewhat startling theory. I should like to know if the Government ask us to leave out this clause, with the view of putting in a clause upon royalties, whether they are going upon the Report stage to move the omission of Section (4) of Clause 10? I do not say that even so we should have as satisfactory a clause as we should have in the Bill as originally introduced, but I do say that we should have something consistent with the principles of the Bill, and I can only say, personally, if mining land is to be exempted from the Undeveloped Land Tax, and only mining royalties are to be taxed, that although I may be the only person who will go into the Lobby against the omission of this clause, I will certainly go there. I represent a mining constituency, and I fought a recent election mainly upon this question, and I was very pleased to see when the Budget was introduced immediately afterwards that this clause was in it. I
  670
  cannot possibly acquiesce in the abandonment of this clause unless I understand from the Government that they are going to bring in mining land within the Undeveloped Land Duty. I do not say that that is as good as the original proposal, but it will satisfy me. Otherwise I shall vote against it.
  Sir JOHN RANDLES: I would like to ask what is going to be the effect of this new proposal on the industries concerned —the industries connected with coal and iron—because it may be that instead of being beaten with whips we are going to be beaten with scorpions. I have no love for the old Clause No. 12, which is now proposed to be abandoned, but we have had arguments from the Government to show that it has some advantages—for instance, it was going to bring into operation mineral properties which were difficult to get hold of for working purposes. It was going to confer the same benefit, and in the same way, as the Undeveloped Land Duty was going to confer by bringing in plots of land into the builders' hand, and causing houses to be built, and a lot of mines were going to be started working under the beneficent operation of this clause, which is now to be abandoned. I think when it is being abandoned we should have, at any rate, some general details as to why it is now being given up. If the arguments that have already been stated have been found to be fallacious, we may then know that the same arguments applied to other things are equally fallacious, and we may perhaps find that it is desirable to have a fresh clause in reference to undeveloped land in some other part of the Bill. So if the Chancellor of the Exchequer would favour us with some explanation of the disadvantages of the clause which he is proposing to abandon to show that the industry which he is proposing to tax will not be more heavily hit by any other proposal which he may have in his mind then we shall say goodbye to this clause with a great deal more satisfaction than is likely to be the case if, as we have some reason to believe, the taxes which he is about to propose are taxes on the industry; because whether you levy a tax upon ungotten minerals or on the royalties, it is the manufacturer, the iron and steel worker, the man who uses the coal, who has got to pay the tax in the long run. Therefore if, instead of a tax of £10,000 or £100,000, or whatever it may be, you are going to put on double the amount of money, and to make it more

  671
  burdensome to the community, and they have got to pay in respect of minerals a far larger amount, then I think we are entitled to protest even under the conditions on which the Government are asking us to withdraw this clause. Little as we like it, we may possibly find it will cost us double the amount to do what the Government propose to do, and therefore
  we want to know something about it before the clause is withdrawn.
  Mr. LLOYD-GEORGE Mr. LLOYD-GEORGE rose in his place, and claimed to move, "That the question be now put."
  Question put, "That the Question be now put."
  The Committee divided: Ayes, 152; Noes, 82.

  Division No. 436.]

  AYES.

  [4.25 p.m.

  Adkins, W. Ryland D.

  Harwood, George

  Pirie, Duncan V.

  Ainsworth, John Stirling

  Haslam, Lewis (Monmouth)

  Richards, Thomas (W. Monmouth)

  Baker, Joseph A. (Finsbury, E.)

  Mawortn, Arthur A.

  Richardson, A.

  Baring, Godfrey (Isle of Wight)

  Hazel, Dr. A. E. W.

  Roberts, Charles H. (Lincoln)

  Barker, Sir John

  Helme, Norval Watson

  Roberts, G. H. (Norwich)

  Barnard, E. B.

  Henderson, Arthur (Durham)

  Robertson, Sir G. Scott (Bradford)

  Barnes, G. N.

  Herbert, T. Arnold (Wycombe)

  Robinson, S.

  Barran, Rowland Hirst

  Higham, John Sharp

  Robson, Sir William Snowdon

  Beale, W. P.

  Hobart, Sir Robert

  Rogers, F. E. Newman

  Be W. (Tower Hamlets, St. Geo.)

  Hobhouse, Rt. Hon. Charles E. H.

  Rose, Sir Charles Day

  Berridge T. H. D.

  Horniman, Emslie John

  Runciman, Rt. Hon. Walter

  Btthell, Sir J. H. (Essex, Romford)

  Hudson, Walter

  Russell, Rt. Hon. T. W.

  Bethell, T. R. (Essex, Maldon)

  Illingworth, Percy H.

  Rutherford, V. H. (Brentford)

  Brace, William

  Jardine, Sir J.

  Samuel, Rt. Hon. H. L. (Cleveland)

  Bright, J. A

  Johnson, John (Gateshead)

  Sears, J. E.

  Brocklebust, W. B.

  Jones, Leif (Appleby)

  Shackleton, David James

  Brooke, Stopford

  Jones, William (Carnarvonshire)

  Sherwell, Arthur James

  Buxton, Rt. Hon. Sydney Charles

  Jowett, F. W.

  Shipman, Dr. John G.

  Byles, William Pollard

  Kekewich, Sir George

  Silcock, Thomas Ball

  Causton, Rt. Hon. Richard Knight

  Laidlaw, Robert

  Snowden, P.

  Cawley, Sir Frederick

  Lamont, Norman

  Soames, Arthur Wellesley

  Cherry, Rt. Hon. R. R.

  Lehmann, R. C.

  Soares, Ernest J.

  Churchill, Rt. Hon. Winston S.

  Levy, Sir Maurice

  Stanley, Hon. A. Lyulph (Cheshire)

  Clough, William

  Lewis, John Herbert

  Steadman, W. C.

  Compton-Rickett, Sir J.

  Lloyd-George, Rt. Hon. David

  Stewart, Halley (Greenock)

  Corbett, A. Cameron (Glasgow)

  Luttrell, Hugh Fownes

  Summerbell, T.

  Corbett, C. H. (Sussex, E. Grinstead)

  Lyell, Charles Henry

  Taylor, John W. (Durham)

  Cornwall, Sir Edwin A.

  Macdonald, J. R. (Leicester)

  Taylor, Theodore C. (Radcliffe)

  Crooks, William

  Macdonald, J. M. (Falkirk Burghs)

  Tennant, H. J. (Berwickshire)

  Davies, Ellis William (Eifion)

  Macnamara, Dr. Thomas J.

  Thomas, Sir A. (Glamorgan, E.)

  Dewar, Arthur (Edinburgh, S.)

  M Callum, John M.

  Thorne, G. R. (Wolverhampton)

  Dickson-Poynder, Sir John P.

  McKenna, Rt. Hon. Reginald

  Thorne, William (West Ham)

  Duckworth, Sir James

  M'Laren, (H. D. (Stafford, W.)

  Verney, F. W.

  Duncan, C. (Barrow-in-Furness)

  M'Micking, Major G.

  Walsh, Stephen

  Dunne, Major E. Martin (Walsall)

  Massie, J.

  Walters, John Tudor

  Erskine, David C.

  Masterman, C. F. G.

  Walton, Joseph

  Evans, Sir S. T.

  Menzies, Sir Walter

  wardle, George J.

  Everett, R. Lacey

  Micklem, Nathaniel

  Warner, Thomas Courtenay T.

  Falconer, J.

  Molteno, Percy Alport

  Wason, John Cathcart (Orkney)

  Ferguson, R. C. Munro

  Morgan, G. Hay (Cornwall)

  White, J. Dundas (Dumbartonshire)

  Findlay, Alexander

  Morgan, J. Lloyd (Carmarthen)

  White, Sir Luke (York, E. R.)

  Fuller, John Michael F.

  Morse, L. L.

  Wilkie, Alexander

  Gill, A. H.

  Murphy, John (Kerry, East)

  Williams, J. (Glamorgan)

  Gladstone, Rt. Hon. Herbert John

  Murray, Capt. Hon. A. C. (Kincard.)

  Wilson, J, W. (Worcestershire, N.)

  Glover, Thomas

  Myer, Horatio

  Wilson, P. W. (St. Pancras, S.)

  Goddard, Sir Daniel Ford

  Nicholson, Charles N. (Doncaster)

  Wilson, W. T. (Westhoughton)

  Griffith, Ellis J.

  Norman, Sir Henry

  Wood, T. M'Kinnon

  Gulland, John W.

  O'Grady, J.

  Yoxall, Sir James Henry

  Harcourt, Rt. Hon. L. (Rossendale)

  Partington, Oswald

  Harcourt, Robert v. (Montrose)

  Pearce, William (Limehouse)

  TELLERS FOR THE AYES.—Mr. Joseph Pease and Sir E. Strachey.

  Hardie, J. Keir (Merthyr Tydvil)

  Perks, Sir Robert William

  Hardy, George A. (Suffolk)

  Pickersgill, Edward Hare

  NOES.

  Anson, Sir William Reynell

  Bowles, G. Stewart

  Clyde, J. Avon

  Anstruther-Gray, Major

  Butcher, Samuel Henry

  Corbett, T. L. (Down, North)

  Ashley, W. W.

  Carlile, E. Hildred

  Courthope, G. Loyd

  Baldwin, Stanley

  Cecil, Evelyn (Aston Manor)

  Cox, Harold

  Balfour, Rt. Hon. A. J. (City, Lond.)

  Cecil, Lord R. (Marylebone, E.)

  Craig, Captain James (Down, E.)

  Banbury, Sir Frederick George

  Chamberlain, Rt. Hon. J. A. (Worc'r)

  Dilke, Rt. Hon. Sir Charles

  Banner, John S. Harmood

  Chance, Frederick William

  Doughty, Sir George

  Barrie, H. T. (Londonderry, N.)

  Chaplin, Rt. Hon. Henry

  Du Cros, Arthur

  Beck, A. Cecil

  Clive, Percy Archer

  Faber, George Denison (York)

  Fell, Arthur

  Lonsdale, John Brownlee

  Ropner, Colonel Sir Robert

  Fletcher, J. s.

  Lowe, Sir Francis William

  Rutherford, Watson (Liverpool)

  Gibbs, G. A. (Bristol, West)

  Magnus, Sir Philip

  Salter, Arthur Clavell

  Gordon, J.

  Marks, H. H. (Kent)

  Sloan, Thomas Henry

  Goulding, Edward Alfred

  Mildmay, Francis Bingham

  Smith, Hon. W, F. D. (Strand)

  Guinness, Hon. R. (Haggerston)

  Moore, William

  Stanier, Beville

  Guinness, Hon. W. E. (B. S. Edmunds)

  Morpeth, Viscount

  Starkey, John R.

  Harris, Frederick Leverton

  Morrison-Bell, Captain

  Staveley-Hill, Henry (Staffordshire)

  Hemmerde, Edward George

  Newdegate, F. A.

  Stone, Sir Benjamin

  Hills, J. W.

  Nicholson, Wm. G. (Petersfield)

  Talbot, Lord E. (Chichester)

  Hope, James Fitzalan (Sheffield)

  Pauiton, James Mellor

  Tuke, Sir John Batty

  Joynson-Hicks, William

  Pease, Herbert Pike (Darlington)

  Walker, Colonel W. H. (Lancashire)

  Kennaway, Rt. Hon. Sir John H.

  Peel, Hon. W. R. W.

  Wedgwood, Josiah C.

  Kimber, Sir Henry

  Powell, Sir Francis Sharp

  Williams, Col. R. (Dorset, W.)

  King, Sir Henry Seymour (Hull)

  Pretyman, E. G.

  Younger, George

  Lambton, Hon. Frederick William

  Randles, Sir John Scurrah

  Lane-Fox, G. R.

  Rawlinson, John Frederick Peel

  TELLERS FOR THE NOES.—Sir A. Acland-Hood and Mr. H. W.,

  Law, Andrew Bonar (Dulwich)

  Renton, Leslie

  Lockwood, Rt. Hon. Lt.-Col. A. R.

  Renwick, George

  Forster.

  Long, Rt. Hon. Walter (Dublin, S.)

  Ridsdale, E. A.

  Question put, "That clause 12 stand part of the Bill."
  The Committee divided: Ayes, 15; Noes, 172.

  Division No. 437.]

  AYES.

  [4.30 p.m.

  Ashley, W. W.

  Craig, Captain James (Down, E.)

  Oddy, John James

  Banner, John S. Harmood

  Dilke, Rt. Hon. Sir Charles

  Rutherford, V. H. (Brentford)

  Barnes, G. N.

  Goulding, Edward Alfred

  White, J. Dundas (Dumbartonshire)

  Cecil, Lord R. (Marylebone, E.)

  Harris, Frederick Leverton

  Corbett, C. H. (Sussex, E. Grinstead)

  Lambton, Hon. Frederick William

  TELLERS FOR THE AYES.—Mr. J. C. Wedgwood and Mr. Hemmerde

  Corbett, T. L. (Down, North)

  Lee, Arthur H. (Hants, Fareham)

  NOES.

  Adkins, W. Ryland D.

  Falconer, J.

  Luttrell, Hugh Fownes

  Ainsworth, John Stirling

  Ferguson, R. C. Munro

  Lyell, Charles Henry

  Ambrose, Robert

  Findlay, Alexander

  Macdonald, J. R. (Leicester)

  Baker, Joseph A. (Finsbury, E.)

  Fletcher, J. S.

  Macdonald, J. M. (Falkirk Burghs)

  Baring, Godfrey (Isle of Wight)

  Fuller, John Michael F.

  Macnamara, Dr. Thomas J.

  Barker, Sir John

  Gill, A. H.

  M'Callum, John M.

  Barnard, E. B.

  Gladstone, Rt. Hon. Herbert John

  McKenna, Rt. Hon. Reginald

  Barran, Rowland Hirst

  Glover, Thomas

  M'Laren, H. D. (Stafford, W.)

  Barrio, H. T. (Londonderry, N.)

  Goddard, Sir Daniel Ford

  M'Micking, Major G.

  Barry, Redmond J. (Tyrone, N.)

  Griffith, Ellis J.

  Massie, J.

  Beale, W. P.

  Guinness, Hon. W. E. (B. S. Edmunds)

  Masterman, C. F. G.

  Beck, A. Cecil

  Gulland, John W.

  Menzies, Sir Walter

  Benn, W. (Tower Hamlets, St. Geo.)

  Harcourt, Rt. Hon. L. (Rossendale)

  Micklem, Nathaniel

  Berridge, T. H. D.

  Harcourt, Robert V. (Montrose)

  Molteno, Percy Alport

  Bethell, Sir J. H. (Essex, Romford)

  Hardie, J. Keir (Merthyr Tydvil)

  Morgan, G. Hay (Cornwall)

  Bethell, T. R. (Essex, Maldon)

  Hardy, George A. (Suffolk)

  Morgan, J. Lloyd (Carmarthen)

  Brace, William

  Harwood, George

  Morse, L. L.

  Bright, J. A.

  Haslam, Lewis (Monmouth)

  Murphy, John (Kerry, East)

  Brocklehurst, W. B.

  Haworth, Arthur A.

  Murray, Capt. Hon. A. C. (Kincard.)

  Brooke, Stopford

  Hedges, A. Paget

  Myer, Horatio

  Buxton, Rt. Hon. Sydney Charles

  Helme, Norval Watson

  Nicholson, Charles N. (Doncaster)

  Byles, William pollard

  Henderson, Arthur (Durham)

  O'Grady, J.

  Causton, Rt. Hon. Richard Knight

  Herbert, Col. Sir Ivor (Mon. S.)

  O'Kelly, Conor (Mayo, N.)

  Cawley, Sir Frederick

  Herbert, T. Arnold (Wycombe)

  O'Mailey, William

  Cecil, Evelyn (Aston Manor)

  Higham, John Sharp

  Partington, Oswald

  Chance, Frederick William

  Hobart, Sir Robert

  Paulton, James Mellor

  Chanping Sir Francis Allston

  Hobhouse, Rt. Hon. Charles E. H.

  Pearce, William (Limehouse)

  Cherry, Rt. Hon. R. R.

  Holland, Sir William Henry

  Pearson, W. H. M. (Suffolk, Eye)

  Clough, William

  Horniman, Emslie John

  Perks, Sir Robert William

  Compton-Rickett, Sir J.

  Hudson, Walter

  Pickersgill, Edward Hare

  Corbett, A. Cameron (Glasgow)

  Illingworth, Percy H.

  Pirie, Duncan V.

  Cornwall, Sir Edwin A.

  Jardine, Sir J.

  Raphael, Herbert H.

  Courthope, G. Loyd

  Johnson, John (Gateshead)

  Richards, Thomas (W. Monmouth)

  Cox, Harold

  Jones, Leif (Appleby)

  Richardson, A.

  Crooks, William

  Jones, William (Carnarvonshire)

  Ridsdale, E. A.

  Cullinan, J.

  Jowett, F. W.

  Roberts, Charles H. (Lincoln)

  Davies, Ellis William (Elflon)

  Joynson-Hicks, William

  Roberts, G. H. (Norwich)

  Dewar, Arthur (Edinburgh, S.)

  Kekewich, Sir George

  Robertson, Sir G. Scott (Bradford)

  Dickson-Poynder, Sir John P.

  Laidlaw, Robert

  Robson, Sir William Snowdon

  Doughty, Sir George

  Lamont, Norman

  Roch, Walter F. (Pembroke)

  Duckworth, Sir James

  Lehmann, R. C.

  Rogers, F. E. Newman

  Duncan, C. (Barrow-in-Furness)

  Levy, Sir Maurice

  Rose, Sir Charles Day

  Dunne, Major E. Martin (Walsall)

  Lewis, John Herbert

  Runciman, Rt. Hon. Walter

  Erskine, David C.

  Lloyd-George, Rt. Hon. David

  Russell, Rt. Hon. T. W.

  Evans, Sir S. T.

  Lowe, Sir Francis William

  Samuel, Rt. Hon. H. L. (Cleveland)

  Everett, R. Lacey

  Lupton, Arnold

  Sears, J. E.

  Shackleton, David James

  Taylor, Theodore C. (Radcliffe)

  Wilkie, Alexander

  Sherwell, Arthur James

  Tennant, H. J. (Berwickshire)

  Williams, J, (Glamorgan)

  Shipman, Dr. John G.

  Thomas, Sir A. (Glamorgan, E.)

  Willoughby de Eresby, Lord

  Silcock, Thomas Ball

  Thorne, G. R. (Wolverhampton)

  Wilson, J. W. (Worcestershire, N.)

  Sloan, Thomas Henry

  Thorne, William (West Ham)

  Wilson, P. W. (St. Pancras, S.)

  Snowden, P.

  Verney, F. W.

  Wilson, W. T. (Westhoughton)

  Soames, Arthur Wellesley

  Walsh, Stephen

  Wood, T. M'Kinnon

  Soares, Ernest J.

  Walters, John Tudor

  Yoxall, Sir James

  Stanley, Hon. A. Lyulph (Cheshire)

  Walton, Joseph

  Steadman, W. C.

  Wardle, George J.

  Stewart, Halley (Greenock)

  Warner, Thomas Courtenay T.

  TELLERS FOR THE NOES.—Mr. Joseph Pease and Sir E. Strachey.

  Summerbell, T.

  Wason, John Cathcart (Orkney)

  Taylor, sahn W. (Durham)

  White, Sir Luke (York, E. R.)

  Clause 13.—(Recovery of Duty on Undeveloped Land and Mineral Rights.)
  Undeveloped Land Duty and Mineral Rights Duty shall be assessed by the Commissioners and shall be payable at any time after the first day of January of the year for which the duty is charged, and any such duty for the time being unpaid shall be recoverable from the owner of the land for the time being or from the person for the time being entitled to the freehold of the minerals, as the case may be, as a debt due to His Majesty, and shall be borne by that owner or person notwithstanding any contract to the contrary:
  Provided that in any case where the Commissioners are satisfied that land is in the course of bonâ fide development, and that it would be just in the special circumstances of the case to postpone the payment of Undeveloped Land Duty in any year, the Commissioners may postpone the collection and payment of the duty for that year for such period, not exceeding five years, as they think fit.
  Mr. LLOYD-GEORGE Mr. LLOYD-GEORGE moved to leave out the words "and Mineral Rights Duty" ["Undeveloped Land Duty and Mineral Rights Duty"]. This is a consequential Amendment.
  Mr. F. W. LAMBTON: I understand from the Chancellor of the Exchequer that this is a consequential Amendment. What is it consequential upon? Is it consequential upon the abandonment of Clause 12?
  The DEPUTY-CHAIRMAN: Yes.
  Mr. LAMBTON: Then I suppose it will not be in order to discuss Clause 12?
  The DEPUTY CHAIRMAN: Clearly not, because the Committee has just negatived Clause 12.
  Mr. LAMBTON: The House need not be surprised at the course the Government are taking, and the emotion of surprise no longer exists amongst us. I feel, however, some grief at parting with
  676
  Clause 12, and I look upon Clause 13 as absolutely consequential on Clause 12; it deals with Undeveloped Land Duty and Mineral Rights Duty. The Chancellor of the Exchequer, by his Amendment, now says that we ought to leave out the words "Mineral Rights Duty"—I presume in consequence of some Amendment he is going to bring forward on a future occasion. When that future occasion is to be the House has not yet been informed.
  The DEPUTY CHAIRMAN: The Amendment is consequential on Clause 12 being struck cut, the words proposed to be left out having now no meaning where they stand.
  Mr. J. C. WEDGWOOD: Is it not in order on this Amendment to discuss the question of the Mineral Rights Duty, though we have struck out Clause 12?
  The DEPUTY-CHAIRMAN: The Question to be put is that the words "and Mineral Rights Duty" stand part, and the discussion is limited to the retention of these words.
  Mr. WEDGWOOD: Will it be in order to discuss the advantages of a Mineral Rights Duty, apart altogether from Clause 12? I do think that the Government's tax upon royalty should be put on a perfectly sound foundation.
  The DEPUTY-CHAIRMAN: It is quite obvious that, as the Committee have struck out Clause 12, the decision of the Committee cannot be gone back upon, and that the present Amendment is purely consequential on what the Committee has done.
  Mr. WEDGWOOD: I bow to your ruling, Sir, but I want to put this point. Under Clause 12 we have ruled out the question of a general tax on mineral rights. Surely we are still allowed to discuss the question of the tax in regard to unworked minerals, where pits are at work, and where there are virgin fields? Am I in order, Sir?
  The DEPUTY-CHAIRMAN: No.
  Lord ROBERT CECIL: I observe in the new clause of which the Government has given notice that it is described as a Mineral Eights Duty Clause. I wish to ask the Government what provision they propose to make in regard to machinery for the collection of that sort of revenue. The machinery does not exist in the clause, so far as I can see. The Prime Minister told us yesterday that one of the purposes of the machinery he was setting up under the Resolution that was passed by the Committee yesterday was to provide for the collection, not only of Undeveloped Land Duty, Increment Duty, and Reversion Duty, but also Mineral Rights Duty. I wish to ask the Chancellor of the Exchequer what machinery he proposes to provide if he strikes out from this clause the machinery for the collection of that duty. The clause does not provide for any machinery which can possibly depend on valuations of the land. Has the Government given notice of it? I may be wrong, but this is an important question.
  Mr. LLOYD-GEORGE: On a point of order. The Noble Lord is inviting the Committee to discuss the question of machinery on an Amendment in respect of which there has not even been a Resolution adopted by the Committee. I submit that this obviously has reference to the recovery of duty under the clause, and, Clause 12 having been omitted, I submit that this is purely a question of drafting.
  The DEPUTY-CHAIRMAN: That is so.
  Mr. BALFOUR: May I ask the Government whether they mean to bring in a new clause to deal with the machinery of the new tax? We all understood from the Prime Minister yesterday that the machinery for collecting the tax was to be in this clause, but that does not appear to be so. I would like to ask the Government whether they mean to have a new clause with reference to that matter?
  Mr. LLOYD-GEORGE: The right hon. Gentleman, if I may say so, is inviting me again to discuss the same thing. If he will look at the clause he will find that the machinery is provided, and, I venture to think, is complete.
  Question, "That the words proposed to be left out stand part of the Clause," put, and negatived.
  Mr. G. D. FABER (York) (for Mr. James Mason),Mr. G. D. FABER (York) (for Mr. James Mason), moved to leave out the words "and shall be borne by that owner or person notwithstanding any contract to the contrary."
  My mind travels back to the speech made two years ago or a year and a-half ago by the Prime Minister in the City of London, with reference to existing contracts. I should like, if I may, to refresh the minds of the Committee by a few sentences from that speech. The Prime Minister said:—
  "So far as he was acquainted with the fact, and he supposed he ought to know, in any legislation which was likely to be proposed in regard to matters of that kind they might be certain that existing contracts would be rigidly respected as sacred. There was no intention, under any pretext of public policy, to rip up obligations which had been incurred in good faith."
  A good deal of water has run under Westminster Bridge since then. I do not know whether the Prime Minister has forgotten those words or not, but evidently he has been made to toe the line, because here we find words introduced in Clause 13 of the Bill which run directly in the face of and athwart that profession, that great profession laid down in that speech. What is the meaning of this speech and the provision "shall be borne by that owner or person notwithstanding any contract to the contrary." Mineral Eights Duty has gone for the moment, but it will come up again. Undeveloped Land Duty remains. I can well conceive a case where the owner of property might let land to a lessee on the faith and on the understanding that all Imperial burdens, new taxation or otherwise, should be borne by the lessee. Do those words interfere with such a contract? Take a contract where A, the owner, lets to B, with the condition that he bears the Imperial taxation other than the Income Tax. The Government come in, and, I contend, proceed to interfere with the existing contract, and make the owner liable for the Undeveloped Land Tax of a halfpenny. The Chancellor of the Exchequer has nothing to recant in this matter, but the Prime Minister has. I would like the Attorney-General to reconcile those statements if he can, because if he cannot there is no more ingenious man in the House. I think there is a direct contradiction in the words of this clause and the words of the Prime Minister. I beg to move.
  The ATTORNEY-GENERAL (Sir William Robson): The hon. Member has referred to me in terms of such generous confidence that I shall not adopt even the

  679
  semblance of ingenuity, but shall confine myself as strictly as possible to the substance of the controversy between the hon. Member and myself. The Bill stipulates with regard to Undeveloped Land Duty that that shall fall on the owner, and that the owner shall not be at liberty to divest himself of that liability by any contract, and that if in form or substance there is already a contract which puts the obligation for all taxes, local or Imperial, upon the tenant as one of the conditions of the tenancy that that contract shall not suffice. I would like the Committee to look at the matter as one of substance and fairness, as well as one of form. What is the contract between the tenant and the landlord? It is a contract to give to the tenant the user of the land according to the existing purposes to which the land is devoted, For instance, if the landlord puts the tenant on a farm the tenant is a farmer, he is not a builder. All he gets, therefore, is the use of the land for agricultural purposes. He may be put on the land for business purposes, for a rope walk or some other defined object, and the letting is made with reference to that user, and no other. For instance, it would be possible for the tenant with some agricultural land to say to himself: "This is very good land near a town. I dare say my landlord will not trouble me very much, and I will proceed to build on it." Of course, he would be a very foolish person to do so. The landlord would say, "You have no right to do anything of the kind. That is not what is let to you. All that is let to you is the right to use the land for the purpose contemplated by the contract." There is another value attaching to the value other than that which attaches to it in respect of existing user—a value with which the tenant has nothing to do. That value is not let to him. He has no right to appropriate it or take advantage of it. That is the value which may arise not in respect of existing user, but in respect of some potential or anticipated user. The contract has no real substantial relation to that, and it is in respect of that part of the value of the land, which is really outside the contract altogether, that the tax is imposed. The contract contemplated by both parties is a contract contemplated in reference to existing user and existing purposes of the land, and nothing else.
  I would ask hon. Members, and especially the hon. Member who proposed the Amendment, and whose opinion, if he will allow me to say so, from long experience
  680
  on Grand Committee, is fair and direct; and I am not merely reciprocating the compliment in any way, to apply his business mind, and not to be misled by technicalities, in which the lay mind delights to confuse lawyers. The business mind is a fair mind; it is honest, and it is a candid mind, and let him apply that mind to this problem. Assuming, as a basis, that the Undeveloped Land Tax is a fair tax, would it not be the grossest injustice to put it upon the tenant who does not get the undeveloped value, who has no right to it, and who would be restrained by a judge if he sought to take advantage of it. Why would it be unfair? It would be unfair because the tenant would be told, "That is outside the contract; you are a farmer, your business is with cattle, sheep and poultry." The landlord would also say. "I am looking forward to that value" at perhaps the not distant future; "leave that to me. When the time for building comes you must go." Therefore, clearly it would be putting on the tenant at the time a burden entirely outside the contemplated scope of the contract. The tenant would probably say to the hon. Member, that it was not a fair thing for his landlord to make him pay under that contract because he had not made a contract to use generally. Obviously, he would say that the covenant he made to pay local and Imperial taxes was a covenant to pay such taxes in relation to the existing user of the land, and that the landlord was now trying to construe the terms of that covenant so as to make him pay taxes which have no relation to the user his contract gave him of the land. That would not be a fair thing to do. I base my argument on the assumption of the tax being a fair one.
  Mr. G. D. FABER: You ought not to interfere with existing contracts.
  Sir W. ROBSON: I have shown precisely what is the nature of the interference. I say there is no interference in substance when the existing contract comes to be fairly interpreted and construed. It is a contract that the tenant should pay the rates and taxes incidental to the existing user of the land. It is not, and was not in truth, a covenant that he should pay taxes, either local or Imperial, in relation to some user of the land which he has never had and cannot get. I say that, under these circumstances, the tax is in reality made upon the landlord in respect of a subject matter which is not in truth and in fact a part of the contract at all.

  681
  I will make this concession to the legal spirit of hon. Members opposite—that I ought perhaps to justify the proposal by precedent. There is an abundance of precedents interfering with contracts in one form or another when taxes come to be imposed, though I do not say precisely in this form. When one looks at a precedent there are always grounds of distinction between one set of facts and any antecedent set of facts. Take the Income Tax for example. The Income Tax might be said to come within the terms of the very class of covenant which we are now discussing. The Income Tax is not a tax upon property, and we must not use it as a precedent further than it will go. The Income Tax is not laid upon any specific class of property, but it does, in fact, affect particular classes of property. Take the operation of Schedule A. A tenant has to pay Income Tax under Schedule A in the first instance, but he makes a deduction in respect of it from the rent, and the landlord is forbidden by statute, no matter what his contract may be, to prevent that deduction. The landlord is not allowed to say, "I do not care what Parliament says to you; those gentlemen at Westminster are always trying to interfere with the true course of our business transactions. I will let you the land on condition that you pay me such and such a rent, without any deduction." Parliament says, "Not at all. The tenant has to make a deduction for our benefit, and you must allow it, or you shall pay three times the duty." There is a case of interference with contract. It is not an exact precedent to the point. I should be very foolish if I so greatly underrated the intelligence of hon. Gentlemen opposite as to put it forward as being an exact and conclusive precedent. But it is a precedent on the broad principle. It is a strong case of what might be called interference with contract, and a limitation of the contractual rights of the parties.
  I think I have shown that these words are just. Would it be fair if this tax is assumed to be possible at all, to leave it to be paid by the tenant? Obviously not. It is a tax on something which is the landlord's alone, and is not comprised in the contract. It is a tax on a subject matter from which the tenant can get no benefit at all, and, therefore, it is a tax upon something outside his contract.
  Mr. BALFOUR: The Attorney-General has given a parallel which I think weakens rather than strengthens his case. In regard to the Income Tax, it is absolutely a question, not of who pays the tax, but of
  682
  how the tax is to be collected. It is purely a question of machinery. Everybody admits that the landlord ought to pay Income Tax on the income he receives; and it will be equally admitted that the tenant should pay Income Tax on everything he receives. The actual method adopted, as I understand it, is merely machinery. It has nothing whatever to do with the incidence of the tax; therefore it is not in the least degree cognate or relevant to an argument which has to do with the incidence of the tax. I do not know that anything will be gained by the Government or by those who support this part of the Bill by bringing in the question of the Income Tax. The Attorney-General points out that you ought not to ask the tenant to pay Undeveloped Land Duy on land which he cannot develop. I agree; it would be grossly unjust. But what are the Government doing? Supposing land is let on an agricultural lease for a term of years. Precisely the same argument which the Attorney-General has used, I think quite rightly, on behalf of the tenant, may be invoked to protect the landlord. If it is true, as I think it is, that you have not the smallest right to ask the tenant to pay Undeveloped Land Duty on land which he cannot develop, it is also manifestly unfair to ask the landlord to pay Undeveloped Land Duty on land which he cannot develop.
  The SOLICITOR-GENERAL (Sir Samuel Evans): Who is to pay it?
  Mr. BALFOUR: I am not imposing the tax. I am not now arguing against the tax which the Committee has passed. I am arguing that if the Attorney-General in language which, if not simple, is at all events a very good imitation of simplicity, tells us that it is a clear injustice to make a man pay Undeveloped Land Duty on land which he cannot develop, when I turn round and say that that argument is a very good one, but it is good not only for the tenant, but also for the landlord, he has no right to come forward and say that that makes absurd a tax which was passed by the infallible wisdom of this Committee a day or two ago. The defence of the Government clearly will not do. It is inconsistent, and it breaks down. It will not for a moment hold water.
  I am afraid that the views which the Government have expressed to-day in regard to contracts do not represent the real views of the Government. I will explain why. My hon. Friend (Mr. G. Faber) brought to the recollection of the House certain speeches made by the late

  683
  Sir Henry Campbell-Bannerman and the present Prime Minister, when a great agitation had been raised in Scotland by the prospect of the taxation of feus. A feu, as every Scotsman knows, and as some Englishmen are beginning to know, is in effect a perpetual lease, under which all the rates and taxes are borne by the perpetual lessee. The proposal to get the owner of the feu taxed for local or Imperial purposes was held, I think justly, in Scotland to be a violent interference with contract; and as feus in Scotland happen to be owned by a very large number of investors, as the number of persons who would be injured by this particular breach of contract was very large indeed, there arose in connection with the Scottish Valuation Bill of the Government an agitation of such strength that, with all solemnity, two principal Members of the Government had to go down and say two things—namely, in the first place, that to make the owner of a feu liable to burdens from which he was by contract exempt would be a violation of contract; and, in the second place, that the very last thing which a Radical Government would do was to sanction in the smallest degree any violation of contract—on the sanctity of which, I think, they piously observed the whole stability of our commercial system in the last resort depended. But that is not the view of the Government now, as I understand it. They have shown that in this particular provision, and they would have shown it still more had they retained Clause 12, because all this argumentation of the Attorney-General about the thing which was leased not being the developable property in the land, but merely the land under another aspect, land as an instrument for agricultural production, would have vanished. As the clause originally stood, as it would have stood had not the consequential Amendment of the Chancellor of the Exchequer been carried, it would have affected contracts, and no such "plain, simple, and untechnical" argument as that used by the Attorney-General would have had the slightest bearing or effect. It would be out of order for me to argue the new clause which the Government are bringing forward, but I am at liberty to refer to it. If hon. Members will look at the Paper they will see that the whole theory of contracts laid down by the Attorney-General is absolutely inconsistent with the wording of the new clause. Therefore, moved as I am by the blandishments of the hon. and
  684
  learned Gentleman, anxious as I am not to show myself too enamoured of those legal technicalities in which laymen are said by him to excel, I think it is manifest on the face of the clause of which the Government have given notice, and on the face of this clause as it stood before the recent Amendment in reference to minerals, that the Government have now adopted a principle of dealing with contracts which, in the most solemn manner, their most important Members declared was absolutely inconsistent with that regard for contracts and for formal arrangements between parties which, in the then view of His Majesty's Government, lay at the root of all civilised commercial dealings. Although I see objections to the Amendment, I see greater objections to the proposals of the Government, who have not attempted to justify their position. All that they have said is that the injustice is inherent in their tax, and as their tax has been passed we have no right to describe their plan as inequitable. Under these circumstances I hope the hon. and learned Gentleman who is sitting near the Attorney-General will be able to give us some more effective and fundamental defence of the policy of the Government than the ingenuity of the Attorney-General has yet been able to advise.
  Lord ROBERT CECIL: There is an Amendment standing in my name, but before making reference to it perhaps my right hon. Friend would allow me to tell him what he could not possibly know and which accounts for a small mistake into which he has fallen. He could not, of course, know that at half-past five this morning the Government materially modified their Bill in Clause 11, Section (5); and perhaps I may also inform the Solicitor-General, who I think was better employed then than attending to these debates—
  Sir SAMUEL EVANS: I beg your pardon, I was here.
  Lord R. CECIL: As a matter of fact, at half-past five this morning the Government accepted the Amendment of my hon. and learned Friend the Member for Kingston (Mr. Cave), striking out the words "that do not exceed twenty-one years" in Section (5). The result of that is that the tax is not payable at all on agricultural land, as I understand it, subject to any existing lease at all of more than one year. The acceptance of that Amendment by the Government clears

