Sitting of 6 July 1909

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

PRIVATE BUSINESS.
Ravenglass and Eskdale Railway Bill,
As amended, considered; to be read the third time.

PRIVATE BUSINESS.

  TAFF VALE RAILWAY (RHYMNEY RAILWAY, VESTING, ETC.) BILL.
  Mr. KEIR HARDIE Mr. KEIR HARDIE had given notice of the following Motion:—
  "That the Order for Committal [1st July] be read and discharged, and that the Bill be committed to a Select Committee of Fifteen Members, Eight to be nominated by the House and Seven by the Committee of Selection:
  "That the Committee have power to send for persons, papers, and records:
  "That Nine be the quorum:
  "That it be an Instruction to the Committee to receive all Petitions to be heard against the Bill in Committee which may be deposited not later than five days before the first sitting of the Committee, and to hear the Petitioners thereon if the Committee thinks fit; to consider the proposals of the Bill in relation to the public interest as well as to the various interests directly affected; to hear the Board of Trade and any other Government Department by counsel and witnesses, and to make a Special Report to the House stating whether any and what advantages and disadvantages would result to the interests of the public, or of the passengers and traders using the railways of the companies promoting the Bill, or of the persons employed by these companies, if the powers sought by the Bill were granted; whether any, and what, safeguards are necessary for the protection of these special and general interests, and (in the event of the Committee finding the Preamble proved) what provisions, if any, have been inserted for this purpose."
  Having put down this notice of Motion, I have been approached by the promoters of the Bill, and they have agreed to accept the first few lines of the Instruction down to the words "thinks fit"; and if it would be in order I would move the Motion in that form and not in the form in which it stands on the Paper.
  Question, "That it be an Instruction to the Committee to receive all Petitions to be heard against the Bill in Committee which may be deposited not later than five days before the first sitting of the Committee, and to hear the petitioners thereon if the Committee thinks fit," put, and agreed to.

  TAFF VALE RAILWAY (CARDIFF RAILWAY, VESTING, ETC.) BILL.
  Mr. KEIR HARDIE had Mr. KEIR HARDIE had had given notice to move:—
  "That the Order for Committal [24th June] be read and discharged, and that the Bill be committed to a Select Committee of Fifteen Members, Eight to be nominated by the House and Seven by the Committee of Selection:
  "That the Committee have power to send for persons, papers, and records:
  "That Nine be the quorum:
  "That it be an Instruction to the Committee to receive all Petitions to be heard against the Bill in Committee which may be deposited not later than five days before the first sitting of the Committee, and to hear the Petitioners thereon if the Committee thinks fit; to consider the proposals of the Bill in relation to the public interest as well as to the various interests directly affected; to hear the Board of Trade and any other Government Department by counsel and witnesses, and to make a Special Report to the House stating whether any, and what, advantages and disadvantages would result to the interests of the public or of the passengers and traders using the railways of the companies promoting the Bill, or of the persons employed by these companies, if the powers sought by the Bill were granted; whether any, and what, safeguards are necessary for the protection of these special and general interests; and (in the event of the Committee finding the Preamble proved) what provisions, if any, have been inserted for this purpose."
  In the case of this Bill also the promoters have agreed to accept the Instruction to the Committee down to the words "thinks fit."
  Question, "That it be an Instruction to the Committee to receive all Petitions to be heard against the Bill in Committee which may be deposited not later than five days before the first sitting of the Committee, and to hear the Petitioners thereon if the Committee thinks fit," put, and agreed to.

  PROVISIONAL ORDER BILLS.
  (Under Section 7 of the Private Legislation Procedure (Scotland) Act, 1899.)
  St. Andrews University Order Confirmation Bill [Lords]
  Considered; to be read the third time upon Thursday.

NEW WRIT.
Mr. JOSEPH PEASE Mr. JOSEPH PEASE moved for the issue of a writ for the election of a Member of Parliament for the County of Derby (High Peak Division) to fill the vacancy caused by the acceptance by Mr. Oswald Partington of the office of one of the Commissioners for executing the office of Treasurer of Great Britain and Lord High Treasurer of Ireland.
Mr. KEIR HARDIE: Before this Motion is put, I desire to ask whether any intimation of the vacancy and the intention to servo the writ to-day has been given to the Whips of the Labour Party? You may, Mr. Speaker, remember that on a recent occasion, when a similar Motion was made from this side, I took exception, and on that occasion the chief Whip of the Unionist party gave what, I understood, to be an undertaking that in future notice would be given when it was the intention on either side, or at least on his side, to move a similar Motion. I desire to ask has that been done now, and, if not, is there any understanding that in future it will be done, so as to give the parties interested an opportunity of considering whether or not they shall contest the business?
Mr. JOSEPH PEASE: On both sides of the House, no matter which party was in power, it has always been the custom to give 24 hours' notice to the Opposition of the intention to move for a writ on the following day. This practice was observed yesterday. No request has ever been made from the Nationalist party in Ireland for notice of that kind, nor am I aware that any such request has been made from the Labour party. But if it is pressed I shall bring the matter before the Prime Minister; but I cannot undertake myself at the present moment that we shall depart from the usual custom.
Motion agreed to.

ORAL ANSWERS TO QUESTIONS.

  Russia and Persia.
  Dr. RUTHERFORDasked the Secretary of State for Foreign Affairs whether he would inquire from the Government of Russia whether Russian troops are being moved to Teheran, and, if that is the case, whether His Majesty's Government will protest against such a move, as opposed to the spirit of the Anglo-Russian Convention and as inimical to the independence of Persia?
  Mr. LYNCHasked the Secretary of State for Foreign Affairs whether it was a fact that instructions had been issued by the Russian Government for the advance of the Russian troops at Tabriz on Teheran and for the preparation of an expeditionary force at Baku; if he could state with what object Russian troops are being marched on Teheran, and was it a fact that the Nationalist forces advancing upon the capital from Kazvin and Kum have for a considerable period been maintaining order at Resht and Isfahan, and have received testimonies from the representatives of the European Powers as to the efficiency of the manner in which they have discharged their task and safeguarded the lives and property of Europeans?
  The SECRETARY of STATE for FOREIGN AFFAIRS (Sir Edward Grey): In reply to the Questions of the hon. Members for Brentford and Ripon: His Majesty's Government have no information to the effect that Russian troops are advancing from Tabriz. The Russian Government have, however, decided to send a force from Baku to Enzeli with orders to advance as far as Kazvin, 86 miles from Teheran. I gather, however, that these orders may be countermanded if negotiations, which are now proceeding with the leaders of the Bakhtiaris and Nationalists, are successful. The object of this measure would be to ensure communication between Kazvin and the Caspian Sea. The further advance of a portion of this force would only take place if it becomes necessary to afford protection to the foreign Legations, to the lives and property of Europeans, and to European institutions at Teheran. The Commander of the troops is to receive categoric instructions to confine himself to the protection of foreign interests, and to abstain from all interference in the internal struggle now in progress. His Majesty's Government have no very recent information as to the state of

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  public order at Resht and Isfahan. According to the latest reports received, Resht had remained quiet, while at Isfahan cases of disorder, robbery, and drunkenness became frequent towards the end of the stay of the Bakhtiari tribesmen in the town, while the state of the neighbouring country and roads remained deplorably bad. His Majesty's Government have received no other expression of opinion, favourable or otherwise, from their Consular representatives in these two towns as to the manner in which order has been maintained there by the Nationalist and Bakhtiari forces respectively, and it is impossible to affirm with certainty that the lives and property of Europeans at Teheran would be safe in the event of the occupation of that capital by those forces. In answer to the question of the hon. Member for Brentford, I must add that we have been kept informed by the Russian Government of what steps they considered necessary, and in view of the chaos which exists in the North of Persia and close to the Russian frontier, I see no ground for saying that any precautions which have been taken hitherto are unreasonable.
  Dr. RUTHERFORD: May I ask the right hon. Gentleman whether he has received any request from the British representative at Teheran for either British or Russian troops to protect British interests?
  Sir E. GREY: No, Sir; I have not received a request from the British representative for protection, because Teheran is out of our reach, and it is impossible for us to send a force to Teheran.
  Mr. H. B. LYNCH: Have any representations been received from His Majesty's Minister at Teheran to the effect that the lives and property of Europeans at Teheran are in his opinion in danger?
  Sir E. GREY: No, Sir; we have received no representations that the lives of British subjects are in danger, but there have been reports that there may be danger to some European subjects.
  Mr. KEIR HARDIE: Before the Russian troops were moved was the sanction of the right hon. Gentleman obtained, or was it simply reported after they had been moved?
  Sir E. GREY: The Russian Government have communicated to us what their intentions are, but they have not asked our
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  sanction. In a similar case of disturbance close to territory of our own, if we considered it necessary to send protection for vested interests we might have in those districts we, of course, should not wait for the sanction of a foreign Power, though we might make the communication as a matter of courtesy.
  Mr. JAMES C. FLYNN: Can the right hon. Gentleman say whether or not the leaders of the popular forces stated that the lives and property of non-belligerent Europeans would be scrupulously respected?
  Sir E. GREY: The hon. Member uses the phrase "leaders of the popular forces." There are so many forces at present in action in Persia that I can only say at present that there is a state of great uncertainty as to what will happen from day to day in a great emergency.
  Mr. J. D. REES: Did we not actually land forces in South Persia to protect our interests in the Gulf?
  Sir E. GREY: Yes. That was the case at Bushire a short time ago, when we thought there was danger there, and in that case we made a communication to the Russian Government as to what we were doing, but, of course, we acted on our own responsibility.
  Mr. LYNCH: Instead of pursuing this matter by question and answer, I beg to give notice that at the end of the questions I shall ask leave to move the adjournment of the House.
  Mr. FLYNN: Can we get any assurance from the Foreign Office that British influence will not be used to uphold reactionary forces against the popular forces?
  Sir E. GREY: There is no question of British influence being used on behalf of reactionary forces. We have endeavoured to pursue a policy of interfering as little as possible in the internal affairs of Persia.