  685
  the ground a little, because it limits, of course, very much the cases in which these words of the Amendment would apply. It limits the case of leases not of an agricultural character entered into by the owner of the land; and, in other words, it applies to leases, I suppose, for industrial or building purposes. What becomes, then, of the argument of the Attorney-General?
  Sir W. ROBSON: I did not refer to that matter just now. I gave an illustration of industrial uses, and only selected part of the subject as a small illustration.
  Lord R. CECIL: As far as industrial purposes are concerned, I think the Attorney-General is right. So far as building purposes are concerned, why is it essentially more unjust that the tenant who has agreed to pay the tax on his land should pay this new tax, which is really the very purpose for which the land was put into his hands? Supposing you have a building lease granted for the purposes of developing land of which there is less than 50 years to run at the time this Bill becomes law. Then comes this Bill and says that with respect to that land not yet developed, under a lease in which the owner is doing his best to have his land developed, and has put it into the hands of a tenant for that purpose, the tenant to pay the tax on the undeveloped land which he has agreed with his landlord to pay—that the tax shall be paid by the landlord.
  Mr. BALFOUR: On a point of order, I want to ask you, Sir, whether, if this precise line of argument obtains, we shall be ruled out when we come to the Amendment in the name of my hon. Friend the Member for Liverpool (Mr. Watson Rutherford), who proposes that where the land is leased or let on the terms that the tenant shall develop it, then the Undeveloped Land Duty, if any, shall be payable by the tenant until such period as the owner recovers possession. This deals with precisely the point to which my Noble Friend has referred.
  The DEPUTY-CHAIRMAN: The question raised in the Amendment of the hon. Member for Liverpool will raise very much the question which is, or can be, raised by this Amendment. A good deal will depend upon the turn the discussion takes on this Amendment.
  Mr. WATSON RUTHERFORD: If I may, I would like to be allowed a word.
  686
  This point has been considered of tremendous importance in the building trade. I have been asked to put down the Amendment, and I am very anxious, therefore, to have the opportunity of moving it. Of course, I did not anticipate that the whole of this subject would be raised on the Amendment before the Committee.
  Lord R. CECIL: On the point of order, I quite agree, and I shall be careful not to say anything that will trench upon any discussion that can subsequently arise. The point I am anxious to press is, not whether it should be the tenant or the owner, but that whoever has agreed to pay the tax should pay it. I shall be very glad to have your ruling as to whether the subsequent Amendment of the Chancellor of the Exchequer meets the point.
  The DEPUTY-CHAIRMAN: If the Amendment of the Chancellor of the Exchequer to leave out the words "or person" is carried, the clause would then stand that the duty was to be recoverable from the owner.
  Mr. AUSTEN CHAMBERLAIN: May I submit that the Amendment standing in the name of the Chancellor of the Exchequer to leave out the words "or person"—I am sure the Attorney-General will confirm me—is clearly consequential for the omission of the Mineral Duty.
  Mr. WATSON RUTHERFORD: On the question of order, may I say that my Amendment, which I have been deputed to move, is, if I may so put it, considered the essential Amendment to the whole of this clause. It will be a great pity if it is ruled out incidentally.
  Mr. AUSTEN CHAMBERLAIN: May I also repeat what I said about the words "or person"? What I said is confirmed by the hon. and learned Gentleman opposite. Further, may I submit that the word "owner" cannot prevent us from putting a limiting proviso. Any proviso would be in order if we were permitted to limit something which had previously been stated in broad terms.
  The DEPUTY-CHAIRMAN: That, of course, is frequently done by way of proviso or limiting words. But a good deal will depend on the nature of the discussion on this Amendment if it raises the same question as that raised in the Amendment of the hon. Member for Liverpool.
  Mr. WATSON RUTHERFORD: But my Amendment commences with the word "but" or "provided that." It would be in order, Mr. Caldwell?
  The DEPUTY-CHAIRMAN: That might be. The difficulty I have in a matter of this kind is that I am asked to give a ruling on a point which, when it comes before the Committee, I shall in all probability have left the Chair. As much must depend upon the discussion of this Amendment I would rather not express any opinion at present, but leave the matter to be dealt with at the time when the Amendment of the hon. Member for Liverpool (Mr. Watson Ruther-ford) is reached.
  Lord R. CECIL: The proper course for me is not to deal with the illustration of building land. It is a small illustration, and I can deal much more safely with the argument by assuming that it only applies for the moment to industrial land. The question is: Why, where you have an industrial owner or tenant, and where the tenant has entered into an agreement that he will pay all the rates and taxes, should it be — that it is manifestly unfair — that the new tax should be paid by the man who cannot develop his land, and has given it up, rather than by the man who, if he likes to develop it, or has entered into an agreement, is in the same position as the landlord to whom a man surrenders his lease and allows the landlord to develop the land] The Attorney-General speaks as though this was an entirely novel question, which had never been considered by the courts or anybody else. Of course, the imposition of any new tax is a circumstance that everybody who has to deal with land has to take into consideration. It is not only the Government who imposes a new tax on land. It sometimes happens that you have an improvement charge levied under, I believe, the Private Streets Improvement Act. That is exactly the same case. This is a new proposal, a new charge which is to be paid either by the tenant or landlord, without reference to the circumstances applying when the original contract was entered into. It has been decided, and business men have acted upon it, that the man who has agreed to pay the tax and charges is to pay any new charge, whether he be the tenant or the landlord. Surely that is a fairer rule Why should you make an exception in this particular case? The landlord and the tenant are equally unable to comply with the desire of the Government to develop
  688
  the land. Therefore you are going to impose a charge on the land, which will be quite unjustified by the circumstances of the case. You are taxing the landlord for not developing his land when ex hypothesi he cannot. Whether the tax is paid by the landlord or the tenant, it appears to me that the case is perfectly clear that under the circumstances it is better to leave the parties to make their own agreement, and not attempt to interfere with them. I agree, if you will impose a heavy charge which interferes with contracts into which people have entered, the proper course, if possible, is to make some provision whereby the contracts can be put an end to. Each party can then start fair. It would be better to make an end of the contract, having in view the existing condition of affairs. I had an Amendment down which, owing to the course of the discussion, has not been reached. Whether that is the way out of the difficulty or not, it does not appear to me that the Government have made the slightest defence, even on the ground of what would seem to be fair. We are really left face to face with this broad problem: The Government deliberately select that form of legislation that has been condemned by the present Prime Minister and by the late Prime Minister, and which is exactly the kind of thing which makes so many people alarmed and disquieted by the provisions of this Budget. It is just because it interferes with what hitherto has been regarded as the essential principle upon which property is enjoyed in this country that this Budget is being so bitterly opposed. We do not think it is really a genuine step, either in the direction of the principles of Mr. Henry George, or of Socialism. If we believed that, there would not be the same feeling against this Budget. It is because we regard it as a revolution in the existing laws of property that we feel compelled to oppose it as strenuously as we can.
  Sir ROBERT PERKS: We are in a difficulty with reference to this clause. There is no doubt that the clause as it stands is at variance with promises in regard to contracts which have been made in Scotland with reference to charges intended to be imposed by statutes on the owners of feus, and it is absolutely at variance with the declarations made by the Prime Minister at two meetings held on the eve of the introduction of this Bill; one was made in connection with the United Temperance Society Buildings in the Strand, and the other was made to commercial

  689
  men at the Mansion House. On both these occasions there was a very explicit and clear declaration made by the present Prime Minister that whatever legislation might be introduced there should be no interference whatsoever with existing contracts. It is exceedingly difficult to reconcile this clause, which says that this tax, which in contracts with the tenant is payable by the tenant, is in future to be paid by the owner and not by the tenant who has contracted to pay all rates and taxes and impositions, wholly or otherwise, which is, I think, the common phraseology. If the Attorney-General is right in his construction of the law that this duty was never intended—and that the contracts were construed in that way—to be payable by the tenant, then of course there would have been no necessity for this provision, and therefore I do not think it is necessary to spend much time upon that branch of the Attorney-General's argument. There is no doubt there is an absolute breach and violation of existing contracts in this provision. I do not believe in the principle which has been adopted for getting at undeveloped land. I voted against Clause 10 because I think the whole principle is an unjust one, and I am not at all surprised that even in the passage of this Bill through the House we have to meet and to deal with these exceptional instances of injustice or difficulty which arise even now, and which have, I believe, only a small proportion of what will arise when this Bill has to be interpreted in practice in the country.
  But we have to meet the difficulty and to impose an injustice on somebody. [An HON. MEMBER: "Why?"] The Undeveloped Land Tax will have to be paid by the owner. I think the proper course would have been in such circumstances to give the parties leave to put an end to existing contracts so that they might devise a new position between themselves if they were willing to do so. But I think one of the effects of this provision unquestionably will be to make the owners of property more unwilling to grant leases than they ever were before. Because although we are starting only with this halfpenny tax upon undeveloped land, we have had most specific declarations made in this House by some of our Friends that the halfpenny tax is only the commencement of further taxation in this direction, should future Parliaments wish and desire to increase the halfpenny to a much larger figure. It is clear from that that under the provisions of this Bill all
  690
  these impositions in the future are to be placed upon the owner, and even if the tenant contracts himself out that that contract would be ultra vires and could not be enforced. I say if the landlord, having had notice of that disposition on the part of an influential section of the Government and its followers, grants leases, he must grant them with the full idea that he may be imposing upon himself in the future charges in respect of undeveloped land very largely in excess of the comparatively small figure which may be realised in the halfpenny tax, and it would be impossible in such circumstances for the owner to know what charge he could reasonably make upon his tenants. Face to face therefore with that difficulty, no: knowing what the charge is to be upon his property, he will naturally say, "I cannot, as in the past, fix a rental that will reasonably remunerate me for my outlay over a long period of years; I must naturally, for the purposes of self-protection, grant leases only from year to year or for an extemely short number of years. I do not know precisely what will be the incidents of the tax in the future or what rent I can properly charge." That seems to me contrary to the interest of the tenant farmers and the small occupiers and people who wish to take leases, and therefore I think this clause is an extremely unfortunate clause to be inserted in a Bill by those of us who always have been preaching in the country the theory that we ought to get security for the tenants as far as possible, and that the longer leases we can get for the farmers the better for the farming classes and the small occupiers of the soil.
  I venture to say, in face of the very clear and emphatic statement made by the Prime Minister on the two occasions to which I have referred, and which created a profound impression throughout the country, and allayed some of the fears which had been excited by some irresponsible statements which had been made by Members of the party, it is extremely unfortunate that the Government should, in the face of these pledges, come down to the House with a clause which unquestionably violates existing contracts. But the point we have to consider is, in these unfair impositions, arising from, I think, a foolish and an unjust method of trying to get at this undeveloped land, who shall pay? Shall the owner or shall the tenant? I think personally that neither should bear it, but if I had to make a selection between the I owner and the tenant I am bound

  691
  to say I should myself vote in favour of the tenant rather than vote for the owner. I greatly regret that I, in common, I think, with many more, have been asked to vote for a clause which T certainly consider unjust and economically unsound, which I think will prejudice the interests of thousands of small lessees and tenants throughout the country, but, being put to that election, I think the course open to one in such circumstances is to vote for the tenant, and not for the imposition of this tax upon him.
  Mr. AUSTEN CHAMBERLAIN: I regret that the very important speech made by the hon. Baronet who has just sat down has been made in a House where there were barely a dozen representatives of the party opposite with which he acts and only one Member of the Government to profit by what he said. If there had been more of that party present they would have learned from the hon. Baronet's observations some of the deeper reasons which make us so hostile to the course of policy which the Government is pursuing in regard to this Bill, and they would see it is the shallowest and the most untruthful accusation to suggest that we are fighting merely a selfish battle of the wealthy classes, and they would see that we are equally concerned for the effects that these taxes are going to have upon the business life of the community and on the necessities of the humbler and poorer members of the public. We have tried upon many occasions to bring home to the Government, as the hon. Baronet tried to do today, the ulterior injurious effects which their proposals are going to have when brought into practice not upon the rich and the strong and the wealthy, but upon the poor and upon the weak, not upon the luxuries of the few, but upon the means of livelihood and the necessities of the many. I will not pursue the particular subject raised by my Noble Friend and developed by the hon. Baronet further, but I want to go back to a point of a slightly different form that was touched upon by the Leader of the Opposition. I am afraid I misled the Leader of the Opposition, because I was not here at 5.30 this morning, and I was not aware of the Amendment in regard to agricultural land introduced into Section (5), Clause 11. That, at any rate, only affects agricultural land. As regards any other land, no direction was given in the earlier hours of this morning.
  692
  The Government has admitted that where the landlord, in granting an agricultural lease which gives the tenant no right to develop the land for building purposes during the currency of the lease, and which prevents him from developing it, that in that case it would be very unjust to make the landlord pay, and for that reason the Amendment was made. That does not apply equally to certain industries. The Attorney-General used the illustration of a rope-walk. I should have thought the illustration of the rope-walk was a bad one. There could not be any Undeveloped Land Tax on a rope-walk, because undeveloped land is described as land which is not being used bonâ fide for any business, trade, or industry other than agriculture. Would not land used bonâ fide as a rope-walk come under that description?
  Sir SAMUEL EVANS: Why?
  Mr. AUSTEN CHAMBERLAIN: I say there could not be undeveloped land if it is being used bonâ fide as a rope-walk, and not for pretence or sham.
  Sir SAMUEL EVANS: If it is used bonâ fide for that purpose, of course not.
  Mr. AUSTEN CHAMBERLAIN: I did not rest my case upon the illustration supplied by the Attorney-General. Take the case of land let to tenants who have developed part of it and kept the rest in order that as his business expands he may have room to develop it. That is not the case which has been made, because there is no obligation on the part of the tenant to build, and it is obvious that the landlord has no power to build. He has let for the purposes of a factory half as much again as is covered by the factory, and he has no power to cancel that lease or force his tenant to build upon the remainder of the land. The landlord is unable to enter upon that land in order to build. I think that is exactly the same case as the agricultural leases which were exempted by the Government yesterday morning, because they did not think it fair that a tax should be levied in such cases.
  Sir S. EVANS: That is hardly the case. What happened was this. Under Clause 11, Sub-section (5), it was provided that where agricultural land was leased for more than one year, and not more than 21 years, it should be exempted from the Undeveloped Land Duty. The Chancellor of the Exchequer was under the impression that agricultural leases were seldom granted for more than 21 years, but it was

  693
  pointed out to him in Scotland that you have a "double 19" lease, and the hon. Member for Kingston (Mr. Cave) also pointed out that there were much longer leases than 21 years. The Chancellor of the Exchequer then stated, if that was the case, he would extend the principle in this clause to those cases.
  Mr. AUSTEN CHAMBERLAIN: I am much obliged to the Solicitor-General for his explanation. I understand that the Chancellor of the Exchequer, having had it brought to his attention that there were agricultural leases not covered by his words, he altered the words to cover the longer leases.
  Sir S. EVANS: Yes, he originally covered all agricultural leases up to 21 years, and then it was pointed out to him that some leases exceeded that term, and he extended it.
  Mr. YOUNGER: To cover all existing leases?
  Sir S. EVANS: Yes, of agricultural land.
  Mr. AUSTEN CHAMBERLAIN: I understand the right hon. Gentleman said that wherever there was an agricultural lease under which the landlord had not power to re-enter until the expiration of the lease, no Undeveloped Land Duty should be charged during the continuance of the tenancy. I do not think there is any controversy between us on that point. But surely the principle which underlay the action of the Chancellor of the Exchequer is that, he admitted in the case of agricultural land that where the landlord had no notice of this tax being about to be imposed—he may have a bonâ fide lease which debars him from developing the land—he was not to be taxed for not having developed it until the moment came when he re-entered into his power to secure that development. Surely that principle is equally applicable in the case I have put Why do you confine the principle to agricultural leases? Does it not apply with equal justice to industrial leases? Take the position of the owner of a factory. Take a case which was given the other day where, besides the land upon which the factory was erected a good deal of spare land was reserved for the deposit of slag. Supposing in this case the Commissioners said, "You have too much land here for industrial use, and, accordingly, we are going to levy the tax upon it." The reply of the Government to this is that that is a question to be dealt with not by
  694
  this House, but by the Commissioners or the Referee, and it depends upon them whether they think the amount of land reserved is more than would be reasonably required or not. Supposing the proprietor is not the owner of the land, but has only got a lease of it, and has got extra land for the purpose of developing his business, which he thinks he may require in the future. If he were wise he would probably allow a large margin. What happens? Down come the Commissioners, who say that that land is not being developed within the meaning of this Act, and they go to the owner and impose the Undeveloped Land Duty. In this case the owner has no power to develop the land, and I submit that that is very hard upon him. This is recognised in the case of agricultural leases to be a hard case, and if the Government cannot accept this Amendment, which I admit only shifts the injustice from one set of shoulders to another without remedying it, surely they are bound to find a remedy for the injustice, as they have done in the case of agricultural leases. I think the Government ought to either accept this Amendment or undertake to deal with this specific case.
  Sir S. EVANS: The bearing of a particular Amendment in a particular case may no doubt be a very important one, but in principle this Amendment comes within a very narrow compass. I will not follow the right hon. Gentleman into the discussion of the question whether there may or may not be other leases which are upon a similar footing to agricultural leases, and ought to be exempted; because that is a matter which cannot be considered on this Amendment. We have already dealt with that point—whether finally or otherwise is not for me to say—in Clause 11, Section (5), The sole question that arises upon this Amendment is when land is subject to the Undeveloped Land Duty upon whom ought that duty to fall?
  Mr. AUSTEN CHAMBERLAIN: Perhaps I did not make my point sufficiently clear. In the case I was trying to put before the Committee the power to develop the land rests with the tenant and not with the owner, and that is why I think it is germane to raise it on this Amendment, which says that where there is a contract in existence it is the tenant and not the owner who should pay the tax.
  Sir S. EVANS: I did not suggest that the point is not in some sense germane,

  695
  but it is obvious that we are discussing now whether or not a particular land ought to be subject to this Undeveloped Land Duty or not.
  Mr. AUSTEN CHAMBERLAIN: Clearly in the view of the Government the land ought to be developed, but you refuse to exclude it from the tax. We contend that these particular cases ought to be exempt from the tax, but the Government refuse to admit this exemption. Our point is as the tax has got to be paid by whom should it be paid in the case I have submitted?
  Sir S. EVANS: Surely that question must arise upon some exception to the general principle here laid down. I am not going to argue a question which may be a very important one about the tacking of a particular proviso upon this general principle. Here we are dealing with land which has been made subject to this Undeveloped Land Duty, and Clause 13 deals with the recovery of that duty. Looking at it from that point of view, I think the right hon. Gentleman (Mr. Austen Chamberlain) rather fought shy of the battle of the strong against the weak, and his point was whether it ought to fall upon the owner or the tenant. Some remarks were made by the hon. Member for Louth (Sir R. Perks) on the general character of the tax, but I do not think that is a matter which ought to be discussed here. Take the case of two leases which may have been granted by a lessor. If he grants the lease for purposes entirely outside the developable character of the land, obviously the tenant of that land ought not to pay the Undeveloped Land Duty. If, on the other hand, the lessor has granted what is tantamount to a building lease then he gets the consideration on that land as such, and therefore the profit derivable by him is a profit to which this duty ought to attach. That is analogous to the case of the Income Tax. Whatever the eon-tract is between the tenant and the landlord the property tax in respect to a particular property has to be borne by the landlord. This proposal we regard as similar to a property tax.
  Mr. YOUNGER: This is a capital tax.
  Sir S. EVANS: That does not change the matter at all. That is an annual tax, and it does not change the principle because it is calculated upon the capital, and tot upon the yearly value. Although this matter has only been considered in this Debate as if it related to past contracts it
  696
  does really also relate to future contracts; as a matter of fact this is a new duty placed for a first time, and intended to be placed upon something which is not a value inuring to the tenant, but inuring to the landlord. In such cases if there are any contracts made which were not made in contemplation of these circumstances the owner ought to pay, and this particular duty ought to be home by the owner and not by the tenant.
  6 p.m.
  Mr. EVELYN CECIL: It was very obvious that the speech to which we have just listened was going to be an extremely ingenious one without that simplicity which generally carries conviction. After all the question raised is a perfectly simple one. The question is who has contracted to pay the tax, and we do not want to go behind that. It is quite sufficient if either the lessor or the lessee has in the particular case contracted to pay he should carry out his contract, and we do not want to go behind that. Both parties enter into the contract with their eyes perfectly open, and they know if the tax is imposed the party that contracts in the language of the agreement to pay the tax ought properly to do so. I do not see that we can go behind that, and to suggest anything else is to introduce a wholly new principle. That is a doctrine which I cannot say I have ever heard used except by most extreme Socialist opinion, and I cannot help feeling that the Attorney-General is in reality simply assisting the Socialist programme, because if these taxes are to be imposed by limiting fiscal convenience to State purposes, I do not see where the matter is to end. It strikes, as does so much of the rest of the Bill, at security of property. Proposals of this kind, of which this is one of the most conspicuous in the Bill, especially shake public confidence, and are doing much harm to property and trade in the country. I cannot understand how the Government can come forward with defences of this character when we recollect the statements made by the Prime Minister, and which have already been referred to. Perhaps the crucial sentence in the Prime Minister's speech on the occasion of his opening the new offices of the United Kingdom Provident Temperance Institution on 12th July, 1907, was that they might be certain existing contracts would be rigidly respected as sacred, and there was emphasis on the word "rigidly." Can it be pretended that the provision in this Bill is rigidly

  697
  respecting the sacredness of existing contracts? It is, of course, doing nothing of the sort. The more one listens to the Debate as this Bill goes on the more he is driven to the conclusion that the Prime Minister is being forced by the more hardened Members of his Cabinet from his original and better thought-out political theories, and to adopt theories which are far more dangerous, and which really take a leaf out of the book of the hon. Members who sit below the Gangway on this side of the House. One is also convinced that the Prime Minister and his Government in these matters are laying foundations upon which Socialists can hereafter build, as is only too obvious from interruptions which have come from below the Gangway. The hon. Baronet the Member for the Louth Division (Sir R. Perks) mentioned the halfpenny Undeveloped Land Tax in connection with this new proposal. There was instantly a shout from below the Gangway. "It will soon be more than a halfpenny." I do not think I am straying beyond the limits of the Debate. I am illustrating generally that provisions of this kind disregarding existing contracts do shake the security of property and the Debate both by its speeches and interruptions has shown this more than ever.
  Sir W. ROBSON Sir W. ROBSON rose in his place, and claimed, "That the Question be now put," but the Chairman withheld his assent and declined then to put that Question.
  Mr. MITCHELL-THOMSON: We have heard a great deal about security of tenure and freedom of contract, and now a Government which in the name of Free Trade declared it could not tax raw materials is proposing to do it so as to give a maximum amount of interference with security of existing contracts. What was the defence given by the Solicitor-General of the position of the Government? He defended their position on the analogy of the Property Tax. The Property Tax falls upon owners, and not upon tenants. This tax, therefore, ought to fall upon owners, and not upon tenants. I think his analogy is entirely without foundation, and I will endeavour to show why. There is all the difference in the world between the Property Tax and this tax. The Property Tax is a tax in which property is taken as a standard for the measure of the tax. There is no way in which you can remove that standard. You may sell the property, but somebody else has to pay the tax. Nothing you can do will prevent
  698
  the tax falling upon the property. This tax is quite different. If you do a certain thing, if you develop the property, then the sword is suspended. Therefore, whereas the Property Tax is a tax proper, this is not a tax at all, but a fine or a penalty. That being so, is it not obvious that our whole case must be a good case? You have no right to attempt to collect from A when A has not the power to do what the tax asks him to do. If you fine a man for not doing a certain thing when it is not he but another person who alone has the power to do it, then you are doing the greatest of all possible injustices, and that is what the Government are doing.
  Sir J. JARDINE: I came here to listen and not to speak, but, having heard some of the Debate, "within me the fire burns." I take exception to the language of ethics used by the hon. Baronet who sits below me (Sir R. Perks). If the money has to be raised for the purposes of the Crown, and there is no other way competent to the House of Commons to raise it, then, I think, the word "injustice" ought not to be used about this tax any more than about any other. With regard to the Prime Minister's speech about the sacredness of contract, I would only refer to the well-known maxim of judges that "Every phrase has to be taken in connection with the context and subject-matter." I think in the case we are dealing with, both parties entered into these contracts absolutely innocent of what the Parliament of the future might enact, or what the Ministry of the present might propose, and therefore a contract couched in general terms can hardly be considered as referring to the particular imposition which it is now proposed to enact. It comes simply to be a question upon which of the parties it is expedient or fair that the tax should be imposed, and in that connection I would refer to the ordinary canons about taxation, and chiefly to that one which says, "Taxes should be put on people according to their ability to pay." I think we ought to look, not at special instances, but at the general practice or custom under which deeds, conveyances, and leases have been made. Speaking as a Scotch Member, and in particular remembrance of the system of perpetual feus there, and the restrictions of different sorts that are usually found, I would like to ask two questions. First, whether the language used by the Government in the clause is intended to allow or forbid the superior landlord, on whom the new tax

  699
  will in terms fall, to bring an action for the application of adjustive equity by requiring the lessee or feuer to recoup him in whole or part? And, secondly, whether, in respect of the widespread tenure of perpetual feu in Scotland, the intention of the Government in drafting the clause was to levy the tax upon the superior or the feuer? Perhaps, in the reply, some answer will be given to those two queries of mine.
  Mr. BALFOUR: The subject is a very important one, and it began, in the case of both the Government and myself, in ignorance of what occurred at half-past five this morning in Committee. I venture to think it would be better if my hon. Friend were to withdraw his Amendment, and that it would save time and meet the general convenience if a specific Debate were taken on the particular proposal contained in the Amendment of my hon. Friend the Member for the West Derby Division of Liverpool (Mr. Watson Rutherford).
  Amendment, by leave, withdrawn.
  Sir W. ROBSON Sir W. ROBSON moved to leave out the words "or person" ["and shall be borne by that owner or person, notwithstanding any contract to the contrary "].
  Question, "That the words proposed to b-3 omitted stand part of the Question," put, and negatived.
  Mr. LAMBTON Mr. LAMBTON moved to insert after the words "any contract to the contrary," the words "made after the passing of this Act." I think it is obvious that, in justice and fair play, existing contracts ought not to be broken.
  Sir W. ROBSON: I submit that this Amendment has been covered by the discussion which we have just had. There is also another Amendment to come on dealing with this particular phase of the question.
  The CHAIRMAN: It is extremely difficult to decide as to the Amendments in the names of the hon. Members for South-East Durham (Mr. Lambton) and Liverpool West Derby (Mr. Watson Rutherford), whether they should be discussed after the discussion we have had. I have already allowed that of the hon. Member for West Derby, and I cannot say that that of the hon. Member for South-East Durham is out of order, but I suggest discussion on both is not desirable.
  Mr. LAMBTON: I will be content to take a Division on it, and will formally move it.
  Question proposed, "That these words be there inserted."
  The Committee divided: Ayes, 90; Noes, 200.

  Division No. 438.]

  AYES.

  [6.20 p.m.

  Acland-Hood, Rt. Hon. Sir Alex. F.

  Gibbs, G. A. (Bristol, West)

  Percy, Earl

  Anson, Sir William Reynell

  Gordon, J.

  Powell, Sir Francis Sharp

  Anstruther-Gray, Major

  Goulding, Edward Alfred

  Randles, Sir John Scurrah

  Arkwright, John Stanhope

  Guinness, Hon. R. (Haggerston)

  Rawlinson, John Frederick Peel

  Ashley, W. w.

  Guinness, Hon. W. E. (B. S. Edmunds)

  Renton, Leslie

  Baldwin, Stanley

  Harris, Frederick Leverton

  Renwick, George

  Balfour, Rt. Hon. A. J. (City, Lond.)

  Hermon-Hodge, Sir Robert

  Ronaldshay, Earl of

  Banbury, Sir Frederick George

  Hills, J. W.

  Ropner, Colonel Sir Robert

  Beach, Hon. Michael Hugh Kicks

  Hope, James Fitzalan (Sheffield)

  Rutherford, John (Lancashire)

  Beckett, Hon. Gervase

  Joynson-Kicks, William

  Rutherford, Watson (Liverpool)

  Bowles, G. Stewart

  Kennaway, Rt. Hon. Sir John H.

  Salter, Arthur Clavell

  Bull, Sir William James

  Kerry, Earl of

  Smith, Hon. W. F. D. (Strand)

  Butcher, Samuel Henry

  Lane-Fox, G R.

  Stanler, Beville

  Carlile, E. Mildred

  Lee, Arthur H. (Hants, Fareham)

  Staveley-Hill. Henry (Staffordshire)

  Cave, George

  Lockwood, Rt. Hon. Lt.-Col. A. R.

  Stone, Sir Benjamin

  Cecil, Evelyn (Aston Manor)

  Long, Col. Charles W. (Evesham)

  Talbot, Lord E. (Chichester)

  Cecil, Lord R. (Marylebone, E.)

  Long, Rt. Hon. Walter (Dublin, S.)

  Thomson, W. Mitchell- (Lanark)

  Chaplin, Rt. Hon. Henry

  Lonsdale, John Brownlee

  Tuke, Sir John Batty

  Clive, Percy Archer

  Lowe, Sir Francis William

  Walker, Colonel W. H. (Lancashire)

  Clyde, J. Avon

  MacCaw, Wm. J. MacGeagh

  Walrond, Hon. Lionel

  Coates, Major E. F. (Lewisham)

  Magnus, Sir Philip

  Warde, Col. C. E. (Kent, Mid)

  Courthope, G. Loyd

  Marks, H. H. (Kent)

  Williams, Col. R. (Dorset, W.)

  Craig, Captain James (Down, E.)

  Mildmay, Francis Bingham

  Willoughby de Eresby, Lord

  Dickson, Rt. Hon. C. Scott

  Moore, William

  Winterton, Earl

  Doughty, Sir George

  Morpeth, Viscount

  Wyndham, Rt. Hon. George

  Douglas, Rt. Hon. A. Akers

  Morrison-Bell, Captain

  Younger, George

  Du Cros, Arthur

  Newdegate, F. A.

  Fell, Arthur

  Oddy, John James

  Fletcher, J. S.

  Parkes, Ebenezer

  TELLERS FOR THE AYES.—Mr. Lambton and Mr. G. D. Faber.

  Forster, Henry William

  Pease, Herbert Pike (Darlington)

  Foster, P. S.

  Peel, Hon. W. R. W.

  NOES.

  Acland, Francis Dyke

  Harcourt, Rt. Hon. L. (Rossendale)

  Partington, Oswald

  Adkins, W. Ryland D.

  Harcourt, Robert V. (Montrose)

  Pearce, Robert (Staffs, Leek)

  Ainsworth, John Stirling

  Hardle, J. Keir (Merthyr Tydvil)

  Pearce, William (Limehouse)

  Alden, Percy

  Hardy, George A. (Suffolk)

  Price, Sir Robert J. (Norfolk, E.)

  Armitage, R.

  Harmsworth, Cecil B. (Worcester)

  Rainy, A. Rolland

  Asquith, Rt. Hon. Herbert Henry

  Harvey, W. E. (Derbyshire, N.E.)

  Raphael, Herbert H.

  Atherley-Jones, L.

  Harwood, George

  Richards, Thomas (W. Monmouth)

  Baker, Joseph A. (Finsbury, E.)

  Haworth, Arthur A.

  Richards, T. F. (Wolverhampton, W.)

  Balfour, Robert (Lanark)

  Hazel, Dr. A. E. W.

  Richardson, A.

  Baring, Godfrey (Isle of Wight)

  Hazleton, Richard

  Ridsdale, E. A.

  Barker, Sir John

  Hedges, A. Paget

  Roberts, Charles H. (Lincoln)

  Barnard, E. B.

  Helme, Norval Watson

  Roberts, G. H. (Norwich)

  Barnes, G. N.

  Hemmerde, Edward George

  Robertson, Sir G. Scott (Bradford)

  Barran, Rowland Hirst

  Henderson, Arthur (Durham)

  Robertson, J. M. (Tyneside)

  Barry, Redmond J. (Tyrone, N.)

  Henderson, J. McD. (Aberdeen, W.)

  Robinson, S.

  Beale, W. P

  Herbert, Col. Sir Ivor (Mon. S.)

  Robson, Sir William Snowdon

  Beauchamp, E.

  Herbert, T. Arnold (Wycombe)

  Roch, Walter F. (Pembroke)

  Bellairs, Carlyon

  Higham, John Sharp

  Rogers, F. E. Newman

  Berridge, T. H. D.

  Hobart, Sir Robert

  Rose, Sir Charles Day

  Bethell, Sir J. H. (Essex, Romford)

  Hodge, John

  Runciman, Rt. Hon. Walter

  Bethell, T. R. (Essex, Maldon)

  Holland, Sir William Henry

  Russell, Rt. Hon. T. W.

  Bowerman, C. W.

  Hudson, Walter

  Rutherford, V. H. (Brentford)

  Brace, William

  Hyde, Clarendon G.

  Samuel, Rt. Hon. H. L. (Cleveland)

  Branch, James

  Illingworth, Percy H.

  Schwann, C. Duncan (Hyde)

  Bright, J. A.

  Jardine, Sir J.

  Sears, J. E.

  Brocklehurst, W. B.

  Jenkins, J.

  Seely, Colonel

  Brooke, Stopford

  Johnson, John (Gateshead)

  Shackleton, David James

  Bryce, J. Annan

  Jones, Leif (Appleby)

  Sherwell, Arthur James

  Burns, Rt. Hon. John

  Jones, William (Carnarvonshire)

  Shipman, Dr. John G.

  Buxton, Rt. Hon. Sydney Charles

  Jowett, F. W.

  Silcock, Thomas Ball

  Byles, William Pollard

  Kekewich, Sir George

  Simon, John Allsebrook

  Carr-Gomm, H. W.

  Kimber, Sir H.

  Snowden, P.

  Cawley, Sir Frederick

  King, Alfred John (Knutsford)

  Soames, Arthur Wellesley

  Chance, Frederick William

  Laidlaw, Robert

  Soares, Ernest J.

  Channing, Sir Francis Allston

  Lambert, George

  Stanger, H. Y.

  Clough, William

  Lament, Norman

  Stanley, Albert (Staffs. N.W.)

  Cobbold, Felix Thornley

  Lehmann, R. C.

  Stanley, Hon. A. Lyulph (Cheshire)

  Collins, Sir Wm. J. (St. Pancras, W.)

  Lever, A. Levy (Essex, Harwich)

  Steadman, W. C.

  Compton-Rickett, Sir J.

  Levy, Sir Maurice

  Stewart, Halley (Greenock)

  Corbett, A. Cameron (Glasgow)

  Lewis, John Herbert

  Summerbell, T.

  Corbett, C. H. (Sussex, E. Grinstead)

  Lough, Rt. Hon. Thomas

  Taylor, John W. (Durham)

  Cornwall, Sir Edwin A.

  Lupton, Arnold

  Taylor, Theodore C. (Radcliffe)

  Crooks, William

  Luttrell, Hugh Fownes

  Tennant, H. J. (Berwickshire)

  Davies, Ellis William (Eifion)

  Lyell, Charles Henry

  Thomas, Sir A. (Glamorgan, E.)

  Dewar, Arthur (Edinburgh, S.)

  Lynch, H. B,

  Thorne, G. R. (Wolverhampton)

  Dickson-Poynder, Sir John P.

  Macdonald, J. R. (Leicester)

  Thorne, William (West Ham)

  Dilke, Rt. Hon. Sir Charles

  Macdonald, J. M. (Falkirk Burghs)

  Verney, F. W.

  Duncan, C. (Barrow-in-Furness)

  Maclean, Donald

  Walsh, Stephen

  Dunne, Major E. Martin (Walsall)

  Macpherson, J. T.

  Walters, John Tudor

  Ellbank, Master of

  M'Callum, John M.

  Walton, Joseph

  Erskine, David C.

  M'Micklng, Major G.

  Wardle, George J.

  Evans, Sir S. T.

  Maddison, Frederick

  Warner, Thomas Courtenay T.

  Everett, R. Lacey

  Massle, J.

  Wason, John Cathcart (Orkney)

  Falconer, J.

  Menzies, Sir Walter

  Waterlow, D. S.

  Ferens, T. R.

  Micklem, Nathaniel

  White, J. Dundas (Dumbartonshire)

  Ferguson, R. C. Munro

  Molteno, Percy Alport

  White, Sir Luke (York, E. R.)

  Findlay, Alexander

  Mond, A.

  Wilkie, Alexander

  Gibb, James (Harrow)

  Montgomery, H. G.

  William, J. (Glamorgan)

  Gill, A. H.

  Morgan, J. Lloyd (Carmarthen)

  Williamson, Sir A.

  Gladstone, Rt. Hon. Herbert John

  Morse, L. L.

  Wilson, J. W. (Worcestershire, N.)

  Glover, Thomas

  Morton, Alpheus Cleophas

  Wilson, P. W. (St. Pancras, S.)

  Goddard, Sir Daniel Ford

  Murray, Capt. Hon. A. C. (Kincard.)

  Wilson, W. T. (Westhoughton)

  Greenwood, G. (Peterborough)

  Myer, Horatio

  Wood, T. M'Kinnon

  Griffith, Ellis J.

  Napier, T. B.

  Yoxall, Sir James Henry

  Gulland, John W.

  Nicholls, George

  Haldane, Rt. Hon. Richard B.

  Nicholson, Charles N. (Doncaster)

  TELLERS FOR THE NOES.—Mr. Joseph Pease and Sir E. Strachey.

  Hall, Frederick

  O'Grady, J.

  Hancock, J. G.

  O'Malley, William

  Mr. WATSON RUTHERFORDthen moved to add at the end of Section (1) the words, "but where the land is leased or let on the terms that the tenant shall develop the same or occupy the same within the meaning of this part of this Act, then the Undeveloped Land Duty, if any, shall be payable by the tenant until such period
  702
  as the owner can in due course recover possession."
  This Amendment is, I submit, one having an important bearing on this clause, which provides, so far as we have gone, that the Undeveloped Land Tax is to fall upon the owner of the property, and not on the lessee or the tenant. It certainly is a very

  703
  useful thing to consider for a moment what ordinarily takes place in connection with the development of land. As a rule the owner of the property does not develop it; he finds it necessary to get some one else to step in and do that. It is just one of those things which should be entrusted to an expert. When an amateur tries to do it, in nine cases out of ten he makes a mess of it, and loses his money. The development of land in our large cities has therefore become a special business, to which skilled people devote themselves, and the result is that the best is done both for the land and for the community. In the ordinary course this takes the form of a building lease, and it is in just that case of the building lease that I wish to bring before the Committee What takes place. The landlord signs a building lease, the lessee is bound by covenant, within the period named in the lease, to build upon that land. That is part of the terms of the lease. It is in consideration of that covenant that he gets possession of the landlord's land. It is that very building upon the land which prevents it from being liable to the Undeveloped Land Tax. So long as the building and the development of the land is postponed, so long, if we pass this Bill, that Undeveloped Land Tax will be payable, and the only way to get out of the payment of the tax is for somebody to build upon the land. In the early hours this morning we practically disposed of the difficulty arising out of agricultural leases, and as land under £50 in value is exempt, and land that has £100 an acre spent upon it is exempt, if follows that really and substantially the only case that is not provided for or dealt with is the case that we are now putting before the Committee—namely, the case of the building lease. In the case of the building lease land which has not had £100 an acre spent upon it, but presumably to start with is over £50 an acre in value, is liable to this Undeveloped Land Tax, and it must be so until it is developed. The lease is signed. What are the terms of 999 out of a thousand leases? What are the terms of the ordinary lease—the lease which is in existence to-day, the lease which will probably be signed to-morrow? They are that the lessee, the tenant of that property, covenants to build, he also covenants that he will pay a certain small rent during the term of the lease, which is the rest of his consideration, for getting possession of the land. The consideration for getting possession of the land there-
  704
  fore consists of two things—the covenant to build and the comparatively small rent. There is also in that lease, as everyone knows who is acquainted with land at all, a covenant by the lessee that ha will during the term of the lease pay ail rates, taxes, and impositions of every kind and description whatsoever, with the exception of the Property Tax or Income Tax.
  That is the common form of the lease which exists to-day, and why? Because the lessee is getting the absolute possession of the property for a given term of years, or indeed he has already got it in the case we are considering, and it is partly expired. He has got possession of the property, and he has entered into these covenants, and that is the contractual position between the parties. He has contracted, that whatever the rates, taxes and impositions are, or may be, during the term of the lease, he, the lessee, will pay them. Then we come to consider the effect of this clause, which sets up a new tax, called the Undeveloped Land Tax, and the owner must pay that tax. How does that tax arise? It arises in this way, that the man who has covenanted to build and to develop the property fails to do so. He, the lessee, or tenant, has got possession; he has covenanted to develop and build, but he has failed to do so, and under this Bill there is a tax payable, and who is to pay it under this measure? The man who has got possession of the property and can develop it? No. The man who has made default in carrying out his covenant? No. The man who could go and carry it out and develop the property? No. The position is, I venture to submit, to the Committee, an absurd one because the owner of the property has got to pay the tax for somebody else's default, when he, the owner, could not develop the property if he wanted to, because somebody else has got possession, and it really seems to me a case in which this difficulty will arise, and which calls for this exception, that I venture to suggest n my Amendment, which runs:—"But where the land is leased or let on the terms that the tenant shall develop the same or occupy the same within the meaning of this Part of this Act, then the Undeveloped Land Duty, if any, shall be payable by the tenant until such period as the owner can in due course recover possession."
  Of course, if there is a breach of the covenant, and the owner is empowered thereby to recover possession, when he

  705
  does so, he is in a position himself to proceed to develop that property in the ordinary and natural way, in which this Bill seeks to make somebody develop it. And then he ought to do so, but until that point arises, when the owner of the property has got it himself and turned this defaulting tenant out, it is unjust and unfair and a breach of the existing contract—though I do not want to lay much stress upon the breach of existing contract, because Parliament can break any existing contracts; but I want to put it upon the ground of plain, common English justice that you should not make a man pay who has committed no default, and when somebody else has committed a default, and when you are making a man pay, who has no opportunity of putting the matter right, because someone else has got possession of his property for the time being. That is my case. My case is that as a matter of common fairness and justice you should make the tenant of undeveloped land pay the duty until the landlord can turn him out for breach of covenant, and then you should make the landlord pay if he himself fails to develop. I should like, if I am in order, just to refer for a moment to the following words, which I have put down and intended to move as the next Amendment, for the reason that they show the justice of the proposition I am making:—"Provided always that where the land is leased on terms that the tenant shall develop the same or occupy the same within the meaning of this Part of this Act, then, in case the tenant fails to do so, such failure shall constitute a default entitling the owner to recover possession." I do not know that that Amendment could be made in the Finance Bill, and I dare say the answer of the hon. and learned Attorney-General would probably be that it would be absurd in a Finance Bill to alter the law in regard to defaults of covenants in leases.
  The CHAIRMAN: I think I ought to say that I think that Amendment would be out of order.
  Mr. WATSON RUTHERFORD: I am raising that point as an illustration, and therefore, although it would be out of order to move such an Amendment as that, I think it bears upon the point whether you should not give some relief of this kind to the landlord and make the tenant pay this tax until the landlord can, in the state of the law as we have it today, turn him out and get possession of the property himself. It was to illustrate
  706
  that point that I put down an Amendment, and not for the purpose of pressing it on the Committee. Without further argument, therefore, because I do think the point needs no further elaboration, it is so simple. I beg to move the first Amendment.
  Sir W. ROBSON: The only difficulty I have in regard to the hon. Member's Amendment is the multiplicity of arguments there are against it. They are very numerous, and each one of them is conclusive. Let us take the case he puts, of a lease by which a landlord has bound the tenant to develop the land—in other words to build on the land, because that is the precise kind of development which is aimed at by the Bill. That would be a long lease, considerably over 50 years, and the tenant in such a case would be the owner of the land for the purpose of the payment of the duty; and, therefore, the tenant would be the one, primarily, to pay the whole burden of the tax. That disposes of the common, if not the invariable case, but in order to find something else, which I may urge in favour of the hon. Member, in order that I may have the satisfaction of answering it, I will suppose a case in which the land has been leased for something less than 50 years, but in which, nevertheless, the tenant has bound himself to develop the land and the tenant fails to develop. The provisions of such a lease would provide for the building of the house, and that house is to be security to the landlord for the ground rent which he exacts; therefore, the landlord is, of course, interested in enforcing the contract and seeing it is carried out. If it should happen to be the case it is difficult to imagine that a landlord, notwithstanding this, still remains under this Bill the owner, and liable to pay the tax, he has also got an obligation under a lease which he can enforce against the tenant, if he finds that he has got to pay Undeveloped Land Tax, because the land is undeveloped. His remedy is in his own hand under his covenant. He may say to the tenant: "Why do you not; develop my land, you do not do it, and I have to pay Undeveloped Land Duty because you are not doing it."
  What he has got to do is to enforce his covenant, and he will get as part of his damages for failure to carry out the covenant, the sum that he has had to pay for Undeveloped Land Duty, but apparently what the hon. Member desires is that instead of the landlord enforcing his contract, which is the reasonable and

  707
  sensible thing to do, he is to use the State in some indirect and some imperfect manner as a means of getting the tenant to develop the land. Instead of acting upon his contract which would be really effective in compelling the tenant to do what he undertook to do, he wants the Chancellor of the Exchequer or the Inland Revenue Department to bring an action against the tenant, or an action against somebody else, to compel him not to continue in default when the simple course is for him to enforce his own contract. I think the only answers I need give are, first of all, that the hon. Member has supposed an extreme case, one of which he has scarcely given us any concrete example, because in nearly all the cases he referred to the tenant would primarily be the person bound to pay the duty; and, secondly, if he is not the person bound to pay the duty, it is the landlord's duty to enforce the contracts and see that he pays it. There is still a further answer. If the tenant is doing anything at all under his contract he will certainly be making an expenditure on roads and sewers, which will also probably be sufficient to prevent the attachment of the duty. I can scarcely imagine a case of the hardship of which the hon. Member complains, and which he desires to meet by the Amendment.
  Mr. CLAVELL SALTER: I go day by day through the same experience. I sit here and listen to an Amendment, and, notwithstanding my growing experience of the powers of the Attorney-General, I wonder what the possible answer will be, but the answer is always forthcoming. In fact, three answers have been forthcoming, prefaced by the observation that there were so many that he hardly knew which to choose. Are we not agreed upon this, that, unless there is some special and conclusive answer to an Amendment which is based upon justice, it is upon the face of it unjust to say that a man who not only has not failed to develop, but has let it for development, should be taxed for not having developed his land; and is it not equally plain that justice would seem to say not merely that you should not tax the owner in such a case, but that you should tax the tenant, who, upon the hypothesis upon which they are proceeding, is committing a flagrant breach of a fundamental portion of his covenant on the strength of which he has obtained possession of his land? Then I think we may ask for a special answer. The Attorney-General gave
  708
  us three, and he says in the first place that if the lease is for more than 50 years this Amendment is not required, because the lessee will be technically the owner, but the Attorney-General knows quite well that what this Bill says is, that where land is let on lease, of which more than 50 years is unexpired, that technical effect shall take place. The Bill is not concerned at all with the length of the original lease, except, of course, that it must be more than 50 years. It is only concerned that there shall be 50 years unexpired, and therefore if, when the Bill comes into operation, the land is in the hands of the tenant for development, and is not developed, and there are 45 years unexpired, the Attorney-General's first point falls to the ground.
  Sir W. ROBSON: Is it really suggested that it is a frequent case that a building lease, which is generally for 90 years, should have been left unacted on for 30 or 40 years?
  Mr. CLAVELL SALTER: I think it is not so rare as might be supposed that part of an estate should have remained undeveloped for a very considerable time, but if the case is so exceptional that does not at all prevent us from asking for justice in any case in which justice is required. The Attorney-General's second point is that the owner has the remedy in his own hands. What is his position? Here is a tenant committing a flagrant breach of his covenant. He has no right of re-entry. He must bring an action, and he must enforce it by action of ejectment. His tenant has equitable rights given to him by the Conveyancing Act. He can go to the court for relief, and no one knows better than the Attorney-General how protracted are these ejectment cases in which appeals are made to the court for equitable relief against forfeiture. And while these proceedings are dragging on, very likely against a man who has not a farthing, and who is failing to develop because he has not a farthing, the unfortunate owner of the land, who has been guilty of no default at all, besides expending his money on these proceedings is to pay the tax for not having developed the land which his tenant ought to have developed. With regard to the last point, it seems to me to depart from the hypothesis. The Attorney-General says the undeveloping tenant will probably have spent at the rate of £100 an acre. If he has, the whole hypothesis falls to the ground. But we must keep to the hypothesis oh which we are arguing the matter, which is that the land is in fact being

  709
  developed within the meaning of the Bill so as to subject someone to the payment of this duty. None of the three grounds which the Attorney-General has given us show the slightest business reason why the inherent justice of this Amendment should not be recognised.
  Mr. GEORGE RENWICK: I wish to say a word from the point of view not of a landowner, but of a manufacturer. I am not in any sense a landowner myself, but I am associated with companies which have land to lease, and we find it, and I think it is the general rule, extremely convenient on the part of those who carry on industrial undertakings, to acquire land upon lease rather than to purchase it. It means that we have not to raise capital by debentures or otherwise to pay for the cost of the land. The lease contains covenants, but in the course of his business the lessee finds it inconvenient at a particular time to carry them out. It may be a building lease or a lease to carry out certain developments other than by building. We hear from the Attorney-General that if the tenant fails to pay the Development Tax, the duty of the landlord is to step in and say to the tenant, "Carry out your covenant." That is exactly the position of the manufacturer. We rely upon the good feeling between the owner of the land and the tenant, and if the owner sees that it does not suit the manufacturer or the tenant, perhaps owing to depression of trade, to carry out at a particular time the covenants of the lease, he very sensibly says, "Very well, I will shut my eyes to the fact, and I will wait until there is an opportunity for carrying them out." It is very easy for a lawyer, and it is like a lawyer, to say that the hard-and-fast remedy is for the owner of the land to insist upon the covenants being carried out. That may be the way a lawyer looks at it, but it is not the way that the owner of the land looks at the matter. It would be an extremely unfortunate thing for many manufacturers and owners of industrial work if they had not that give-and-take system between the owner and the tenant. I support the Amendment because. I think it would be a manifest injustice to the owner to ask him to pay this Undeveloped Land Duty in case the tenant should not develop. Let me ask him, in case the tenant eventually could not pay it, what is the effect of putting this into the Bill? It means that in future the owner of the land will always have in view the possibility that he may have to
  710
  pay it, and, therefore, he comes down upon the lessee and says, "Carry out, immediately, the covenants of the lease." Has the right hon. Gentleman any idea of what the effect will be? I can give a dozen cases where no profit is being made, rates and taxes and rent are being paid, but the owner of the works has the greatest difficulty in carrying them on, and are you going to add to his burdens by having the owner of the land saying, "Carry out these developments, otherwise I will take possession"? It would be disastrous. From this fact and others of a similar character it appears that the right hon. Gentleman, when he introduced this Bill, did not take into account what was going to be the effect of it. I have tried to put before the Committee from a business man's point of view what is going to be the effect of the Bill without an Amendment of this description. Then there is another fact. Suppose we want a renewal of the lease or want to have a lease for a longer period, which is not uncommon, and negotiate to have the lease lengthened. Suppose it is not in a prosperous condition at the moment. The landlord refuses to meet the tenant, and there you do an injustice to a struggling tenant or would-be tenant. Again, you are going to favour the rich as against the poor. Suppose a rich man comes into competition with a needy man, the owner of the land will give it to the rich man. The Committee will see that the effect of this provision is likely to be more far-reaching than those in charge of the Bill have any idea of. For these reasons I sincerely hope the Chancellor of the Exchequer will give his most favourable consideration to this most reasonable Amendment.
  Mr. LYULPH STANLEY: I do not think we need consider the question of an estate which is not being developed. I should like to take the case of a plot of land—10 acres—let on a building lease to a man who only intends to put up one house and to keep the rest as a garden. I take the case of an existing lease for 99 years. For the first 49 years of the lease he will be treated as the owner, and will pay the Undeveloped Tax on his garden, but at the end of the 49 years the tax will swing over to the lessor, and the lessor will be called upon to pay the halfpenny tax on the garden of the lessee. The lessee gets the advantage of the garden, but the lessor pays for it. That may be all right under a newly created lease after the passing of the Act,

  711
  because both lessor and lessee have notice of what is intended. But it seems doubtful whether justice will be met in imposing such terms upon an existing lease, and if I am correct in my understanding of the provisions of the Bill I hope the Chancellor will consider such a case as I have mentioned and deal with it now. I am very desirous to support the Government on all occasions I can, but, still, such cases as this rather strain one's party loyalty.
  7.0 P.M.
  Mr. BALFOUR: I wish to express my sympathy with the hon. Member opposite (Mr. A. Lyulph Stanley) in the position in which he finds himself, and I would extend also to the Government my sympathy on the rather half-hearted support which they have received from the hon. Gentleman. I should think that the discussion which has occurred since the Attorney-General made his speech has convinced him that the numerous reasons he gave, and the numerous reasons in his mind which he did not give are hardly sufficient to meet the case put by the hon. Gentleman opposite and by my hon. Friend who moved the Amendment. Under the Bill a landowner will have to pay the tax who is not in a position to develop the land himself and has handed it over to another man who is not carrying out his contract. It is not denied that that is a gross hardship. What is the remedy? Eviction. The only way which is suggested to the ingenious mind of the Attorney-General and to the Government to which he belongs by which the halfpenny tax is to fall upon the shoulders of the person who ought to pay is to evict the man who has not fulfilled his contract—to begin with a lawsuit and to end with an eviction. And this is the tax about which the hon. and learned Gentleman, in triumphant accents, told us two days ago that one thing which could be said of it was that it never interfered with trade and commerce in any form. My hon. Friend the Member for Newcastle (Mr. Renwick) speaks of this from the manufacturers' practical point of view, just as the hon. Member opposite (Mr. A. Lyulph Stanley) speaks of it from the point of view of house property, and my hon. Friend who moved the Amendment (Mr. Watson Rutherford) speaks of it from the point of view of one who has great acquaintance with the actual methods by which building is carried out in this country. My hon. Friend the Member for Newcastle pointed out the gross 'Hardship which would be inflicted upon
  712
  manufacturers, and that for the simple reason that it is neither the interest of the landlord nor the interest of the tenant in many cases that the landlord should enforce by means of a lawsuit, and consequent eviction, the carrying out of building operations. The natural way of dealing with it, of course, is that there should be an arrangement between the two. That was not contemplated by the Government at all—I mean a general arrangement as to the not carrying out of a building contract. That is not the view of the Government. The view of the Government is that the proper relation between landlord and tenant is that when a contract has been entered into between them the landlord should enforce it to the uttermost farthing. This from a Government who, when it suits them, and when under different circumstances and speaking to different audiences, state that every landlord who does carry out his business transactions in accordance with the plain and legal rights of property is a being no better than a blackmailer. I really cannot conceive why the Government should resist this Amendment. It is a simple and easy form of getting over one of the difficulties of their Bill which can hurt nobody, which does not detract from the value of the tax, and which does not lessen the wretched pittance which this tax is going to bring in to the Exchequer. But for some occult reasons—certainly for none of the reasons given by the Attorney-General—they resist the Amendment which I should have thought every Member of the House would agree carries out the plain principles of justice and makes the tax a little less injurious, a little less hurtful, a little less inexpedient, and a little less injurious to the ordinary commercial transactions between man and man which wall be left after the Government have finished tinkering.
  Mr. ATHERLEY-JONES: If it were assumed that there were short leases of this nature there might be a great deal of force in the contention that has been urged, but everybody knows that it is the invariable practice for the land to be let or long lease. Clause 27 provides that where there is an unexpired term of over 50 years "the lessee under the lease shall be deemed to be the owner, instead of the person entitled to the freehold." What is the possible combination of circumstances which would operate so as to prejudice the lessor? It is the possibility

  713
  that the lessee having a lease remaining of some 45 years unexpired might leave the land undeveloped in such a way that the lessor would fall the victim of this tax. That is a contingency which I venture to say that anyone, having experience in regard to leases would state never does arise. I myself cannot conceive a case where it would arise. The Leader of the Opposition said a great deal with reference to eviction. I think the right hon. Gentleman in times past found eviction a very effective weapon. It certainly has been used in the most effective manner—I do not say in this country, but in Ireland. In every lease what do you find? You find most careful covenants and provisos for re-entry in the event of the lessee not having performed his duty by the land. Surely that is sufficient for the lessor. Let the right hon. Gentleman recognise that it is the genius of the English law that the freeholder, except for certain specific purposes, is to be regarded as the true owner. Income Tax is collected from the tenant who can recoup himself from the landlord. I do think that the right hon. Gentleman on reflection will see that there is the most perfect security for the landlord. I would vote for the Amendment in a moment if I thought that the landlord could be compelled to pay without indemnity in the way suggested by hon. Members opposite. I can assure them that such a case will never occur, and, if it did occur, the landlord would have the effective remedy of retaking possession of his land, and not by the long process which has been suggested.
  Mr. AUSTEN CHAMBERLAIN: The hon. Member has not offered any answer to the case which was put forward by the hon. Member for Cheshire (Mr. A. Lyulph Stanley). It is a very common case in the part of the country from which I come. If the hon. and learned Member for North-West Durham (Mr. Atherley-Jones) will accompany the Prime Minister when he goes to visit Birmingham, and if he will spare an hour or two from the attractions of Bingley Hall, he will find a great many houses where there are very large grounds attached which will not be covered by the concessions in regard to garden grounds. The landlord has leased the ground on long building lease, the tenant has complied with the obligation by putting up a house, and the landlord has no power to evict him, but the landlord is to be charged the tax because he has not built on other portions of that land more houses. Having
  714
  taken five acres of land and put up one house upon it, and has not covered the remainder with other houses in which he does not wish to live, the landlord is to be taxed.
  Mr. ATHERLEY-JONES: The leases define what houses are to be built and the time in which they are to be built in many cases.
  Mr. AUSTEN CHAMBERLAIN: Of course they do in some cases, but in other cases they do not. What I am now dealing with is not the case of the leases which provide that the whole of the land shall be covered with houses. We know that when the whole of the land is covered with houses the Government will have succeeded in introducing what they think will be a paradise on earth, but in the meantime, and under other and older-fashioned ideas, landlords, tenants, and other people, and even a whole community, have thought it a great advantage not to have the whole of the land covered by houses. It is perfectly unjust in a case where the landlord cannot secure other buildings on the land that he should become subject to the Undeveloped Land Tax. I do not doubt, although the Attorney-General did not deal with that case, that the Government will deal with it before we have proceeded much further with the Amendment. I wish to put another, but possibly rarer, case which has come under my own notice. A friend of mine who held land took a further piece adjacent to his land, with the obligation to build upon it, but the landlord, not having been able to foresee the terms of this Bill, was not prudent enough to provide that he should build upon it at once. Though there is an obligation to build, it is not an immediate obligation. My friend, I think, is not under obligation to build until 21 years from the time his lease began. He will fulfil his covenant to his landlord if he puts up houses within 21 years. I may be wrong about the exact period, but I am certain that there is a considerable number of years during which he need not carry out the building covenant. There, again, the landlord has ceased to have any power during those years to get the land developed. I do not think that I inquired at the time, and I confess that I am speaking with imperfect knowledge; but the right hon. Gentleman may take it from me that the essential point for the purpose of my argument is correct as stated by me. My friend is under no obligation to build

  715
  for several years after he took the lease. Surely it would be most unfair under those circumstances to charge the landlord, who has no power, even by the summary process so dear to the heart of the learned Attorney-General, to secure the development of the land, because the land is not built on. I hope that we may have an assurance from the Government that they will meet these cases of great and gross hardship, which are on all fours with the cases they excluded under Clause 10 in dealing with agricultural land, and that they will admit that where the landlord could not compel development, and while he could not compel development, it was not fair to tax him because the land was undeveloped. In these cases, until the landlord is in a position to secure development, and secure it without hardship to his tenant, as was pointed out by the hon. Member for Newcastle (Mr. Renwick), he should certainly be protected.
  Mr. W. R. PEEL: I listened with great interest to the advice to landlords given by the Attorney-General (Sir W. Robson). My right hon. Friend below (Mr. A. J. Balfour) alluded to the statement of the Chancellor of the Exchequer with regard to blackmailing attributed to landlords in ordinary business transactions. I think it is only fair, as my right hon. Friend quoted that statement, to refer to the statement in a similar case of the Secretary for Foreign Affairs (Sir E. Grey). The Secretary for Foreign Affairs said it is only an ordinary business transaction. It is perfectly fair, I think, to quote one Member of the Government on one side, and to quote the other on the other. I notice that one generally contradicts the other before a fortnight or a week is up, and sometimes, as I am reminded, on the same night. I quite understand that the Government should want to put this tax upon the land, because if the tax was fairly laid, and in certain cases was upon the lessee, then it would be perfectly clear that the tax was laid upon the industry, and of course the Attorney-General tried to argue all through that these are taxes which in no case fall upon the industry. He tried to conceal the real incidence of the tax by placing it in the first place on the shoulders of the landlord; but the fact that it will be a burden on the industry is absolutely patent to everyone. It is in exactly the same way a burden on the industry if placed upon the landlord as if
  716
  placed upon the lessee. The Attorney-General poured scorn on the suggestion that there would be many cases of this kind. He was speaking of leases of 99 years. But there are a great many building leases about London of 60 years, and it is quite obvious that in the case of these 60-year leases before 10 years, are up a very considerable portion of the estate would not have been developed. I take one instance of this which is rather apposite. It is land in the hands of a municipality, and it is quite obvious that the municipality would be as anxous as possible to develop the land; and of course it is well-known that municipalities can borrow money more cheaply than a private trader. There was in the estate 225 acres. The municipality developed about 45 of them. It has had this lease about 10 years. Therefore if it were let under these building leases, which are common about London for 60 years, it is quite clear then in that case someone will have to bear the burden of Undeveloped Land Duty on 180 acres. The municipality is advised in reference to this particular estate that it is hopeless to cover that land with houses for some time to come, and that it may take at least 30 years before these different houses would be inhabited. Surely that is a case which very frequently occurs, when the greatest possible hardship might happen to the landlord who had done all he could to get the estate developed while the lessee has not been able to develop the whole of the estate.
  The Attorney-General deals with cases under contract, where he says: "Let the landlord enforce his rights on the lessee." It is hardly necessary to point out the utter absurdity of asking them to do so in these circumstances. So far as I know these leases do not contain obligations that the whole of the land should be covered with houses. They say they should develop the land, but the rate at which the estate is to be covered with houses is left in many cases to the lessee, and of course it is obvious that it must be so, because it is impossible to foresee when the lease is granted what would be the state of the building trade three or four years hence. Therefore, in most of these cases where the Attorney-General says it is simple for the landlord to enforce he would not be able to enforce because the lessee would discharge his obligation by building a certain number of houses on the land. But there is a case where the landlord would be absolutely without any remedy whatever. He would have to pay this

  717
  Undeveloped Land Tax, and he could not recover himself against the lessee; and as this tax is in the nature of a punitive tax, and is placed on the unfortunate free-holder to make him develop the land, it is extremely hard in cases of that kind that it should fall upon the landlord because he has got no call whatever to enforce development of that land, and in fact he has done everything he could do to see that that land has been developed. I appeal to the Attorney-General to consider cases of that kind where the hardship would be very severe. We need not transfer the rule to cases where there are building leases of 30 or 40 years, which are sometimes given, because so far as my knowledge goes 60 years is the commoner case, and that is the case where the greatest hardship will fall on the landlord. The Attorney-General presents a stiff front to ns on this particular occasion, but we are not frightened off by that because the Government have done that on other points. On the last two points they were very hard to move. When they do move they generally move at some respectable hour in the morning, but still after several weeks of vigorous Debate they generally do change their minds. But this is so unfair, and it would have so bad an effect on the building trade and the development of houses in putting this additional burden or landlords, and making them more exacting in their terms with their lessees, that I am confident that on consideration the Government will give some mitigation of the harshness of this tax.
  Sir JOHN BARKER: We have listened to a great many fairy tales during the discussion of this financial clause, and we have also listened to a great many arguments used in favour of landlords and against landlords. I have a great deal of experience of leases and of buildings, and I have never yet found a landlord who would give me a lease to build, and who would allow me to build and give me grace for 21 years. That is one of the things that have never come before me. I certainly think that that gentleman who did that should have employed a solicitor, and I think he would have guarded him against such a foolish arrangement. There have been a great many things said about landlords, and there has been a great deal said in and out of this House about the Gorringe estate. I was a friend of Mr. Gorringe, and I knew everything in connection with the dealings that he had with the Duke of Westminster. I also know that he built a
  718
  great part of the back portion of his premises on a 19 years' lease, for the very reason that he could not get a longer lease from the Duke; and I believe that he also continued building some of the private part of his establishment at a less time than even 17 years. I think that if anyone had the experience, as I have had, of London ground landlords he would not have the sympathy that is expressed for them on many occasions in this House. I assure you, as a man of business, that has to unite something like 40 or 50 houses under different landlords, as well as knowing the difficulties and the trouble with the solicitors on each side—
  The CHAIRMAN: I think that the hon. Member is straying a little from the point under discussion.
  Sir JOHN BARKER: I am very sorry, but I want to speak of the question of building in London. There is a very large house in Oxford-street. The lessee built a magnificent pile of buildings with a 40 years' lease, and the excuse given by the Duke of Portland's solicitors was that they could not hamper their successors. The landlord is in possession of that block of buildings, and he has to fix the rent for the property to be rebuilt by this firm; and unless the parties can come to terms for the rent of the premises that are to be built the landlord is in possession of the goodwill of the business. I want to show the difficulty which there is under the leasehold system in London with regard to uniting one house with another, and the difficulty there is in getting a reasonable lease from the landlord at a reasonble price when any man is fairly successful in business; and I think myself that if we consider fairly, with regard to this development of property, the reason—
  The CHAIRMAN: The hon. Member is not keeping quite to the matter under discussion.
  Mr. J. W. HILLS: The hon. Member who has just spoken started by saying he never knew a building lease of 60 years or less. He then proceeded to give three cases of building leases of 40 years, 19 years, and 17 years.
  Sir JOHN BARKER: Twenty-one years to build—the option of building during the 21 years.
  Mr. HILLS: Surely it is perfectly well known, if you take that one point where

  719
  there is a large tract of land adjoining to be developed, that a very free hand is given to the tenant. I have a case in my mind at the present moment. There a large tract of land has been let, and 50 years have been given to the tenant to put up the last house. He has 50 years to build that line of houses. It is a perfectly common case in the suburbs of London. They do not develop very rapidly, and it is useless to build houses too quickly. They give a free hand to the tenant. He is the man in possession. He builds very much as he pleases. All the landlord cares for is that the rent is fairly secure, and that when the time comes to an end the houses are on the land. We are not discussing the general conduct of landlords on the Amendment, but merely the narrow point who pays the taxes in these cases. Surely it is proved to demonstration that the Amendment will remedy a very clear and obvious injustice, and I hope even now—at the eleventh hour—the Government will reconsider their position and accept the Amendment.
  Mr. AUSTEN CHAMBERLAIN: May I respectfully ask the Government to give some answer to the questions that have been addressed to them, and the arguments which have been used by hon. Gentlemen on this side of the House?
  Mr. LLOYD-GEORGE: I think my hon. and learned Friend the Attorney-General really did give a complete answer. The case that the hon. and learned Member gave was that of a building lease, time being given to the tenant to develop. He says: "Suppose he has not developed, and the halfpenny is charged on the undeveloped land, why should the landlord pay, the fact of the tax becoming due being entirely attributable to the default of the tenant?" That is the case, I think, which the hon. and learned Member put, and it is a totally different case. I agree it is a case we have to consider when we come to the definition of the word "owner." The point put by the hon. Member for Cheshire (Mr. A. L. Stanley) had reference to a wholly different case. I think that is a case which will require careful consideration, but I would rather deal with the Amendment on the basis stated by the hon. Member who moved it. What is the position? If a lease has more than 50 years to run, well then the tax falls upon the tenant, and, as a man of experience in these matters, I think the hon. and learned Member opposite will
  720
  admit that, in the vast majority of cases, the lease will be carried out a number of years before it has expired.
  Mr. WATSON RUTHERFORD: I admit that in regard to the vast majority of cases.
  Mr. LLOYD-GEORGE: The sort of case put by the hon. Member behind me, the short lease of Messrs. Gorringe, and cases of 17 years and 40 years, are cases in which there is not a yard of undeveloped land; but the majority of cases put by the hon. Member opposite are not of that nature, and I do not know that there are many cases of 10 acres. I should think a 10 acre case is very exceptional. I very much doubt if there are many cases of more than five acres. I should say they are very exceptional indeed. But that is not the case intended to be covered by the Amendment. There are very exceptional cases where landlords have allowed the tenant 10, 20, and even 30 years to carry out his covenant.
  Mr. WATSON RUTHERFORD: I just want to make my point clear. I did not know it was going to be replied to in this way. It is just this, that in a very large number of leases the lease comprises, as a rule, a very large piece of land, and it is taken up gradually in a series of years. There are numbers of cases of which I could give particulars of all over the country with which I am acquainted myself, where there are very considerable leases-in which breaches of the covenants have occurred, pieces of the land being left unbuilt upon. A very large piece of land belongs to the father of Lie hon. Member opposite within a few miles of where I live myself—Hoylake. It is just in those cases where hardship arises.
  Mr. LLOYD-GEORGE: Those are rather different cases. Leases are not granted until the land is taken up actually for building. Where leases are granted, there are agreements which cover options very often; those options are taken up, and the lease is then granted from the date of the actual completion of the covenant. These are not cases of 50 or 60 years' leases. The hon. Gentleman himself answers his own argument by taking the Hoylake case. I do not know whether the hon. Member will agree, but I should have thought that there were a very large number of leases, not of 60 years, but more like 80 years.
  Mr. WATSON RUTHERFORD: They all date back to the date of the agreement.
  Mr. LLOYD-GEORGE: Then until the lease is taken up the document has not been signed, and there is no lease. I should be very much surprised if the hon. Gentleman could point out a single case to me—I will not say a single case—if he can point any number of cases to me where the lease is taken up with 50 years to run, and there is still a large tract undeveloped. It is really almost an impossible case. I do not know any case at all in which there is no covenant under which the landlord can bring pressure to bear. It is not necessary for him to forfeit his lease. He could go and say to the tenant, "I am willing to give you time, but I am not going on paying the halfpenny tax while you will not develop." I have no doubt an arrangement could be come to in regard to the matter.
  Mr. WATSON RUTHERFORD: But the clause absolutely prevents such an arrangement being come to.
  Mr. LLOYD-GEORGE: There is nothing to prevent the tenant from sending on his cheque. The provision making the landlord pay the tax quite apart from the question of any other contract is a totally different thing. If the tenant wants to get indulgence from the landlord, the landlord can say, "Why ask me for the indulgence? I cannot extend indulgence to you whilst I am paying this tax." At any rate the remedy is in the hands of the landlord. After all it is a very exceptional thing. The hon. Member will not deny that somebody ought to pay. ["No."] The whole point is whether the landlord or the tenant ought to pay. The remedy is entirely in the hands of the landlord at the present moment. The case, it is admitted, is a very exceptional one, but even in this exceptional case the matter is entirely in the hands of the landowner.
  Mr. JOYNSON-HICKS: The suggestion which is made by the Chancellor of the Exchequer that where a lease has got down to 50 years, and where the tenant is not developing the land, then the landlord may go to the tenant and say to him, "Unless you will refund the amount of Development Tax I will put an end to your lease." I say at once that is an illegal bargain. The words of the section are clear that the tax shall be borne by the owner, notwithstanding any contract to the contrary. The right hon. Gentleman says the landlord may go to the tenant and may make a bargain, and that he may turn him out of his holding unless he pays the tax. That is an
  722
  illegal bargain within the terms of this section.
  Earl WINTERTON: Will the Law Officers of the Crown support the Chancellor of the Exchequer in the suggestion that when this part of the Bill becomes law the tenant and the landlord may get over the legal restrictions contained in the clause by coming to an arrangement behind the back of the law? I would ask the Attorney-General whether he really supports the Chancellor of the Exchequer in making that illegal suggestion?
  Sir W. ROBSON: The Noble Lord must state accurately what my right hon. Friend said before he can expect to get a legal answer. He did not state the case pint by my right hon. Friend at all, nor did he endeavour to state it.
  Mr. BALFOUR: I certainly understood, the Chancellor of the Exchequer to say that if a tenant did not develop the land, and if, in consequence of that, the landlord had to pay the tax, then the landlord might, in spite of what is in this Bill, pay this tax and hold the tenant liable for it. ["No."] That is what the right hon. Gentleman said. The Chancellor of the Exchequer will not deny that he suggested that the landlord said, "First of all send on your cheque." That argument has no meaning whatever unless the cheque was for the tax. I think I have stated the point quite clearly, although I may have misstated the argument of the Chancellor of the Exchequer. We ask for a legal opinion on the point. Of course, if I have misstated what the right hon. Gentleman said, he will correct me, and will tell us what he did say or intended to say.
  Sir W. ROBSON: Without discussing whether or not the right hon. Gentleman has exactly stated the case put by my right hon. Friend, at all events I will deal with the case stated by the Leader of the Opposition. What is the prohibition contained in Clause 13 with respect to contracts? It is that the owner of the land shall pay the Undeveloped Land Duty, notwithstanding any contracts to the contrary. That is all. It simply means that the owner shall pay, even although he made a contract to the contrary. These are the precise words of prohibition. The section does not say that a man may not make a contract; he may make thousands of contracts, he may go on doing nothing else but make contracts, and they will not be worth the paper they are written on. The

  723
  Noble Lord says it is going behind the back of the law. The law is very indifferent to things which go on behind its back, and which it has not forbidden. What is the case put? The tenant is under the obligation to develop, and if he does not develop the landlord goes to him and says, "You must develop your land according to your contract." There is nothing illegal in it at all in either the tenant saying or the landlord suggesting "What are you going to turn me out for?" and the landlord saying "I have been paying Undeveloped Land Duty by your neglect of your obligation." There is nothing to prevent the tenant from saying, "Oh, if that is all, I will pay the Undeveloped Land Duty for you." He is perfectly at liberty to do it. There is nothing in the Act to prevent him or to prevent the landlord giving that legal intimation which will induce the tenant to adopt that course.
  Mr. AUSTEN CHAMBERLAIN: We understand that in fact the words which the Government insisted on keeping in just now have no meaning whatever. The landlord may make a contract with the tenant that he shall pay the tax, but the contract would be worthless. He may hold a pistol to the head of the tenant and extort money thereafter. He will then be in his legal right in taking the course which the Government advise him to pursue, and the tenant will be helpless.
  Sir W. ROBSON: I am quite certain no one who has heard what I have said supposes that to be a fact.
  Mr. BONAR LAW: I want to ask the Attorney-General one simple question in
  regard to the case he has put to the Committee. He says that notwithstanding what is in the Act, the landlord may go to the tenant and say; "I am paying Undeveloped Land Tax; unless you pay it, and it is jour fault, I will break the lease." [An HON. MEMBER: "He never said that."] That is absolutely what he said. The hon. Gentleman himself does not deny it.
  Sir W. ROBSON: I do not admit it.
  Mr. BONAR LAW: Suppose that is done, and suppose the landlord gets the money on that basis, will the tenant not have the right on this clause in the Act to go back to him when the whole thing is over and say, "You have extorted that money from me in contravention of the Act, and I demand it back."
  Sir W. ROBSON: No, Sir; I said nothing of the sort.
  Mr. JOYNSON-HICKS: I want to put this case, this bonâ fide case. The tenant is in default and the landlord goes to him and says, "I am paying this Undeveloped Land Tax. I shall turn you out." The tenant says, "Will you give me another five years to go on, and in consideration of your doing that I will pay the tax." They enter into a contract to that effect.-I suggest that that contract is in direct contravention of the Act, and the next morning the tenant cannot enforce it, and the tenant can refuse to pay.
  Question put, "That those words be there inserted."
  The Committee divided: Ayes, 87; Noes, 198.

  Division No. 439.]

  AYES.

  [7.50 p.m.

  Acland-Hood, Rt. Hon. Sir Alex, F.

  Douglas, Rt. Hon. A. Akers-

  Lee, Arthur H. (Hants, Fareham)

  Arkwright, John Stanhope

  Du Cros, Arthur

  Lockwood, Rt. Hon. Lt.-Col. A. R.

  Ashley, W. W.

  Faber, George Denison (York)

  Long, Col. Charles W. (Evesham)

  Baldwin, Stanley

  Fell, Arthur

  Lonsdale, John Brownlee

  Balfour, Rt. Hon. A. J. (City, Land.)

  Fletcher, J. S.

  Lowe, sir Francis William

  Banbury, Sir Frederick George

  Forster, Henry William

  MacCaw, Wm. J. MacGeagh

  Barrie, H. T. (Londonderry, N.)

  Foster, P. S.

  Magnus, Sir Philip

  Beckett, Hon. Gervase

  Gardner, Ernest

  Moore, William

  Bowles, G. Stewart

  Gordon, J.

  Morpeth, Viscount

  Bull, Sir William James

  Guinness, Hon. W. E. (B. S. Edmunds)

  Morrison-Bell, Captain

  Butcher, Samuel Henry

  Harrison-Broadley, H. B.

  Newdegate, F. A.

  Carlile, E. Hildred

  Hay, Hon. Claude George

  Nicholson, Wm. G. (Petersfield)

  Cecil, Evelyn (Aston Manor)

  Herman-Hodge, Sir Robert

  Oddy, John James

  Cecil, Lord R (Marylebone, E.)

  Hills, J. W.

  Parkes, Ebenezer

  Chamberlain, Rt. Hon. J. A. (Worc'r)

  Hope, James Fitzalan (Sheffield)

  Pease, Herbert Pike (Darlington)

  Chaplin, Rt. Hon. Henry

  Hunt, Rowland

  Peel, Hon. W. R. W.

  Clive, Percy Archer

  Joynson-Hicks, William

  Percy, Earl

  Clyde, J. Avon

  Kennaway, Rt. Hon. Sir John H.

  Powell, Sir Francis Sharp

  Coates, Major E. F. (Lewisham)

  Kerry, Earl of

  Pretyman, E. G.

  Corbett, T. L. (Down, North)

  Keswick, William

  Randles, Sir John Scurrah

  Courthope, G. Loyd

  King, Sir Henry Seymour (Hull)

  Rawlinson, John Frederick Peel

  Craig, Captain James (Down, E.)

  Lambton, Hon. Frederick William

  Renwick, George

  Dickson, Rt. Hon. C. Scott-

  Lane-Fox, G. R.

  Ronaldshay, Earl of

  Doughty, Sir George

  Law, Andrew Bonar (Dulwich)

  Ropner, Colonel Sir Robert

  Rutherford, John (Lancashire)

  Talbot, Lord E. (Chichester)

  Willoughby de Eresby, Lord

  Salter, Arthur Clavell

  Tuke, Sir John batty

  Wyndham, Rt. Hon. George

  Smith, Hon. W. F. D. (Strand)

  Walker, Colonel W. H. (Lancashire)

  Stanier, Seville

  Walrond, Hon. Lionel

  TELLERS FOR THE AYES.—Mr. Watson Rutherford and Earl Winterton.

  Starkey, John R.

  Warde, Col. C. E. (Kent, Mid)

  Staveley-Hill, Henry (Staffordshire)

  Williams, Col. R. (Dorset, W.)

  Stone, Sir Benjamin

  NOES.

  Acland, Francis Dyke

  Hall, Frederick

  Newnes, F. (Notts, Bassetlaw)

  Adkins, W. Ryland D.

  Hancock, J. G

  Nichoils, George

  Ainsworth, John Stirling

  Harcourt, Rt. Hon. L. (Rossendale)

  Nicholson, Charles N. (Doncaster)

  Alden, Percy

  Harcourt, Robert V. (Montrose)

  O'Malley, William

  Armitage, R.

  Hardy, George A. (Suffolk)

  Partington, Oswald

  Atherley-Jones, L.

  Harmsworth, Cecil B. (Worcester)

  Pearce, Robert (Staffs, Leek)

  Baker, Joseph A. (Finsbury, E.)

  Harvey, W. E. (Derbyshire, N. E.)

  Pearce, William (Limehouse)

  Balfour, Robert (Lanark)

  Harwood, George

  Price, Sir Robert J. (Noriolk, E.)

  Baring, Godfrey (Isle of Wight)

  Haslam, James (Derbyshire)

  Rainy, A. Rolland

  Barker, Sir John

  Haworth, Arthur A.

  Raphael, Herbert H.

  Barnard, E. B.

  Hazel, Dr. A. E. W.

  Richards, Thomas (W. Monmouth)

  Barnes, G. N.

  Hazleton, Richard

  Richards, T. F. (Wolverhampton, W.)