  Colonel Harding's Resignation.
  Mr. RENDALLasked the Under-Secretary for the Colonies whether, by virtue of the powers conferred on him by the Barotseland, North Western Rhodesia, Order in Council, 1899, His Excellency the High Commissioner of South Africa appointed Colonel Colin Harding, C.M.G., to be commandant of the Barotseland Police; and whether such appointment is contained in Proclamation No. 16, of

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  1901, and signed, by command of His Excellency the High Commissioner, J. Perry, Imperial Secretary?
  The UNDER-SECRETARY for the COLONIES (Colonel Seely): The reply to my hon. Friend's question is in the affirmative. I should, however, state at the same time that under the Barotseland Order in Council it rests with the British South Africa Company to nominate officers for appointment.
  Mr. RENDALLasked whether there is any official record that Lord Selborne, when accepting Colonel Harding's resignation, which had been handed in under the mistaken belief that the abolition of his post had been sanctioned by the Colonial Office, wrote Colonel Harding on 30th March, 1906, saying that he wished him to understand that his retirement was due solely to the reduction which Lord Selborne had agreed to in response to the urgent request made to him by the British South Africa Company?
  Colonel SEELY: Lord Selborne on 30th March, 1906, addressed a telegram to Colonel Harding which contained the following statement: "I wish you to understand that I regard your retirement as due solely to the reductions which I have agreed to in response to the urgent request made to me on grounds of economy by the British South Africa Company. The Company are, of course, entitled to their own opinion as to your conduct while in their service, but I assure you that the opinion which they have thought fit to communicate to you is not shared by me, and would not influence me in considering your application for any suitable appointment under my control which might become vacant in the future."
  Mr. RENDALL: Can the hon Gentleman explain why Lord Selborne stated in his letter that Colonel Harding's resignation was accepted solely on the ground of necessary reduction for economy, whereas the hon. Gentleman said a fortnight ago that there were "other reasons"?
  Colonel SEELY: If my hon. Friend will look back to the answer I gave he will find that I said I did not accept without reserve the statement then made. Beyond that I did not go, and I do not go now.
  Mr. RENDALL: Do I understand that my hon. Friend entirely concurs in Lord Selborne's view that the resignation was caused solely by reduction due to economy?
  Colonel SEELY: All this happened long before I came to the Colonial Office. Of course, in a particular matter of this kind, in reference to facts that took place some time ago, it would plainly be easy for anyone to give a very wrong impression of what took place by replying to a question. If my hon. Friend will ask a specific question on any point I shall be only too glad to give him an answer. But in reply to a supplementary question as to what were the motives of different people at different times, I think the House will agree that it would be most unwise to give an answer.
  Mr. RENDALL: May I ask——
  Mr. SPEAKER: The hon. Member may ask Question No. 5.
  Mr. RENDALLasked whether on 14th May, 1906, Lord Selborne, as High Commissioner for South Africa, wrote to the then Secretary for the Colonies recording his opinion that Colonel Harding was an honourable and conscientious officer, who had loyally and efficiently served both His Majesty's Government and the British South Africa Company; and whether he will immediately retain the services of this officer in some suitable capacity?
  Colonel SEELY: Yes, Sir, Lord Selborne did write to the Secretary of State in the terms indicated. The Secretary of State is desirous of finding suitable employment for Colonel Harding, but, as I stated in reply to a similar question on the 22nd of last month, it is very difficult to find a suitable post.

  Bloemfontein Education Department (Dismissals).
  Lord BALCARRES (for Viscount Castlereagh)asked whether the hon. Gentleman is in a position to give any information with respect to the summary dismissal at Bloemfontein of three of the inspectors in the Education Department on 17th May last?
  Colonel SEELY: The Secretary of State has not yet received further information from the Governor, and I am not, therefore, in a position to add anything to the answer I gave to a question put by the right hon. Gentleman the Member for St. George's, Hanover Square, on the 16th of last month.

  Stornoway Infectious Diseases Hospital.
  Mr. WEIRasked the Lord Advocate, in view of the fact that the medical officer for Ross and Cromarty in his last report

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  states that the Stornoway Infectious Diseases Hospital is in urgent need of a water supply, will he state what action has been taken by the local authority in the matter, and when a suitable supply is likely to be available?
  The LORD ADVOCATE (Mr. Ure): While the water supply of this hospital might be improved, my hon. Friend must not infer that the local authority have not taken such action as is open to them, or that the hospital is without a fairly satisfactory supply. The local authority do all they possibly can to give a copious supply. The patients have never suffered from the want of water; and the hospital has a very good record to show in the number of recoveries of the patients treated. There are no residents in the hospital since May 21st last except the nurse and her assistant.
  Mr. WEIR: Is the right hon. Gentleman aware that people will not go into this hospital in consequence of its insanitary condition, and that they prefer to die in their own homes?
  Mr. REES: Is not the death rate in the Lewis lower than that of Hampstead, the salubrious suburb in which the hon. Gentleman resides?
  Mr. WEIR: I do not pay any attention to remarks of that kind.

  Congested Districts Board (Lewis Farm Lands).
  Mr. WEIRasked, having regard to the fact that there are 20,000 acres of farm lands in the island of Lewis not under lease, will the right hon. Gentleman state whether, in response to the applications made by the Congested Districts Board, Major Matheson, the proprietor of the island, has assigned any reason for refusing to break up these lands into new holdings; and, if so, will he state briefly its nature?
  Mr. URE: My hon. Friend was informed on November 9th, 1908, in answer to a question in this House, that, in view of the heavy burden of local taxation in the Lewis, the proprietor is not willing to consider any proposals which might possibly have the effect of increasing expenditure or local burdens. That is all the information which I have upon the subject.
  Mr. WEIR: Are we to understand that the proprietor positively refuses to break up this 20,000 acres so that people may get access to the land?
  Mr. URE: I have nothing to add to the answer I have given.
  Mr. HENRY A. WATT: Would the rent not be larger from the tenants if the land were broken up than from one farm?
  Mr. URE: I cannot say. The Crofters' Commission have not yet considered the question.
  Mr. WEIR: Will the Lord Advocate have some inquiry made into this matter? The people are dying of starvation there.

  Shawbost Cottars (Lewis).
  Mr. WEIRasked whether the right hon. Gentleman is aware that the South Shawbost cottars, island of Lewis, now located on a small portion of the Dalbeg farm, are in such distress that the proprietors of the "People's Journal," Dundee, after a thorough inquiry into the destitute condition of the people, have forwarded to them a free supply of oatmeal to keep the families from starvation; and will he state what assistance the Government propose to render to these landless cottars?
  Mr. URE: I have caused inquiry to be made, and I am informed that no application for parochial relief has been made on behalf of these cottars, and that there is no destitution among them. I am aware that the proprietors of the "People's Journal" forwarded a present of oatmeal to be distributed among them, but, under the circumstances, I do not consider it necessary to take any special action.