  Barran, Rowland Hirst

  Hedges, A. Paget

  Richardson, A.

  Barry, Redmond J. (Tyrone, N.)

  Helme, Norval Watson

  Ridsdale, E. A.

  Beale, W. P.

  Hemmerde, Edward George

  Roberts, Charles H. (Lincoln)

  Beauchamp, E.

  Henderson, Arthur (Durham)

  Roberts, G. H. (Norwich)

  Beaumont, Hon. Hubert

  Henderson, J. McD. (Aberdeen, W.)

  Robertson, Sir G. Scott (Bradford)

  Berridge, T. H. D.

  Henry, Charles S.

  Robinson, S.

  Bethell, Sir J. H. (Essex, Romford)

  Herbert, Col. Sir Ivor (Mon. S.)

  Robson, Sir William Snowdon

  Bethell, T. R. (Essex, Maldon)

  Herbert, T. Arnold (Wycombe)

  Rogers, F. E. Newman

  Bowerman, C. W.

  Higham, John Sharp

  Russell, Rt. Hon. T. W.

  Brace, William

  Hobart, Sir Robert

  Rutherford, V. H. (Brentford)

  Branch, James

  Hodge, John

  Samuel, Rt. Hon. H. L. (Cleveland)

  Bright, J. A.

  Hudson, Walter

  Sears, J. E.

  Brocklehurst, W. B.

  Hyde, Clarendon G.

  Shackleton, David James

  Brooke, Stopford

  Illingworth, Percy H.

  Sherwell, Arthur James

  Bryce, J. Annan

  Jenkins, J.

  Shipman, Dr. John G.

  Burns, Rt. Hon. John

  Johnson, John (Gateshead)

  Silcock, Thomas Ball

  Buxton, Rt. Hon. Sydney Charles

  Jones, Leif (Appleby)

  Snowden, P.

  Byles, William Pollard

  Jones, William (Carnarvonshire)

  Soares, Ernest J.

  Causton, Rt. Hon. Richard Knight

  Kekewich, Sir George

  Stanger, H. Y.

  Cawley, Sir Frederick

  King, Alfred John (Knutsford)

  Stanley, Albert (Staffs, N. W.)

  Channing, Sir Francis Allston

  Laidlaw, Robert

  Steadman, W. C.

  Cherry, Rt. Hon. R. R.

  Lamb, Ernest H. (Rochester)

  Stewart, Halley (Greenock)

  Clough, William

  Lambert, George

  Summerbell, T.

  Cobbold, Felix Thornley

  Lamont, Norman

  Taylor, John W. (Durham)

  Collins, Sir Wm. J. (St. Pancras, W.)

  Lehmann, R. C.

  Taylor, Theodore C. (Radcliffe)

  Compton-Rickett, Sir J.

  Lever, A. Levy (Essex, Harwich)

  Tennant, H. J. (Berwickshire)

  Corbett, A. Cameron (Glasgow)

  Levy, Sir Maurice

  Thomas, Sir A. (Glamorgan, E.)

  Corbett, C. H. (Sussex, E. Grinstead)

  Lewis, John Herbert

  Thompson, J. W. H. (Somerset, E.)

  Cornwall, Sir Edwin A.

  Lloyd-George, Rt. Hon. David

  Thorne, G. R. (Wolverhampton)

  Crooks, William

  Lupton, Arnold

  Thorne, William (West Ham)

  Cullinan, J.

  Luttrell, Hugh Fownes

  Tillett, Louis John

  Davies, Ellis William (Eifion)

  Lyell, Charles Henry

  Verney, F. W.

  Dewar, Arthur (Edinburgh, S.)

  Lynch, H. B.

  Walsh, Stephen

  Dickson-Poynder, Sir John P.

  Macdonald, J. R. (Leicester)

  Walters, John Tudor

  Duncan, C. (Barrow-in-Furness)

  Macdonald, J. M. (Falkirk Burghs)

  Walton, Joseph

  Dunn, A. Edward (Camborne)

  Maclean, Donald

  Wardle, George J.

  Dunne, Major E. Martin (Walsall)

  Macnamara, Dr. Thomas J.

  Warner, Thomas Courtenay T.

  Ellbank, Master of

  Macpherson, J. T.

  Wason, John Cathcart (Orkney)

  Erskine, David C.

  M'Callum, John M.

  Waterlow, D. S.

  Evans, Sir S. T.

  McKenna, Rt. Hon. Reginald

  White, J. Dundas (Dumbartonshire)

  Everett, R. Lacey

  M'Laren, H. D. (Stafford, W.)

  White, Sir Luke (York, E. R.)

  Falconer, J.

  Massie, J.

  Whitehead, Rowland

  Ferens, T. R.

  Masterman, C. F. G.

  Wilkie, Alexander

  Ferguson, R. C. Munro

  Menzies, Sir Walter

  Williams, J. (Glamorgan)

  Findlay, Alexander

  Micklem, Nathaniel

  Wills, Arthur Walters

  Fuller, John Michael F.

  Molteno, Percy Alport

  Wilson, Hon. G. G. (Hull, W.)

  Gibb, James (Harrow)

  Mond, A.

  Wilson, John (Durham, Mid)

  Gill, A. H.

  Montgomery, H. G.

  Wilson, J. W. (Worcestershire, N.)

  Gladstone, Rt. Hon. Herbert John

  Morgan, G. Hay (Cornwall)

  Wilson, P. W. (St. Pancras, S.)

  Clover, Thomas

  Morgan, J. Lloyd (Carmarthen)

  Wilson, W. T. (Westhoughton)

  Goddard, Sir Daniel Ford

  Morton, Alpheus Cleophas

  Wood, T. M'Kinnon

  Greenwood, G. (Peterborough)

  Murphy, John (Kerry, East)

  Yoxall, Sir James

  Griffith, Ellis J.

  Murray, Capt. Hon. A. C. (Kincard.)

  Culland, John W.

  Myer, Horatio

  TELLERS FOR THE NOES.—Mr. Joseph Pease and Sir E. Strachey.

  Haldane, Rt. Hon. Richard B.

  Napier, T. B.

  Mr. LLOYD-GEORGE Mr. LLOYD-GEORGE moved, after the words "contract to the contrary," to insert the words, "If at any time Unde-
  726
  veloped Land Duty is not assessed within the year for which it is charged, owing to there being no value either shown in the

  727
  provisional valuation or finally Settled on which the duty can be assessed, or for any other reason, the duty may be assessed at any time, and shall be payable at any time after the expiration of two months from the date of the assessment."
  Mr. WATSON RUTHERFORD Mr. WATSON RUTHERFORD moved to leave out from the proposed Amendment the words, "may be assessed at any time, and shall be payable at any time after the expiration of two months from the date of the assessment," and to insert, after the word "duty," the words "for that year shall not be payable."
  I am bound to say that when I got to the words in the Chancellor's Amendment, "finally settled," I looked around to see if there was any substance that finally settled could possibly deal with. I came to the conclusion that the draftsman had left a word out by mistake. What exactly that means I do not know. The Amendment says "may be assessed at any time," and may be insisted on being recovered. It seems to me this is a case of great hardship. When, for some reason or other, probably and possibly through no fault in any way of the owner of the property, but for some reason in a given year, the duty is not assessed and is not asked for, then the Chancellor of the Exchequer wants to get permission to come down at some future date, possibly years afterwards, and ask him for those arrears of duty.
  I consider that a most unfair suggestion. It seems to me that if the Inland Revenue have not taken the necessary precautions to enable them to collect the duty in any year that duty ought to cease to be payable. In many of the offices all over the country there will be a tremendous congestion of business. It will be almost impossible to get some of the site values and other details settled, and there are certain to be arrears of collection. I shall probably be told that, in the case of Income Tax, if a man does not pay what is due, the Crown can come upon him for all the arrears. But, as a matter of practice, the Crown never does ask a man for arrears where he has not himself committed some default. That, however, will not be the case here.
  For a variety of reasons the assessment may not be made, and then, when the circumstances, perhaps, have entirely altered—possibly the man may have disposed of the property or have entered into contracts in a variety of ways—the
  728
  Chancellor of the Exchequer asks for the power to collect the arrears without any limit. The object of my Amendment is to prevent that and to say that if the Government do not take the trouble to ask for the tax in the year in which it is payable, they shall not be able to demand it in subsequent years.
  Mr. LLOYD-GEORGE: I think the hon. Member will realise that there must be some power of collecting arrears. What he really wants is to limit that power. I agree that there should not be unlimited power to collect five, ten, or even twenty years' accumulations of arrears. I think the hon. Member's point is that the Commissioners might say, "Here is a piece of undeveloped land which we have never discovered before. It was equally valuable twenty years ago, and therefore we will claim twenty years' arrears of undeveloped Land Tax." The hon. Member will probably agree, however, that it is quite impossible for us not to take power to collect arrears, especially now that we are to make the valuation ourselves. Otherwise it might be said that the Commissioners could pick and choose. They might value one man's property now and that of another man not until next year. That is obviously a state of things we cannot allow. I do not mean to say that it would lead to any corrupt partiality, but there might be a suggestion of favouring one landlord and penalising another. I think the best way of meeting the case would be to adopt the limitation which obtains in the case of Income Tax, namely, three years.
  Mr. WATSON RUTHERFORD: I think the Chancellor of the Exchequer has in mind the converse position, namely, that if you pay too much Income Tax you cannot get it back after three years.
  Mr. LLOYD-GEORGE: I think I am right in saying that the power to collect arrears of Income Tax is limited to three years. If the hon. Member will accept a similar limitation in this case I shall be prepared to insert words either now or on the Report stage.
  Mr. AUSTEN CHAMBERLAIN: I think my hon. Friend will be wise to accept the proposal of the Chancellor of the Exchequer. With regard to the general working of the tax, I think it is a reasonable compromise. When once the tax is in working order, I think it will be a fair solution. But I confess that when I saw the Amendment of the Chancellor of the Exchequer

  729
  it did not strike me in the light of applying to a piece of land which, not coming under the tax when the Commissioners make their first survey, at some future time becomes undeveloped land within the meaning of the statute, and therefore liable to the tax, but escapes the notice of the Commissioners. I thought it was to deal with cases which will arise in the first years before the valuation is completed.
  Mr. LLOYD-GEORGE: That is the object.
  Mr. AUSTEN CHAMBERLAIN: That is quite a different matter, and the Amendment will at any rate cover it. Though I think the concession promised by the Chancellor of the Exchequer meets the case of the normal working of the tax, I think it will leave considerable unavoidable injustice in regard to the first period. The Prime Minister expressed the hope two days ago that the valuation might be completed within four years. Then the very case which the Chancellor of the Exchequer deprecated will arise, and some estates will not have been assessed during the first year, and the man who is assessed in the first year after the passing of the Act will say, "Why do you choose me? Why not begin with X? If you begin at one end of the scale, I shall pay during all of the first four years, while X will pay perhaps only for three." That kind of difference between the treatment of one man and the treatment of another in exactly similar circumstances must arise, and the Commissioners will be open to the complaints of the taxpayer who is charged while his neighbour escapes. But that is due to the determination of the Government to proceed in the way they have adopted. It only shows once again that the methods of this Bill are radically wrong. You ought to begin with a Valuation Bill, and then, when you have completed your valuation, you could proceed to impose your tax. But because you have chosen to smuggle a Valuation Bill into scattered clauses of a Finance and Taxing Bill, and to impose taxes years before the valuation is completed, then will and must occur not only injustice as between individual and individual, but in many cases inconvenience of a serious character in the ordinary transactions of business. A man whose property is unassessed may wish to sell it, but there will be the uncertainty introduced into the bargain by the Chancellor of the Exchequer. The parties will not know exactly what they are doing until
  730
  the valuation is completed, as they will not be able to calculate the tax to which the owner will be liable. In this case it will affect the purchaser more than the owner, because he will be buying in ignorance of his exact obligations.
  Mr. WATSON RUTHERFORD: If I understood the Chancellor of the Exchequer aright, he said that while he could not accept the Amendment as it stands, he would be prepared to insert words to the effect that the recovery of arrears should be limited to three years.
  Mr. LLOYD-GEORGE: Substantially, that is so.
  Mr. WATSON RUTHERFORD: Then I would ask leave to withdraw my Amendment and to substitute another.
  Amendment to the proposed Amendment, by leave, withdrawn.
  Mr. WATSON RUTHERFORD Mr. WATSON RUTHERFORD moved to add at the end of the proposed Amendment the words, "But the arrears shall be limited to three years."
  Mr. LLOYD-GEORGE: Might I suggest that the hon. Member should move his Amendment in this form: "Save, however, that no such duty shall be recoverable more than three years after the expiration of the year for which it is payable"? It is really the same thing.
  Mr. WATSON RUTHERFORD: I agree. It is the same idea.
  Amendment to the proposed Amendment, by leave, withdrawn.
  Mr. WATSON RUTHERFORD Mr. WATSON RUTHERFORD moved to add at the end of the proposed Amendment the words, "Save, however, that no such duty shall be recoverable more than three years after the expiration of the year for which it is payable."
  Mr. RAWLINSON: May I point out how very largely the Government have altered their views in this matter of valuation. The question of the coming into operation of this Act was raised previously, and it was pointed out that unless its operation was postponed till 1911, or some such date, the inequalities which have since become apparent would continually occur. The Chancellor of the Exchequer said that so far as undeveloped land was concerned, there would not be the slightest difficulty of dealing with the matter between the time of passing the

  731
  Act and 31st March next. The work of the Commissioners, he said, under this system would be no greater; would be, in fact, substantially the same as under the present system. Under the Bill as it was then, the Chancellor of the Exchequer said that they would have to take out the valuation of the whole of the undeveloped land in the Kingdom. I only make this comment, which I wish to emphasise, and on a comparatively small matter, to point out how, in much larger matters, the Government have underestimated the importance of this great valuation which they are undertaking.
  Amendment to the proposed Amendment agreed to.
  Amendment, as amended, agreed to.
  Mr. LLOYD-GEORGE Mr. LLOYD-GEORGE moved to leave out the words, "Provided that in any case where the Commissioners are satisfied that land is in the course of boná fide development, and that it would be just in the special circumstances of the case to postpone the payment of Undeveloped Land Duty in any year, the Commissioners may postpone the collection and payment of the duty for that year for such period, not exceeding five years, as they think fit."
  Mr. AUSTEN CHAMBERLAIN: On a point of order, may I ask whether the Amendment standing in the name of my Noble Friend the Member for Marylebone (Lord R. Cecil) is in order? It says:—"Provided that such owner or person may, instead of paying the duty, require the Commissioners to purchase the land or mineral rights for their total value, and the Commissioners shall thereupon purchase such land or mineral rights on behalf of the Crown or of the local authority of the district if they so desire."
  The DEPUTY-CHAIRMAN: The matter will require a Resolution.
  Mr. AUSTEN CHAMBERLAIN: I submit it requires no Resolution. It can only require a Resolution if it imposes a burden on the taxpayer. It is the essence of the Government's case that the land is not put to its best economic use or there would be no tax, and if it is put to its best economic use then its rise in value would be steady, continuous, and progressive.
  Mr. LLOYD-GEORGE: If the words I have moved to omit were left in they would
  732
  detract from the value of the words that have been inserted.
  Mr. AUSTEN CHAMBERLAIN: I agree that in some respects the Amendment dealing with the £100 goes further than these words. Does it in all respects cover the same thing? Take the man who has not spent his £100. He gets some small accommodation, but scarcely relief. I think that in the main the £100 provision is more valuable than these words that the Chancellor of the Exchequer is taking away. He is taking away something by simply striking out these words, which he has not provided for anywhere else.
  Mr. LLOYD-GEORGE: I do not want to deprive anyone of any advantage. But I am desirous of meeting the right hon. Gentleman.
  Mr. AUSTEN CHAMBERLAIN: The Chancellor of the Exchequer has met me very fairly, and I want to meet him, but I want to do the thing the other way round. If you leave the words here you might take them out on Report, or bring in other words.
  Mr. LLOYD-GEORGE: No, I am afraid I cannot. I am certain I can put them in on Report. I am not clear that I can take them out.
  Mr. AUSTEN CHAMBERLAIN: Your only reason why you could not take them out on Report is that taking them out is in fact imposing a charge.
  Mr. LLOYD-GEORGE: That might be argued.
  Mr. AUSTEN CHAMBERLAIN: The Chancellor of the Exchequer says that the matter needs grave consideration. I think that is an additional difficulty. I say quite frankly why I wish to proceed the other way round is because the Chancellor knows we on this side of the House are at the mercy of the Government. I might put down an Amendment on Report, and owing to the circumstances of Debate—
  Mr. LLOYD-GEORGE: If the right hon. Gentleman prefers it that way I do not want to dispute the matter with him, I do not mind, but I would warn him as to what may happen.
  Mr. AUSTEN CHAMBERLAIN: The Chancellor of the Exchequer has warned me both ways. I think I had better fall in with the original proposal of the Chancellor of the Exchequer that he should take the words out now, and give the matter his personal consideration. The only

  733
  reason why I was going to press the thing was that the Chancellor of the Exchequer can always secure a hearing for an Amendment. We on this side may under circumstances which are familiar to the House, in the course of the Debate, or owing to the ruling of the Chairman as to the importance of the subject, be unable to do so. I am quite content if the Chancellor of the Exchequer undertakes to look into it if he finds by omitting these words to restore that which was subtracted.
  Mr. SALTER: If I might venture I would point out that the Amendment, a much larger one no doubt in scope to which the Chancellor of the Exchequer has referred, is not by any means the same thing as the case which he has dealt with in the clause which is now under discussion. The Amendment of the Chancellor of the Exchequer provides that the duty as such shall be payable where money at a certain rate had been expended upon the land; this provides for the postponement, but does not provide for non-payment or immunity of the land at all. I have put down an Amendment to this clause suggesting that in cases where the development of the property is going forward with due speed to the satisfaction of the Commissioners within a time which they consider reasonable, that then there should be, not only first of all postponement, but that at the expiration of that time remission would be only right and just. You are proceeding on the hypothesis that at the commencement of the material period in the area the owner is doing his best and developing, and is going forward at a proper speed, and gets his development completed over the area in a period of time which the Commissioners think proper. It appears to me it is only common justice to say that in that case the duty should be first postponed, and I do not think it is too much to ask that at the end of the time it should be remitted. But if the Chancellor's Amendment stood,
  what would happen is that the Commissioner would be allowed to remit in the case of a deserving owner who has got to work as rapidly as possible, as soon as he has spent nearly all of the £100 an acre. The area is then franked, but until the amount is expended he will be liable, but his liability will be postponed. I think a man who is doing his best to develop his land, and does develop it in the proper time, should not in any way be charged this duty, and therefore I would ask the Chancellor of the Exchequer to consider whether, if he strikes out these words, he will not be sacrificing a serious protection?
  Mr. LLOYD-GEORGE: These words, at any rate, would not do that for which the hon. Member pleads. He pleads for the man who is in the course of spending £100; that he should not be charged, and that eventually he should be exempted. That is a good alternative, but if that case is to be safeguarded it will not be safeguarded by these words. I agree with the hon. Member that it is a case which ought to be safeguarded, that is where the man is in the actual course of expending £100. There ought to be power on the part of the Commissioners to say, "We will not charge him, we will exempt him." The case is put first of postponement and then of exemption. What you really want is something between the two, and I think we had far better stand by the suggestion of the right hon. Gentleman (Mr. Austen Chamberlain), and take out the words now and see if we can put in words later which will first postpone and eventually exempt the owner.
  Question put, "That Clause 13, as amended, stand part of the Bill."
  The Committee divided: Ayes, 179; Noes, 61.

  Division No. 440.]

  AYES.

  [8.30 p.m.

  Acland, Francis Dyke

  Bethell, T. R. (Essex, Maldon)

  Collins, Sir Wm. J. (St. Pancras, W.)

  Adkins, W. Ryland D.

  Bowerman, C. W.

  Compton-Rickett, Sir J.

  Ainsworth, John Stirling

  Brace, William

  Corbett, A. Cameron (Glasgow)

  Armitage, R.

  Branch, James

  Corbett, C. H. (Sussex, E. Grinstead)

  Atherley-Jones, L.

  Bright, J. A.

  Crooks, William

  Baker, Joseph A. (Finsbury, E.)

  Brocklehurst, W. B.

  Davies, Ellis William (Eifion)

  Balfour, Robert (Lanark)

  Brooke, Stopford

  Dewar, Arthur (Edinburgh, S.)

  Barker, Sir John

  Bryce, J. Annan

  Duncan, C. (Barrow-in-Furness)

  Barnard, E. B.

  Burns, Rt. Hon. John

  Dunn, A. Edward (Camborne)

  Barnes, G. N.

  Buxton, Rt. Hon. Sydney Charles

  Dunne, Major E. Martin (Walsall)

  Barran, Rowland Hirst

  Byles, William Pollard

  Elibank, Master of

  Barry, Redmond J. (Tyrone, N.)

  Causton, Rt. Hon. Richard Knight

  Everett, R. Lacey

  Beale, W. P.

  Cawley, Sir Frederick

  Falconer, J.

  Berridge, T. H. D.

  Cherry, Rt. Hon. R. R.

  Ferens, T. R.

  Bethell, Sir J. H. (Essex, Romford)

  Clough, William

  Ferguson, R. C. Munro

  Findlay, Alexander

  Lewis, John Herbert

  Runciman, Ht. Hon. Walter

  Fuller, John Michael F.

  Lloyd-George, Rt. Hon. David

  Russell, Rt. Hon. T. W.

  Gibb, James (Harrow)

  Lupton, Arnold

  Rutherford, V. H. (Brentford)

  Gill, A. H.

  Luttrell, Hugh Fownes

  Samuel, Rt. Hon. H. L. (Cleveland)

  Gladstone, Rt. Hon. Herbert John

  Lyell, Charles Henry

  Sears, J. E.

  Glover, Thomas

  Lynch, H. B.

  Seely, Colonel

  Goddard, Sir Daniel Ford

  Macdonald, J. R. (Leicester)

  Shackleton, David James

  Greenwood, G. (Peterborough)

  Macdonald, J. M. (Falkirk Burghs)

  Sherwell, Arthur James

  Griffith, Ellis J.

  Maclean, Donald

  Shipman, Dr. John G.

  Gulland, John W.

  Macnamara, Dr. Thomas J.

  Silcock, Thomas Ball

  Haldane, Rt. Hon. Richard B.

  Macpherson, J. T.

  Snowden, F.

  Hall, Frederick

  M'Callum, John M.

  Soares, Ernest J.

  Hancock, J. G.

  M'Laren, H. D. (Stafford, W.)

  Stanger, H. Y.

  Harcourt, Rt. Hon. Lewis (Rossendale)

  Massie, J.

  Stanley, Albert (Staffs, N. W.)

  Harcourt, Robert V. (Montrose)

  Masterman, C. F. G.

  Stanley, Hon. A. Lyulph (Cheshire)

  Hardy, George A. (Suffolk)

  Menzies, Sir Walter

  Steadman, W. C.

  Harmsworth, Cecil B. (Worcester)

  Micklem, Nathaniel

  Stewart, Halley (Greenock)

  Harvey, W. E. (Derbyshire, N. E.)

  Molteno, Percy Alport

  Strauss, E. A. (Abingdon)

  Harwood, George

  Montgomery, H. G.

  Summerbell, T.

  Haslam, James (Derbyshire)

  Morgan, G. Hay (Cornwall)

  Taylor, John W. (Durham)

  Haworth, Arthur A.

  Morgan, J. Lloyd (Carmarthen)

  Taylor, Theodore C. (Radcliffe)

  Hazel, Dr. A. E. W.

  Morton, Alpheus Cleophas

  Tennant, H. J. (Berwickshire)

  Hedges, A. Paget

  Murray, Capt. Hon. A. C. (Kincard.)

  Thomas, Sir A. (Glamorgan, E.)

  Helme, Norval Watson

  Myer, Horatio

  Thompson, J. W. H. (Somerset, E.)

  Hemmerde, Edward George

  Napier, T. B

  Thorne, G. R. (Wolverhampton)

  Henderson, Arthur (Durham)

  Newnes, F. (Notts, Bassetlaw)

  Thorne, William (West Ham)

  Henderson, J. McD. (Aberdeen, W.)

  Nicholls, George

  Walsh, Stephen

  Henry, Charles S.

  Nicholson, Charles N. (Doncaster)

  Warner, Thomas Courtenay T.

  Herbert, T. Arnold (Wycombe)

  Norman, Sir Henry

  Wason, John Cathcart (Orkney)

  Higham, John Sharp

  Partington, Oswald

  Waterlow, D. S.

  Hodge, John

  Pearce, Robert (Staffs, Leek)

  White, J. Dundas (Dumbartonshire)

  Hudson, Walter

  Pearce, William (Limehouse)

  White, Sir Luke (York, E. R.)

  Hyde, Clarendon G.

  Pickersgill, Edward Hare

  Whitehead, Rowland

  Illingworth, Percy H.

  Price, Sir Robert J. (Norfolk, E.)

  Wilkie, Alexander

  Jenkins, J.

  Priestley, Arthur (Grantham)

  Williams, J. (Glamorgan)

  Johnson, John (Gateshead)

  Rainy, A. Rolland

  Wills, Arthur Walters

  Jones, Leif (Appleby)

  Richards, Thomas (W. Monmouth)

  Wilson, John (Durham, Mid)

  Jones, William (Carnarvonshire)

  Richards, T. F. (Wolverhampton, W.

  Wilson, J. W. (Worcestershire, N.)

  King, Alfred John (Knutsford)

  Richardson, A.

  Wilson, P. W. (St. Pancras, S.)

  Laidlaw, Robert

  Roberts, Charles H. (Lincoln)

  Wilson, W. T. (Westhoughton)

  Lamb, Ernest H. (Rochester)

  Roberts, G. H. (Norwich)

  Wood, T. M'Kinnon

  Lambert, George

  Robertson, Sir G. Scott (Bradford)

  Yoxall, Sir James Henry

  Lamont, Norman

  Robinson, S.

  Lehmann, R. C.

  Robson, Sir William Snowdon

  TELLERS FOR THE AYES.—Mr. Joseph Pease and Sir E. Strachey.

  Lever, A. Levy (Essex, Harwich)

  Roch, Walter F. (Pembroke)

  Levy, Sir Maurice

  Rogers, F. E. Newman

  NOES.

  Arkwright, John Stanhope

  Gordon, J.

  Newdegate, F. A.

  Ashley, W. W.

  Guinness, Hon. W. E. (B. S. Edmunds)

  Parkes, Ebenezer

  Barrie, H. T. (Londonderry, N.)

  Hermon-Hodge, Sir Robert

  Pease, Herbert Pike (Darlington)

  Bull, Sir William James

  Hills, J. W.

  Peel, Hon. W. R. W.

  Butcher, Samuel Henry

  Hope, James Fitzalan (Sheffield)

  Percy, Earl

  Carlile, E. Hildred

  Hunt, Rowland

  Powell, Sir Francis Sharp

  Cecil, Evelyn (Aston Manor)

  Joynson-Hicks, William

  Pretyman, E. G.

  Cecil, Lord R. (Marylebone, E.)

  Kennaway, Rt. Hon. Sir John H.

  Randles, Sir John Scurrah

  Chamberlain, Rt. Hon. J. A. (Worc'r)

  Kerry, Earl of

  Renwick, George

  Clive, Percy Archer

  Lambton, Hon. Frederick William

  Ropner, Colonel Sir Robert

  Clyde, J. Avon

  Lane-Fox, G. R.

  Rutherford, Watson (Liverpool)

  Corbett, T. L. (Down, North)

  Law, Andrew Bonar (Dulwich)

  Salter, Arthur Clavell

  Courthope, G. Loyd

  Lee, Arthur H. (Hants, Fareham)

  Stone, Sir Benjamin

  Craig, Captain James (Down, E.)

  Lockwood, Rt. Hon. Lt.-Col. A. R.

  Tuke, Sir John Batty

  Dickson, Rt. Hon. C. Scott-

  Lonsdale, John Brownlee

  Walrond, Hon. Lionel

  Doughty, Sir George

  Lowe, Sir Francis William

  Warde, Col. C. E. (Kent, Mid)

  Douglas, Rt. Hon. A. Akers-

  MacCaw, Wm. J. MacGeagh

  Williams, Col. R. (Dorset, W.)

  Du Cros, Arthur

  Magnus, Sir Philip

  Winterton, Earl

  Fell, Arthur

  Moore, William

  Fletcher, J. S.

  Morpeth, Viscount

  TELLERS FOR THE NOES.—Mr. G. D. Faber and Mr. Rawlinson.

  Forster, Henry William

  Morrison-Bell, Captain

  Gardner, Ernest

  Question, "That the words proposed to be left out stand part of the Clause," put, and agreed to.

VALUATION FOR PURPOSES OF DUTIES ON LAND VALUES.

  CLAUSE 14.—(Definition of Total Value and Site Value of Land, excluding Minerals.)
  (1) For the purposes of this Part of this Act, the total value of land means the amount which the fee simple of the land,
  736
  if sold at the time in the open market by a willing seller in its then condition might be expected to realize.
  (2) For the purposes of this Part of this Act the site value of land means the amount which the fee simple of the land, if sold at the time in the open market by a willing seller, might be expected to realise

  737
  if the land were divested of any buildings, and of any other structures (including fixed or attached machinery) on, in, or under the surface, which are appurtenant to or used in connection with any such buildings and of all growing timber, fruit trees, fruit bushes, and other things growing thereon.
  (3) For the purposes both of total value and site value, land shall be deemed to be sold free from incumbrances, but subject to any easements affecting the land, and to any covenant restricting the use of the land entered into before the thirtieth day of April nineteen hundred and nine, where, in the opinion of the Commissioners, the restraint imposed by the covenant is reasonably necessary in the interests of the public, or in view of the character and surroundings of the neighbourhood, and the opinion of the Commissioners shall in this case be final and not subject to any appeal.
  (4) The Commissioners shall allow as deductions from the site value of any land:—

  (a) Any part of that site value which is proved to the satisfaction of the Commissioners to be directly attributable to works of a permanent character executed bonâ fide by or on behalf of any person interested in the land for the purpose of fitting the land for use as building land or for the purpose of any business trade or industry other than agriculture; and

  (b) Any sums which in the opinion of the Commissioners it would be necessary to expend in order to divest the land of buildings, timber, trees, or other things of which it is to be taken to be divested for the purpose of arriving at the site value and of which it would be necessary to divest the land for the purpose of realising the full site value;

  and the site value as reduced by those reductions shall be taken to be the site value as ascertained for the purposes of this Part of this Act.
  Mr. WATSON RUTHERFORD Mr. WATSON RUTHERFORD moved, in Section (1), after the word "the" I "the amount which the fee simple"], to insert the word "net." The section would then read, "(1) For the purposes of this Part of this Act, the total value of land means the net amount which the fee simple of the land, if sold at the time in the open market by a willing seller in its then condition might be expected to realise." It is an important point, and not a very lengthy one. My point is this: Supposing
  738
  a property is sold, say, for £1,000. It would naturally be assumed, for the purposes of this clause, or for any other purposes, that £1,000 would be the exact figure to be taken into account for the purposes of this calculation, but, as a matter of fact, when the property is sold nominally for £1,000, it does not actually realise £1,000 to the owner, but probably £982 10s., or something like that, because there is frequently the cost of valuation, and always the legal expenses of the vendor. The result is that it is more equitable in all these cases to take the net amount which a man would realise, because this clause is giving the definition of how the value is to be arrived at, and than value has got to be deducted or other values deducted from it later on for the purpose of arriving at the amount of the tax, and it is just the difference between one value and the other that is going to make all the difference in the world. It is therefore important that the duty should be accurately ascertained. If you take the ordinary case of a man who in round figures buys a property, say, for £800, and sells it for £1,000, the difference is £200. If he had Increment Duty to pay upon that, it would be one-fifth of £200, namely, £40. Taking the two together, it makes an immense difference, because in the case I am putting the man who had given £800 would really pay £825, because he would have £25 expenses at the time he bought it, and if he sold it for £1,000 he would get probably £982 10s., or something like that sum. You take merely the price which appears in the conveyance. Looking at these clauses in other places it is the exact amount of the consideration which is referred to, and that is the gross price which appears in the conveyance. I want to make it clear that if a man has to pay one of these duties and is going to pay 20 per cent. on some profit he has made, let him pay 20 per cent. on the actual profit, and let the net amount be taken into account. In cases where men keep books and enter the cost of what they buy and the amount they receive for what they sell they do not enter the price which appears in the conveyance, but they enter the actual money paid out by the bank or by cash, as the case may be, and they enter as receipts the actual net amount they receive, and not the gross total that appears in the conveyance. I am anxious that common justice should be done in this matter, and it is with that object that I move the Amendment which stands in my name to insert the word "net."
  Sir W. ROBSON: This Amendment involves some rather complex considerations. We are dealing in Clause 14 with two taxes—first the Increment Value Duty and next the Undeveloped Land Duty. We have got to test each Amendment—first with the Increment Value Duty and next with the Undeveloped Land Duty. The comparison for the purpose of the Increment Value Duty between the purchase money paid and the transfer with the original site value—that is to say, the total value—does not really enter into it. It would not really matter whether you included expenses or not, because it would be the same in both cases. But that is not what we are doing. The hon. Member will see that I shall deal with both of his Amendments in the same argument.
  Mr. WATSON RUTHERFORD: My argument applied to both as well.
  Sir W. ROBSON: I think I can show the hon. Member that his proposal would not be to the advantage of the taxpayer.
  Mr. WATSON RUTHERFORD: I did not argue that point at all. I was arguing for abstract justice.
  Sir W. ROBSON: I quite realise the hon. Gentleman does not represent any sectional or class interest. If I can show that the proposal of the Government is in favour of the taxpayer, then I think I shall commend myself a little more to the favour of the House, and especially to the Opposition. The comparison on which we are going to collect the taxes is between the consideration on the transfer, as provided in Clause 2, and the original site value, as defined in Clause 14. We have already passed Clause 2, and we have said that the taxable value shall be the whole consideration on transfer. We have not there inserted the word "net" at all. When we come to taxation, we take the gross amount, and make no deduction for expenses. If the hon. Member's Amendment is accepted we shall, in the original site value, make a deduction for expenses, but the higher the original site value for the purposes of the Increment Value Duty the better it is for the taxpayer, because it is the amount of the original site value that is deducted from the consideration given on the transfer before you arrive at the amount it is desired to tax. The taxpayer, for the purposes of the Increment Value Duty, therefore obviously gains by a high original site value.
  Mr. WATSON RUTHERFORD: It is just the opposite on the Undeveloped Land Duty.
  Sir W. ROBSON: I know, and I am coming to that. We do not want to put any fresh burden upon the taxpayer, and it is to the advantage of the taxpayer to have a high original site value. This Amendment would, for the purposes of the Increment Value Duty reduce the amount of the original site value without reducing the amount of the value under Clause 2 which comes to be taxed. That would be to the disadvantage of the taxpayer. Now I come to the Undeveloped Land Duty. There is on the Increment Value Duty a substantial disadvantage, and the Amendment would only tend in an extremely small degree to the advantage of the taxpayer on the Undeveloped Land Duty. It would only amount to a halfpenny in the £ upon £25 to take the figure mentioned by the hon. Member as being about the amount of the expenses. The amount gained by the taxpayer by the introduction of the word "net" is therefore really a negligible quantity. It is true that for the purposes of the Undeveloped Land Duty you reduce the value by £20 or £30, and therefore save 20 or 30 halfpennies, but that is a very small and unimportant saving. I therefore think the hon. Member's Amendment would be against the taxpayer, and we propose to let the clause stand as it is. It will be very inconvenient to have a deduction from the original site value which we have not provided for in Clause 2.
  Mr. PRETYMAN: I appreciate the hon. and learned Member's answer, but there are two points which I think he has not covered. He has with regard to total value omitted one consideration. The Prime Minister yesterday informed us that the total value ascertained here was going to be the method on which the Death Duties are to be calculated. That is a very important consideration indeed. I think the Death Duties should be levied upon the net value and not upon the total value, and on that ground I shall certainly advise my hon. Friend to adhere to his Amendment.
  Mr. WATSON RUTHERFORD: The Death Duties are now.
  Mr. PRETYMAN: Yes, but how will it affect agricultural land under the new clause?
  Mr. HALDANE: There is no cost of conveyance in the case of Death Duties; that is the point.
  Mr. PRETYMAN: At present I am not quite clear. The Death Duties is a very complicated subject. It may be right as the Death Duties are now calculated, but on agricultural land and land generally they are calculated upon so many years' purchased under Schedule A. It is now proposed to substitute for that the value as ascertained here We shall, therefore, require the word "net." Is not that so?
  Sir W. ROBSON: I think the hon. and gallant Member is not quite correct in what he ascribes to the Prime Minister. I rather understood that all the right hon. Gentleman said was that the new process of valuation would assist in the case of the Death Duties. He did not say there was going to be any difference in the mode of assessment.
  Mr. PRETYMAN: I was not relying upon what the Prime Minister said, but upon Clause 44, which definitely proposes to abolish the persent method of the assessment of the Death Duty. Taking that, together with the Prime Minister's statement, I do not know whether the learned Atorney-General or the Secretary of State for War will suggest any method other than that proposed in this Clause 14. I have felt ever since I saw Clause 44 that it imported—and the Prime Minister's words strengthened that feeling—that this Clause 14 was going to form the basis for the Death Duties on all land in future, and in that case we do require the word "net." I do not see, as at present advised, what other basis is available than Clause 14, Section (1). There may be some other basis, but I do not know what it is, and, unless we receive a satisfactory answer on that point, I hope my hon. Friend will press his Amendment in regard to total value. With regard to site value, it appears to me that the most satisfactory arrangement would be to introduce the word "net" in Clause 2 on Report. We shall then have the advantage of what is the real proper basis of valuation in both cases for comparison. We shall have a fair and proper comparison between net and site values.
  Mr. HALDANE: I cannot see how the introduction of the word "net" makes any difference to the point which the hon. Member has put forward. When you value the Death Duties the word is used in the manner suggested in the Amendment, but there is no such question here. I am not quite sure whether the words in which the hon. and gallant Member (Mr. Pretyman) introduced the subject were intended—
  Mr. PRETYMAN: They were only general words.
  Mr. HALDANE: The hon. and gallant Member was comparing the general systems of valuation, but that would not affect the principle on which the value of the property in this case is assessed, and which is defined in the Finance Act of 1884 and followed in Clause 44 of this Bill. The hon. and gallant Gentleman made a suggestion in regard to site value, but I would point out that you get the site value by making certain deductions, and the question of the cost of conveyance does not come in there.
  Mr. PRETYMAN: Perhaps I did not explain myself properly. There is no question of net site value; such a thing could not exist. I did not mean that. We do not propose to introduce the word "net" before the word "site."
  Mr. JAMES HOPE: This Clause 10 affects three taxes—the Increment Duty, the Reversion Duty, and the Undeveloped Land Duty. How far it has a bearing on the Death Duties it is very difficult to argue, but the other three duties certainly have a direct bearing on it, and I should like to point out the effect of the word "net" in each of those cases. The Attorney-General told us we might put the Reversion Duty out of account. I cannot really see why he suggests that. When we get back to the Reversion Duty the words are these: "Reversion Duty shall be recoverable from any lessor to whom any benefit accrues from the determination of a lease as a debt due to His Majesty. Every lessor shall, on the determination of a lease on the determination of which Reversion Duty is payable under this section, deliver an account to the Commissioners setting forth the particulars of the land and the value of the benefit accruing to the lessor by the determination of the lease." On what basis, then, ought it to be calculated for the purposes of this section? The benefit accruing to the lessor is to be the amount by which the total value of the land exceeds the capital value on consideration of the lease. It is quite obvious that the lower total value of the land will be the difference between that and the consideration for the lease. Therefore it will tell in favour of the taxpayer. In the case of undeveloped land, that has been admitted by the Attorney-General. It is for the benefit of the taxpayer that the word "net" should be inserted here. I think it is clear that in

  743
  two out of three cases it will be to the advantage of the taxpayer to have this word inserted. But now I come to the Increment Duty. You will find that the basis of the Increment Duty is not the same as that of the site value as denned by Section 10. The latter is ascertained on the basis of capital value. This is a very intricate point. It arises between Clauses 2 and 14, and although it has been several times raised, it has never been satisfactorily cleared up. If you look at Section (2) of Clause 2, you will find provided that the site value of the land shall be taken on the occasion on which Increment Value Duty becomes due. In each case you first take the capital value, which, I think is the same as the total value, and then you proceed to make certain deductions, and from that basis you argue what is the capital value. If you want to get the total value as low as possible, that will be the basis from which you make the deduction in order to arrive at the site value on the occasion on which the Increment Duty is due. It is doubtful whether the introduction of the word "net" here would not be to the advantage of the taxpayer also. I believe it is to the advantage of the taxpayer that you should have the total value, and, in the second instance, because it is from the total value that you arrive at the net value under Clause 2. Another consideration must be taken into consideration. If the Committee will look at Clause 12 they will see the difference. Clause 4, in case of the Increment Value Duty refers to what I believe is an established principle at present. The purchaser pays the Stamp Duty, but under Clause 4 it is the vendor or lessor who has to pay. The first section of Clause 4 provides that "On any transfer on sale of any land or interest in land, or on the grant of any lease of any land, Increment Value Duty shall be collected on the instrument by means of which the transfer or the lease is effected or agreed to be effected, and shall be assessed by the Commissioners and paid by the transferor or lessor, as the case may be." So here again there is a difference. Whether you put in the word "net" or not the difference will be in favour of the taxpayer, and if you put in the word "net" it is because the transferor or lessor pays the Stamp Duty. I admit the point is difficult and somewhat obscure, but it certainly does want clearing up. As regards undeveloped land it certainly is in the interests of the taxpayers that the word
  744
  "net" should be put in. It is equally clear that it is desirable in the case of Reversion Duty. As regards the increment, the point wants clearing up, but I think from the taxpayer's point of view there also the word "net" should be inserted. I would ask the learned Attorney-General to clear up, if he would, the doubtful point of Increment Value Duty which I have raised, and which is a doubtful point.
  Sir W. ROBSON: I do not think I can add anything to what I have already said. I think that what the hon. Member says about the Reversion Duty is probably correct, but on the other parts of the case I have nothing to add, but I do not want to come under the accusation of not giving an answer.
  Mr. RAWLINSON: On the Reversion Duty it is a very clear matter indeed.
  Sir W. ROBSON: I have said so; but I do not think it is very material.
  Mr. RAWLINSON: I do not think it is very material, but in dealing with the land it will make a considerable difference, as we are dealing with the amount of the consideration in the particular instance. If the Government see no real objection, is there any harm in allowing this Amendment, in the first place, of the net amount. For myself, I think it makes a great difference, although the Secretary for War says it will make a small one. If so, he could, one would think, make the concession. I have a wholesome dread that the first 28 clauses of this Bill are not a part of the Finance Bill of this year, but set up a standard for many other purposes and constitute a valuation which will be available at any future time. Therefore we, on this side of the House, attach great importance to this Amendment, and I venture to press that if it is such a small sum, as the Government think it is, there could be no harm in introducing it, especially if it is the important matter which I think it is.
  Sir W. ROBSON: It is a small sum, so far as amount is concerned, either to the taxpayer or the Revenue, but I think it would be a troublesome matter to the Commissioners, and that is why I do not like inserting it.
  Mr. JAMES HOPE: I hope I shall not be charged with vain repetition in rather pressing my point as to Clause 2. Surely it is in the interest of the taxpayer that increment value in Clause 2 should be net. The increment value there is based upon

  745
  the total value after certain deductions. You have to get the total capital value first, and then make these deductions before you arrive at the site value for the purposes of increment value under Section (2). Therefore it is in the interest of the taxpayer that the total from which you make your deduction should be low. Then, as to Clause 4, this Stamp Duty being charged upon the vendor, that ought to be taken into account, and if it is taken into account it will make the value low. I do not say it is of great importance, but it does come in there, and, therefore I submit to the hon. and learned Gentleman that his contention that the word "net" inserted here would for the purpose of the increment value be against the taxpayer, is really not sound, because if he reads Clause 2 he will see it is in the interest of the taxpayer that the total value, which is based on ascertaining the site value on which the Increment Duty is to be charged is low, and it would be made lower by inserting the word "net." The Stamp Duty is, of course, an additional point, which, I believe, tends in the same direction, although it is somewhat different.
  Sir W. ROBSON: I think the hon. Member is quite wrong when he spoke of the value. The value given in the clause is the consideration for the transfer. That makes the difference.
  Mr. JAMES HOPE: What is the meaning of Sub-section (b) in reference to the value of the fee simple of the land calcu-
  lated on the basis of the value of the consideration for the grant of the lease or the transfer of the interest. That must refer to some totally different value to that in Clause 14.
  Sir W. ROBSON: Again it is the value of the consideration both in Sub-sections (a) and (b) of Clause 2.
  Mr. PRETYMAN: What my hon. Friend suggests is that there should be the net value of the consideration.
  Mr. JAMES HOPE: I know that the relations between Clauses 2 and 14 are very difficult for any man to really understand, but if the hon. and learned Gentleman looks at Sub-section (d) of Clause 2 he will find it runs, "Where the occasion is a periodical occasion on which the duty is due in respect of land held by a body corporate or unincomporate, the value of the fee simple of the land as ascertained for the purposes of the assessment of duty under this Act." Surely that is the same as the total value under this section. If it is not so, then what is the difference; but if it is so, you want it low, and inserting the word "net" will make it low. Therefore the argument of the Attorney-General on the subject of increment falls to the ground, and he has already given way on the other two duties.
  Question put, "That the word 'net' be there inserted."
  The Committee divided: Ayes, 54; Noes, 182.

  Division No. 441.]

  AYES.

  [9.15 p.m.

  Ashley, W. W.

  Guinness, Hon. W. E. (B. S. Edmunds)

  Pease, Herbert Pike (Darlington)

  Barrie, H. T. (Londonderry, N.)

  Hermon-Hodge, Sir Robert

  Peel, Hon. W. R. W.

  Beach, Hon. Michael Hugh Hicks

  Hills, J. W.

  Pretyman, E. G.

  Bull, sir William James

  Joynson-Hicks, William

  Randles, Sir John Scurrah

  Carlile, E. Hildred

  King, Sir Henry Seymour (Hull)

  Rawlinson, John Frederick Peel

  Cecil, Evelyn (Aston Manor)

  Lambton, Hon. Frederick William

  Renwick, George

  Clive, Percy Archer

  Lane-Fox, G. R.

  Ropner, Colonel Sir Robert

  Clyde, J. Avon

  Law, Andrew Bonar (Dulwich)

  Salter, Arthur Clavell

  Corbett, T. L. (Down, North)

  Lee, Arthur H. (Hants, Fareham)

  Stone, Sir Benjamin

  Courthope, G. Loyd

  Lockwood, Rt. Hon. Lt.-Col. A. R.

  Talbot, Lord E. (Chichester)

  Craig, Captain James (Down, E.)

  Lonsdale, John Brownlee

  Tuke, Sir John Batty

  Doughty, Sir George

  Lowe, Sir Francis William

  Walker, Col. W. H. (Lancashire)

  Douglas, Rt. Hon. A. Akers-

  MacCaw, Win. J. MacGeagh

  Warond, Hon. Lionel

  Du Cros, Arthur

  Magnus, Sir Philip

  Warde, Col. C. E. (Kent, Mid)

  Faber, George Denison (York)

  Marks, H. H. (Kent)

  Winterton, Earl

  Fell, Arthur

  Moore, William

  Fletcher, J. S.

  Morpeth, Viscount

  TELLERS FOR THE AYES.—Mr. Watson Rutherford and Mr. James

  Forster, Henry William

  Morrison-Bell, Captain

  Gardner, Ernest

  Parkes, Ebenezer

  Hope.

  Gordon, J.

  NOES.

  Acland, Francis Dyke

  Baring, Godfroy (Isle of Wight)

  Beauchamp, E.

  Adkins, W. Ryland D.

  Barker, Sir John

  Bellairs, Carlyon

  Ainsworth, John Stirling

  Barnard, E. B.

  Berridge, T. H. D.

  Armitage, R.

  Barnes, G. N.

  Bethel), Sir J. H. (Essex, Romford)

  Atherley-Jones, L.

  Barran, Rowland Hirst

  Bethell, T. R. (Essex, Maldon)

  Baker, Joseph A. (Finsbury, E.)

  Barry, Redmond J. (Tyrone, N.)

  Bowerman, C. W.

  Balfour, Robert (Lanark)

  Beale, W. P

  Brace, William

  Branch, James

  Herbert, T. Arnold (Wycombe)

  Richardson, A.

  Bright, J. A.

  Higham, John Sharp

  Ridsdare, E. A.

  Brocklehurst, W. B.

  Hodge, John

  Roberts, Charles H. (Lincoln)

  Brooke, Stopford

  Hudson, waiter

  Roberts, G. H. (Norwich)

  Br yet, J. Annan

  Hyde, Clarendon G.

  Robertson, Sir G. Scott (Bradford)

  Burns, Rt. Hon. John

  Illingworth, Percy H.

  Robinson, S.

  Byles, William Pollard

  Jenkins, J.

  Robson, Sir William Snowdon

  Causton, Rt. Hon. Richard Knight

  Johnson, John (Gateshead)

  Rogers, F. E. Newman

  Cawley, Sir Frederick

  Jones, Leif (Appleby)

  Russell, Rt. Hon. T. W.

  Chance, Frederick William

  King, Alfred John (Knutsford)

  Rutherford, V. H. (Brentford)

  Channing, Sir Francis Allston

  Laidlaw, Robert

  Samuel, Rt. Hon. H. L. (Cleveland)

  Cherry, Rt. Hon. R. R.

  Lamb, Ernest H. (Rochester)

  Samuel, S. M. (Whitechapel)

  Clough, William

  Lambert, George

  Sears, J. E.

  Compton-Rickett, Sir J.

  Lamont, Norman

  Seely, Colonel

  Corbett, A. Cameron (Glasgow)

  Lehmann, R. C.

  Shackieton, David James

  Corbett, C. H. (Sussex, E. Grinstead)

  Lever, A. Levy (Essex, Harwich)

  Sherwell, Arthur James

  Crooks, William

  Levy, Sir Maurice

  Shipman, Dr. John G.

  Davies, Ellis William (Eifion)

  Lewis, John Herbert

  Silcock, Thomas Ball

  Dewar, Arthur (Edinburgh, S.)

  Lupton, Arnold

  Snowden, p.

  Dlike, Rt. Hon. Sir Charles

  Luttrell, Hugh Fownes

  Soares, Ernest J.

  Duncan, C. (Barrow-in-Furness)

  Lynch, H. B.

  Stanger, H. Y.

  Dunn, A. Edward (Camborne)

  Macdonald, J. R. (Leicester)

  Stanley, Albert (Staffs, N. W.)

  Elibank, Master of

  Macdonald, J. M. (Falkirk Burghs)

  Stanley, Hon. A. Lyulph (Cheshire)

  Erskine, David C.

  Maclean, Donald

  Steadman, W. C.

  Everett, R. Lacey

  Macnamara, Dr. Thomas J.

  Stewart, Halley (Greenock)

  Ferens, T. R

  Macpherson, J. T.

  Strauss, E. A. (Abingdon)

  Ferguson, R. C. Munro

  M'Callum, John M.

  Summerbell, T.

  Findlay, Alexander

  M'Laren, H. D. (Stafford, W.)

  Taylor, John W. (Durham)

  Fuller, John Michael F.

  Massie, J.

  Taylor, Theodore C. (Radcliffe)

  Gibb, James (Harrow)

  Menzies, Sir Walter

  Tennant, H. J. (Berwickshire)

  Gill, A. H.

  Micklem, Nathaniel

  Thomas, Sir A. (Glamorgan, E.)

  Gladstone, Rt. Hon. Herbert John

  Molteno, Percy Alport

  Thempson, J. W, K. (Somerset, E.)

  Glover, Thomas

  Montgomery, H. G.

  Thorne, G. R. (Wolverhampton)

  Goddard, Sir Daniel Ford

  Morgan, G. Hay (Cornwall)

  Verney, F. W.

  Greenwood, G. (Peterborough)

  Morgan, J. Lloyd (Carmarthen)

  Walsh, Stephen

  Griffith, Ellis J.

  Worse, L. L.

  Warner, Thomas Courtenay T.

  Gulland, John W.

  Morton, Alpheus Cleophas

  Wason, John Cathcart (Orkney)

  Haldane, Rt. Hon. Richard B.

  Murray, Capt. Hon. A. C. (Kincard.)

  Waterlow, D. S.

  Hall, Frederick

  Myer, Horatio

  White, J. Dundas (Dumbartonshire)

  Hancock, J. G.

  Napier, T. B.

  White, Sir Luke (York, E. R.)

  Harcourt, Rt. Hon. L. (Rossendale)

  Newnes, F. (Notts, Bassetlaw)

  Whitehead, Rowland

  Harcourt, Robert V. (Montrose)

  Nicholls, George

  Wilkie, Alexander

  Hardy, George A. (Suffolk)

  Nicholson, Charles N. (Doncaster)

  Williams, J. (Glamorgan)

  Harmsworth, Cecil B. (Worcester)

  Norman, Sir Henry

  Wills, Arthur Walters

  Harvey, W. E. (Derbyshire, N. E.)

  O'Kelly, Conor (Mayo, N.)

  Wilson, Hon. G. G. (Hull, W.)

  Harwood, George

  Partington, Oswald

  Wilson, John (Durham, Mid)

  Haslam, James (Derbyshire)

  Pearce, Robert (Staffs, Leek)

  Wilson, J. W. (Worcestershire, N.)

  Haworth, Arthur A.

  scarce, William (Limehouse)

  Wilson, P. W. (St. Pancras, S.)

  Hazel, Dr. A. E. W.

  Perks, Sir Robert William

  Wilson, W. T. (Westhoughton)

  Hedges, A. Paget

  Pickersgill, Edward Hare

  Wood, T. M'Kinnon

  Helme, Norval Watson

  Price, Sir Robert J. (Norfolk, E.)

  Yoxall, Sir James Henry

  Hemmerde, Edward George

  Priestley, Arthur (Grantham)

  Henderson, Arthur (Durham)

  Rainy, A. Rolland

  TELLERS FOR THE NOES.—Mr. Joseph Pease and Sir E. Strachey.

  Henderson, I. McD. (Aberdeen, W.)

  Richards, T. F. (Wolverhampton, W.)

  Henry, Charles S.

  Richards, Thomas (W. Monmouth)

  Mr. WATSON RUTHERFORD Mr. WATSON RUTHERFORD moved, in Section (1), after the word "sold," to insert the words, "subject to such reasonable conditions of sale and restrictions (if any) as the Chancery Division of the High Court would in such case authorise and impose."
  The object of this sub-section is to find out the amount which a given property would realise. That is not such a simple proposition as at first glance anyone would think, because you have property under all sorts of varying conditions, and you have land the property of the same owner in the neighbourhood, and you have property that is held under all sorts of restrictions and all sorts of difficulties. The true test of what is the real value of any property at any time is what it could be sold for in the open market. The condi-
  748
  tions which you ought to consider are those reasonable and proper conditions which, if the court were to order the property to be sold, it would be referred to the Master to fix the conditions when he had considered all the circumstances of the case and fixed the conditions of sale, having regard to the best interests of the property and the proper conditions that ought to be imposed under the circumstances. It is a recognised rule that if you are selling property and want to realise the really proper and accurate and best conditions under which that property ought to be sold, having regard to all the circumstances, those conditions are ummarised in this expression, "subject to such reasonable conditions of sale and restrictions, if any, as the Chancery Division of the High Court would in such case

  749
  authorise and impose." There is no difficulty in finding out what those are, because they are recognised and laid down in a series of well-appreciated and well-rocognised regulations. It is not difficult to be advised as to what conditions, in nine cases out of ten, the Chancery Division would impose, and these are the proper conditions under which the property ought to be sold if you want to ascertain its real value. It is also equally important to say, "either as a whole or in such lots or parcels as would be reasonable under the circumstances of each case." I have no doubt at all that this is what the Government meant. I shall probably be told that this is what was implied. If that is the answer which I am going to get from the Government, then of course they can have really no vital objection to adopting the Amendment. But if there is some concealed difference in the words which I cannot at present imagine, I hope that they will tell us what the objection to the Amendment is.
  Mr. HALDANE: My hon. Friend (Mr. Watson Rutherford) began by apologising to the Committee for speaking so often. I do not think he has any need to apologise. He always talks in a good-natured way, and shows great shrewdness, and we are always prepared to hear him on this side of the House. When I was practising at the Bar my hon. Friend and I had a great many conveyances to draw up, and I had frequent consultations with him. If he had brought this point to me for consideration I should have been very much ashamed of him. I have drawn a great many conveyances myself, and I have not the smallest notion of what are the "reasonable conditions of sale and restrictions (if any) as the Chancery Division of the High Court would, in such case, authorise and impose." Fifty years ago these words might have had some meaning, but nobody now cares very much what the conditions of sale are. That being so, and it being clear that there is really no such thing as any scale, or standard, or stereotyped conditions of sale imposed by the Court of Chancery, and still less any that will make a difference in the price realised on the sale, I think that all that the hon. Member wishes to attain is covered by the words as they stand in the Bill. The words are, "For the purposes of this Part of this Act, the total value of land means the amount which the fee simple of the land, if sold at the time in the open market by a willing seller in its then condition might be expected to realise." If the hon. Member
  750
  wishes to introduce something bearing on the practice of the Chancery Division, the only result which would happen would be that everyone would reject it as having no possible ascertainable meaning.
  Mr. PRETYMAN: I do not think we can ask for a higher authority than the Secretary of State for War when he refers to his old practice at the Bar. I should be sorry to enter into controversy with him on this point, which I do not profess to understand. I hardly think that my hon. Friend would be well advised in pressing this Amendment.
  Mr. JAMES HOPE: Would not in these circumstances the Chancery Division impose such restrictions as would prevent the first part of an estate, perhaps being sold at a high price, from being used for some noxious purpose or inferior class of buildings which would impair the value of the rest of the estate? Would they not impose such conditions as would perhaps lessen the value in the first instance in order to save the rest of the property from being injured by some more or less unsuitable and undesirable use to which the first part might be applied?
  Mr. HALDANE: The words in the Bill cover the case put by the hon. Gentleman. "If sold at the time m the open market by a willing seller in its then condition might be expected to realise."
  Mr. J. W. HILLS: I venture to question the statement of the right hon. Gentleman. I think it is rather too wide to say that the conditions of sale do not affect the price. Surely it we have to ascertain the open market price we cannot get at that if you disregard the conditions of sale altogether. I agree that you cannot lay down a stereotyped form that will apply to all cases, but still, in each case, if on the sale of an estate certain conditions were imposed, these conditions would be taken into account in ascertaining the value. Surely that is a reasonable proposition.
  Mr. WATSON RUTHERFORD: There is a complete answer to what the Secretary of State for War has stated, but if the Government do not want the Amendment passed, I will not waste the time of the Committee in pressing it to a Division. I beg leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Mr. JAMES HOPE: I beg to move in Section (2) to leave out the words "in the

  751
  open market" ["if sold at the time in the open market by a willing seller"]. I move the Amendment with the view of ascertaining from the Government what is their construction of the words "in the open market." Do they mean in the open market under existing conditions? I think the question arises whether the open market means the open market under existing conditions or under the special conditions contemplated by the Bill. The difference will be considerable. If they mean the normal conditions as they existed before the passing of the Bill, of course, that would be very easily understood; but you would have to take the conditions as they would exist. Suppose this Bill were to pass, you would have each portion of land assessed for these valuations on the supposition that it would be sold. But if they were all put upon the market at the same time, obviously the price would very largely deteriorate. This is a point that has been alluded to, though not very definitely or closely, on former occasions, notably by the hon. Member for North Paddington (Mr. Chiozza Money), because obviously if all the land affected by these taxes were to be put on the market at once, the price would be very seriously reduced. There would be a considerable difference, supposing the market conditions of last year prevailed, from what there would be if all the land subject to these taxes were sold at once; and I wish to know which of these two conditions of affairs the Government contemplate by these words in the open market.
  Sir W. ROBSON: The hon. Member says that he does not quite know what sort of a market there will be and whether the valuer is to assume that everyone will sell at once or whether he is to assume that the tax would make no difference. Certainly the valuer would be foolish to assume that everybody would sell at once or that the market could possibly be affected in that respect. I have to remind the hon. Member that, after, all, this is a tax of a halfpenny per annum in the £ on the capital value, and that it is £2 per annum on £1,000 of the capital value. Take the other tax, the Increment Tax. There again one would scarcely suppose that a great number of properties would be suddenly thrown on the market, because if there is a subsequent sale there is a liability to pay one-fifth of the increment
  752
  arising. So we do not anticipate by any means such a disturbance of the market as the hon. Member has indicated. The valuer will know what the market will be and he will deal with it, and the tax may be reduced in some cases; but he must exercise his judgment as to what the effect on the market will be. Certainly it is not for us to add any words of qualification to words in themselves quite simple and understood by all those who are interested in the valuation of land.
  Mr. JOYNSON-HICKS: There is a consequential Amendment put down by the Noble Lord (Lord Robert Cecil) to leave out "Might be expected to" and insert "Would," and then follows a second consequential Amendment to insert "Provided that for the purpose of Undeveloped Land Duty land shall not be deemed to have a total value higher than could actually be obtained from a known buyer." We had some remarks on this subject from the right hon. Gentleman the Secretary for War the night before last in answer to remarks by myself. The Secretary for War told us that unless the land would realise in the market a certain price it would not pay the tax. I took the case of 800 acres of land at Trafford Park near Manchester, any one of which, if sold to-day, would realise £1,000, but it was quite impossible to realise £1,000 each for the whole of the 800 acres. You could not put up the whole lot for sale and realise £800,000. The right hon. Gentleman said that it they would not realise it in the estate market they would not pay a tax, and I asked him a further question, Is it really the case that this tax is not to be placed on any land that would not realise what the owners suggest is the market value? The right hon. Gentleman said it would be placed on the market value for the time being, the capital value of the site—that is, what it will get in the market. Now, it is very important with regard to this high-priced land to ascertain whether the halfpenny tax on undeveloped land is to be paid on what is really the value of the land; that is to say, what an individual acre of the land is worth for which you can find a purchaser—a £1,000—or whether it is to be placed upon the value which the whole of the land would realise if the whole of it was thrown into the market at once. I do not quite see any other part of the Bill where that point would be so reasonably raised and reasonably settled as at the present moment. If it is true, as the right hon. Gentleman said—and I am sure he meant what he said—that unless 800 acres of Traf-

  753
  ford Park would realise to-day in the market £800,000 it would not be right to value it for that amount so far as undeveloped land went. Then, on the other hand, there comes in the difficulty with regard to the Reversion Duty, because if one were to value the whole of the 800 acres in Trafford Park, say, at £300 an acre, the price which the whole would realise if the whole of it were placed on the market to-day, then if one acre of it were sold to-morrow morning for £1,000 there would be the very large Increment Duty to be paid on the difference between the value of the whole at £300 an acre and the value of the one acre sold at £1,000 for the acre. I cannot help feeling that there needs to be some difference in the mode of valuation between the value for Increment Duty and the value for Development Land Duty, because it is perfectly clear that while the value of one acre may be £1,000, the value of every single acre may be £1,000, but the value of the whole 800 acres would not be £800,000. One old master may be worth £10,000, but if you find 100 replicas of the same picture by the same artist it is perfectly certain that you could not get £10,000 for each of them, while if there was only one going to be put on the market you could realise the £10,000 at once. Therefore it would not be right if Increment Duty were payable upon an old master picture to charge the Increment Duty on the difference between £200, the value of one out of a hundred, and £10,000, the value of one particular picture if there were only one. I take it the right hon. Gentleman really meant that if it would not realise in the open market it would not pay the tax. Trafford Park is a very considerable estate, end it would not pay the tax unless the whole of it is realised to-morrow at the price at which any particular part of it might be worth if it were realised.
  Mr. PRETYMAN: One of the most difficult points to the ordinary mind, and it is one of extraordinary difficulty, is how you are going to value a piece of land in any part of the country on the supposition which is here stated in the Bill, unless the words of my Noble Friend's Amendments—I shall deal with the whole of them for convenience—are accepted. I would point out to the Government that they suppose a willing seller. It is obvious that they are entitled to suppose a willing seller, because every piece of land in the country which is to be valued has an owner, and therefore they may assume that the owner is willing
  754
  to sell. Where can you find the willing buyer? That is the weak point in the whole of this question of valuation—it must be pure imagination. You have got a willing seller. Where is the buyer? The willing buyer is conceivable in regard to certain portions of a piece of land, but is not conceivable in regard to the whole of the land. We get back here really to close quarters with the question in respect of the difference between the words "suitable" and "required." The whole basis on which the tax on land is to be established is that it is required for building. There is a part of the undeveloped land of this country which is required and which is ripe for building, and as to which we may be justified in assuming that there is a willing buyer; but our point is—and so far we have never had any attempt to answer it, though I do hope that the Secretary of State for War will really try to apply his mind to it, for nobody can do it better or give us a more clear answer—on what possible hypothesis can it be assumed that there is a willing buyer for the land which is not "required" for building, but which is only "suitable" for building.
  That really governs the largest part of the land which has to suffer the weight of this tax. The land which is ripe for building, which is in the front line of "undeveloped land" in the sense of this Bill, we may assume will find a willing buyer; but in regard to the land which lies behind, and to a great proportion of which there is no access, how are you going to assume a willing buyer? And if you cannot assume a buyer and can only assume a seller, on what principle is your valuation going to be based? It does seem to me that to use the word "open market" assumes a buyer as well as a seller. Where is the buyer, how are the Government going to imagine a buyer, when it is perfectly obvious that the whole of the land' on which this tax is going to fall cannot possibly be sold, for no buyer will buy? Even at this moment, and largely on account of this Bill, I know that an hon. Friend of mine has got particulars of some value which, I think, are germane to this Amendment, and which I hope he will submit to the Committee in order to show how they affect the question of the willing; buyer. Certainly, if this Bill becomes law, there will be very few willing buyers for some time to come, and the value of the land will be very considerately affected. This is really a vital point, and it is one on which I want to get a clear explanation from the Government.
  Mr. HALDANE: We do not assume, nor is there any necessity to assume, a willing buyer. Take a case which arises every day: A railway company serves notice to treat, and a contract is entered into subject to ascertainment of the price. The price is ascertained by a hypothetical sale with the hypothetical buyer and the hypothetical seller in the open market.
  Mr. PRETYMAN: The very first thing you do is to assume an actual buyer, and not a hypothetical one.
  Mr. HALDANE: When the notice to treat is served the railway company, who have compulsory powers, take the land, but the arbitrators determine the price from the point of view of a hypothetical sale in which there is a willing purchaser and a willing seller in the "open market." That is the very phrase used in the Bill. What do the arbitrators do? They call before the umpire expert witnesses and valuers, who state what the property would be sold for in the open market under normal conditions, and what they expect a willing buyer would give. Of course, there may be a state of things in which property is plainly affected by the congestion of the market arising from causes which are not really of a transitory nature. In such a case as that, the circumstances which affect the price are taken into account. But ordinarily it is assumed that the transaction takes place under normal conditions. A man has a large piece of ground, such as Trafford Park, to which the hon. and gallant Member referred. It is assumed that the Park has its value under conditions in which somebody wants to buy. You do not assume that the whole of the property is put into liquidation at once; that is never assumed. The hon. and learned Member for Edinburgh knows that. Normal conditions are taken. The case which the hon. and gallant Gentleman put to me is an abnormal one. In the case of Trafford Park he assumes a seller who wants to sell the enormous block of property under such conditions as would congest the market. Those are not the normal conditions usually taken. A part of that property would be valued and we take it that it would be dealt with like any normal transaction in the open market, where somebody is ready in the usual course of things to buy. The conundrums which have been put by hon. Members opposite are not such as would be dealt with by practical arbitrators who have to deal with these matters over and over again. We take things
  756
  in the normal in the case of a seller selling in the open market.
  Mr. BONAR LAW: I agree with my hon. and gallant Friend that this is the most convenient stage, and that this is the real crisis of how you are going to get a valuation which will be fair and just. I should like to take a point referred to by the hon. Member for Sheffield (Mr. James Hope), and to which, I think, the Secretary of State for War has not given an answer. An answer was attempted by the Attorney-General, but I do not think it was a satisfactory one. The point is: Are the Commissioners to assume in the valuation that the market is in the position on 1st April, before the effect this Bill had on the market, or are they to take the valuation after the effect of the Bill? Even the right hon. Gentleman the President of the Board of Trade, the other day in a speech in the country, made the statement that the Bill already had had the effect of making land cheap. I am sure that is absolutely true. A friend of mine who is engaged in this business in London gave me a list of the estates for building round London, which had been offered for sale in the open market by auction since this Budget was introduced. There were a good many, I forget how many, but not one single one of those properties was sold. There was no bidder. To show that that is not due to the fact that people who own those properties are asking exorbitant prices, I may mention that this gentleman told me that he had himself offered £25,000 last autumn for an estate which was put up at an upset price of £20,000, and there was no buyer at £20,000. That shows that already the Budget has had a great effect in lowering values, and for the sake of undeveloped land, I want to know if the valuation is to count from 1st April, before these effects have taken place. Are the Commissioners to take into account the effect of the Budget, or are they to value it as if no effect whatever had been produced by it? I think that is important.
  10 P.M.
  There is the other aspect, which has been dealt with by the right hon. Gentleman (Mr. Haldane). I am bound to say, if the explanation of the right hon. Gentleman is the real explanation of the way in which the Commissioners are going to act, there is going to be perpetrated a most extreme act of injustice in the way in which property is going to be valued. The right hon. Gentleman says that it is

  757
  precisely the same as what happens every day when a railway company buys a piece of land and an arbitrator deals with it. He omitted to notice the whole point of the speech of my hon. and gallant Friend (Mr. Pretyman). Under the Bill everybody is a seller presumably, because all land has to be valued. But you have to imagine your willing buyer, as you have not got him. In the case of the arbitration, the fact that it is to be an arbitration shows that there is a buyer who wants it for developing purposes. Undoubtedly that is the case; but in the case of all the land you have no evidence whatever that there are buyers for the whole of that land that is to be valued at anything above its agricultural value. In one case there is a buyer for development; in the other there is no one. What is the real vital difficulty in connection with this matter? If it were true that it is possible to value the land at the price which the owner could get for it, if he chose to sell it to-morrow, then I admit, though I would still think it to be a bad kind of tax, it would not be so utterly unjustifiable. If you can assume that the Commissioners can really arrive at the price at which the owner if he chose could sell, then the problem would be comparatively easy. How can that possibly be done? I admit that valuers will put a value on any property they are asked to value; but I say it is utterly impossible to put a valuation on the value of the building land of this country, which is even approximately just or correct. Take the case which the right hon. Gentleman the Secretary for War has not answered, the case of Trafford Park. There is an estate of about 800 acres, and they have taken 12 years to dispose of considerably less than half of the total estate. How long will they take to dispose of the balance? That is the essence of the present-day valuation of that property. The value from the point of view of the Government Bill as I understand it, is that you are going to tax on what you assume to be the price which the seller would get for it to-day if he chose to sell it. Is not that the assumption?
  Mr. HALDANE: I tried to make that clear. A hypothetical sale is the basis and not actual sale. The fallacy of the hon. Member if he will permit me to use the word, is that he is really assuming a sale. In the case of a railway company, there is no real transaction or voluntary contract—there is a compulsory relation, and it is a hypothetical sale which is brought in. In the Trafford Park case, he is really assuming a forced sale. The basis of the Bill is
  758
  a hypothetical sale in the open market with a willing buyer who is willing because he has got an ordinary seller.
  Mr. BONAR LAW: I do hope the view the right hon. Gentleman has expressed is not the real view of the Government. If his view is right, then the assumption is that in a case like Trafford Park the whole land is to be taxed at the value at which you could sell a single acre if the buyer came along. [HON. MEMBERS: "No! No!"] Is that the intention of the Government? They will not even answer that simple problem which is really of the essence of the question. What I understood was the intention of the Government—and I think the Chancellor of the Exchequer, who really knows what the intention of the Government is, will bear me out—is that the Government is not to have the land valued at the price which could be obtained for a single acre to-day if the owner chose to sell it. Am I right in saying that the intention of the Government is that the land shall be valued at a price which shall be obtained by the owner if he chose to sell it? Is that, or is it not, the intention of the Government in the system of valuation?
  Mr. HALDANEindicated assent.
  Mr. BONAR LAW: It is. Very well, that makes the case much easier, and the injustice is not nearly so great as the Secretary of State made it out to be. If it is to be valued in the same way as a piece of land taken by a railway company would be valued to-day, that obviously would be an injustice which would be intolerable, and which I am sure the Government do not intend. What they do intend is to take approximately the price which could be obtained for the land by the owner now, if he chose to realise it. How in the world can any system of valuation you choose to adopt find out what that price is? The case of Trafford Park is a very simple one compared with the whole land of the country. It is all there, ready to be built upon as soon as you find buyers. You have had experience how long it takes to dispose of a certain part of the land. It has taken 12 years to dispose of only a small part of the estate. You may assume, therefore, that it will take at least 20 years to dispose of the whole estate. On that assumption you are to take the mean date, that is to say, 10 years, as the equivalent of the value of the whole of the estate. No one, I think, will question that that is sound. That means that if the

  759
  price for a single acre to-day is £1,000, by taking the ordinary insurance tables for the 10 years you arrive at the value of the whole estate. That is comparatively simple. It simply means that the £1,000 per acre will be reduced by something like one-third. The only danger is that the valuer may assume that the estate will be disposed of in 20 years, while in reality it may take a great deal more. But the problem is utterly insoluble when you take the whole of the possible building land of the country and try to put a value to-day upon it. I will take a concrete case to show how utterly imposible it is to get a real and just basis of value. Glasgow was the city which moved first, as a corporation, in favour of this kind of tax. Within the area of the Corporation of the City of Glasgow itself there are 6,000 acres which are undoubtedly building land, and the Commissioners would certainly assess the whole of those 6,000 acres for the Development Tax. The matter is much more complicated if you take not only urban land, but land outside. Taking, however, the 6,000 acres, there is not a single acre which might not be built upon to-morrow; but the one certainty is that only a small fraction of the whole can possibly be built upon either to-morrow or in a reasonable number of years. The development of the city of the last 30 years has been only something like 60 acres a year; that is to say, it will take 100 years before the whole 6,000 acres are used. The Commissioners have to go down, and put to-day's value for building purposes upon the whole of those 6,000 acres. The only way in which that can fairly be done is to take the mean term of the period it will take for the whole quantity to be disposed of, and then use the insurance tables to find out what to-day's value of that would be deferred to the period when it will come into operation. Think what that means. The mean term of 100 years is 50 years. The assumption is, therefore, that the whole of the property has to-day a present value to come into force 50 years hence. What effect has that upon the total value of these 6,000 acres? The deferred interest table spread over 50 years has this effect—that if land to-day is worth £360 an acre if you can sell it, by applying the 4 per cent, tables it is worth at the end of 50 years not £360 but just over £50. I have not exaggerated the case in the least. I think the hon. Member for Sheffield (Mr. Tudor Walters), who has experience in these
  760
  matters, will agree that I am not stating the case wrongly.
  Mr. TUDOR WALTERS: I think you are stating it quite wrongly.
  Mr. BONAR LAW: Let me give my reasons for saying that I am not stating the case wrongly. Even in the case given by the Secretary of State for War, in which admittedly very full value is obtained, namely, the case of a compulsory purchase by a railway company, valuers take into account the length of time it may be before the land is disposed of. On what other system can you possibly value the whole of the building land, every acre of which might be taken to-morrow, but the whole of which cannot be taken for 100 years? On what other principle can you go than that which I have suggested? To put a value to-day on land which to the certain knowledge of everyone, if you take the whole of it, cannot be disposed of for a number of years stretching far into the future—that can only be done on the principle I have given. If it is not done on that principle it is bound to be done on a principle which will be unjust to some owners of property. The case is complicated still further where a number of owners are concerned. If the land were all in one hand, you could arrive at the value by taking into account the deferred system; but when it is owned by a great many different people, how can you possibly say that the land owned by one man hi one place is worth so much and by another in another place so much, on the assumption that both are going to sell and can sell, whereas, as a matter of fact, everybody knows that one could sell, but more than one could not? That is, I think, the crux of this question, from the point of view of getting a just valuation. You can perfectly well value any single acre of land if you have not only a willing seller but a willing buyer. You then take as the basis of your valuation the price which is being paid for similar land. But when you come to deal with thousands of acres, of which only a small fraction can possibly be used within a reasonable time, I say that it is utterly impossible by any system to get at a just valuation.
  Mr. BEVILLE STANIER: The Minister for War asked us for a normal case. I think, with the data I have in my hands, I shall be able to give such a case, and thereby support the argument of the hon. Member for Dulwich (Mr. Bonar Law). I have here a catalogue of a sale which