  Prison Commission (Scotland).
  Mr. WATTasked the Lord Advocate whether the post of chairman of the Prison Commission in Scotland is now vacant; whether the compulsory retiral age for that position is 65 years; whether the late holder of it got a two years' extension of time, making him 67 years of age in June of this year when he fell to retire; and will he say whether military or legal training will be required in future for the appointment?
  Mr. URE: The post is not now vacant, a further extension of service having been granted to the present holder. The statute does not require either military or legal training for the appointment of Prison Commissioners, and it is not proposed to prescribe any special qualifications in filling the prospective vacancy.
  Mr. WATT: Are we to understand that a suitable man cannot be found to succeed him?
  Mr. URE: No, Sir; my hon. Friend must not so infer.

  Feus and Leases (Select Committee).
  Mr. LAIDLAW (for Sir John Jardine)asked the Lord Advocate whether he is aware of the statements made before the Select Committee on Feus and Leases in 1893 by the town clerk of Kilmarnock as to the enormous increase of the amount levied as casualties in that superiority since the Conveyancing Act of 1874 came into operation, prior to which an heir could be tendered as a vassal and could get off by payment of a relief, being the amount of a year's feu duty only; and whether he will take into consideration the expediency of amending that Act?
  Mr. URE: I am aware of the statements referred to by my hon. Friend. No complaints have reached me regarding the operation as mentioned in my hon. Friend's question of the Conveyancing Act of 1874, although the judgment of the House of Lords, which fixed the interpretation of the clause that produced the result referred to in the question, was pronounced so far back as February, 1880. In these circumstances I do not propose to consider the expediency of amending the Act.

  Cromarty and Dingwall Railway.
  Mr. WEIRasked the President of the Board of Trade if he will ascertain the cause of the delay in proceeding with the construction of the Cromarty and Ding-wall Railway?
  The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. H. J. Tennant): When this railway was authorised, it was contemplated that the line would be constructed by the Highland Railway Company, but it appears from a letter which the Board of Trade have received from the promoters of the scheme that they are now considering the construction of the line on their own account.
  Mr. WEIR: May I ask if this letter is of recent date?
  Mr. TENNANT: I think so, but I am not quite certain.
  Mr. WEIR: I will put another question, and perhaps the hon. Member will find out and let me know.

  Railway Amalgamations (Scotland).
  Mr. CHARLES PRICEasked the President of the Board of Trade whether he is aware of the anxiety in Scotland caused by the recent proposal to amalgamate the three principal railway companies, and of the dissatisfaction of traders to the demurrage charges proposed by these companies; and whether, under these circumcumstances he will add to the Departmental Committee on Railway Amalgamations and Agreements some representative of the trading interests of Scotland in addition to Lord Hamilton of Dalzell?
  Mr. TENNANT: I cannot undertake to enlarge the number of members of this Committee for reasons already stated in answer to questions in this House. One of the original members of the Committee has, however, resigned, and in filling the vacancy due weight is being given to the suggestion of my hon. Friend.
  Mr. WATT: Can the hon. Gentleman say whether Lord Hamilton of Dalzell is a representative of the directors, or traders, or of the Board of Trade?
  Mr. TENNANT: If we could get a representative of the three in one it would be ideal. Lord Hamilton is put on as a representative of the Board of Trade.

  Royal Naval Reserve.
  Mr. ASHLEYasked the First Lord of the Admiralty whether the decrease of 7,122 in the Royal Naval Reserve between 1st April, 1906, and 1st April, 1909, and a reduction in the Coastguard of 688 during the same period, were compensated for by a corresponding increase in the Royal Fleet Reserve?
  The FIRST LORD of the ADMIRALTY (Mr. McKenna): The decrease in Royal Naval Reserve ratings during the period named was 6,456. The reduction has been mainly caused by discharging men who completed their fourth, fifth, or sixth periods of enrolment in the Royal Naval Reserve, that is to say, men over 40, instead of allowing them to serve till 50, as previously. The increase of Royal Fleet Reserve during the same period was 4,813, a net reduction in the combined reserves of 1,643. The Coastguard have nothing to do with the number of reserves, and are in no sense reserves; they are part of the active service numbers, and are included in Vote A. Every man reduced for the Coastguard means an extra man available to serve afloat in the fleet.
  Mr. ASHLEY: May I ask what reduction in naval strength abroad has justified this reduction of over 1,600 in our Naval Reserves?
  Mr. McKENNA: The hon. Gentleman will see that the larger part of the reduction in the Royal Naval Reserves of 6,000 was caused by the age of 40 instead of SO, and that that was not a real reduction in strength. In actual fighting strength the reduction is only 1,640, and if the hon. Gentleman will put the facts together he will come to the conclusion I certainly have come to that there is no real reduction in fighting strength.
  Mr. ASHLEY: Are we to understand that the Admiralty think that any man over forty is of no use as a reserve man?
  Mr. McKENNA: That would not be a proper inference to draw.

  Coaling Accidents (Navy).
  Mr. ASHLEYasked how many officers and men were killed on His Majesty's ships while coaling was being carried on; and how many were treated for injuries in the sick bay during the last 12 months?
  Mr. McKENNA: The number asked for in the first part of the question is six during the past 12 months—one at each of the following places: Devonport, Queens-ferry, Ballachulish, Portland, Scapa Flow, Portsmouth. With regard to the second part of the question, coaling accidents are not specified in the Returns from the sick bays.
  Mr. ASHLEY: In view of the fact that there have been six fatal accidents in the last 12 months at coaling stations at home, and an indefinite number of injuries, can the right hon. Gentleman see his way to issue some regulations by which this alarming state of affairs may be removed?
  Mr. McKENNA: I have examined the cause in each case, and, with the exception of one case, the report was that no person was to blame.
  Mr. ASHLEY: There is nobody to blame, but is it not owing to the unnecessary competition between ships?
  Mr. McKENNA: No; that has nothing to do with it.
  Lord BALCARRES: Will the right hon. Gentleman inquire if a Return can be made?
  Mr. McKENNA: I can inquire on the point of a possible Return.

  Fleet Exhibitions and Displays in Home Waters.
  Mr. GRETTONasked whether the time devoted to exhibitions and displays of His Majesty's fleets in Home waters is deducted from the time during mobilisation which would otherwise be spent in sea training, or if these exhibitions occupy time additional to the ordinary period of mobilisation; and, if the latter, what is the cost to the nation?
  Mr. McKENNA: The inspection at Spit-head was, and the visit to the Thames and the review in the Solent, will be composed of ships fully commissioned, and not mobilised ships. These functions in no way interfere with the sea training of the vessels.
  Mr. GRETTON: Will the right hon. Gentleman explain what he means by ships in full commission not mobilised?
  Mr. McKENNA: Fully commissioned ships are ships with full crews, and not ships with nucleus crews or specially filled up for the occasion.
  Mr. GRETTON: What is the cost of all this over the ordinary sea training?
  Mr. McKENNA: These ships would not necessarily be at sea during the time the review is taking place. They might be in some harbour; they would not all be in the same harbour. It is impossible to say what the additional cost would be. The hon. Member must understand that ships are not always at sea.
  Mr. LEE: Are we to understand these reviews do not cause any increased cost?
  Mr. McKENNA: It would be impossible to say. I have no doubt there is some, naturally, because all the ships are centred in the Solent instead of some at Portsmouth and some at Devonport, to which they have to return. It is impossible to say what the cost would be, but it is not serious.

  Royal Marines.
  Lord BALCARRES (for Mr. Meysey-Thompson)asked the First Lord of the Admiralty whether it is the intention of the Government to abolish the Royal Marines; and, if not, will he state how many officers and men it is intended to retain?
  Mr. McKENNA: The answer to the first part of the question is in the negative. With regard to the second part, the numbers will depend on requirements.
  Mr. ASHLEY: Is it not the fact that the Marines have been reduced 3,000 in the last three years?
  Mr. McKENNA: I think the hon. Gentleman has these figures on the subject; I have given them in detail.
  Mr. LEE: May I ask, in order to relieve the great anxiety in the Corps of Royal Marines, and owing to the uncertainty they are under, whether he can see his way to issue a circular stating what is the Admiralty policy on the matter, or make a speech?
  Mr. McKENNA: There can be no uncertainty. I have given a clear, definite negative to the first part of the question.
  Lord BALCARRES (for Mr. Meysey-Thompson)asked how many officers have joined the Royal Marines during the last two years?
  Mr. McKENNA: Six officers were entered for the Royal Marines on 1st September, 1907. None have been entered since that date. The hon. Member must, of course, understand that the late Government, in introducing the new scheme of entry of officers, arranged for the admission of officers by the old channels of Woolwich and Sandhurst up to a given date only. Cadets, who will be the Marine officers of the future, have been entered at Osborne continuously since September, 1903.