  761
  should have taken place on Monday, at Church Stretton, in Shropshire. The land was fully ripe for building purposes, it was beautifully timbered; it had sites and plantations on the hillside; it was laid out for private residences, bungalows, and villas. There was a great demand for shops and cottages, and sites for these were provided There was also a large hotel to be built on the slope of the mountain. Here we have 75 plots. Surely there was enough for everyone to choose from. As I have said, there were sites for residences, for business premises, for shops, and for other purposes. This is what the salesmen write to me: "We enclose a copy of particulars relating to the large quantity of building land which was submitted to auction by us on Monday last. The sale was well advertised and everything done by our clients and ourselves to make it a success. Notwithstanding this, we regret to say that not one single lot changed hands. In fact, there was practically no reasonable bidding." Here we have a case with a hypothetical seller, but no buyer. How is the Minister of War going to value an estate of that sort? There are land sales all around. You cannot take it in any other way except by a normal sale. There was no normal sale. How can the Minister for War account for that? The whole thing was absolutely genuine and laid out for the purpose of sale. It was cut up for building sites, and there was not a large reserve price put on the land. I ask the Minister for War how is he going to value in a case like that?
  Mr. TUDOR WALTERS: The hon. Gentleman the Member for Dulwicih (Mr. Bonar Law), who has just spoken, introduced several fallacies into his method of reasoning. He assumed, in the first place, in his concrete illustration of Glasgow, that the whole of the land comprising these thousands of acres around the city was taken at an equal value. Let me give him a concrete illustration from a town of which I am very familiar—Leicester. Suppose it fell to my lot—that I was the fortunate individual at a substantial fee—to value the undeveloped building land around Leicester. How should I go to work? In the first place, I should not find much difficulty in estimating, from the experience of past years, and from the present demand, what was the amount of land that could reasonably be expected to be sold in a given year round about Leicester. I should take my process of examination a step further than that, and I should be
  762
  able to divide the undeveloped land around the town into districts. Some parts would be suitable for large houses, for which there was a demand, some for factories and business premises, others for small houses, and some for working men's dwellings. I should carry my analysis even further. There would be some portions even of those various districts riper than others, not necessarily the pieces nearest the built-up area. There would be considerations of drainage, the subsoil, access, etc., affecting in a varying way different parts of the land. Then I should proceed to allot the number of acres of reasonable and probable demand in a given district. I should take the land available and should deal with it in strips I would take the belt of land immediately ripe and for which I might expect a present demand. I should then take the next attractive portions, not quite as ripe or useful for the purposes of that particular district, and for these I should take a lower price. I should then, having disposed of what was immediately available for the present demand of that suburb, go a step further, and, proceeding to the third and fourth belts, proceed in precisely the same way. If I found the first five or ten acres go off at a certain price and the next few acres of the particular belt at a lower figure, I should discount the value accordingly, till by the time I got to my third or fourth belt I should find that there was no present demand for land for building at all; and that it is not undeveloped building land. I apply my methods of valuation to each particular district of the town, and I do it in the same way. If I happen to be an iron or steel manufacturer, and went down to Leicester and tried to apply a pure arithmetical table, the result would be disastrous I believe, but if I understood the business and understood the relative value of the different belts, and what exactly the demand was, I fancy I could come, approximately, near to a reasonable result. I think that the assumption that the land is all to be sold at once is a perfectly fictitious one. To vary the illustration of my case, let me suppose, instead of valuing for the Undeveloped Land Tax I went down to value for the purpose of advising some client of mine what he could advance towards a development company on mortgage. I could not say I should not advise my client to advance any money, because the development company cannot sell all their land to-morrow. I would say, "Here is 20 acres, how long

  763
  will it take to develop this area, to complete the road-making, the drainage, to pay the lawyer's fees, etc." I should find that out, and I should make a careful arithmetical calculation as a result of knowledge and experience, and I should arrive at a figure which it would be safe for a reasonable man to lend on mortgage, a man who would expect to get his money back as the land was being developed. I do not for a moment contend that this method of valuation has no difficulties; it would be absurd and ludicrous to underestimate the difficulty. It will be an elaborate and a difficult process, and that is one of the reasons why I advocated a week or two ago that it should be undertaken by the State. But though difficult, I believe it is a reasonable, possible, and entirely practicable scheme for experienced men to proceed on the lines that I have briefly indicated to arrive at a value, and I believe that they can arrive at that value. Of course, they will have to make allowances for possible acceleration or diminution of the rate of building. These things do not proceed on the exact geometrical basis that certain tables indicate. AH these are matters of knowledge and experience, and I am satisfied the principle laid down in the Bill is fair and wise, and if intelligently applied, I see no reason why a fail value should not be arrived at. But I venture to say that, in order to get a fair valuation, the theory that you must have a man to buy the whole lot to-morrow is egregious and absurd, and therefore I shall oppose the Amendment.
  Mr. BALFOUR: Anybody who has listened to the expert witness who has just made an admirable and most interesting speech will begin to wonder how many people there are who still think that the valuation of the land of this country, which is to cost £2,000,000, can be done by 500 gentlemen. At least we have now heard someone who really understands the practical work of valuation, and I do not think anybody who has listened to the hon. Member's remarks will attach the smallest value to the estimates made by the Government, either as to the cost of the valuation or the time it will take. I know that is not strictly relevant to the issue now before us, but there are other issues which are strictly relevant, and I will venture to call the attention of the Committee to two of them. What has the hon. Member opposite (Mr. Tudor Walters) pointed
  764
  out? He has pointed out, as must be evident to anybody who reflects upon it, that there are in the neighbourhood of any great central population a series of zones of varying amounts, all varying in value depending upon the length of time it will take before there is any reasonable prospect of them being practically developed as building land. The site value is estimated at so much, and then when the estimated 20 years has elapsed, and it has become building land, the owner will be taxed on the increment which has occurred between the time when the valuation is taken and the time the land becomes ripe for building, and on that income he will have to pay a tax. But the hon. Member says all this must be done according to actuarial tables, and the development value must be considered in view of all those calculations. But you do not count the development value in the increment value; the Increment Tax is an absolute thing, and that length of time in which a man has to earn the income does not come in at all. That is in itself a very strong argument against the Increment Tax. My hon. and learned Friend the Member for Dulwich (Mr. Bonar Law) pointed out that land of a given value would not always find a market at the same time, and that is surely the fact, however much you divide it up into zones. Take any zone you like. Take the whole of some particular zone. What is the simple process which the expert valuer has got to go through? Of all the land of equal value, only a fraction will be required and nobody can say what fraction. Let us say, for example, that at a given distance from Leicester there are 500 acres of land which the hon. Member opposite would value all at the same price.
  Mr. TUDOR WALTERS: No.
  Mr. BALFOUR: That is the hypothesis, because he has divided the land round Leicester into zones of equal value.
  Mr. TUDOR WALTERS: That would not be so, because even in the first strips there would be some land which would be much more saleable than other portions of the land. Even if you take a zone after a period of five years there would be different prices obtained in the same zone. I do not want to minimise the difficulty of valuation, because your zones have to be divided up into relative values.
  Mr. BALFOUR: And this is what is called the simple process. I am obliged to the hon. Member for his interruption,

  765
  and, if he will allow me, I will now take the fraction of a zone which the hon. Gentleman opposite estimates as being of equal value, equal qualification, and equal merits as developable land. Let us say there is a block of 100 acres of land equally developable five years hence. Of that 100 acres only some will be developed five years hence. The market will not during those five years absorb the whole 100 acres, but only a fraction of them.
  Mr. TUDOR WALTERS: The point is this. If you take a zone as requiring five years to absorb, you will then take the mean price of that as 2½ years' purchase.
  Mr. BALFOUR: It is a lottery, so to speak, which of the 100 acres is absorbed first and which last. The acre absorbed first will obviously be taxed at a different rate to the acre absorbed last. Its value is different. You cannot, in the eye of the valuer, distinguish between them; they are about the same. When the five years' period terminates some acres will be taken and some left, and no valuer can say which acres will be taken and which left. It is a mere matter of chance. Some acres will find a willing purchaser and some will not. The acre which finds a willing purchaser may, no doubt, be fairly treated, but what about the acre which does not find a willing purchaser? It is treated on a wholly different system and turns out at a wholly different value. Take two owners. They are going to be taxed exactly at the same rate. The moment arrives when a purchaser comes forward. Nobody can say whether he will go to A or B. If he goes to B, A. has to stand out of his money. If he goes to A, B has to stand out of his money. Therefore you are taxing properties at the same rate as if they were of the same value, when in fact they are not. If they belonged to the same owner, you could average them; but, belonging to different owners, you cannot average them. This is the fundamental difficulty which seems to me to lie at the root of this system of saying valuation of future values is to form the basis of taxation. It differentiates land from stocks, from things which are dealt in in small parcels on the Stock Exchange. I think of all forms of property land is the least susceptible of equitable taxation on its capital value, if in its capital value you include ail reasonable and prospective possibilities. In the 100 acres, only 10 acres can be taken in the first year and another 10 acres in the last of the series of years to which re-
  766
  ference has been made, and it is a gamble which of those acres is going to be taken first. You cannot avoid the gamble. That is the fundamental vice which lies at the root of this whole system of the taxation of land values. I think I may say, without contradiction, that the Government have never really attempted to get at the root of this matter, and have never met us face to face when we have brought this difficulty before the Committee. Now we have an opportunity of thrashing it out, I hope we shall hear what view the Government take of the system of valuation so admirably and instructively described by the hon. Member for the Brightside Division of Sheffield (Mr. Tudor Walters).
  Mr. ROWLAND HUNT: The hon. Gentleman who last spoke on the opposite side of the House declared that unless a man knew the district he could not value the land properly. But are we to understand that the Commissioners to be appointed will know every district in their area? If they do not, according to the hon. Member they cannot value the property properly. The hon. Member said he would take the land and value it, knowing perfectly well that only a certain portion of it could be built upon. But according to the Government scheme you are going to tax it all, although you know perfectly well only a small amount will be built upon. You are thereby going to penalise the owner in respect of the remainder. I can cite a case within my own knowledge of land within a short distance of where I live; it is between a big village and a station and within eight miles of a county town. There are about 100 acres of building land. A great deal of the land has a main road facing it. It is quite close to the station, and under this Bill it will be put down as building land, although it is absolutely impossible it can be built upon for three or four years. Yet under this Rill you are going to tax the whole of this land as building land, knowing that only eight or ten out of the 100 acres can possibly be built upon under existing circumstances. You are going to tax 90 acres of agricultural land for something like 10 years, when you know that it cannot possibly be built upon, and thereby you are taxing the food, drink and clothing of the people, produced in this country for the people. And that is what the Liberal party call legislating for the benefit of the people.
  Mr. HALDANE: I beg to move, "That the Question be now put."
  Mr. AUSTEN CHAMBERLAIN Mr. AUSTEN CHAMBERLAIN rose—
  Mr. HALDANE: I beg to withdraw my Motion.
  Mr. AUSTEN CHAMBERLAIN: For the personal courtesy shown me I am indebted to the right hon. Gentleman. But that is a small matter between ourselves. The point at issue is of great importance. My right hon. Friend has put forward certain arguments, to which the Government have vouchsafed no reply whatever. I hope the Government are not going to rely entirely on the Closure for an answer to the arguments of their opponents. I hope that they will attempt to give a reasoned argument to reasonable arguments. I want to put another point before them. The hon. Member for Sheffield (Mr. Tudor Walters) made some observations which are very valuable, because he told us how a man appointed by the Government might be expected to proceed under certain circumstances in valuing the land. He chose for illustration land which had a building value in excess of agricultural value.
  Mr. TUDOR WALTERS: It was a question of the position of the land, its value diminishing until it finally fell to agricultural value.
  Mr. AUSTEN CHAMBERLAIN: I perfectly understood that that was the natural conclusion, but eventually it came to the point of further from or nearer to the town, whether it was a purely agricultural value and nothing else. I do not know whether the hon. Gentlman was dealing with the valuation of the nearer zone, where there was an existing building value in the land, but if I understood him rightly his method of arriving at the present value of that land was to say, "when it comes to be built upon it will be worth so much, having regard to all the circumstances which I have mentioned, the amount which you might reasonably expect the town to require for its development every year, the character of the districts, of the land, and of large portions of land within each district, and so forth. I anticipate that any given plot will take so many years before it is built upon, and, accordingly, I take its value when it is built upon, I discount that by the number of years that will pass before it is built upon, and the result is its present value." The hon. Gentleman is good enough to confirm that. That is the way in which he would proceed. The Government propose to take that present value as their starting point. That present value, as the hon. Gentleman said, is nothing but the future value
  768
  unrealised, discounted by the number of years, before you can realise it, yet when that future value is realised you treat it under the Increment Tax as a windfall and deduct one-fifth of it as being unexpected, unearned, and something on which a man could not count and upon which he had no right to count. That is something more than what the hon. Gentleman said, and my only excuse for saying it is that sometimes, when another man repeats an argument in another way it may bring the matter home to the Government, and they may give an answer. The Chancellor of the Exchequer shakes his head and dissents from my argument, and perhaps he he will show me where I am wrong. Let us look at it from the point of view not of the Increment Tax but of the Development Duty, because the Government ingeniously think that the owner of land should be hit both ways, on the present value, on which the right hon. Gentleman refuses to discount the future value by the number of years it would take before that future value is realised—on the present value, and he is going to be charged with Undeveloped Land Duty. On what basis? On a basis which is a direct negation of the hypothesis on which the expert valuer proceeds. The expert valuer proceeds upon the basis that all this land, not only must not be, but cannot be built upon at once. The Government proceed upon the basis that every plot, every square yard, every foot of land has a building value, in excess of the agricultural value, and ought to be built upon at once. [HON. Members: "No."] They do. It is no good saying "No." You must disprove it. What is the basis of the Undeveloped Land Duty as expounded by the Government? It is that land is not being put to its best economic use—that is, that we should derive the greatest revenue from it, and accordingly, if it has a higher value for building purposes than it has for agricultural purposes it should be built upon. They must go upon the assumption that it is possible to build upon it. There is an infinite amount of this land which has a present value because of its building possibilities in the future in excess of its agricultural value, which cannot be built upon, and, accordingly, setting aside the injustice of your methods of valuation under the Increment Tax, when you have taken from a man on the ground that it is a windfall what you have already calculated will come to him in a given number of years, here, under this tax, you tax him

  769
  for not building on land which your own valuers will assess, on the assumption that you cannot build upon it at the present time. We are fortified by experience of the way in which a practical man in a skilled manner will proceed in these matters, and we say it makes your valuation perfectly unjust, both for the purpose of the Increment Tax and for the purpose of the Undeveloped Land Duty, and we are entitled to some answer from the Government to the objections that we urge.
  Mr. HALDANE: We have already put our case fully, and I think very simply. It was this. We ask people not to sell their property before they are ready to, but to pay the tax upon the actual value, and the actual value is what they could obtain under normal conditions in the open market. If you boil down the speech of the right hon. Gentleman (Mr. Austen Chamberlain) it is that that actual value is not ascertainable. It is an argument against the possibility of any valuation.
  Mr. AUSTEN CHAMBERLAIN: No, no.
  Mr. HALDANE: I said boiling it down.
  Mr. AUSTEN CHAMBERLAIN: That really was not my argument under either head. My argument was two-fold. Proceeding upon the data given us, I said that in the case of the Increment Tax you tax a man when he receives a value which you have anticipated and discounted in the valuation. In the case of the Undeveloped Land Duty you tax a man because he does not build on land which your valuers in their valuation tell you he cannot build upon.
  Mr. HALDANE: It comes to the same thing. The right hon. Gentleman has not answered the speech of my hon. Friend (Mr. Tudor Walters). My hon. Friend said there is a case in which valuations are made every day in the year, which show that the very thing which the right hon. Gentleman is arguing cannot be done is done.
  Mr. AUSTEN CHAMBERLAIN: I never said that you could not make a valuation. I accepted the right hon. Gentleman's statement as to how a valuation would be made. What I want to know is how the Government can argue that the result arrived at will be just?
  Mr. HALDANE: Because the Government take it that the valuation arrived at is a true valuation. Take the case of the
  770
  development company to which my hon. Friend referred. It wants to raise money on mortgage, and not to sell or let. It advertises for money, and a set of trustees have money which they desire to lend. Now the law says that they may lend in a case of that sort provided that they lend no more than a certain proportion of the value, and that a proper valuation is made. They have a valuation made. What is the basis of the valuation? It has been described by my hon. Friend (Mr. Tudor Walters). It is valued in strips and zones. No doubt there is a great deal of the property which cannot be realised at once, but that does not prevent a particular piece of land from having a value which is realisable. It is assumed right through that the value of a particular piece would be different in a forced sale, say, in a liquidation, from what it would have if put in the market under normal conditions. My hon. Friend says that the surveyor who advised the trustees would look at the known conditions affecting the action of a willing seller of part of the property in the open market. Nobody is a willing seller who is forced to sell. In the case of the development company, the trustees advance money on the property. They can realise. Is it supposed that the law would allow trustees to lend money on securities which could not be realised when they could get such a security as Consols? The law allows them to put money in that security because it is a security which experience shows can be realised. You may have difficulties under abnormal conditions. You may get an excessive price under abnormal conditions, but the value of the property is whatever under known conditions will be realised. That is the footing on which valuations are made every day of the year, and that is the case which my hon. Friend the Member for Sheffield described. The money is lent to the development company because that company can under normal conditions, things being in their ordinary state, get that value for a particular piece of property. We assume that a person in that position has got a piece of property and could realise it. We say that having got it he ought to pay on it. We do not want him to sell. We say that he has got it, and that he may quite legitimately for his own purpose choose not to sell it. It seems to me to be a very simple thing.
  Mr. F. W. LAMBTON: Unless we have got a real buyer the valuations in hypothetical cases amount to nothing practical.

  771
  We have had an interesting explanation of the valuation of land by dividing it into strips and zones, and we have heard of strips around Leicester valued for £1,000 an acre. Development Duty would be charged on that £1,000. But if the owner put that land up for sale and advertised that it would be sold for £1,000 an acre, and no buyer were forthcoming, would the duty be charged on that value of £1,000 on that land, when it is plain that it has no real value of £1,000? That is a question to which I would like a plain answer.
  Mr. LLOYD-GEORGE: That was a case raised by the hon. Member for Leicester the other day. It was discussed, and the right hon. Member for East Worcester (Mr. Austen Chamberlain) and the hon. and gallant Member for Chelmsford (Mr. Pretyman) took part in the discussion.
  Mr. F. W. LAMBTON: I want a simple answer.
  Mr. LLOYD-GEORGE: The answer which I gave then is the answer which I repeat now. If a man can prove that he
  has done his very best to sell land, advertised it, put up hoardings, and put it up for sale by auction, and he has had no bidder, there can be no better evidence of the absence of value as far as that land is concerned. In that case it would depend on whether the failure was because the reserve was too high or because there has been no bidding at all.
  Mr. F. W. LAMBTON: But as regards the price put upon it by the Government valuer?
  Mr. LLOYD-GEORGE: There can be no better evidence of the absence of value than a case of that kind. The owner could submit that as a very valuable piece of evidence.
  Mr. HALDANE Mr. HALDANE rose in his place and claimed to move, "That the Question be now put."
  Question put, "That the Question be now put."
  The Committee divided: Ayes, 197; Noes, 91.

  Division No. 442.]

  AYES.

  [11.0 p.m.

  Acland, Francis Dyke

  Cornwall, Sir Edwin A.

  Herbert, T. Arnold (Wycombe)

  Adkins, w. Ryland D.

  Crooks, William

  Higham, John Sharp

  Ainsworth, John Stirling

  Dewar, Arthur (Edinburgh, S.)

  Hobart, Sir Robert.

  Armitage, R.

  Dickson-Poynder, Sir John P.

  Hodge, John

  Atherley-Jones, L.

  Duncan, C. (Barrow-in-Furness)

  Holland, Sir William Henry

  Baker, Joseph A. (Finsbury, E.)

  Dunn, A. Edward (Camborne)

  Hudson, Walter

  Balfour, Robert (Lanark)

  Dunne, Major E. Martin (Walsall)

  Hyde, Clarendon G

  Baring, Godfrey {Isle of Wight)

  Ellbank, Master of

  Illingworth, Percy H.

  Barker, Sir John

  Erskine, David C.

  Jardine, Sir J.

  Barnard, E. B

  Evans, Sir S. T.

  Jenkins, J.

  Barnes, G. N

  Everett, R. Lacey

  Johnson, John (Gateshead)

  Barran, Rowland Hirst

  Ferens, T. R.

  Jones, Leif (Appleby)

  Barry, Redmond J. (Tyrone, N.)

  Ferguson, R. C. Munro

  Jones, William (Carnarvonshire)

  Beale, W. P.

  Findlay, Alexander

  Kekewich, Sir George

  Beauchamp, E.

  Fuller, John Michael F.

  Laidlaw, Robert

  Beaumont, Hon. Hubert

  Gibb, James (Harrow)

  Lamb, Ernest H. (Rochester)

  Beck, A. Cecil

  Gill, A. H.

  Lambert, George

  Bellairs, Carlyon

  Gladstone, Rt. Hon. Herbert John

  Lamont, Norman

  Berridge, T. H. D.

  Glover, Thomas

  Lehmann, R C.

  Bowerman, C. W.

  Goddard, Sir Daniel Ford

  Lever, A. Levy (Essex, Harwich)

  Brace, William

  Greenwood, G. (Peterborough)

  Levy, Sir Maurice

  Branch, James

  Grey, Rt. Hon. Sir Edward

  Lewis, John Herbert

  Bright, J. A.

  Griffith, Ellis J.

  Lloyd-George, Rt. Hon. David

  Brocklehurst, W. B.

  Gulland, John W.

  Lough, Rt. Hon. Thomas

  Bryce, J. Annan

  Haldane, Rt. Hon. Richard B.

  Lupton, Arnold

  Burns, Rt. Hon. John

  Hancock, J. G.

  Luttrell, Hugh Fownes

  Buxton, Rt. Hon. Sydney Charles

  Harcourt, Rt. Hon. Lewis (Rossendale)

  Lyell, Charles Henry

  Byles, William Pollard

  Harcourt, Robert V. (Montrose)

  Lynch, H. B.

  Carr-Gomm, H. W.

  Hardie, J. Keir (Merthyr Tydvil)

  Macdonald, J. R. (Leicester)

  Causton, Rt. Hon. Richard Knight

  Hardy, George A. (Suffolk)

  Macnamara, Dr. Thomas J.

  Cawley, Sir Frederick

  Harmsworth, Cecil B. (Worcester)

  M'Callum, John M.

  Chance, Frederick William

  Harvey, W. E. (Derbyshire, N.E.)

  McKenna, Rt. Hon. Reginald

  Channing, Sir Francis Allston

  Harwood, George

  M'Laren, H. D. (Stafford, W.)

  Cherry, Rt. Hon. R. R.

  Haworth, Arthur A.

  M'Micking, Major G.

  Clough, William

  Hazel, Dr. A. E. W.

  Marks, G. Croydon (Launceston)

  Clynes, J. R.

  Hedges, A. Paget

  Mason, A. E. W. (Coventry)

  Cobbold, Felix Thornley

  Helme, Norval Watson

  Massie, J.

  Collins, Sir Wm. J. (St. Pancras, W.)

  Hemmerde, Edward George

  Masterman, C. F. G.

  Compton-Rickett, Sir J.

  Henderson, Arthur (Durham)

  Miklem, Nathaniel

  Cooper, G. J.

  Henderson, J. McD. (Aberdeen, W.)

  Mond, A.

  Corbett, A. Cameron (Glasgow)

  Henry, Charles S.

  Morgan, G. Hay (Cornwall)

  Corbett, C. H. (Sussex, E. Grinstead)

  Herbert, Col. Sir Ivor (Mon. S.)

  Morgan, J. Lloyd (Carmarthen)

  Morse, L L.

  Robson, Sir William Snowdon

  Thorne, G. R. (Wolverhampton)

  Morton, Alpheus Cleophas

  Roch, Walter F. (Pembroke)

  Verney, F. W.

  Murray, Capt, Hon. A. C. (Kincard.)

  Rogers, F. E. Newman

  Walsh, Stephen

  Myer, Horatio

  Runciman, Rt. Hon. Walter

  Walters, John Tudor

  Napier, T. B.

  Russell, Rt. Hon. T. W.

  Warner, Thomas Courtenay T.

  Newnes, F. (Notts, Bassetlaw)

  Samuel, Rt. Hon. H. L. (Cleveland)

  Wason, John Cathcart (Orkney)

  Nicholls, George

  Samuel, S. M. (Whitechapel)

  Waterlow, D. S.

  Nicholson, Charles N. (Doncaster)

  Sears, J. E.

  Wedgwood, Josiah C.

  Norman, Sir Henry

  Shackleton, David James

  White, J. Dundas (Dumbartonshire)

  Partington, Oswald

  Sherwell, Arthur James

  White, Sir Luke (York, E. R.)

  Pearce, Robert (Staffs, Leek)

  Shipman, Dr. John G.

  Whitehead, Rowland

  Pearce, William (Limehouse)

  Silcock, Thomas Ball

  Wilkie, Alexander

  Perks, Sir Robert William

  Simon, John Allsebrook

  Willims, J. (Glamorgan)

  Pickersgill, Edward Hare

  Soames, Arthur Wellesley

  Wills, Arthur Walters

  Price, Sir Robert J. (Norfolk, E.)

  Scares, Ernest J.

  Wilson, Hon. G. G. (Hull, W.)

  Priestley, Arthur (Grantham)

  Stanley, Hon. A. Lyulph (Cheshire)

  Wilson, John (Durham, Mid)

  Rainy, A. Rolland

  Steadman, W. C.

  Wilson, J. W. (Worcestershire, N.)

  Raphael, Herbert H.

  Stewart, Halley (Greenock)

  Wilson, P. W. (St. Pancras, S.)

  Richards, Thomas (W. Monmouth)

  Strauss, E. A. (Abingdon)

  Wilson, W. T. (Westhoughton)

  Richards, T. F. (Wolverhampton, W.)

  Summerbell, T.

  Wood, T. M'Kinnon

  Richardson, A.

  Taylor, John W. (Durham)

  Yoxall, Sir James Henry

  Roberts, Charles H. (Lincoln)

  Taylor, Theodore C. (Radcliffe)

  Roberts, G. H. (Norwich)

  Tennant, H. J. (Berwickshire)

  TELLERS FOR THE AYES.—Mr. Joseph Pease and Sir E. Strachey.

  Robertson, Sir G. Scott (Bradford)

  Thomas, Sir A. (Glamorgan, E.)

  Robinson, S.

  Thompson, J. W. H. (Somerset, E.)

  NOES.

  Acland-Hood, Rt. Hon. Sir Alex, F.

  Foster, P. S.

  Pease, Herbert Pike (Darlington)

  Anson, Sir William Reynell

  Gardner, Ernest

  Peel, Hon. W. R. W.

  Anstruther-Gray, Major

  Gibbs, G. A. (Bristol, West)

  Percy, Earl

  Arkwright, John Stanhope

  Gordon, J.

  Pretyman, E. G.

  Ashley, W. W.

  Guinness, Hon. R. (Haggerston)

  Randles, Sir John Scurrah

  Baldwin, Stanley

  Guinness, Hon. W. E. (B. S. Edmunds)

  Rawlinson, John Frederick peel

  Balfour, Rt. Hon. A. J. (City, Lond.)

  Harrison-Broadley, H. B.

  Renton, Leslie

  Banbury, Sir Frederick George

  Hay, Hon. Claude George

  Renwick, George

  Banner, John S. Harmood-

  Hermon-Hodge, Sir Robert

  Ronaldshay, Earl of

  Barrie, H. T. (Londonderry, N.)

  Hills, J. W.

  Ropner, Colonel Sir Robert

  Beach, Hon. Michael Hugh Hicks

  Hope, James Fitzalan (Sheffield)

  Rutherford, John (Lancashire)

  Beckett, Hon. Gervase

  Joynson-Hicks, William

  Rutherford, Watson (Liverpool)

  Bowles, G. Stewart

  Kerry, Earl of

  Salter, Arthur Clavell

  Bull, Sir William James

  Keswich, William

  Smith, Hon. W. F. D. (Strand)

  Butcher, Samuel Henry

  King, Sir Henry Seymour (Hull)

  Stanier, Seville

  Carlile, E. Hildred

  Lambton, Hon. Frederick William

  Starkey, John B.

  Cecil, Evelyn (Aston Manor)

  Lane-Fox, G. R.

  Staveley-Hill, Henry (Staffordshire)

  Cecil, Lord R. (Marylebone, E.)

  Law, Andrew Bonar (Dulwich)

  Talbot, Lord E. (Chichester)

  Chamberlain, Rt. Hon. J. A. (Worc'r)

  Lee, Arthur H. (Hants, Fareham)

  Thomson, W. Mitchell- (Lanark)

  Chaplin, Rt. Hon. Henry

  Lockwood, Rt. Hon. Lt.-Col. A. R.

  Walker, Colonel W. H. (Lancashire)

  Clyde, J. Avon

  Long, Col. Charles W. (Evesham)

  Walrond, Hon. Lionel

  Coates, Major E. F. (Lewisham)

  Lowe, Sir Francis William

  Warde, Col. C. E. (Kent, Mid)

  Corbett, T. L. (Down, North)

  MacCaw, Wm. J. MacGeagh

  Williams, Col. R. (Dorset, W.)

  Courthope, G. Loyd

  Marks, H. H. (Kent)

  Willoughby de Eresby, Lord

  Craig, Captain James (Down, E.)

  Mildmay, Francis Bingham

  Wilson, A. Stanley (York, E. R.)

  Dickson, Rt. Hon. C. Scott-

  Moore, William

  Winterton, Earl

  Doughty, Sir George

  Morpeth, Viscount

  Wyndham, Rt. Hon. George

  Douglas, Rt. Hon. A. Akers-

  Morrison-Bell, Captain

  Younger, George

  Du Cros, Arthur

  Newdegate, F. A.

  Faber, George Denison (York)

  Nicholson, Wm. G. (Petersfield)

  TELLERS FOR THE NOES.—Mr. Rowland Hunt and Captain Clive.

  Fletcher, J. S.

  Oddy, John James

  Forster, Henry William

  Parkes, Ebenezer

  Question put accordingly, "That the words proposed to be left out stand part of the Clause."
  The Committee divided: Ayes, 196; Noes, 91.

  Division No. 443.]

  AYES.

  [11.10 p.m.

  Acland, Francis Dyke

  Beauchamp, E.

  Carr-Gomm, H. W.

  Adkins, W. Ryland D.

  Beaumont, Hon. Hubert

  Causton, Rt. Hon. Richard Knight

  Ainsworth, John Stirling

  Bellairs, Carlyon

  Cawley, Sir Frederick

  Alden, Percy

  Benn, W. (Tower Hamlets, St. Geo.)

  Chance, Frederick William

  Armitage, R.

  Berridge, T. H. D.

  Channing, Sir Francis Allston

  Baker, Joseph A. (Finsbury, E.)

  Bowerman, C. W.

  Cherry, Rt. Hon. R. R.

  Balfour, Robert (Lanark)

  Brace, William

  Clough, William

  Baring, Godfrey (Isle of Wight)

  Branch, James

  Clynes, J. R.

  Barker, Sir John

  Bright, J. A.

  Cobbold, Felix Thornley

  Barnard, E B.

  Brocklehurst, W. B.

  Collins, Sir Wm. J. (St. Pancras, W.)

  Barnes, G. N.

  Bryce, J. Annan

  Compton-Rickett, Sir J.

  Barran, Rowland Hirst

  Burns, Rt. Hon. John

  Cooper, G. J.

  Barry, Redmond J. (Tyrone, N.)

  Buxton, Rt. Hon. Sydney Charles

  Corbett, A. Cameron (Glasgow)

  Beale, W. P.

  Byles, William Pollard

  Corbett, C. H. (Sussex, E. Grinstead)

  Cornwall, Sir Edwin A.

  Kekewich, Sir George

  Robinson, S.

  Crooks, William

  Laidlaw, Robert

  Robson, Sir William Snowdon

  Dewar, Arthur (Edinburgh, S.)

  Lamb, Ernest H. (Rochester)

  Roch, Walter F. (Pembroke)

  Dickson-Poynder, Sir John P.

  Lambert, George

  Rogers, F. E. Newman

  Duncan, C. (Barrow-in-Furness)

  Lamont, Norman

  Runciman, Rt. Hon. Walter

  Dunn, A. Edward (Camborne)

  Lehmann, R. C.

  Russell, Rt. Hon. T. W.

  Dunne, Major E. Martin (Walsall)

  Lever, A. Levy (Essex, Harwich)

  Samuel, Rt. Hon. H. L. (Cleveland)

  Elibank, Master of

  Levy, Sir Maurice

  Samuel, S. M. (Whitechapel)

  Evans, Sir S. T.

  Lewis, John Herbert

  Sears, J. E.

  Everett, R. Lacey

  Lloyd-George, Rt. Hon. David

  Seely, Colonel

  Ferens, T. R.

  Lough, Rt. Hon. Thomas

  Shackleton, David James

  Ferguson, R. c. Munro

  Lupton, Arnold

  Sherwell, Arthur James

  Findlay, Alexander

  Luttrell, Hugh Fownes

  Shipman, Dr. John G.

  Fuller, John Michael F.

  Lyell, Charles Henry

  Silcock, Thomas Ball

  Gibb, James (Harrow)

  Lynch, H. B.

  Simon, John Allsebrook

  Gill, A. H.

  Macdonald, J. R. (Leicester)

  Soames, Arthur Wellesley

  Gladstone, Rt. Hon. Herbert John

  Macnamara, Dr. Thomas J.

  Soares, Ernest J

  Glover, Thomas

  M'Callum, John M.

  Stanley, Hon. A. Lyulph (Cheshire)

  Goddard, Sir Daniel Ford

  McKenna, Rt. Hon. Reginald

  Steadman, W. C.

  Greenwood, G. (Peterborough)

  M'Laren, H. D. (Stafford, W.)

  Stewart, Halley (Greenock)

  Grey, Rt. Hon. Sir Edward

  M'Micking, Major G.

  Strauss, E. A. (Abingdon)

  Griffith, Ellis J.

  Marks, G. Croydon (Launceston)

  Summerbell, T.

  Gulland, John W.

  Mason, A. E. W. (Coventry)

  Taylor, John W. (Durham)

  Haldane, Rt. Hon. Richard B.

  Massie, J.

  Taylor, Theodore C. (Radcliffe)

  Hancock, J. G.

  Masterman, C. F. G.

  Tennant, H. J. (Berwickshire)

  Harcourt, Rt. Hon. Lewis (Rossendale)

  Micklem, Nathaniel

  Thomas, Sir A. (Glamorgan, E.)

  Harcourt, Robert V. (Montrose)

  Mond, A.

  Thompson, J. W. H. (Somerset, E.)

  Hardie, J. Keir (Merthyr Tydvil)

  Morgan, G. Hay (Cornwall)

  Thorne, G. R. (Wolverhampton)

  Hardy, George A. (Suffolk)

  Morgan, J. Lloyd (Carmarthen)

  Verney, F. W.

  Harmsworth, Cecil B. (Worcester)

  Morse, L. L

  Walsh, Stephen

  Harvey, W. E. (Derbyshire, N.E.)

  Morton, Alpheus Cleophas

  Walters, John Tudor

  Harwood, George

  Murray, Capt. Hon. A. C. (Kincard.)

  Warner, Thomas Courtenay T.

  Haworth, Arthur A.

  Myer, Horatio

  Wason, John Cathcart (Orkney)

  Hazel, Dr. A. E. W.

  Napier, T. B.

  Waterlow, D. S.

  Hedges, A. Paget

  Newnes, F. (Notts, Bassetlaw)

  Wedgwood, Josiah C.

  Helme, Norval Watson

  Nicholls, George

  White, J. Dundas (Dumbartonshire)

  Hemmerde, Edward George

  Nicholson, Charles N. (Doncaster)

  White, Sir Luke (York, E. R.)

  Henderson, Arthur (Durham)

  Norman, Sir Henry

  Whitehead, Rowland

  Henry, Charles S.

  Partington, Oswald

  Wilkie, Alexander

  Herbert, Col. Sir Ivor (Mon. S.)

  Pearce, Robert (Staffs, Leek)

  Williams, J. (Glamorgan)

  Herbert, T. Arnold (Wycombe)

  Pearce, William (Limehouse)

  Wills, Arthur Walters

  Higham, John Sharp

  Pickersgill, Edward Hare

  Wilson, Hon. G. G. (Hull, W.)

  Hobart, Sir Robert

  Price, Sir Robert J. (Norfolk, E.)

  Wilson, John (Durham, Mid)

  Hodge, John

  Priestley, Arthur (Grantham)

  Wilson, J. W. (Worcestershire, N)

  Holland, Sir William Henry

  Rainy, A. Rolland

  Wilson, P. W. (St. Pancras, S.)

  Hudson, Walter

  Raphael, Herbert H.

  Wilson, W. T. (Westhoughton)

  Hyde, Clarendon G.

  Richards, Thomas (W. Monmouth)

  Wood, T. M'Kinnon

  Illingworth, Percy H.

  Richards, T. F. (Wolverhampton, W.)

  Yoxall, Sir James Henry

  Jardine, Sir J.

  Richardson, A.

  Jenkins, J.

  Ridsdale, E. A.

  Johnson, John (Gateshead)

  Roberts, Charles H. (Lincoln)

  TELLERS FOR THE AYES.—Mr. Joseph Pease and Sir E. Strachey.

  Jones, Leif (Appleby)

  Roberts, G. H. (Norwich)

  Jones, William (Carnarvonshire)

  Robertson, Sir G. Scott (Bradford)

  NOES.

  Acland-Hood, Rt. Hon. Sir Alex. F.

  Doughty, Sir George

  Lockwood, Rt. Hon. Lt.-Col. A. R.

  Anson, Sir William Reynell

  Douglas, Rt. Hon. A. Akers-

  Long, Col. Charles W. (Evesham)

  Anstruther-Gray, Major

  Du Cros, Arthur

  Lowe, Sir Francis William

  Arkwright, John Stanhope

  Faber, George Denison (York)

  MacCaw, Wm J. MacGeagh

  Ashley, W. W.

  Fletcher, J. S.

  Marks, H. H. (Kent)

  Baldwin, Stanley

  Forster, Henry William

  Moore, William

  Balfour, Rt. Hon. A. J. (City, Lond.)

  Foster, P. S.

  Morpeth, Viscount

  Banbury, Sir Frederick George

  Gardner, Ernest

  Morrison-Bell, Captain

  Banner, John S. Harmood-

  Gibbs, G. A. (Bristol, West)

  Newdegate, F. A.

  Barrie, H. T. (Londonderry, N.)

  Gordon, J.

  Nicholson, Wm. G. (Petersfield)

  Beach, Hon. Michael Hugh Hicks

  Guinness, Hon. R. (Haggerston)

  Parkes, Ebenezer

  Beckett, Hon. Gervase

  Guinness, Hon. W. E. (B. S. Edmunds)

  Pease, Herbert Pike (Darlington)

  Bowles, G. Stewart

  Harrison-Broadley, H. B.

  Peel, Hon. W. R. W.

  Bull, Sir William James

  Hay, Hon. Claude George

  Percy, Earl

  Butcher, Samuel Henry

  Hermon-Hodge, Sir Robert

  Pretyman, E. G.

  Carlile, E. Hildred

  Hills, J. W.

  Randles, Sir John Scurrah

  Cecil, Evelyn (Aston Manor)

  Hope, James Fitzalan (Sheffield)

  Rawlinson, John Frederick Peel

  Chamberlain, Rt. Hon. J. A. (Worc'r)

  Hunt, Rowland

  Renton, Leslie

  Chaplin, Rt. Hon. Henry

  Joynson-Hicks, William

  Renwick, George

  Clive, Percy Archer

  Kerry, Earl of

  Ronaldshay, Earl of

  Clyde, J. Avon

  Keswick, William

  Ropner, Colonel Sir Robert

  Coates, Major E. F. (Lewisham)

  King, Sir Henry Seymour (Hull)

  Rutherford, John (Lancashire)

  Corkett, T. L. (Down, North)

  Lambton, Hon. Frederick William

  Rutherford, Watson (Liverpool)

  Courthope S. Loyd

  Lane-Fox, G. R

  Salter, Arthur Clavell

  Craig, Captain James (Down, E.)

  Law, Andrew Bonar (Dulwich)

  Smith, Hon. W. F. D. (Strand)

  Dickson, Rt. Hon. C. Scott-

  Lee, Arthur H. (Hants, Fareham)

  Stanier, Beville

  776

  777

  Starkey, John R.

  Warde, Col. C. E. (Kent, Mid)

  Wyndham, Rt. Hon. George

  Staveley-Hill, Henry (Staffordshire)

  Williams, Col. R. (Dorset, W.)

  Younger, George

  Talbot, Lord E. (Chichester)

  Willoughby de Eresby, Lord

  Thompson, W. Mitchell- (Lanark)

  Wilson, A. Stanley (York, E. R.)