  Naval Dockyard Facilities.
  Mr. ASHLEYasked what facilities for the repair and docking of His Majesty's ships of various classes exist in British dockyards to the east of Malta and to the west of Haulbowline?
  Mr. McKENNA: I propose to circulate with the Votes the list of British dockyards referred to.—[See Written Answers this date.]

  Medical Service (New Cumnock Collieries Company, Limited).
  Mr. KEIR HARDIEasked the Secretary of State for the Home Department whether he is aware that the New Cumnock Collieries Company, Limited, Ayrshire, Scotland, have intimated by notice to their workpeople that the deductions from their wages for medical service will be paid over to a certain practitioner, who is a relative of the managing director; that a memorial signed by 300 workpeople objecting to this and directing
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  the medical deductions to be handed over to the two medical men hitherto acting for the workpeople has been sent to the firm, who have ignored the request; that pressure is being brought to bear upon the workmen, and threats of dismissal used, to compel them to agree to recognise the medical nominee of the company and to desert the doctors of their own choice; and whether he proposes taking action to enforce those provisions of the Truck Act which are thus being violated?
  The SECRETARY of STATE for the HOME DEPARTMENT (Mr. Gladstone): I have received a report with regard to this matter, from which it appears that the facts are, generally, as stated in the first two paragraphs of the question. The company took over the mine in question last March, and an agreement was entered into at the time between them and the men employed at the mine in pursuance of section 23 of the Truck Act, 1831, for deductions to be made in respect of the provision of medical attendance by the company. The company contend that the memorial referred to in the question protesting against the new arrangement, and requesting that the deductions be paid to the same doctors as before has not terminated the agreement; and if this is so, no infringement of the Truck Act is being committed. The company state, however, that they are not making deductions from the wages of those who have personally signified to them their objection to the deductions, but they decline to collect deductions for the former doctors. The matter appears to be one for settlement between the company and the men.
  Mr. KEIR HARDIE: May I ask whether the Home Secretary is aware that the men do not object to the deduction being made, but they do object to giving it to a man whom they do not want to pay for. Is not that an infringement of the principle of the Truck Act?
  Mr. GLADSTONE: No; the point is not a new one. It has arisen in many parts of the country. Of course, there are difficulties.
  Mr. KEIR HARDIE: Will not the Home Office instruct the Mines Inspector to enter a prosecution?
  Mr. GLADSTONE: I have already explained that it does not seem clear that there has been an infringement of the Act.

  Kensington Gardens (Purpose of Building).
  Mr. STANGERasked the First Commissioner of Works if he could make any statement as to the purpose to be served by the octagonal building which was being erected in the north-west corner of Kensington Gardens?
  The FIRST COMMISSIONER of WORKS (Mr. Harcourt): The small building in question has been erected by the generosity of a lady who does not wish her name to be divulged, in order to provide a shelter and drinking fountain, surmounted by a clock, for the use of the children who frequent Kensington Gardens. Another anonymous donor has been equally kind in providing the swings and other equipment necessary for the formation of a playground for children immediately around the fountain. The fountain, which has been most carefully designed to harmonise in every essential with its surroundings, will, I anticipate, prove not only an addition to the appearance of that portion of the gardens, but also the greatest boon to the numerous children who have at present no playground or means of obtaining water in that part of the gardens. I am also providing a sandpit for the children.

  Board of Education (Circular 709).
  Captain MORRISON-BELL (on behalf of Captain Clive)asked the President of the Board of Education if his attention had been called to the fact that the effect of Circular 709 would be to impose upon the ratepayers of Herefordshire an additional annual burden of over £1,000; and if he could see his way to withdraw the Order?
  The PRESIDENT of the BOARD of EDUCATION (Mr. Runciman): On 25th June the local education authority of Herefordshire furnished an estimate of the amount mentioned. The particulars on which the statement is based will be investigated as soon as possible.
  Captain MORRISON-BELLasked the President of the Board of Education whether the investigation of the estimates received from the local education authorities with reference to Circular 709 had been sufficiently advanced to enable him now to give detailed information of the financial effect of the circular; if so, would he state what were the minimum and maximum amounts of the increased expenditure disclosed by such estimates; and what was the amount of the increased rate involved in each case?
  Mr. RUNCIMAN: The investigation and discussion of the estimates furnished by local education authorities is proceeding as rapidly as possible. I hope to be able to furnish information on the matter at an early date.

  Deer Forests (Suggested Taxation).
  Mr. WEIRasked the Chancellor of the Exchequer, in view of the fact that there were upwards of 2,000,000 acres of land in the Highland crofting counties used as deer forest and exclusively for the purposes of sport, would he consider the expediency of introducing some special form of taxation on those sporting areas, especially bearing in mind that the locking-up those lands deprived the Highland people of the land which was cultivated by their forefathers, and which the people now so much needed for crofter holdings?
  The FINANCIAL SECRETARY to the TREASURY (Mr. Hobhouse): As my hon. Friend is aware, my right hon. Friend's proposals for meeting the financial requirements for the year are now before the House, and he can hardly, in the circumstances, accept his suggestion.
  Mr. WEIR: Will the right hon. Gentleman impress upon the Chancellor of the Exchequer the importance of securing some portion of his funds from this magnificent hen-roost?

  Licence Duties (Ireland).
  Mr. FLYNNasked the Chancellor of the Exchequer whether he could state the yield from Ireland in the last financial year of the duty paid by on-licence holders and off-licence holders respectively; and the total amount expected from Ireland out of the estimated £2,600,000?
  Mr. HOBHOUSE: The amounts of Licence Duty paid in Ireland in the year ended 31st March, 1909, by on-licence holders and by off-licence holders were £143,000 and £24,000 respectively. As my right hon. Friend informed the hon. Member for East Tyrone in reply to a question on 3rd May, the Irish contribution to the estimated revenue from the additional Liquor Licence Duties will be approximately £104,000.

  SCOTTISH GRAND COMMITTEE— VALIDITY OF PROCEEDINGS.
  Mr. WATT: I wish to ask your ruling, Mr. Speaker, on the following matter. On 9th June, according to the Votes and Pro-

  1025
  ceedings of this House, there were appointed to the Scottish Grand Committee five Members, who within recent months had been elected at by-elections for Scottish Constituencies. Before 9th June four of those Members had taken part, by speech and vote, in the proceedings of that Committee. I wish to ask whether the work of that Committee is nullified by The speeches and votes of those Members?
  Mr. SPEAKER: I do not understand what the hon. Member means. Perhaps he will give me notice in writing of the point on which he wishes my ruling, and I will inquire into it.

  AFFAIRS IN PERSIA.
  Mr. LYNCH: I beg to move the adjournment of the House in order to call attention to a definite matter of urgent public importance, namely, the violation by His Majesty's Government of the Anglo-Russian Convention dealing with Persia.
  Mr. SPEAKER: The hon. Member has overlooked the blocking notice standing in the name of the hon. Member for Montgomery Boroughs (Mr. J. D. Rees), which will debar him from raising the question.
  Mr. LYNCH: Does that blocking motion bar any discussion not only as regards Persia, but also as regards an infringement of the provisions of an international instrument?
  Mr. SPEAKER: The notice is drawn in very wide terms, and it is certainly intended for that purpose.

FINANCE BILL.
Considered in Committee.—[Eighth day.]
[Mr. EMMOTT in the chair.]
(IN THE COMMITTEE.)

FINANCE BILL.
  PART I.—DUTIES ON LAND VALUES.
  Increment Value Duty.