  TELLERS FOR THE NOES.—Lord

  Walker, Colonel W. H. (Lancashire)

  Winterton, Earl

  R. Cecil and Mr. Mildmay.

  Walrond, Hon. Lionel

  Mr. HALDANE Mr. HALDANE moved "That in respect of the words of the Clause to the words in Section (3) 'but subject' ['shall be deemed to be sold free from incumbrances, but subject'], the Chair be
  empowered to select the Amendments to be proposed."
  Question put.
  The Committee divided: Ayes, 195; Noes, 91.

  Division No. 444.]

  AYES.

  [11.20 p.m.

  Acland, Francis Dyke

  Harcourt, Rt. Hon. Lewis (Rossendale)

  Norman, Sir Henry

  Adkins, W. Ryland D.

  Harcourt, Robert V. (Montrose)

  Partington, Oswald

  Ainsworth, John Stirling

  Hardie, J. Keir (Merthyr Tydvil)

  Paulton, James Mellor

  Alden, Percy

  Hardy, George A. (Suffolk)

  Pearce, Robert (Staffs, Leek)

  Armitage, R.

  Harmsworth, Cecil B. (Worcester)

  Pearce, William (Limehouse)

  Atherley-Jones, L.

  Harvey, W. E. (Derbyshire, N.E.)

  Pickersgill, Edward Hare

  Baker, Joseph A. (Finsbury, E.)

  Harwood, George

  Price, Sir Robert J. (Norfolk, E.)

  Balfour, Robert (Lanark)

  Haworth, Arthur A.

  Priestley, Arthur (Grantham)

  Baring, Godfrey (Isle of Wight)

  Hazel, Dr. A. E. W.

  Rainy, A. Rolland

  Barnard, E. B.

  Hedges, A. Paget

  Raphael, Herbert H.

  Barnes, G. N.

  Helme, Norval Watson

  Richards, Thomas (W. Monmouth)

  Barran, Rowland Hirst

  Hemmerde, Edward George

  Richards, T. F. (Wolverhampton, W.)

  Barry, Redmond J. (Tyrone, N.)

  Henderson, Arthur (Durham)

  Richardson, A.

  Beale, W. P.

  Henry, Charles S

  Ridsdale, E. A.

  Beauchamp, E.

  Herbert, Col. Sir Ivor (Mon. S.)

  Roberts, Charles H. (Lincoln)

  Beaumont, Hon. Hubert

  Herbert, T. Arnold (Wycombe)

  Roberts, G. H. (Norwich)

  Bellairs, Carlyon

  Higham, John Sharp

  Robertson, Sir G. Scott (Bradford)

  Benn, W. (Tower Hamlets, St. Geo.)

  Hobart, Sir Robert

  Robinson, S.

  Berridge, T. H. D.

  Hobhouse, Rt. Hon. Charles E. H.

  Robson, Sir William Snowdon

  Bowerman, C. W.

  Hodge, John

  Roch, Walter F. (Pembroke)

  Brace, William

  Holland, Sir William Henry

  Rogers, F. E. Newman

  Branch, James

  Hudson, Walter

  Runciman, Rt. Hon. Walter

  Bright, J. A.

  Hyde, Clarendon G.

  Russell, Rt. Hon. T. W.

  Brocklehurst, W. B.

  Illingworth, Percy H.

  Samuel, Rt. Hon. H. L. (Cleveland)

  Bryce, J. Annan

  Jardine, Sir J.

  Samuel, S. M. (Whitechapel)

  Burns, Rt. Hon. John

  Jenkins, J.

  Seely, Colonel

  Buxton, Rt. Hon. Sydney Charles

  Johnson, John (Gateshead)

  Shackleton, David James

  Byles, William Pollard

  Jones, Leif (Appleby)

  Sherwell, Arthur James

  Carr-Gomm, H. W.

  Jones, William (Carnarvonshire)

  Shipman, Dr. John G.

  Causton, Rt. Hon. Richard Knight

  Kekewich, Sir George

  Silcock, Thomas Ball

  Cawley, Sir Frederick

  Laidlaw, Robert

  Simon, John Allsebrook

  Chance, Frederick William

  Lamb, Ernest H. (Rochester)

  Soames, Arthur wellesley

  Channing, Sir Francis Allston

  Lambert, George

  Soares, Ernest J.

  Cherry, Rt. Hon. R. R.

  Lamont, Norman

  Stanley, Hon. A. Lyulph (Cheshire)

  Clough, William

  Lehmann, R. C.

  Steadman, W. C.

  Clynes, J. R

  Lever, A. Levy (Essex, Harwich)

  Stewart, Hailey (Greenock)

  Cobbold, Felix Thornley

  Levy, Sir Maurice

  Strauss, E. A. (Abingdon)

  Collins, Sir Wm. J. (St. Pancras, W.)

  Lewis, John Herbert

  Summerbell, T.

  Cooper, G. J.

  Lloyd-George, Rt. Hon. David

  Taylor, John W. (Durham)

  Corbett, A. Cameron (Glasgow)

  Lough, Rt. Hon. Thomas

  Taylor, Theodore C. (Radcliffe)

  Corbett, C. H. (Sussex, E. Grinstead)

  Lupton, Arnold

  Tennant, H. J. (Berwickshire)

  Cornwall, Sir Edwin A.

  Luttrell, Hugh Fownes

  Thomas, Sir A. (Glamorgan, E.)

  Crooks, William

  Lyell, Charles Henry

  Thompson, J. W. H. (Somerset, E.)

  Dewar, Arthur (Edinburgh, S.)

  Lynch, H. B.

  Thorne, G. R. (Wolverhampton)

  Dickson-Poynder, Sir John P.

  Macdonald, J. R. (Leicester)

  Verney, F. W.

  Duncan, C. (Barrow-in-Furness)

  Macnamara, Dr. Thomas J.

  Walsh, Stephen

  Dunn, A. Edward (Camborne)

  M'Callum, John M.

  Walters, John Tudor

  Dunne, Major E. Martin (Walsall)

  McKenna, Rt. Hon. Reginald

  Warner, Thomas Courtenay T.

  Elibank, Master of

  M'Laren, H. D. (Stafford, W.)

  Wason, John Cathcart (Orkney)

  Evans, Sir S. T.

  M'Micking, Major G.

  Waterlow, D. S.

  Everett, R. Lacey

  Marks, G. Croydon (Launceston)

  Wedgwood, Josiah C.

  Ferens, T. R.

  Mason, A. E. W. (Coventry)

  White, J. Dundas (Dumbartonshire)

  Ferguson, R. C. Munro

  Massie, J.

  White, Sir Luke (York, E. R.)

  Findlay, Alexander

  Masterman, C. F. G.

  Wilkie, Alexander

  Fuller, John Michael F.

  Micklem, Nathaniel

  Williams, J. (Glamorgan)

  Gibb, James (Harrow)

  Mond, A.

  Wills, Arthur Walters

  Gill, A. H.

  Morgan, G. Hay (Cornwall)

  Wilson, Hon. G. G. (Hall, W.)

  Gladstone, Rt. Hon. Herbert John

  Morgan, J. Lloyd (Carmarthen)

  Wilson, John (Durham, Mid)

  Glover, Thomas

  Morse, L. L.

  Wilson, J. W. (Worcestershire, N.)

  Goddard, Sir Daniel Ford

  Morton, Alpheus Cleophas

  Wilson, P. W. (St. Pancras, S.)

  Greenwood, G. (Peterborough)

  Murray, Capt. Hon. A. C. (Kincard.)

  Wilson, W. T. (Westhoughton)

  Grey, Rt. Hon. Sir Edward

  Myer, Horatio

  Wood, T. M'Kinnon

  Griffith, Ellis J.

  Napier, T. B.

  Yoxall, Sir James Henry

  Gulland, John W.

  Newnes, F. (Notts, Bassetlaw)

  Haldane, Rt. Hon. Richard B.

  Nicholls, George

  TELLERS FOR THE AYES.—Mr. Joseph Pease and Sir E. Strachey.

  Hancock, J. G.

  Nicholson, Charles N. (Doncaster)

  NOES.

  Anson, Sir William Reynell

  Gardner, Ernest

  Peel, Hon. W. R. W.

  Anstruther-Gray, Major

  Gibbs, G. A. (Bristol, West)

  Percy, Earl

  Arkwright, John Stanhope

  Gordon, J.

  Pretyman, E. G.

  Ashley, W. W.

  Guinness, Hon. R. (Haggerston)

  Randles, Sir John Scurrah

  Baldwin, Stanley

  Guinness, Hon. W. E. (B. S. Edmunds)

  Rawlinson, John Frederick Peel

  Balfour, Rt. Hon. A. J. (City, Lond.)

  Harris, Frederick Leverton

  Renton, Leslie

  Banbury, Sir Frederick George

  Harrison-Broadley, H. B.

  Renwick, George

  Banner, John S. Harmood-

  Hay, Hon. Claude George

  Ronaldshay, Earl of

  Barrie, H. T. (Londonderry, N.)

  Hermon-Hodge, Sir Robert

  Ropner, Colonel Sir Robert

  Beach, Hon. Michael Hugh Hicks

  Hills, J. W.

  Rutherford, John (Lancashire)

  Beckett, Hon. Gervase

  Hope, James Fitzalan (Sheffield)

  Rutherford, Watson (Liverpool)

  Bowles, G. Stewart

  Hunt, Rowland

  Salter, Arthur Clavell

  Bull, Sir William James

  Joynson-Hicks, William

  Smith, Hon. W. F. D. (Strand)

  Butcher, Samuel Henry

  Kerry, Earl of

  Stanier, Beville

  Carlile, E. Hildred

  Keswick, William

  Starkey, John R.

  Cecil, Evelyn (Aston Manor)

  King, Sir Henry Seymour (Hull)

  Staveley-Hill, Henry (Staffordshire)

  Cecil, Lord R. (Marylebone, E.)

  Lambton, Hon. Frederick William

  Talbot, Lord E. (Chichester)

  Chamberlain, Rt. Hon. J. A. (Worc'r)

  Lane-Fox, G. R.

  Thompson, W. Mitchell- (Lanark)

  Chaplin, Rt. Hon. Henry

  Lee, Arthur H. (Hants, Fareham)

  Walker, Colonel W. H. (Lancashire)

  Clive, Percy Archer

  Lockwood, Rt. Hon. Lt.-Col. A. R.

  Walrond, Hon. Lionel

  Clyde, J. Avon

  Long, Col. Charles W. (Evesham)

  Warde, Col. C. E. (Kent, Mid)

  Coates, Major E F. (Lewisham)

  Lowe, Sir Francis William

  Williams, Col. R. (Dorset, W.)

  Corbett, T. L. (Down, North)

  MacCaw, Wm. J. MacGeagh

  Willoughby de Eresby, Lord

  Courthope, G. Loyd

  Marks, H. H. (Kent)

  Wilson, A. Stanley (York, E. R.)

  Craig, Captain James (Down, E.)

  Mildmay, Francis Bingham

  Winterton, Earl

  Dickson, Rt. Hon. C. Scott-

  Moore, William

  Wyndham, Rt. Hon. George

  Doughty, Sir George

  Morpeth, Viscount

  Younger, George

  Douglas, Rt. Hon. A. Akers-

  Morrison-Bell, Captain

  Du Cros, Arthur

  Newdegate, F. A.

  TELLERS FOR THE NOES.—Sir A. Acland-Hood and Mr. H. W.

  Faber, George Denison (York)

  Nicholson, Wm. G. (Petersfield)

  Fletcher, J. S.

  Parkes, Ebenezer

  Forster.

  Foster, P. S

  Pease, Herbert Pike (Darlington)

  The CHAIRMAN: I now call upon the hon. Member for Ayr Burghs to move his Amendment in its altered form.
  Mr. GEORGE YOUNGER Mr. GEORGE YOUNGER moved at the end of Section (2) to insert the words, "and of improvements of whatever nature on, in, or under the soil executed in order to prepare the land for the purpose for which it is actually used."
  The object of altering my Amendment in that way is to leave out for the present the question of reclamation, levelling and so forth which more properly can be dealt with under Section (4). We are now considering from what improvements the land should be divested in order to arrive at the somewhat abstract valuation which is to be placed upon it, and it must be obvious that the section as it stands does not go nearly far enough in stating what this divesting should consist of. Section (2) provides that "the site value of land means the amount which the fee simple of the land, if sold at the time in the open market by a willing seller might be expected to realise." The words "by a willing seller" were introduced into the Scotch Land Bill by an Amendment of mine, which I do not think was a very good one. The section goes on to provide, "if the land were divested of any buildings, and of any other structures (including fixed or attached machinery) on, in, or under the surface, which are appurtenant to or
  780
  used in connection with any such buildings." That is a very limited divesting. It would include drains and all that sort of thing under the soil in so far as they were connected with the structure, but it would not include, as it certainly ought to include, arterial and the smaller tile drains which are necessary on those farms and which form a very large part of the expenditure in the equipment of a farm.
  Therefore you want words of a much wider character, giving a much more clear definition of the strictures of which the land is to be divested, and there is sufficient width for this purpose in the words I have proposed. If we are to have an abstract valuation of this kind—which I am bound to say is the most nonsensical I ever heard of—we should at least have an accurate and not an inaccurate abstraction. Anyone who knows anything about this matter, and the expense which landlords have been put to preparing land for this purpose, know that the limiting words in Section (2) give absolutely no proper deduction for the expenditure which in most cases is necessary to bring that land into agricultural use.
  When you consider that agricultural land in this country was raised, I believe, nearly one-third in value by fencing alone, it will be realised how very much depends upon a careful definition of structures and improvements which you include

  781
  in this particular clause if you are at be at all fair to those who have spent money in developing their land. I am bound to tell the Chancellor of the Exchequer quite honestly that if he thinks he wall have much value left after he has taken out this expenditure he is mightily mistaken. The actual cost of the structures and improvements of many farms in Scotland with which I am acquainted total to a great deal more than the fee simple of the farm. It was all right when rents were £3 per acre, but it is totally different now they are 19s. or £1. Apart altogether from the dishonesty which would be bound to result if you tax a thing more than its annual value, it is obvious there would be no basis of rating at all. We are concerned to see we are strictly fair in giving an allowance for all that large expenditure, and I do not think the Chancellor of the Exchequer, if he looks at this point carefully, will deny that it requires to be very much more widely expressed in order to give effect to what is obviously his own intention of giving full credit for all the expenditure which has been incurred to bring the land to agricultural use.
  Mr. LLOYD-GEORGE: The hon. Member very frankly informed me that he has come to the conclusion that an Amendment which he moved last year to the Scotch Land Value Bill was a very bad one.
  Mr. YOUNGER: Two years ago.
  Mr. LLOYD-GEORGE: I have no doubt if the hon. Member takes another two years he will come to exactly the same conclusion with regard to his present Amendment.
  Mr. YOUNGER: No, I think it is an excellent one.
  Mr. LLOYD-GEORGE: And I do not despair of convincing the hon. Member in two minutes that is the case. As far as I can understand, this is a remnant of some controversy about Scotch land values.
  Mr. YOUNGER: Oh, no.
  Mr. LLOYD - GEORGE: I rather gathered he was answering some argument of the Lord Advocate's two years ago.
  Mr. YOUNGER: That would take me two hours.
  Mr. LLOYD-GEORGE: I could not follow the merits of the controversy, and I could not see that it had the slightest
  782
  reference to the proposal now under discussion. What is the proposal? As far as I can understand, the hon. Member proposes that improvements of whatever nature on, in, or under the soil, executed in order to prepare the land for the purpose for which it is actually used, shall be deducted in ascertaining the original site value. How does the hon. Member propose to distinguish between that and the deductions made in Section (4) Every improvement of a permanent character and, more than that, the value attributable to improvements of a permanent character are deducted there. He proposes here that the cost of all improvements of whatever character which fit the land for the time being shall be deducted.
  Mr. YOUNGER: That is for any business other than agriculture. It is quite a different thing.
  Mr. LLOYD-GEORGE: I do not want to anticipate—
  Mr. YOUNGER: It is the whole point.
  Mr. LLOYD-GEORGE: Why does the hon. Gentleman want to raise the Debate here? Section (4) will have to be reconsidered. Why does he want to interpose these words here? How does he distinguish between words interposed here and those introduced in Section (4)? They seem to me to answer exactly the same purpose.
  Mr. PRETYMAN: I think I can make this plain to the Chancellor of the Exchequer. The distinction between Section (2) and Section (4) is clear. The former divests the land of all the different improvements made in it as the result of expenditure upon it for the purpose of the original use, whereas Section (4) deducts from the value any expenditure for the purpose of fitting the land for its new use. The object of this Amendment is absolutely consistent with that.
  Mr. LLOYD-GEORGE: I want to be perfectly clear, but that seems to me to be deducting it twice over.
  Mr. PRETYMAN: Not at all. If the right hon. Gentleman will look at the words of the Amendment he will see that it follows the exact scheme of the Bill. The words do not specially refer to agriculture only; they refer to the fact that the land may not necessarily be used for purely agricultural purposes. There may be changes on the land. This Amendment proposes that the land shall be divested

  783
  not only of the buildings which are upon it, but of anything else which has been put there in order to fit it for its original use—whatever that use may be. There may be some other use than agriculture which will not make the land fully developed land. If it is undeveloped land it is still being used for some purpose, and any expenditure which has been incurred upon that land to fit it for its original use, and anything which results from that expenditure on the land it shall be divested of. The Amendment only makes it perfectly clear that the land is to be deemed to be divested of anything put upon it for its original use. When we come to Section (4) we are dealing with something quite different. We are dealing with expenditure calculated to fit the land for its new use. The object of this Amendment is particularly in regard to the Undeveloped Land Duty, because you want to keep your site value low for the purpose of that duty. I am perfectly aware it acts to some extent against the Increment Value Duty. But the same deductions are allowed in both cases. My object when I speak in these Debates is not invariably to reduce the amount of the tax, and here I am simply pointing out that the hardship of this Undeveloped Land Duty is more inexcusable than in the case of the Increment Value Duty.
  To create a site value which is not really there, and then charge Undeveloped Land Duty upon it, seems to me to be the most indefensible thing in the Bill. All this Amendment does is to carry out the scheme of Clause 2.
  Mr. LLOYD-GEORGE: I really am not quite clear how the hon. Gentleman reads this Amendment. He is going to separate the deductions in Section (2) from the deductions in Section (4). He says, in the first place, you must strip the land of all improvements made for its original use.
  Mr. PRETYMAN: Divest it of all improvements for its original use.
  Mr. LLOYD-GEORGE: Supposing the value before you start is £1,000, and you divest the land of improvements to the extent of £300, that leaves an original site value of £700. Then you deduct improvements of the character described m Section (4). Probably they are not exactly the same improvements, but some of them will be, and you will be deducting them twice over. It is quite open to the hon. Gentleman to say that the im-
  784
  provements mentioned in Section (4) are not wide enough, but that is a question of amending Section (4) rather than Section (2).
  Mr. PRETYMAN: If you wanted to amend Section (4) in that sense you will have to alter the whole scheme for it. These improvements are all limited for the purpose of fitting the land for its new use, and they cannot be deducted under the scheme of Section (4). Of course, if you are prepared to alter the whole scheme and amalgamate Section (4) and Section (2), it would be different, but whatever the improvements are under Section (4), the deductions are only those which are made for the purpose of fitting the land for its new use. Unless that it is so they cannot be deducted. I would suggest that this Amendment is the only form in which you could keep that distinction. Its object is perfectly obvious, and you do not do the same thing for the two separate purposes; you do not take it twice, and no valuer would do that; you have something which is done to fit the land for its original use, and you divest it of that, and something to fit it for its new use, and you deduct that; you cannot put the improvements referred to in this Amendment in Section (4) because they have not been made for the purpose of fitting the land for its new use.
  Mr. LLOYD-GEORGE: It may not be a new use at all. It may be the same use. It is for fitting the land for the purpose for which it is actually used—that is the proposal of the hon. Gentleman—used at the time the estimate is made. The same class of improvement may be credited to the owner of the site under Section (4).
  Mr. PRETYMAN: I am sure my hon. Friend would be prepared to put in Section (4) the words "exclusive of anything of which the land is to be divested" in Section (2). That would make it perfectly plain.
  Mr. LLOYD-GEORGE: But what may happen in that case is this: You may spend money for the purpose of fitting a site in one case for one use, and you may in the second place deduct in respect of money expended for the purpose of fitting it for another use. You should not be allowed to deduct a thing twice over, because money spent upon the first case is money which is not of the slightest use when you deduct it in the second case. Here is another point. The money which is deducted in respect of im-

  785
  provements ought to be in respect of permanent improvements when you are dealing with site value, which is the foundation for all time of the increment as well as the ½d. tax. This will be money which could be spent on purely temporary improvements. You ought not to deduct for purely temporary improvements when you are dealing with the site value, which is the foundation for 10 or 50 years, or for all time.
  Mr. PRETYMAN: Surely the Chancellor of the Exchequer is absolutely departing from his own principle in Section (2). On what principle can you defend the deduction of any buildings which are there now, which are merely temporary, and put there for the present use of the land? The whole principle, as we understand it, which he has suggested is that the land is to be deemed in the first instance to be the bare site, freed of everything which has been put upon it. He has embodied that principle in the section in regard to structures, and I cannot think he is either following his own principle or any principle at all in refusing this Amendment, which merely applies his own principle to all improvements as well as structures. Why should you do a thing for structures and buildings which you do not do for a drain? On what principle are you to divest the land of a structure, such as a shed, which has been put upon it for temporary use at the time at which the valuation is made, when you refuse to deduct for a drain? There is no difference whatever.
  Mr. LLOYD-GEORGE: The reason is that you want to get at the value of the land apart from the structure. That is the principle on which you tax site values in every country in the world, and we are simply following the precedent which has been set whenever there is an attempt to separate site from structure. Drains may be a purely temporary improvement, and deducting them will not give you the site value. But stripping the land of buildings gives you the site value of the land, and that is what you want to get at. But when you come to deduct improvements, in my judgment you ought only to deduct such improvements as are of a permanent character and really contribute to the real value of the site.
  Mr. YOUNGER: May I refer the right hon. Gentleman to his own Government's definition of "improvements" in the
  786
  Scotch Land Values Bill? This was a scientific clause, as I understand it, and it included the permanent improvements which are required to be deducted before you get site value. The clause provides for the inclusion of the value of drains at the time of the valuation. I am asking no more in my Amendment than the Government gave in their own Bill which twice passed this House. It was the subject of great and prolonged Debate, and I cannot understand on what possible ground the right hon. Gentleman can say that these improvements should be treated differently now.
  Mr. AUSTEN CHAMBERLAIN: Possibly the Chancellor of the Exchequer would assist us if he would give an explanation of the difference between Sections (2) and (4). Why are certain things put in Section (2) and other things in Section (4)? My hon. Friend the Member for Chelmsford (Mr. Pretyman) has given his interpretation of the difference between the two sections, and if the right hon. Gentleman does not accept that interpretation, I should be very much obliged if he would tell us what is his own explanation. I do not understand why the Government have divided Sections (2) and (4) at all. Section (2) says that site value is so and so; then Section (4) says that from that site value there shall be allowed certain deductions. When you turn over the page you find that the site value so reduced shall be the site value for the purpose of the tax. What on earth is the meaning of draftsmanship of that kind? First you say that A is the site value, then you say that you may deduct B, and that A minus B shall be the site value. A learned Cambridge professor, in a letter to "The Times," has pointed out that you never can understand the principles of this taxation unless you explain them by means of algebra. The Solicitor-General says that A is the site value.
  The SOLICITOR - GENERAL(Sir Samuel Evans): What I say is that if there are no deductions the site value remains A.
  Mr. AUSTEN CHAMBERLAIN: I wonder whether that is as clear to other Members of the Committee as it is to the Solicitor-General. A minus B is the site value, but if there are no deductions A remains the site value. Would the hon. and learned Gentleman state it again.
  Sir S. EVANS: What I mean is this. You have to arrive at site value. You

  787
  may have site value which is not subject to any deduction at all. That is perfectly clear. But there may be a piece of land before you can arrive at the site value of which you must have some deduction if Section (4) is to form part of the scheme; that is to say, if you have some of these improvements which are of a permanent nature in accordance with the provisions of that section, they are to be deducted in arriving at the site value of that particular piece of land.
  12 A. M.
  Mr. AUSTEN CHAMBERLAIN: What I want to know is why the Government drafted the Bill in this form, and what is the reason for putting certain deductions into Section (2) and other deductions into Section (4)? Section (2) says that a certain thing is the site value. Section (4) says that for the site value you must deduct something else. But Section (2) says that the site value is the total value when the land is divested of certain things. But that does not mean you are to make an allowance for divesting land of timber which is not growing any, or divesting it of structures which are not on it. Of course, you must assume that these things will only be deducted where they are there to deduct. The Bill says that the site value is the land divested of those things of which you may divest it under Section (2). Why then does Section (4) say that from that site value there shall be deductions? Obviously, when you have deducted something from the site value it is no longer the site value, but something different. But when you turn over a page and subtract something for the site value, you still have the site value. A minus B equals A; and that not merely when B equals nothing, which would be the ordinary solution of the problem, but when B equals any figure you like to put on it. Whether it is £100, £1,000, or £10,000, A minus B is still equal to what A was before. I think that the Chancellor of the Exchequer will see my difficulty. Obviously what the Bill says is a mathematical, algebraical absurdity in that respect. If what you get in Section (2) is the site value, then what you get in Section (4) is not the site value. If what you get in Section (4) is the site value, then what you get in Section (2) is not the site value. Why have the Government confused matters by dividing the thing up into two sections and why did they not state in a single section that the site value is the land
  788
  divested of everything that they have put into Section (2), and after making allowance for everything that they also deduct in Section (4)? That would have been logical and would have produced a sum which would work out in algebra and prove to be correct. I come back to the early part of the Debate. There is one observation I have to make on the Chancellor of the Exchequer's ground for refusing the Amendment. My hon. Friend is urging him to exempt purely temporary improvements which have lost their value. To do that is to ask twice over for the same thing; that is to say, you spend money on the land to prepare it for one purpose, and subsequently you spend money on the land to prepare it for another purpose. By reason of development the money spent first of all becomes idle. Does that bar the claim for an allowance on the second sum? You are not asking for the sum twice over; you are asking for two sums, each spent at the appointed time and in the appointed order for the development of the land. If the Chancellor of the Exchequer will kindly look at Section (2) he will see that he is labouring under a complete delusion when he supposes that the land is only to be divested of permanent improvements. Take the drains themselves as the substructures. These structures may be of a very temporary character. It is so difficult to argue with the Government, because the arguments they themselves use apparently have no reference to the facts of the case. A structure may be a temporary improvement, such as a shed run up to shelter cows. It may be that the drains connected with the structure are improvements of a temporary character, while the more permanent drains alongside will not be allowed for, because the Chancellor of the Exchequer says they are temporary. But we need not rest the case on drains or substructures. Does the right hon. Gentleman mean that fruit trees and fruit bushes and other things growing are permanent improvements? I know what it is, the Chancellor of the Exchequer has been misled by the expression, permanent pasture. I think if he will consult agriculturists he will find that these things are not so.
  Mr. LLOYD-GEORGE: The difference between the two cases is this: We want to ascertain the basis of the tax on site value. If you look at Section (4) you will find that a deduction is made for the pur-

  789
  pose of ascertaining the site value, and what is the process? The first process, as I have already pointed out, is to divest the land of buildings and structures, of fruit trees and bushes, and so on. The next step is to deduct the value attributable to other improvements which may not be on that piece of land at all. It is perfectly true that the hon. Member has a later Amendment, but in substance he is moving exactly the same thing. For instance, there are the works of drainage and reclamation that may not be on that piece of land.
  Mr. YOUNGER: I have taken them out.
  Mr. LLOYD-GEORGE: I have pointed out that substantially it is the same Amendment. The only difference is that the hon. Gentleman is satisfied it is far better to have general comprehensive words, because he imagines he may have left out something else.
  Mr. YOUNGER:I do.
  Mr. LLOYD-GEORGE: At any rate he does include works of reclamation. Therefore it is the same thing. I want to get some specific illustration to work on. The works of reclamation would not be on the building site, or say would be just inside or on that particular unit possibly. What the hon. Gentleman means, and I think wants, is to take the levelling and not the sea wall or the embankment, which cost the most money. The Government are infinitely fairer than the hon. Member. The hon. Member wants to take the levelling under Section (2), and the sea wall under Section (4). We deduct the whole of the value of your costs which created the whole of the value under Section (4). That is the real difference. We want to make it an improvement to which the value is attributable, even though it is not on the particular site. I think it is clear to the hon. Gentleman now what it is: The first is a simple separation of the site for the structures and everything that is growing upon it. The second is you take any value which is attributable to expenditure, even though it may be outside that particular plot. You give the land credit for that before you arrive at the taxable subject matter. That is the real difference between the two cases.
  Mr. BALFOUR: I am not sure that there is any difference of substance or principle between the policy of my hon. Friend (Mr. Younger) and the policy which I understand to be the policy of the Government.
  790
  I think to begin with the Chancellor of the Exchequer has made one very fundamental mistake when he supposed that my hon. Friend uses the word "deduct" My hon. Friend uses the word "divest" Deduction comes in under Section (4), divesting is confined to Section (2). The policy of the Government, if I understand it rightly, is that they take everything off the bit of land, or the supposed acre of land, and there will be the site, the original thing given by Nature, before it was touched by man, an abstraction, but more or less an infinitesimal abstraction. He says when you have done that you may commence your deductions, because you will, or may have, done things outside that acre, the next acre, or somewhere else, which has increased the value of the land and certain premises, and from which it ought to have a deduction made before you fix a tax. That I believe to be the-policy of the Government.
  Mr. LLOYD-GEORGE: Would the right hon. Gentleman take the illustration of reclamation? I have just explained Dereference to reclamation the difference between the two.
  Mr. BALFOUR: I should have said reclamation is not a perfectly precise term for the following reason, that reclamation of a given acre of land may be due to works done a mile away.
  Mr. LLOYD-GEORGE: I agree.
  Mr. BALFOUR: In that case you cannot divest the land of that. You may make deductions under Section (4). I think you ought to.
  Mr. LLOYD-GEORGE: I agree.
  Mr. BALFOUR: You cannot divest a given acre of something which is on another acre. As I understand the matter, we are supposed to divest the acre of land of everything that man has done, to put it back into its primeval condition as Nature gave it, and that you propose to do in Section (2). That is the process of divesting. Then, coming to Section (4), you say that it is not sufficient to imagine the land divested of everything, you must make deductions, in order to be fair to the landlord who has made improvements elsewhere by which that particular acre of land has been improved. I believe that to be the policy of the Government. This is what naturally puzzled my hon. Friend. You have this extraordinarily clumsy drafting, in which you have two

  791
  kinds of site value. In Section (2) you have a thing called "site value," and in Section (4) you have a thing called "site value ascertained for the purposes of this Act"—two different things. How anybody could draft a Bill with that sort of terminology and expect it to be, understood, I do not know. The confusion produced is endless. I am talking now not about deductions, but about divesting. If you want to bring your acre of land into the state in which God made it, you must divest it of everything, and my hon. Friend's Amendment is to turn the incomplete catalogue which the Government have given in Sub-section (2) into a complete catalogue, so that the divesting shall be a really complete and finished operation, after which in Sub-section (4) you can proceed to make what deductions you want, so as to get the second form of site value which you call "site value as ascertained for the purposes of this Act."
  Mr. LLOYD-GEORGE: I have no quarrel with the general proposition of the right hon. Gentleman. He has stated very fairly and, of course, very lucidly, the position of the matter. I take the case of reclamation, because I think it is a very fair test. What the right hon. Gentleman wants is this: that where a landlord has spent money for the purpose of improving land—very often creating land for either agricultural or building purposes—he should get full credit not merely for the expenditure, but for the value created thereby, and that that should be deducted before you come to the taxable subject-matter.
  Mr. BALFOUR: That is the point.
  Mr. LLOYD-GEORGE: Stripped of all technical language, that is the proposition on which the right hon. Gentleman and I are agreed.
  Mr. BALFOUR: That is the meaning of the Bill?
  Mr. LLOYD-GEORGE: Yes. Not only that, but I think he also agrees that that is what you want to get at. I am assuming that we are to tax site value at all. I say that it is done better by the method adopted in the draft. I do not think there can be any doubt that it is done by the Bill. But there would be real doubt if we adopted the Amendment. Let us follow the case of reclamation. I put it to the right hon. Gentleman that you cannot possibly strip that particular
  792
  site of the works that may be executed five miles away. You therefore would have to resort to Section (4) in order to deduct the sea wall. Then, says the hon. Member for Ayr (Mr. Younger), the sea wall and the embankment is not the only obligation. You have the levelling up. Therefore, he said, you ought to divest the thing of the levelling-up and filling-in stuff, and you then deduct the sea wall. Surely that is the very worst way of doing it. I submit that it is far and away better that you should take the reclamation works as one operation, because you are not deducting the amount that you have spent, but the value which you have created. That is a much fairer thing; in most cases you will get more out of it. If you begin to split and divide in the way suggested by the hon. Member, you will undertake such a very complicated operation that you could not possibly arrive at a correct result. It is infinitely better that it should be done by deduction. I thoroughly support the way the clause has been drafted. I think it is a better and more business-like way of doing it. I do not think it leaves anyone in doubt for a moment that we arrive at the common purpose that we have in view—that is, to give the landlord the credit for the expenditure that he has made upon that land.
  Mr. YOUNGER: Will the right hon. Gentleman tell us whether he means to stick to the words in the last two lines of Section (4), Sub-section (a)? I An Amendment would possibly settle the whole thing. It is no good unless he makes changes in this clause.
  Mr. LLOYD-GEORGE: I do not think this is the time to discuss that.
  Mr. YOUNGER: I do not want to discuss it.
  Mr. LLOYD-GEORGE: It is anticipating discussion that will come on at that particular stage.
  Mr. YOUNGER: I do not want to discuss it at all.
  Mr. LLOYD-GEORGE: At any rate, I should like to hear what is said against leaving these words in. I am keeping a perfectly open mind. I stand by the Bill until I hear what arguments there are for altering it.
  Mr. AUSTEN CHAMBERLAIN: Assuming that the man had reclaimed land for

  793
  the purpose of agriculture, and subsequently developed that land for building, could he claim any deduction under Section (4) or under Section (2)? I do not think he could.
  Mr. MUNRO FERGUSON: The Solicitor-General for Scotland might be able to give the Government some valuable information with respect to the discussion on the Land Values Bill for Scotland which was taken upstairs a couple of years ago. In the case of that Bill I should be sorry to hazard the opinion as to whether these deductions should be under the head of the divesting clause, or under the head of the deduction clause. We had a similar clause in the Land Values Bill upstairs; the Government intended to get the fair value of the land by the deduction of the buildings. It was pointed out that the value of the land was often affected by operations other than building, and that drainage might be a very permanent improvement; I am merely clearing up the point the Chancellor of the Exchequer asked about. Under the proposals of the Government in the Scottish Land Values Bill you would have been entitled to deduct the expenditure of the water supply if given by a windmill, but not if given by gravitation. In one case the machinery might be worked by an oil engine or by steam, in other oases by a dam or water supply, which is a very expensive and permanent structure. All these have to be deducted, and under Section (2), if fruit bushes would have to be deducted stone walls and hedges would have to be deducted. I think the list might be made too complicated, bait it does require a very complete list if we are to have a pure site value. I think if the Government would take that into consideration they would have no difficulty in getting at the matter.
  Mr. CLAVELL SALTER: As I understand it the Chancellor of the Exchequer makes no objection to the principle of the Amendment. He says he agrees with that which the Amendment desires to do, but his point is, it is already done in the Bill as it stands; and he says his way of doing it in the Bill is preferable to the way of the Amendment. I want to test the accuracy of that. I take the simplest possible case, that of the ordinary agricultural field. The valuer is instructed to ascertain this novelty, the site value of that field. He is to do so by first ascertaining the real value by making certain deduc-
  794
  tions. He finds in this field certain drains which are in fact permanent works, and which are technically described in many Acts of Parliament, such, for instance, as the Agricultural Holdings Act, as permanent works and permanent improvements. What is he to do about these drains that represent so much capital which is to be deducted under Section (2). We have finished with divestiture and reached the stage of deduction; we have got the site value, not the site value on which the owner is to be taxed, and he is, so far as we have gone, to be taxed upon the drainage which he may have put there with his own hands. Is that to come out under Section 4 as deduction? I hold in my hand a paper which the Government have circulated showing how Section 4 (a) will stand after it is amended as the Government propose to amend it. It says, "Any pant of the site value which is proved to the Commissioners to be directly attributable to works of a permanent character excluded, or to expenditure of capital incurred for the benefit or on behalf of any person interested in the land for the purpose of improving the value of the land as building land or for the purpose of any business, trade or industry other than agriculture."
  It is a matter of demonstration about which there cannot be any dispute, and with great respect I say that the Chancellor of the Exchequer is wrong when he says that the permanent improvements, the work of man, will come out under the Bill as it stands when this Amendment has been inserted. Whether my hon. Friend has put his Amendment too wide or not, he wants to meet such a case as this, and the point of his Amendment is that if the Committee carries it this drainage will come out, and it ought to come out. This ought to be done if the Government are sincere in their professions. The Government say that they do not wish to tax a man on that which is the work of human hands, and that they only wish to tax the bounty of nature. I wish to point out that we have never yet been told what this site value is. We have now reached what is undoubtedly the heart and the marrow of the first part of this Bill. The whole of this nex taxation is to be based upon this double abstraction, and in future years perhaps even more important taxation may be based upon it. Here is our system of taxation depending on this, and yet no Member of the Government has got up to tell us what site value is, or what they understand by it, in plain words or how it

  795
  should be arrived at. I wish somebody on the other side would have the courage to tell us in a few plain words how they think a valuer should go to work as a matter of principle, and what questions he ought to put to himself if he desires to ascertain the site value of an old pasture field of which the actual value is £100. What deductions ought he to make and how ought he to set about it?
  The CHAIRMAN: The hon. Member is going away from the Amendment altogether.
  Mr. SALTER: I was perfectly aware that I was trespassing, but I regret that the action of the closure has shut out the Motion upon which we could have raised this question, an opportunity which I was looking forward to and which I regret has been denied us. Coming back to the Amendment, whatever you do you are taxing the work of the hands of man. Are you going to tax him on the work of drainage which he may have laid with his own hands? If so, you are not following out your professions. For these reasons I ask the Government to accept my Amendment.
  Mr. ELLIS GRIFFITH: I think the meaning of this proposal is perfectly clear, although the application of it is not so simple. I understand there are three processes. You have first to get the total value of the land by arriving at the market value. Having got at that figure, you thereupon, as I understand, divest it of certain value that is attributable to certain things upon the land. You thus get A minus B, which I understand is the site value in this clause. The Government, however, in its generosity, says: "We are not taxing A minus B. It is quite true that is the site value in the primary sense of the word, but we will not tax it; we are generous towards the landowner, and we will make a certain deduction C. We will take B and C in his favour, and we will tax the land on A, minus B and C." We are all practically united on that construction. The immediate question before the Commissioners, as I understand it, is whether the permanent drain mentioned in the Amendment is within either the deduction or the divestiture. It makes no difference whether it is a divestiture or a deduction; the owner is equally saved whether the value of the drain be divested or deducted. I do not know
  796
  whether the Government have quite clearly expressed their intention upon this point; I do not know whether it is intended to include or exclude it, but as I read the section I have at any rate considerable doubt whether a permanent drain of the kind is in the divestiture or deduction clause. I should have considerable difficulty in saying a permanent drain came within Section (2), and, although perhaps it may be arguable, I do not think it comes within the deduction. Under those conditions, I do not quite know what the intention of the Government is, whether it is to include or exclude it. If their intention is to exclude it, the clause, I think, ought to be as it stands; but, if their intention is to include it, I think some other words are necessary.
  Mr. MITCHELL-THOMSON: We are really both desirous of arriving at the same result, but the great difficulty arises from the fact that the Government will not tell us what they mean to do with regard to the treatment of works of this character. Take a field of agricultural land with a sea wall somewhere outside, the field which has served the work of reclamation. On the field you have a sluice shutting out the sea—a very costly and valuable piece of work. The sea wall and the sea sluice have two totally different kinds of value; one is the structural value. That is the amount it has actually cost to make the sluice and put it there and to shovel the dirt to make the sea wall. There is another and quite a different value—the value resulting to the land from the fact that the sea wall and sea sluices are there. Section (4) is intended in general to apply to both of these values, but our fear is that in the case of agricultural land neither of these will be allowed for. All we say is that whereas Section (2) deals with the divestiture of structural value, you cannot always get at the structural value of a sea wall. What we suggest to the right hon. Gentleman is: "If you will not tell us what you are going to do in Section (4)— whether or not this value is to be deducted—the least we can do is to make sure that the cost of constructing the sea wall and sea sluices shall be deducted from the value of the land. "If the right hon. Gentleman will only tell us what the Government intend to do in section (4) without anticipating the Debate, I think it will not be necessary to prolong this discussion.
  Sir FREDERICK CAWLEY: If the words in Section (2), which are pertinent to this, were left out there would be little use in the hon. Member's Amendment. Years ago in a great many parts of this country people were ruined by Government drainage schemes, but still a great deal of land was reclaimed, and I think this should be allowed for just as much as rushes and timber on an estate, is the drainage of land to be allowed for?
  Mr. ROWLAND HUNT: I want to put this question to the Chancellor of the Exchequer. Take the case of ten acres of arable land which it did not pay u> cultivate. The landlord made the land valuable, or, rather, he created a value for it by laying it down as permanent pasture. By spending £4 or £5 upon it he gave it an annual value of £2 or £3 per acre. This is a not uncommon thing. I want to know from the Chancellor of the Exchequer—is the landlord in this -case to be allowed the £4 or £5 he has spent in laying the land down as permanent pasture, and is he also to be allowed the value which he has created for the land of £2 or £3 per acre, seeing that, before he undertook this, the land was worth practically nothing. I submit that the permanent pasture should be treated as an improvement of the land, and that the landlord should be allowed to reap the benefit of his enterprise. That is a case which will certainly happen all over the country.
  Mr. LEIF JONES: I think we had better have a fair understanding on this matter, although I do not know that I can help it very much, because I have been puzzled over it very much myself. But I should like to put the conclusion I have arrived at before the House, although I think the hon. Member for Anglesey (Mr. Ellis Griffith) very nearly got it quite right. I think there is more logic in the drafting of the Bill than the right hon. Gentleman the Leader of the Opposition could find concealed in it.
  Mr. BALFOUR: I thought it was extremely badly worded. The Government reasoning is in opposition to the logic of their own Bill.
  Mr. LEIF JONES: Perhaps the right hon. Gentleman will agree with what I am going to say. The total value is made up of two values, the site value and the value of what is upon the site, and the first thing we have to do is to separate these two values. It is a certainty that it
  798
  can be done, and that you can ascertain the value of the site by divesting it of what has been put upon the site. I think if hon. Members would leave for a moment the tax out of sight, they would see the difference between Section (2) and Section (4). In Section (2) we are engaged in ascertaining merely a matter of fact— a hypothetical fact—what in fact is the value of the site without considering in the least how that value is made up, and when you come to deduct from site value then you begin to enter into the merits of the case, and it seems to me that in Section (4) you state the deductions which you make in order that your tax will be a just tax. You must deduct under Section (4) therefore from your site value, reached as I have described under Section (2)—you must deduct whatever is necessary to fit the site for development purposes, that is to say, you must deduct any money spent for works of a permanent character, and contributing to its fitness, and you must also take into account the cost of stripping it, which makes it fit for building. From that point of view, you have a clear, logical distinction between Section (2) and Section (4), and there need be no anxiety on the part of those who are anxious that injustice should not be done to those who have spent money, inasmuch as it is not allowed on Section (2) because it is Section (4) which tells us what is subject to the deduction, and from what you make the deduction. [An HON. MEMBER: "Agricultural land."] Agricultural land is not the subject of the Development Tax but only of the Increment Tax, and on the subsequent site value you do make certain deductions which are a departure from the strict logic of the scheme; but, although it spoils the strict logic of the scheme, I do not think it is for us, who are interested in agriculture, to complain, as it is for the benefit of agricultural land that the Government have made this somewhat illogical distinction.
  Mr. MILD MAY: I hope the Chancellor of the Exchequer recognises that there are many of us who are honestly puzzled at the attitude taken up in this connection. The hon. Gentleman says the hon. Member (Mr. Ellis Griffith) had the matter quite straight. As I understood the hon. Member, he came to the conclusion that neither under Section (2) nor under Section (4) was land drainage taken into consideration? I think the Chancellor of the Exchequer scarcely realises what a large

  799
  expenditure there has been on this kind of drainage throughout the country, largely of a permanent character. I do not see how you can avoid making provision that this drainage shall be taken into consideration, especially as it can be done in a qualified way by the insertion of the words "unexhausted value" alluded to as being in the Scotch Act. If there is no value, no value would be taken into consideration.
  Mr. LLOYD-GEORGE: With regard to any value which is attributable to drainage, that certainly would be deducted when you are ascertaining taxable site value. If the words are not clear they can be made absolutely clear in Section (4). Agricultural land is not taxed either for Undeveloped Duty nor for increment. It is only taxed When it becomes valuable for either a building or for an industrial purpose, and therefore drainage, which ought to be deducted, is drainage which makes it fit for the purpose for which it is taxed. For instance, if a swamp is drained it makes it better for agriculture, but also for industrial and building purposes, and that value ought to be deducted. The value created by reclamation can also be deducted under Section (4).
  Mr. MITCHELL-THOMSON: There is also the other value, the actual structural value. That is a matter not for deduction, but for divesting. Ought the land not to be divested of this?
  Mr. LLOYD-GEORGE: The hon. Gentleman is asking too much now. You want it twice over.
  Mr. MITCHELL-THOMSON: No.
  Mr. LLOYD-GEORGE: I can well understand expenditure which the owner might regard as made for an improvement, and which added no value to the land, but which might even reduce the value of the land. I can also understand an improvement which cost twice more than the value added to the land, and another case where the value added to the land was not half the cost of the improvement. I can understand an improvement which has added to the value of the land twice more than the cost of the improvement. In all these cases the value added will be deducted and not the actual expenditure. I apply that to sluices, drains, and all works of a permanent character.
  Mr. PRETYMAN: It is perfectly clear that this limitation for the purpose of fit-
  800
  ting the land for any business, trade, or industry, can be amended. I do not think there is any question as to that not being clear. I think it is clear that if the land was drained or a reclamation carried out for a purpose which was originally agricultural, and if the land was used for a purpose, such as gardens or tennis grounds, which was not a business, trades or industry, the owner would not be able to deduct the cost under Section (2) or Section (4). It is perfectly plain that in that particular case no deduction would be allowed under these sections. If the right hon. Gentleman had told us earlier that he was prepared to make the alteration we would have saved a great deal of time. Now that he says he is prepared to make it I am perfectly satisfied.
  Mr. YOUNGER: I should like to say to the Chancellor of the Exchequer that if he had said at the beginning what he has said now, I would have been quite content. I do not care whether the deduction is made under Section (2) or Section (4), provided that it is made. I beg leave to withdraw the Amendment.
  Mr. BALFOUR: I confess that I think this is most illogical. You are trying to lay down what the value of the land will be when what man has done to it has been deducted, and certain gentlemen wish to make that the basis of taxation. That ought to be laid down in Section (2). This is an attempt to imagine what land would be worth if man's hand had never come near it That can be done in the case of some land, but it cannot be done in the case of other land. You are trying to do what land nationalisers all want, namely, just to imagine what the land would be if man had not touched it at all. To do that you must extend all the provisions in Section (2), and make them exhaustive. I am content with that protest made in the interest of logic.
  Amendment, by leave, withdrawn.
  Mr. E. G. PRETYMAN Mr. E. G. PRETYMAN moved to insert at the end of Section (2) the words: "Provided that, in the opinion of the owner, the original site value entered in the return required by Section 16 of this Act may be calculated by deductions from the total value according to the method prescribed by Sub-section (2) of Section (2) of this Act."
  There are two distinct methods laid down, one in Clause 2 and the other in Clause 14 of arriving at site value. We have already debated at considerable

  801
  length the different methods by which those two valuations are arrived at. They are different, and they have to be compared in order to get the increment value. My lion, and learned Friend (Mr. Clyde), in whose name this Amendment stood, suggests that in arriving at site value the owner should have the option of calculating either by the method proposed in Clause 14, or the method proposed in Clause 2, Section (2).
  Mr. LLOYD-GEORGE: This Amendment contains words which refer to Clause 16. This is anticipating a clause to which we have not come yet.
  The CHAIRMAN: The words "entered in the return required by Section 16 of this Act" should come out.
  Mr. PRETYMAN: Yes.
  The CHAIRMAN: In that case I think that the Amendment would be in order.
  Sir W. ROBSON: This Amendment seems unnecessary after the discussion that has just taken place.
  Mr. JAMES HOPE: I understand that there is a change of policy on the part of the Government, because I think that the learned Attorney-General claimed credit for the statement that they were deliberately making a difference between the method of assessment under Section 2 and that under Section 14, and the result would be favourable to the taxpayer. I believe that it was really designed to meet the case of agricultural land, although in the form the Bill then took those words were not absolutely expressed. If that is still the intention of the Government, do they now maintain that the process under Clause 14 is the same process as that under Clause 2, or if it is not the same, do they intend to allow the Amendment which will make the process of arriving at site value absolutely identical? That is to say, the method of computing the original site value in Clause 14 should be exactly the same as computing the site value in Section 2. Certainly the form of expression is very different. But do I understand that the learned Attorney-General has abandoned his original idea of making the difference and that now things are to be in absolute harmony?
  Sir W. ROBSON: I think the hon. Gentleman is asking for a declaration of what may happen when we come to Section (4). What we have to say on that point will be said either to-night or to-morrow.
  Mr. JAMES HOPE: I do not ask for words. I was only asking for an interpretation. Do I understand the Attorney-General now to say that the intention of computing the site value under Clause 14 in Section (2) is exactly the same as the other?
  Mr. J. A. CLYDE: I am not certain from what fell from the Attorney-General whether he quite comprehended the purpose the Amendment fairly gives effect to. I think it will be within the recollection of the Committee that in connection with the discussion on the second section of the Bill, the difference between the two valuations which have to be brought into comparison with each other in order to arrive at the increment value, was pointed out, and I think it will be within the Attorney-General's recollection that he said that he would take care that at some later stage some alteration of one or other or of both of these sections would be made so as to bring these valuations on to parallel lines. If I am right in that, there is nothing that touches the real disparity at all. The first valuation is on the logical law of Clause 14. That valuation assumes that it is the subject of a divested piece of land. It is not accurate to say that a person under Clause 14 begins with the total value and then divests or deducts from that so as to arrive at the site value for the Act; because for the purposes of the site value you estimate that the land should be divested, and begin from that. The original site value, of course, depends upon the valuation of a subject assumed to be in a hypothetical condition.
  Your datum in that case is the value of a subject in a hypothetical condition; but when you come to the valuation later, by means of which the increment is to be discovered, your datum is the total value as measured by the actual price got on a transaction. Everything depends upon the valuation wherever you introduce a different basis of valuation in order to arrive at the two figures you are going to compare, you inevitably and necessarily introduce a minimum which will make the increment value in the two cases exactly the same. Suppose if you are dealing with two houses in the same street, on the same side of the street, identical in plan and everything. One of the houses happens to be sold by a seller in a hurry, and the other by a seller not in a hurry, and the

  803
  latter gets a better price. The site value of the two places is exactly identical, but you come to the end of the affair, and you find that in the one case the seller was in a hurry and in the other he was not, and the datum of the figure is different, and therefore your site value is different. You apply the tax accordingly in each increment. We have been told over and over again in the course of these Debates that the real value, the actual value, of all these things is not what happens to be the value in the market, but what would be got on a valuation assuming a market for it. I think it is absurd to call the actual or real value what in fact is the mere estimated value. It is no good quarrelling about terms. For the purpose of comparison here we reach the basis of the tax.
  Sir WILLIAM ROBSONdissented.
  Mr. CLYDE: I see the learned Attorney-General dissents from that view.
  Sir WILLIAM ROBSON: I am sure the hon. and learned Gentleman will forgive me for interrupting, but has this really anything to do with the Amendment?
  Mr. CLYDE: Of course it has. Let me make that plain. I admit I did not make the explanation earlier. Perhaps I ought to have done so, but let me make it now. The proposal here is that in the valuation to be made under Section 16 the proprietor shall have the option to require the datum to be taken to be the same datum as is taken under Section (2), to wit, the actual market value on the transaction, if there is any, in order that in the result the two values to be compared should now be based on actual market prices. Is that not plain, because it is the Amendment. I understand the learned Attorney-General does not think it is. Then let us look at it.
  Sir W. ROBSON: I am sorry I interrupted.
  Mr. CLYDE: I am very pleased. The Amendment says: "Provided that, in the option of the owner, the original site value may be calculated by deductions from the total value according to the method prescribed by Sub-section (2) of Section (2) of this Act on the occasion of the Increment Value Duty becoming payable, and the site value so ascertained may be substituted in the said return for the site value calculated according to the provisions of
  804
  this sub-section. "The object of it is that instead of making the two valuations on different bases you obtain the two valuations on identical bases so far as may be possible. You take in both cases the total value; in the case of Clause 14 the total value is to be estimated, because that is all we can get; and in the case of Section (2) the total value by the actual price ascertained on the transaction. I hope I have made the purpose of the Amendment perfectly clear. I think I am fairly entitled to say that I have shown the object is to start with a datum similar or as nearly the same as possible in both cases, in order that the comparison may fairly be made. It must be admitted at once by the learned Attorney-General that if you do not compare like with like your estimate of increment value is and must be unreliable. I have put this in the form only of an option. Why? Because I understand there may be cases in which it is inexpedient to adopt this course. But is it not fair that this method should be within the power of the landowner to insist upon? To sum up, the proposition is that the owner should be entitled to say: "I want both valuations made on the same basis. I want the total value taken in both cases, and the deductions made according to the same method in both cases." The Amendment is not a hostile one, but it is intended so far as possible to make the measure 'if the Increment Duty really reliable, and not to allow it to be disturbed by introducing into the methods of comparison elements accidental to the transaction which have nothing in the world to do with the transaction itself.
  Sir W. ROBSON: I must say I think that the hon. and learned Gentleman has not said anything to impugn or impeach the scheme adopted in the Bill. The scheme adopted in the Bill is at least as simple, indeed, it is much simpler than the scheme proposed by the hon. and learned Member. Our scheme is first of all to find out the original site value in the way we have so much discussed to-night. We take the, land as it is in a state of nature, hypothetically divesting it of all buildings and structures—in fact we take the total value which the hon. and learned Gentleman says is not considered by the clause at all—and the other matters catalogued in Clause 14. Then you arrive at the site value, afterwards reaching the actual taxable site value and certain further deductions under Section (4). That gives you your site

  805
  value. Afterwards when you go to collect your increment value and put on your tax you have to deal in a very different situation. You have to deal in an actual transfer or transaction, and you begin then with the consideration given in the transfer or transaction. You compare that with the site value. You have then to make deductions so as to bring it into comparison in your original site value, and you make those deductions under Section (2). The deductions, so far as the datum is concerned, are practically the same. They agree with the two subject matters put into exact comparison. That is what we do by the Bill. That is what the hon. and learned Gentleman says would be done by his Amendment. I dare
  say it would. I am not sure that his Amendment would reach the same result. I am certain it would not reach it in plainer terms or by a method more easily explained than ours. He said that he took something which would represent the real market value just as on an actual transaction you take the market value. That is what we do, and then we proceed to make the deductions and collect the tax. I venture to say that no easier and no simpler plan could be adopted than that which we have adopted.
  Question put, "That those words be there inserted."
  The Committee divided: Ayes, 60; Noes, 123.

  Division No. 445.]

  AYES.

  [1.20 a.m.

  Anson, Sir William Reynell

  Gordon, J.

  Peel, Hon. W. R. W.

  Ashley, W. W.

  Guinness, Hon. R. (Haggerston)

  Pretyman, E. G.

  Balfour, Rt. Hon. A. J. (City, Lond.)

  Guinness, Hon. W. E. (B'y St. Edm'ds)

  Randles, Sir John Scurrah

  Banner, John S. Harmood-

  Harris, Frederick Leverton

  Renton, Leslie

  Barrie, H. T. (Londonderry, N.)

  Harrison-Broadley, H. B.

  Renwick, George

  Beach, Hon. Michael Hugh Hicks

  Hay, Hon. Claude George

  Salter, Arthr Clavell

  Beckett, Hon. Gervase

  Hermon-Hodge, Sir Robert

  Stanier, Beville

  Bowles, G. Stewart

  Hills, J. W.

  Starkey, John R.

  Butcher, Samuel Henry

  Hope, James Fitzalan (Sheffield)

  Staveley-Hill, Henry (Staffordshire)

  Cecil, Evelyn (Aston Manor)

  Hunt, Rowland

  Talbot, Lord E. (Chichester)

  Chamberlain, Rt. Hon. J. A. (Worc'r.)

  King, Sir Henry Seymour (Hull)

  Thomson, W. Mitchell- (Lanark)

  Clyde, J. Avon

  Lambton, Hon. Frederick William

  Walker, Col. W. H. (Lancashire)

  Coates, Major E. F. (Lewisham)

  Lane-Fox, G. R.

  Warde, Col. C. E. (Kent, Mid.)

  Courthope, G. Loyd

  Lockwood, Rt. Hon. Lt.-Col. A. R.

  Williams, Col. R. (Dorset, W)

  Craig, Captain James (Down, E.)

  Long, Col. Charles W. (Evesham)

  Wilson, A. Stanley (York, E. R.)

  Dickson, Rt. Hon. C. Scott-

  Mildmay, Francis Bingham

  Winterton, Earl

  Doughty, Sir George

  Moore, William

  Younger, George

  Douglas, Rt. Hon. A. Akers-

  Morpeth, Viscount

  Faber, George Denison (York)

  Newdegate, F. A.

  TELLERS FOR THE AYES.—Sir A. Acland-Hood and Mr. H. W.

  Foster, P. S.

  Parkes, Ebenezer

  Gardner, Ernest

  Pease, Herbert Pike (Darlington)

  Forster.

  Gibbs, G. A. (Bristol, West)

  NOES.

  Acland, Francis Dyke

  Duncan, C. (Barrow-in-Furness)

  Hudson, Walter

  Ainsworth, John Stirling

  Dunn, A. Edward (Camborne)

  Johnson, John (Gateshead)

  Balfour, Robert (Lanark)

  Dunne, Major E. Martin (Walsall)

  Jones, Leif (Appleby)

  Baring, Godfrey (Isle of Wight)

  Evans, Sir S. T.

  Jowett, F. W.

  Barnard, E. B.

  Everett, R. Lacey

  Laidlaw, Robert

  Barnes, G. N.

  Ferens, T. R.

  Lambert, George

  Barry, Redmond J. (Tyrone, N.)

  Fuller, John Michael F.

  Lamont, Norman

  Beale, W. P.

  Gill, A. H.

  Lehmann, R. C.

  Beauchamp, E.

  Glover, Thomas

  Lever, A. Levy (Essex, Harwich)

  Beaumont, Hon. Hubert

  Goddard, Sir Daniel Ford

  Levy, Sir Maurice

  Bellairs, Canyon

  Greenwood, G (Peterborough)

  Lewis, John Herbert

  Berridge, T. H. D.

  Griffith, Ellis J.

  Lloyd-George, Rt. Hon. David

  Bowerman, C. W.

  Gulland, John W.

  Lyell, Charles Henry

  Branch, James

  Hancock, J G.

  McKenna, Rt. Hon. Reginald

  Brocklehurst, W. B.

  Harcourt, Rt. Hon. L. (Rossendale)

  M'Laren, H. D. (Stafford, W.)

  Bryce, J. Annan

  Harcourt, Robert V. (Montrose)

  Masterman, C. F. G.

  Burns, Rt. Hon. John

  Hardie, J. Keir (Merthyr Tydvil)

  Micklem, Nathaniel

  Carr-Gomm, H. W.

  Hardy, George A. (Suffolk)

  Mond, A.

  Causton, Rt. Hon. Richard Knight

  Harmsworth, Cecil B. (Worcester)

  Morgan, G. Hay (Cornwall)

  Cawley, Sir Frederick

  Harvey, W. E. (Derbyshire, N.E.)

  Murray, Capt. Hon. A. C. (Kincard.)

  Chance, Frederick William

  Haworth, Arthur A.

  Newnes, F. (Notts, Bassetlaw)

  Channing, Sir Francis Allston

  Hazel, Dr. A. E. W.

  Nicholls, George

  Clough, William

  hedges, A. Paget

  Nicholson, Charles N. (Doncaster)

  Clynes, J. R.

  Helme, Norval Watson

  Norman, Sir Henry

  Collins. Sir Wm. J. (St. Pancras, W.)

  Henry, Charles S.

  Partington, Oswald

  Corbett, C. H. (Sussex, E. Grinstead)

  Herbert, Col. Sir Ivor (Mon. S.)

  Pearce, Robert (Staffs, Leek)

  Cornwall, Sir Edwin A.

  Herbert, T. Arnold (Wycombe)

  Pickersgill, Edward Hare

  Dewar, Arthur (Edinburgh, S.)

  Higham, John Sharp

  Price, Sir Robert J. (Norfolk, E.)

  Dickson-Poynder, Sir John P.

  Hobart, Sir Robert

  Priestley, Arthur (Grantham)

  Rainy, A. Holland

  Simon, John Allsebrook

  White, J. Dundas (Dumbartonshire)

  Rapnael, Herbert H.

  Soares, Ernest J.

  White, Sir Luke (York, E. R.)

  Richards, Thomas (W. Monmouth)

  Stanley, Hon. A. Lyulph (Cheshire)

  Whitehead, Rowland

  Richards. T. F. (Wolverhampton, W.)

  Strauss, E. A. (Abingdon)

  Wilkie, Alexander

  Roberts, Charles H. (Lincoln)

  Summerbell, T.

  Williams, J. (Glamorgan)

  Roberts, G. H. (Norwich)

  Taylor, John W. (Durham)

  Wilson, Hon. G. G. (Hull, W.)

  Robinson, S

  Tennant, H. J. (Berwickshire)

  Wilson, J. W. (Worcestershire, N.)

  Robson, Sir William Snowdon

  Thomas, Sir A. (Glamorgan, E.)

  Wilson, W. T. (Westhoughton)

  Runclman, Rt. Hon. Walter

  Thorne, G. R. (Wolverhampton)

  Russell, Rt. Hon. T. W.

  Walsh, Stephen

  Samuel, Rt. Hon. H. L. (Cleveland)

  Walters, John Tudor

  TELLERS FOR THE NOES.—Mr. Joseph Pease and Sir Edward

  Seely, Colonel

  Warner, Thomas Courtenay T.

  Shackleton, David James

  Wason, John Cathcart (Orkney)

  Strachey.

  Silcock, Thomas Ball

  Wedgwood, Joslah C.

  Question, "That those words be there inserted," put, and agreed to.

  The CHAIRMAN: I should like to ask the hon. Member for the Central Division of Sheffield (Mr. James Hope) to explain the object of the Amendment standing in his name [to insert after "and other things growing thereon" the words, "Provided that in the case of land the value of which for purposes other than agricultural is greater than its value for agricultural purposes, regard shall be had, for the purpose of fixing the site value, to the amount of similar land within a radius of five miles and to the effect which would be produced on the market in the event of all such land being simultaneously offered for sale"]?
  Mr. JAMES HOPE: The Amendment is in two parts, and I only propose to move the first part down to and including the word "miles" ["within a radius of five miles"]. I think the latter part of the Amendment was discussed on the Amendment of the hon. and learned Member for East Marylebone (Lord Robert Cecil). The object of my Amendment is simply this: that the valuer shall not only take into account the piece of land as if it existed only by itself, but shall take into account its value in conjunction with the neighbouring land of the same kind. I think the Chancellor of the Exchequer twice in the course of these Debates has said that ought to be done by the Commissioners or the valuers.
  The CHAIRMAN: I do not think that has been substantially debated.
  Mr. LLOYD-GEORGE Mr. LLOYD-GEORGE moved in Section (3), after "subject" ["but subject to any easements"] to insert "to any rent-charge and to any burden, charge, or restriction arising by operation of law or imposed by any Act of Parliament, or in pursuance of the exercise of any powers or the performance of any duties under any such Act, and to any right of common, and"
  Mr. DUNDAS WHITE: I do not want to occupy the time of the Committee, and
  808
  I formally move the Amendment standing in my name, to leave out from the proposed Amendment the words "rent-charge and to any" ["to any rent-charge and to any burden."]
  The CHAIRMAN: I think I have a right under the new Standing Order to select or refuse Amendments to Amendments. I do not think under the circumstances the hon. Member can move.
  Mr. CLYDE Mr. CLYDE moved to insert after the word "land" ["subject to any easements affecting the land"] the words "and subject to any public right of passage, user, or otherwise affecting the land, and to any statutory restriction affecting the land or limiting the user or disposal thereof, whether in the interests of the public or otherwise."
  As the section stood it was merely "subject to any easements affecting the land, and to any covenant restricting the use of the land," provided always that "the restraint imposed by the covenant is reasonably necessary in the interests of the public." The point is really quite a short one. It seems to be quite clear that in considering what are the burdens imposed upon a piece of land and which affect it by way of diminution in its value, it is not reasonable to limit this merely to easements on the one hand which affect the land -private easements, no doubt—and, on the other hand, covenants restricting the use of the land entered into before a certain date, where, in the opinion of the Commissioners, the restrictions are reasonably necessary in the interests of the public in the neighbourhood. Surely the truth and the justice of the case is that if there exists over the land a public right of passage, or a public right of user, or any public right which affects the land, or if, on the other hand, there is any restriction by Statute or otherwise which affects the land or limits its use, that ought to form

  809
  the subject of consideration by the valuer by way of diminishing the total value of the subject so affected, whether in the interests of the public or otherwise. After all, what possible difference does it make to the influence on the value of the subject whether the restriction is in the interests of the public or anybody else? That cannot make any difference, and, therefore, without more ado, I respectfully ask the Chancellor of the Exchequer to consider whether it is not necessary to add to easements public rights no doubt of exactly the same character except that they are public and not private and which equally with the easements affect the value of the land.
  Mr. LLOYD-GEORGE: With regard to the latter part of the Amendment, I think the hon. and learned Gentleman will see that it has practically been covered by the Amendment which I have moved and which has already been incorporated in the Bill. The hon. and learned Gentleman referred to public rights of passage. I should have thought they would have been covered by easements affecting the land. At any rate, I have no objection to that case being covered, but I would rather not have the words inserted at the present moment because they are rather covered by the Amendment which I have inserted. I should be prepared to accept the Amendment in so far as the first part of it relating to public rights of passage is concerned. Perhaps the hon. and learned Gentleman would withdraw his Amendment on the undertaking that the first part would be inserted on the Report stage?
  Mr. CLYDE: I beg leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Mr. SALTER Mr. SALTER moved after the word "covenant" ["and to any covenant restricting"] to insert the words "express or implied."
  This Amendment ought not to take up any time at all. It is a mere drafting Amendment. I am not quite sure that it is necessary. A covenant is a covenant, whether express or implied. But in order to avoid any dispute on that point I propose to insert those words.
  Mr. LLOYD-GEORGE: Would the hon. and learned Gentleman mind giving any illustration he has in mind which would render it necessary for the insertion of these words.
  Mr. SALTER: Such a case is where land has been sold as part of a building scheme. It is in such cases often held subject to restrictions for the benefit of the purchasers of similar plots of land. The Chancellor of the Exchequer and the Government desire that this land should be taxed upon its real value, and if the land is in fact subject to an existing condition which would limit its use and therefore diminish its value, it cannot in the least matter whether that covenant be express or implied. If there is a covenant it ought to be taken into account whether it be express or implied.
  Sir W. ROBSON: A covenant, as the hon. and learned Gentleman said, is a covenant whether it be express or implied. To add the words "or implied" would, I think, import some element of uncertainty. I do not think the words would strengthen the section in any way whatever. If really the agreement, clause or stipulation is of such a character as to be legally described as a covenant, it does not matter whether it is express or implied.
  Mr. J. W. HILLS: I quite agree that covenants include an express or implied covenant. But we are here giving directions to the valuer, who is a layman, and who might very well think a covenant was restricted to an express covenant. Surely there would be no harm in saying that, as all the real burdens that are upon the land are to be included here, implied covenants are as real burdens as express covenants.
  Sir WILLIAM ROBSON: I think the danger which the hon. Member for Durham anticipates—the want of sufficient direction to the valuer—is really met by the word "agreement" which we propose to insert.
  Mr. HILLS: But it is not an agreement that I have in mind.
  Sir WILLIAM ROBSON: If it is neither an agreement nor a covenant I am afraid we can scarcely assent.
  Mr. HILLS: In the case of land let in connection with the Exhibition of 1852, a note in the margin of a draft deed was held to import a covenant.
  Question put, "That those words be there inserted."
  The Committee divided: Ayes, 55; Noes, 120.

  Division No. 446.]

  AYES.

  [1.45 a.m.

  Acland-Hood, Rt. Hon. Sir Alex, F.

  Gibbs, G. A. (Bristol, West)

  Pease, Herbert Pike (Darlington)

  Anson, Sir William Reynell

  Gordon, J.

  Pretyman, E. G.

  Ashley, W. W.

  Guinness, Hon. R. (Haggerston)

  Randles, Sir John Scurrah

  Balfour, Rt. Hon. A. J. (City, Lond.)

  Guinness, Hon. W. E. (B. S. Edmunds)

  Renton, Leslie

  banner, John S. Harmood-

  Harris, Frederick Leverton

  Renwick, George

  Beach, Hon. Michael Hugh Hicks

  Harrison-Broadley, H. B.

  Smith, Hon. W. F. D. (Strand)

  Beckett, Hon. Gervase

  Hay, Hon. Claude George

  Stanier, Beville

  Bowles, G. Stewart

  Herbert, T. Arnold (Wycombe)

  Starkey, John R.

  Carlile, E. Hildred

  Hermon-Hodge, Sir Robert T.

  Staveley-Hill, Henry (Staffordshire)

  Cecil, Evelyn (Aston Manor)

  Hills, J. W.

  Talbot, Lord E. (Chichester)

  Chamberlain, Rt. Hon. J. A. (Worc'r.)

  Hope, James Fitzalan (Sheffield)

  Thomson, W. Mitchell- (Lanark)

  Clyde, J. Avon

  Hunt, Rowland

  Walker, Col. W. H. (Lancashire)

  Coates, Major E. F. (Lewisham)

  Lambton, Hon. Frederick William

  Warde, Col. C. E. (Kent, Mid.)

  Courthope, G. Loyd

  Lane-Fox, G. R.

  Williams, Col. R. (Dorset, W.)

  Craig, Captain James (Down, E.)

  Long, Col. Charles W. (Evesham)

  Winterton, Earl

  Dickson, Rt. Hon. C. Scott-

  Mildmay, Francis Bingham

  Younger, George

  Douglas, Rt. Hon. A. Akers-

  Moore, William

  Forster, Henry William

  Morpeth, Viscount

  TELLERS FOR THE AYES.—Mr. Salter and Mr. Peel.

  Foster, P. S.

  Newdegate, F. A.

  Gardner, Ernest

  NOES.

  Acland, Francis Dyke

  Hancock, J. G.

  Price, Sir Robert J. (Norfolk, E.)

  Ainsworth, John Stirling

  Harcourt, Rt. Hon. L. (Rossendale)

  Priestley, Arthur (Grantham)

  Baring, Godfrey (Isle of Wight)

  Harcourt, Robert V. (Montrose)

  Rainy, A. Roiland

  Barnard, E. B.

  Hardie J. Keir (Merthyr Tydvil)

  Raphael, Herbert H.

  Barnes, G. N.

  Hardy, George A. (Suffolk)

  Richards, Thomas (W. Monmouth)

  Barry, Redmond J. (Tyrone, N.)

  Harmsworth, Cecil B. (Worcester)

  Richards, T. F. (Wolverhampton, W.)

  Beale, W. P.

  Harvey, W. E. (Derbyshire, N.E.)

  Roberts, Charles H. (Lincoln)

  Beauchamp, E.

  Haworth, Arthur A.

  Roberts, G. H. (Norwich)

  Beaumont, Hon. Hubert

  Hazel, Dr. A. E. W.

  Robinson, S.

  Bellairs, Carlyon

  Hedges, A. Paget

  Robson, Sir William Snowdon

  Berridge, T. H. D.

  Helme, Norval Watson

  Roch, Walter F. (Pembroke)

  Bowerman, C. W.

  Henry, Charles S.

  Runciman, Rt. Hon. Walter

  Branch, James

  Herbert, Col. Sir Ivor (Mon. S.)

  Russell, Rt. Hon. T. W.

  Brocklehurst, W. B.

  Higham, John Sharp

  Samuel, Rt. Hon. H. L. (Cleveland)

  Bryce, J. Annan

  Hobart, Sir Robert

  Seeiy, Colonel

  Bums, Rt. Hon. John

  Hudson, Walter

  Shackleton, David James

  Carr-Gomm, H. W.

  Johnson, John (Gateshed)

  Silcock, Thomas Ball

  Causton, Rt. Hon Richard Knight

  Jones, Leif (Appleby)

  Simon, John Allsebrook

  Cawley, Sir Frederick

  Jowett, F. W

  Soares, Ernest J.

  Chance, Frederick William

  Laidlaw, Robert

  Stanley, Hon. A. Lyulph (Cheshire)

  Charming, Sir Francis Allston

  Lambert, George

  Strauss, E. A. (Abingdon)

  Clough, William

  Lament, Norman

  Summerbell, T.

  Clynes, J. R.

  Lehmann, R. C.

  Taylor, John W. (Durham)

  Collins, Sir Wm. J. (St. Pancras, W.)

  Lever, A. Levy (Essex, Harwich)

  Tennant, H. J. (Berwickshire)

  Corbett, C. H. (Sussex, E. Grinstead)

  Levy, Sir Maurice

  Thomas, Sir A. (Glamorgan, E.)

  Cornwall, Sir Edwin A.

  Lewis, John Herbert

  Thorne, G. R. (Wolverhampton)

  Dewar, Arthur (Edinburgh, S.)

  Lloyd-George, Rt. Hon. David

  Walsh, Stephen

  Dickson-Poynder, Sir John P.

  Lyell, Charles Henry

  Walters, John Tudor

  Duncan, C. (Barrow-in-Furness)

  McKenna, Rt. Hon. Reginald

  Wason, John Catheart (Orkney)

  Dunn, A. Edward (Camborne)

  M'Laren, H. D. (Stafford, W.)

  Wedgwood, Joseph C.

  Dunne, Major E. Martin (Walsall)

  Masterman, C. F. G.

  White, J. Dundas (Dumbartonshire)

  Evans, Sir S. T.

  Micklem, Nathaniel

  White, Sir Luke (York, E. R.)

  Everett, R. Lacey

  Mond, A.

  Whitehead, Rowland

  Ferens, T. R.

  Morgan, G. Hay (Cornwall)

  Wilkie, Alexander

  Ferguson, R. C. Munro

  Murray, Capt. Hon. A. C. (Kincard.)

  Williams, J. (Glamorgan)

  Fuller, John Michael F.

  Newnes, F. (Noits, Bassetlaw)

  Wilson, J. W. (Worcestershire, N.)

  Gill, A. H.

  Nicholls, George

  Wilson, W. T. (Westhoughton)

  Glover, Thomas

  O'Kelly, Conor (Mayo, N.)

  Goddard, Sir Daniel Ford

  Partington, Oswald

  TELLERS FOR THE NOES.—Mr. Joseph Pease and Sir Edward

  Greenwood, G. (Peterborough)

  Pearce, Robert (Staffs, Leek)

  Griffith, Ellis J.

  Pickersgill, Edward Hare

  Strachey.

  Gulland, John W.

  Mr. LLOYD-GEORGE Mr. LLOYD-GEORGE moved, in Section (3), after the word "covenant" ["For the purposes both of total value and site value, land shall be deemed to be sold free from incumbrances, but subject to any easements affecting the land, and to any covenant restricting the use of the land"] to insert the words "or agreement."
  Question, "That the words 'or agreement' be there inserted," put, and agreed to.
  Further Amendment agreed to, ill Section (3) to leave out the words "entered into before the thirtieth day of April, Nineteen Hundred and Nine" ["and to any covenant or agreement restricting the use of the land entered into before the thirtieth day of April, Nineteen Hundred and Nine"].
  Mr. SALTER Mr. SALTER moved to leave out of Section (3) the words "where, in the opinion of the Commissioners, the

  813
  restraint imposed by the covenant is reasonably necessary in the interests of the public, or in view of the character and surroundings of the neighbourhood, and the opinion of the Commissioners shall in this case be final, and not subject to any appeal."
  Mr. LLOYD-GEORGE: I beg to move "That the Chairman do report Progress, and ask leave to sit again."
  Question put, and agreed to.
  Committee report Progress; to sit again this day (Friday).
  And it being after half-past eleven of the clock on Thursday evening, Mr. Deputy-Speaker adjourned the House without Question put, in pursuance of the Standing Order.
  Adjourned at Two minutes before Two a.m. Friday, 13th August.

  Fishery Research.
  Fishery Research.
  Irish Pension Officers.
  Irish Pension Officers.
  Grants for Fishery Investigations.
  Grants for Fishery Investigations.
  Duty Paid Spirits (Ireland).
  Duty Paid Spirits (Ireland).
  Spirits, Wine and Beer (Duty Paid).
  Spirits, Wine and Beer (Duty Paid).
  Mr. Batt's Estate, County Down.
  Mr. Batt's Estate, County Down.
  Hyde Estate, County Cork.
  Hyde Estate, County Cork.
  Secondary Schools, Ireland (Assistant Teachers).
  Secondary Schools, Ireland (Assistant Teachers).
  Promotion of Sorters.
  Promotion of Sorters.
  Post Office Tracers' Holidays.
  Post Office Tracers' Holidays.
  Destroyers (Delay in Delivering).
  Destroyers (Delay in Delivering).
  Case of Rev. George Wise (Liverpool).
  Case of Rev. George Wise (Liverpool).
  Anthrax Cases.
  Anthrax Cases.
  Public Analyst (Isle of Wight).
  Public Analyst (Isle of Wight).
  Transparencies for Motors.
  Transparencies for Motors.
  Estimates for School Places.
  Estimates for School Places.