  CLAUSE 2.—(Definition of Increment Value.)
  (1) For the purposes of this part of this Act the increment value of any land shall be deemed to be the amount (if any) by which the site value of the land, on the occasion on which Increment Value Duty becomes due, exceeds the original site value of the land.
  (2) The site value of the land on the occasion on which Increment Value Duty becomes due shall be taken to be:—
  1026

  (a) Where the occasion is a transfer on sale of the fee simple of the land, the value of the consideration for the transfer; and

  (b) where the occasion is the grant of any lease of the land, or the transfer on sale of any interest in the land, the value of the fee simple of the land calculated on the basis of the value of the consideration for the grant of the lease or the transfer of the interest; and

  (c) where the occasion is the death of any person and the fee simple of the land is property passing on that death, the principal value of the land as ascertained for the purposes of Part I. of the Finance Act, 1894, and where any interest in the land is property passing on that death the value of the fee simple of the land calculated on the basis of the principal value of the interest as so ascertained; and

  (d) where the occasion is a periodical occasion on which the duty is due in respect of land held by a body corporate or unincorporate, the value of the fee simple of the land is ascertained for the purposes of the assessment of duty under this Act;

  subject to such deductions (if any) as the Commissioners allow in each case in respect of any part of the value which is proved to their satisfaction to be attributable to the value of buildings or structures of which the land is deemed to be divested under this Act for the purpose of ascertaining the site value, or to any matter in respect of which a deduction may be allowed under this Act in estimating-that site value, or to goodwill, or any other matter which is personal to the occupier or other person interested for the time being in the land, and, in the case of agricultural land the value of which is due solely to its capacity for agricultural purposes, also in respect of any part of that value which is proved to the satisfaction of the Commissioners to be attributable to works of a permanent character, executed by or on behalf of any person interested in the land.
  (3) Where, on any occasion on which Increment Value Duty is due in respect of any land, it becomes necessary, for the purpose of ascertaining the original site value of the land on which the duty is to be assessed, to apportion any original site value as first adopted for the purposes of this part of this Act, that value shall be apportioned between that part of the land

  1027
  on which duty is to be assessed and the remaining part of the land in such proportions as the Commissioners think just, and the value attributed on any such apportionment to each part of the land shall, for the purposes of this part of this Act, be treated as the original site value of that part of the land.
  (4) Where the owner of any land proves to the satisfaction of the Commissioners that he, or any of his predecessors in title, has purchased the land within twenty years before the thirtieth day of April, nineteen hundred and nine, and that the amount then paid by him for the purchase of the land exceeds the total value of the land as first adopted for the purposes of this part of this Act, such sum shall be substituted for the purposes of Increment Value Duty for the original site value of the land as the Commissioners consider, having regard to the amount so paid for the purchase of the land, was at the time of the purchase the site value of the land.
  Mr. JAMES MASON Mr. JAMES MASON moved to insert after the words "subject to" ["subject to such deductions (if any) as the Commissioners allow"] the words "deduction of any costs and expenses of valuation or of sale or of transfer incurred by the owner in connection with the land."
  The object of this Amendment is to deal with a class of deduction which is not contemplated or included in the section, and to include it in a slightly different way from the deductions which follow. The expenses which I propose to include do not in any way increase the actual value of the land, whereas the deductions referred to later in the clause relate to matters which are calculated to increase the intrinsic value of the property. Further, I desire to make my proposed deductions compulsory, and not to leave them to the discretion of the Commissioners. As the deductions to which I refer are legal expenses for transfer and valuation, to which the owners are deliberately put by the terms of the Bill, and which do not improve the value of the property, I think it is only reasonable that they should be compulsorily deducted from the increment before the duty is calculated. The Chancellor of the Exchequer is very fond of going to Germany for his lessons. But I am informed that in Germany they do make a deduction in these classes before calculating the Increment Duty. It is quite evident that if you do not allow for deductions of this kind a certain class of
  1028
  injustice must inevitably result, and this, I am sure, is not contemplated by the Government in their Bill. Here is a definite case, merely by way of illustration—and I am fully aware that my particular case is affected by the decision of the right hon. Gentleman as to the 10 per cent. A tradesman bought a house for £450. He made no structural alterations, and subsequently sold it for £475. The charges of the agents and solicitor came to about £20, including stamps, and as the Increment Duty under the Bill before the concession of yesterday would have been £5, making altogether £25, it would leave the man no profit whatever after paying Increment Duty. Cases of this kind, especially in the smaller transactions, are very likely to occur where practically the whole profit will be swallowed up in legal expenses and expenses of valuation. I think that these expenses, especially of valuation, are probably not at all realised by a great number of the hon. Gentlemen who sit opposite. I wonder whether they fully realise the huge cost of these valuations? I wonder whether they realise the bottomless morass of legal mud into which, in the way of expenditure, we are plunging; plunging, not at the expense of the State—that is fully guarded against—but at the expense of the individual.
  It is a noticeable fact that hitherto there has been no attempt to form any sort of estimate in any quarter as to what the cost of all this undertaking is going to be. Only this morning in "The Times," I saw a letter from the hon. Gentleman the Member for Walworth (Mr. C. J. O'Donnell) which attempts some estimate. A few lines may be worth the attention of the Committee. The hon. Member says:—
  "There are many hundreds of thousands of landowners in Great Britain, each of whom must make a return for every separate holding. Their preparation (many millions of returns), involving as it will the necessity of obtaining valuations—since no prudent owner will rely on mere guesswork—must occasion enormous expense to owners, many of whom are men of small means."
  He goes on then to form an estimate of the cost of the valuation which has to be paid by the owners. He says:—
  "I am assured that, including cost of travelling, etc., a valuer would charge 1 per cent. and most certainly ½ per cent. of the value. An 'elaborate' valuation is the State's demand."
  He then refers to my right hon. Friend the Member for Wimbledon (Mr. Henry Chaplin), who, it appears, said on a previous occasion that the value of the agricultural land in Great Britain was £4,000,000,000.
  Mr. CHAPLIN: Not agricultural land alone, but the whole land.
  Mr. MASON: He continues:—
  "If only half that amount at ½ per cent. came under the valuation, the cost would be £10,000,000 sterling."
  Do hon. and right hon. Gentlemen opposite realise that they are involving the owners of this class of property in a valuation which is going to cost them £10,000,000? Why, it simply means that the legal profession and the valuers are to get thousands of pounds for every hundred that goes into the pockets of the State. Surely it cannot be contemplated that this heavy and uncertain burden of legal transfer and other expenses are to fall upon the private individual? The hon. Member in his letter calls it "Bee in the bonnet finance—if finance at all." Although that I scarcely Parliamentary and a peculiar expression to use, as an expression it is not far wide of the mark. I beg to move.
  Question proposed, "That the words proposed to be left out stand part of the Question."
  The CHANCELLOR of the EXCHEQUER (Mr. Lloyd-George): I am rising to answer a totally different proposition to the one printed, and which I examined this morning. I will deal first of all with the question of the expenses of the transfer. The hon. Member gave us a specific case of a man buying a house for £450 and selling it for £475, and after expenses had been paid making a profit of £5. What happens? The house would be valued at £450 on the register. It is sold for £475, and the vendor is allowed the margin of 10 percent., and therefore the Act does not apply. It is absolutely free property, and that shows the advantage of the 10 per cent. margin. It clears all these small expenses and cost, and things of that kind ought to be dealt with as a whole. The hon. Member treated this as if the vendor paid this cost. I agree with him that in Germany there is an allowance for legal costs and some of the transfer taxes, but these transfer taxes are twice as heavy in Germany as here. They are more than twice as heavy—very nearly three times as heavy, and will be even after this Finance Bill is passed. In Germany there is a charge of £3 per cent.; here the charge would be only £1, even when the new Stamp Duties are imposed, and half of these fall upon the vendor in Germany. Take the case of a transfer here. I have some experience, notwithstanding what the hon. and gallant
  1030
  Gentleman the Member for Chelmsford (Mr. Pretyman) thinks, that I do not know much about land, of transfers, and I have perused many small leases in connection with land and minerals that might surprise the hon. and gallant Member. However, that is by the way. Take the transaction of the kind brought forward by the hon. Member for Windsor (Mr. Mason). The whole of the expenses of the transfer in that case are invariably paid by the purchaser. These gentlemen, the vendor and purchaser, go to the same solicitor, and he prepares the whole of the documents. It is not like a great transaction where an estate is sold—where the vendor is represented by one solicitor and the purchaser by another, and where they have to go into the investigation of title and of requisition. There, I agree, a good deal of expense falls upon the vendor, as well as upon the purchaser; but in these small transactions the legal expenses invariably fall upon the purchaser, and why should the vendor deduct the cost of legal expenses incurred by somebody else? There is no case at all for the deduction of these legal expenses. As to the question of valuation, why should valuation be deducted from increment? If any of these costs of valuation were deducted, the deduction ought to be made from the original site value; it is not an expense incurred after the original site value has been made, and therefore if there was any deduction for valuation it ought to be a deduction in connection with the original site value. Otherwise what would happen? I do not want to anticipate the discussion that will take place in connection with other expenses—the expenses of advertisements for instance, where the site value is practically created by the purchaser, where you have a place along the coast where probably no one would ever build a house except for the enormous sums of money spent in advertising the place. These things have to be considered in connection with the fixing of the site value, and I say the same thing applies here. It is not an expense which is incurred after the valuation is completed; it is incurred before the valuation, and it ought to be considered in connection with the original site value. Otherwise what would happen? If it is deducted after the original site value every subsequent purchaser would get the benefit of expenses which he never incurred. The expense is only incurred once by the original owner, he sells to somebody else; the second

  1031
  man then sells to a third. Why should they get the expenses of a valuation which they never incurred? That would be the effect of introducing this Amendment here. The hon. Member said this expense should be deducted or added to the original site value, when he states it ought to be added, I would remind him that applies to the halfpenny tax. I want him to make up his mind which horse he is going to ride. When the hon. Member talks of the vendor being allowed to deduct legal expenses, he wants to allow him to deduct something incurred by somebody else, and when he comes to the question of valuation, which he assumes is an expenditure that ought to be taken off, this certainly is not the stage at which to discuss it.
  Mr. PRETYMAN: I admit there is a great deal of difficulty in estimating these deductions and in the consideration of the different valuations to be made, but I do not know whether the right hon. Gentleman quite appreciated the point of the Amendment. I am sorry it was changed at the last moment, but it is a very obvious point, and the right hon. Gentleman might have known that these deductions would be asked for. In Germany allowance is made to cover these expenses in the first instance; no expenses of valuation whatever are incurred in Germany, because there they have a State register, in which all the required particulars are always to be found. In addition to that, there is a further allowance of 15 per cent. The right hon. Gentleman makes a great deal about his 10 per cent. which he has been good enough to concede, but that 10 per cent. has to cover all out-goings, and it will not be sufficient to cover them with fairness. In Germany it has to cover nothing whatever. A man is entitled to have a small income. All the other allowances are made, and it is generally agreed that when the increment is as small as 15 per cent., the owner is entitled to it. Here the allowance is but 10 per cent., and that has to cover, first of all, decrement; secondly, interest—a most important item; and, thirdly, all other expenses, which may be very considerable. The Chancellor of the Exchequer says the vendor does not pay any expenses, but if the right hon. Gentleman looks at the Amendment again he will see that that answer is no answer at all. If there are none, then we do not ask for any. What defence is it to get up and tell us that the vendor does not pay? If he
  1032
  does not, we get nothing. My hon. Friend gave a concrete case in which £20 expenses had been incurred, and I am prepared to accept the Chancellor of the Exchequer's statement. I regret if I attributed inexperience to him in dealing with land, because I thought I was paying him a compliment. I did not think this Bill could have been brought in by anyone with any such experience. I have sufficient experience to know that when I sell a piece of land I invariably get a lawyer's bill, which I pay. I am speaking of small transactions, and invariably on every transaction the vendor pays so much and the purchaser pays so much.
  Mr. LLOYD-GEORGE: No.
  Mr. PRETYMAN: The right hon. Gentleman denies it, but it is so. The practice must have been altered since the days when the right hon. Gentleman practised, or perhaps in mountain regions the practice is different to what it is in London. There obviously are expenses, and all that this Amendment does is to provide that where there are expenses which fall upon the vendor they should be deducted. It is not reasonable that where the vendor has to incur expenses in selling he should have to pay a tax upon those expenses. You take a certain figure at which a man has bought a certain piece of land at which it has been valued to him. He sells it at another figure and incurs certain expenses which are a dead loss to him, and which have to be deducted from the difference between those two sums. You take those two sums and charge a tax upon the whole. I say you are taxing that man upon an expense which he cannot avoid, and you are taxing him upon an outgo. There must be some reason and justice even in such a Bill as this, and I cannot see how these things can be defended. The right hon. Gentleman says that the expenses of valuation should be on the original site value. The original site value is to be estimated as from 30th April, 1909, before there was any expenses of valuation incurred. Therefore they cannot be taken into consideration in that valuation. I do not see how that is possible. The right hon. Gentleman said they were not expenses incurred subsequent to the original site value, but clearly they are. The expenditure upon valuation will be an expenditure incurred by the owner subsequent to the date at which the original site value is to be fixed, and it must be so. Therefore they are expenses incurred subsequent to the valuation, and

  1033
  there ought to be a right to deduct them in arriving at the tax on the site value. The point made by the Chancellor of the Exchequer as to what would happen on the second, third, and fourth sales brings us back again to the difficulty pointed out yesterday, that if he is going in every case in the future to the Day of Judgment to throw back the original valuation, he naturally gets into all these difficulties. That necessarily follows; but if he started at the second point and made that a point of departure, an allowance made there would stand for ever. That would work smoothly; but you will get into all these difficulties if you try to throw back to the original site value in every subsequent case, however many transactions may have been incurred, however much the land has been subdivided, and however many units have to be examined. This Amendment simply allows the deduction of costs and expenses naturally incurred by the owner, which he will have to show were actually incurved. I flunk that is a most reasonable request, and if the Chancellor of the Exchequer has a little more time to consider the point, he will see that it cannot in any fairness be resisted, and it ought not to be included in the allowance of 10 per cent. which has already been given for a totally different purpose. That 10 per cent. does not more than cover that particular purpose, and cannot be held to cover this reasonable request.
  Mr. W. W. ASHLEY: I appeal to hon. Members opposite to give all the support they can to this very reasonable Amendment, because those who are interested in land, whether they own a large or a small amount, think it is a little unfair that not only are they having this tax put upon them, but they are also having a further heavy tax placed upon them for legal expenditure in connection with valuation and other things. I will give the Committee an instance which came under my notice in regard to a small property in the home counties. This property, comprising 170 acres, was bought two years ago for £17,000. A portion of that land, comprising some 12 acres, was bought 12 years ago for £2,200. Previous to the whole 120 acres being bought by the one man two years ago the portion of 12 acres which was bought for £2,200 was put up for sale separately, and was withdrawn at £1,500 because no one would bid any more for it, and that was the reserve price. Here we have an instance of land within a distance of 11 miles of the Marble
  1034
  Arch which, in 18 years, has decreased from £2,200 to £1,500. I am not now discussing the question of decrement, but I wish to point out that if you are going to put upon the owner of those 170 acres the immense difficulty of ascertaining the site value of those 12 acres of land which, 20 years ago, were bought for £2,200, and which two years ago were withdrawn at £1,500, and this land was included in the 170 acres, if you are going to put this burden upon that land you will be putting an unreasonable burden upon the owner. How can anybody value those 12 acres? It is obvious that the owner of the land who is not skilled in land valuation will not attempt to value them, and he will be driven to engage a professional man. We all know that the great majority of land-owners in this country, if this Bill goes through in its present form, will be seeking expert advice from the great firms of land agents all over the country. Obviously, there is only a limited number of these firms and of people who are skilled in valuing land. What will be the result if the demand exceeds the supply? Naturally, the price of these gentlemen who are skilled in this matter will go up. Their charges are already high, and they will go up higher. The lawyers say they are already over-worked, and that they cannot work at the ridiculously low prices of the past. Their charges, therefore, will also go up. We shall not only have this extra tax put upon the land, but the land agents and the lawyers will charge much higher fees than they do at present. I would also point out to the Committee that a year ago these 12 acres, which two years ago were withdrawn at £1,500, were valued by an experienced land agent, and he charged £25. At that rate, we should not have half per cent. charged on the capital value but one per cent., and therefore, instead of 10 millions, at which the hon. Member for Walworth put the legal expenses, we should have 20 millions. I think, whether it is 10 or 20 millions, these charges ought to be met in some way, because, if you are going to put this heavy tax upon the owners of land, you ought not to impose upon them also these heavy legal expenses.
  Mr. GEORGE YOUNGER: I rise because an ounce of experience is worth a ton of theory in this matter, and I may tell hon. Gentlemen that when the Scotch Valuation Bill was under discussion—where the values to be made were very much the same as they will be under this Bill—I had a farm, consisting of about 140

  1035
  or 150 acres, valued for the purposes of the Debate, and it took an experienced and practical man very nearly a fortnight to do it. The right hon. Gentleman will really find it is not only an expensive but a difficult thing to do, and of course everything depends upon the construction he places upon the word "structure." I do not know whether it includes main drains, roads, hedges, and everything of that kind. If it does, it would be a very costly thing indeed. It is really mean to put all these charges on the owner, and a deduction ought to be made in respect of them. My hon. Friends have made out a very good case, and I give that experience of my own as what will happen, assuming the Bill is not amended, as I hope it will be.
  Mr. JAMES HOPE: It cannot be true to say, as the right hon. Gentleman the Chancellor of Exchequer has said, that it is only in valuing the original site value that the owner will be put to much expense. There are a great number of cases which may arise for determining the site value for the purpose of the Increment Duty, and there may be a great deal of trouble in getting the apportionment of the original site value, which will involve very nice questions, and in which a great deal of professional advice will have to be taken. For example, where the occasion is the death of any person, and the particular plot on which the Increment Value Duty is to be charged has to be valued, much expense will fall upon the owner. Again he may have to test the value of the fee simple on the passing of various interests. There are therefore numerous points in which he will be put to extra expense when the site value is determined quite apart from the original site value. One or two calculations as to what the expenses of valuation will be quite apart from the legal charges have been made, and the leter of the hon. Member for Walworth has been quoted. A Member of a leading firm of surveyors has supplied me with another calculation. He takes the rateable value of. England and Wales as in 1906, £207,000,000. He adds a little for increment since that date, say, four per cent., and he takes off the value of the property owned by the rating authorities, leaving a round average of £200,000,000. He says the capital value will be at least 25 times the rateable value, and he arrives at a capital value of the real property in England and Wales of £5,000,000,000. Now comes the calculation as to how the
  1036
  ordinary scale of surveyor's fees is to be applied to the valuation of a great property like that. Of course a great deal will depend upon what the average is in any particular owner. He takes a high average, an average as large as £5,000, as the value of each owner's property in any one locality. Five thousand pounds will be the average unit with which the surveyors will have to deal. It is probably much too high. He applies what is known to surveyors as Hyde's scale to this—I believe it is ¾ per cent.—and it works out at a total cost of £38,000,000 for valuation for England and Wales. He says that if you allow deduction for surveyors accepting fees less than the Ryde scale, still you would come to something exceeding 20 millions. We do not ask that the whole of that should be deducted. All we ask is that the expenses in ascertaining the site value shall be deducted before you proceed to tax the owner.
  Mr. HENRY CHAPLIN: We have this afternoon to make, as we have often had to make before, complaint of the very meagre answers given by the Government to the objections raised over and over again by hon. Gentlemen on this side of the House. The right hon. Gentleman the Chancellor of the Exchequer, in replying to the Mover of the Amendment, complained that it had been transformed, and that instead of it being moved as it appeared on the Paper, it had been divided under two heads. That is not true. My hon. Friend thought it better no doubt to specify exactly the point he wished to put before the Committee, and to which he hoped to obtain an answer from the Government. The right hon. Gentleman said he would deal with transfer, and he proceeded to do so. He began by saying the cost of transfer could hardly be deducted from the cost of valuing the site value. As far as I am able to follow the Bill and the Amendment, that is the position at this moment. Clause 2 deals entirely with site value, and sub-section 2 says that the site value of the land on the occasion on which the Increment Value Duty becomes due shall be taken to be on a certain occasion which it specified so and so. On each of those occasions in the subsection, the omission of one of which was ruled out of order yesterday, it specifies how the value is to be calculated. Then we come to the Amendment at the end of those sub-sections, and it reads: "Such value shall be taken to be subject to certain deductions." Here is one of the de-

  1037
  ductions which my hon. Friend (Mr. James Mason) desires to move, but upon that point the Chancellor of the Exchequer had very little to say. What he did tell us was—and I am exceedingly glad to hear it—that he had had six years' experience in a land agent's office. It is more surprising to me that, having had that experience, he should have so little to tell us on the subject of valuation and the cost of the valuation he is imposing by this Bill on the owners of land all throughout the country. My hon. Friend behind me quoted a letter which appears today in "The Times," written by a supporter of the Government, in which some estimate is made of the burden that the right hon. Gentleman is deliberately casting upon the owners of real property in all parts of the country. I am not prepared myself to say at this moment how far the different estimates which have been made on this subject are right or how far they are wrong. There is no doubt about one thing. The expense will be enormous. The estimate of the hon. Gentleman which appears to-day in "The Times" is 10 millions of money. Another estimate given from the back benches by my hon. Friend (Mr. James Hope) is a great deal more than that. I put down a question asking the right hon. Gentleman whether this question had been considered, and whether any organised estimate had been attempted to be made by His Majesty's Government before they imposed this enormous and unwarrantable burden upon the owners of land. What is the history of that question? On three different occasions when it was asked the Chancellor of the Exchequer was not in his place to answer it. I make full allowance for the very unusual and exceptional labours which are thrown upon him at present by the necessity of considering all the numerous Amendments which appear from day to day upon the Paper. At last I caught him as he was coming in, and, having obtained the leave of Mr. Speaker after the questions were all over, I put the question to him. What was his answer? It differed somewhat from the answer given on the first occasion by the Secretary to the Treasury (Mr. Hobhouse), who said it had been considered, but he could not give the estimate. I gathered from the answer of the right hon. Gentleman the Chancellor of the Exchequer that it had never been considered at all, because his reply to me was, "Why, obviously it is quite impossible for me to estimate what
  1038
  it is going to cost the owners of the land in the country, although I have placed that burden upon them." A more extraordinary statement, coming from a Minister imposing a burden of this kind upon people all over the country, I do not think I have ever heard in my life. What consideration has this subject received from His Majesty's Government? I really think we ought to be taken into their confidence, and we ought to be told whether they do really expect the owners of real property in this country to pay the cost of this burden, whether it be 5, 10, 20, or 30 millions. We ought to be told frankly whether it is to be considered additional taxation, and, if it is, then I say there ought at least to have been some estimate on the part of the Government as to this enormous charge they are imposing. I hope that even yet we may hear something more from the Government on this subject of the cost of the valuation which they are imposing upon people right throughout the country. I desire to get some further information on the subject.
  The EARL of RONALDSHAY: The first part of this Amendment deals with only one of the many Bills which are confined within the cover of this Budget. It is interesting to note that the Government themselves are admitting that the Budget covers many Bills. The Vice-President for the Board of Agriculture (Ireland) (Mr. T. W. Russell), speaking at Belfast the other day, remarked that the Government would carry the Budget, with all the Bills inside the Budget, and he went on to point out that among the Bills included was a Valuation Bill. Everybody admits that enormous expense will be thrown upon the owners of land who are called upon to make this valuation. It is admitted by Members on both sides of the House, and I have a quotation here from the hon. Member for South Buckinghamshire (Mr. Arnold Herbert), in which he declared in this House that the mere question of valuation is going to be a very heavy burden on owners of land. I could give many quotations from speeches and from statements issued by various societies, as well as from Commissions appointed by the Government, but I think it is only necessary to add one. Various estimates have been made as to what this valuation will cost. I believe it was estimated that in the case of the City of Glasgow the cost would be something like half a million sterling, but we also have something approaching an estimate from a Government source, given by

  1039
  Mr. J. Grant Lawson, Secretary to the Local Government Board under the last Government, when dealing with another Bill affecting valuation. Mr. Grant Lawson stated, on 14th April, 1905:—
  "This valuation and the separation of site from structure will cost a great deal of money. The cheapest estimate for London was £400,000. The estimates of other surveyors varied between two millions and four millions, and the net result to the whole country was that a valuation separating site from structure would cost at least 18 millions sterling."
  I notice that the Prime Minister the other day, in one of his many interesting speeches on the Budget outside this House, boasted that it was a very fair Budget, and gave as his reason for making that boast that—
  "I am imposing in indirect taxation £6,000,000, and I am imposing in direct taxation £6,800,000, and that is an eminently fair distribution of the burden."
  But he did not tell his audience he was further imposing on the payers of direct taxation a sum of 18 or 20 million sterling, which would be required for the valuation. Under these circumstances, I hope the Government will find it possible to give favourable consideration to the Amendment of my hon. Friend, which, though it does not remedy the whole of the grievance the owners of real property legitimately feel, will, at any rate, do something to mitigate the injustice.
  Mr. TUDOR WALTERS: May I remark, as a humble Member of the profession of surveyors and valuers to which the hon. Member for Sheffield (Mr. Hope) has just referred, that the basis of calculation which he has adopted for the cost of valuation, namely, Ryde's scale, is, after all, only one of those ideals which it is desired to attain, but which is seldom arrived at.
  Mr. JAMES HOPE: It is not my calculation. It is a calculation sent me by a member of the Surveyors' Institute, and the sum of 19 millions, at which he arrives, is on the basis of half Ryde's scale.
  Mr. TUDOR WALTERS: I am very glad to find my brother surveyors are making such liberal preparations for the emoluments of the profession. I have never been guilty of cutting down prices, and I do not intend to begin doing so, but it does seem to me that, when figures of this kind are submitted to the House, it is necessary to examine them quietly. The first suggestion is that Ryde's scale is the proper scale for valuing under this Act, but if hon. Gentlemen will make themselves acquainted with the fees that are
  1040
  paid to eminent surveyors for valuations in some of our urban districts they will certainly find that that scale is not general. As far as the great estates in this country are concerned, it will not be necessary in most cases to go outside and employ a surveyor either on Ryde's scale or on any other scale. I do not know a wellmanaged estate office which has not in its own possession plans, schedules, and valuations of the property of the owner, and which has not on the staff a practical man quite competent to make such a valuation as will be required under the provisions of this Act. Then, again, to arrive at the many millions with which my colleague has dazzled the House it will be necessary to include the cost of valuing the house property. But may I point out that an expert surveyor would not necessarily value every house separately on the property? After all, this house property is usually built in streets, and, having valued one house, it would only be necessary to multiply the total result by the number of houses included in the property. I venture to submit, therefore, that these calculations as to the cost of valuation are most grotesquely exaggerated. Still. I have a little sympathy with some of the difficulties which will face owners of land in valuing certain classes of property. I look upon this self-valuation principle as only a temporary expedient. I am afraid if a scale of surveyors' fees is allowed under this Act for the purpose of arriving at the Increment Tax you will stereotype that self valuation and that scale of fees for all time. I do not want to see that done. I want to see a really effective system of State valuation, because I think that would produce a much better return for the Treasury. May I point out one case in which difficulty is likely to arise? We will take two ten-acre fields of undeveloped building land adjacent to a town, and for all practical purposes having the same value. One field is part of a large estate. The other is owned by a man who has recently bought it, and cannot afford to keep it idle. Both those owners have to go through the same process of self-valuation. But they will look at the matter from an entirely different standpoint. One owner will say to himself, "I will not develop that field for many years to come. It gives access to the remainder of my estate, and I will not develop it until the whole estate is ready for development." He is concerned not so much about the increment as about the Land Tax, and, therefore, he puts the

  1041
  valuation as low as possible. But the owner of the adjoining field, who has to develop almost immediately, does not bother about the Land Tax. He is concerned with the Increment Tax, and he, therefore, puts the valuation as high as possible.
  The CHAIRMAN: I have allowed the hon. Member to develop his argument, but it seems to me he is now discussing a point which properly comes in on Clause 16. This is an Amendment to allow the deduction from the increment value of the expense of the valuation on sale or transfer of the land. The whole question of valuation hardly arises here. It is germane, I think, to point out that the cost of valuation will be very heavy, and I have allowed that argument to be advanced, but I do not think it is in order on this Amendment to go into the whole question of the cost of the valuation.
  Mr. TUDOR WALTERS: I will not pursue that further. I was only attempting to make this point, that, instead of allowing the surveyor's scale for valuation in connection with this particular case you should aim, in the near future, at getting a proper valuation made by the State. The object of my illustration was this: these two men would value from very different standpoints, and they would arrive at two very different values—one would be four times as much as the other. Although this self valuation may be a necessary and temporary expedient, I do not want it stereotyped, because it is not satisfactory. I hope that, as soon as possible, the right hon. Gentleman, by cooperation with rating and other authorities and by the appointment of proper valuers, will be able to arrive at some satisfactory basis upon which this Increment Tax can be calculated. I do not look upon the present proposal as a permanent arrangement, and I hope that it will not be long before we get a more effective system of valuation.
  Mr. BALFOUR: We all listened with interest to the hon. Member who has just addressed the House, knowing that he is closely in touch with the difficult problem of valuation. But I do not think he perfectly realised the character of the suggestion he has just made to the House. He says that the system proposed in the Bill is unsatisfactory on the ground that it involves hardship, and he urges that it should be treated as a temporary expedient, provided the Government hold out hopes of having a State valuation. I am not sure that this topic is in order, but
  1042
  may I just make one observation? The hon. Member is actually advising the Government to persist in a measure which is going to throw a prodigious burden on a particular class, that prodigious burden being only temporary, and not constituting a permanent or satisfactory settlement. I think if he will reflect upon that proposition he will see that he is greatly aggravating the grievance we complain of. If he suggests that this enormous burden is not to have any permanent effect, is to be a mere stop-gap, until the Government step in to do what it is probable they ought to do now, and that is to carry out their own valuation at their own cost, it will add to the grievance. I confess I was a little disappointed with the speech in regard to the cost of valuation of the hon. Gentleman who has just spoken (Mr. Tudor Walters). He is a great expert in this matter, but he only took up a position of purely destructive criticism and supplied us with no constructive calculation, or information, as to how we should arrive at the cost. He derided the idea that it would cost this sum, or that sum, or that the Ryde scale should be adopted in its entirety, which was never suggested on this side of the House. All that has been suggested on this side is that, according to the calculations of some expert's, half that scale should be adopted, but with regard to that I am not in a position to form the smallest judgment as to whether any of the estimates which have been put forward has the smallest basis in fact. There has been an estimate given of 10 millions by the right hon. Gentleman opposite; there has been an estimate of 18 to 20 millions by an official of the Local Government Board in 1905, and there have been later estimates, bringing up his estimate of 20 millions to 30 millions. I have not the least idea which of these estimates is accurate, or whether any of them are accurate; whether the basis of the charges in them is excessive, or is not excessive, or whether the lowest and the smallest of them does not fall short of the actual needs of the case. Have we not, however, a right to ask the Government for some assistance in this matter? It is all very well for the Government to get up and say, "your valuations are extravagant and fallacious," but surely if all these people, whom we are obliged to rely upon, in default of official information—if all these estimates are incorrect, the Government ought to have given us some estimates beforehand. I cannot make out that they have even taken the trouble to estimate

  1043
  the number who will come under their Bill, which I should have thought was the first thing that would have been done. But they have not made the smallest attempt, so far as I know, to tell us what kind of burden will actually be thrown upon the owners of property in land and houses in our big towns and our agricultural districts, and they take up, like the hon. Gentleman, a purely critical attitude, without giving the smallest assistance, upon a point which everybody must admit is very important, from the point of view of the actual working of the Bill.
  This Debate has been conducted by all the speakers to-day from the point of view of the heavy burden you are going to throw upon the owners of property in land and houses. They approached it simply from the point of view of the magnitude of the grievance, and if the Government and the right hon. Gentleman do not think it is a great grievance, they should supply an estimate which would correct these extravagant figures, which they say have been given by my right hon. Friend, and should prove that those figures are extravagant and fallacious. I do not wish, however, to approach this matter from the point of view of the grievance to a particular class in the community, namely, the owners of houses and lands, the owners of property solely, but I want to approach it from the point of view of the principles upon which you ought to carry out taxation of this kind. Consider what you are doing! You are determined to get the increment on a particular class of property, and surely you ought to see that the increment is the net, and not the gross, increment. We had a Debate yesterday, to which I mean to do no more than to refer, in which the case was stated of a man who ran his property as a part of his business. On some of the houses he was dealing with he made an increment profit, on others he made no profit at all, or made a loss, and it was then pointed out that if you treat that man as you treat any other member of the community he ought to be permitted to set off his losses against his gains. That was refused; I cannot see on what grounds, but the Government were supported by the hon. Member for Leicester (Mr. Ramsay Macdonald) on the ground that it should not be treated as an Increment Tax at all. Very well, then, let us abandon for a moment the view that anybody dealing with land or houses may set off losses against gains, and pay on the difference between the two. I still think
  1044
  that is fair; but surely you are going much further. You are going to say to a man, "You own land or property, which, owing not to any exertion of yours, but to the exertions of the community, has become valuable, and we mean to take off 20 per cent. of that increment value." Let us grant, as we are bound to grant, for the purpose of considering this proposal, that that is a just plan. It is a question we shall have to discuss at a later stage, and I am not going to argue it now, but at the present I assume it is just, but if you impose it, see that it is 20 per cent. of what the man makes by the work of society; if it is the work of society, see that it is 20 per cent. of that work on which you are going to take toll, and before he gets it into his pocket, see that it is on what he gets into his pocket. Is not that part of the business, but that is not the proposition of the hon. Member for Leicester. It is quite a different proposition, and I maintain that it is an unanswerable proposition. The Government say, "Oh, you are raising on this Amendment the general question of the original valuation." No, Sir; we are not raising on this Amendment the question of the original valuation, and everybody must see who reads this Bill that whenever the payment of this increment value is made there will be transactions connected either with the transfer of the property or with the estimate of the freehold value of the property inferred from some interest in the property, complicated calculations, the very complexity of which embarrass unhappy Ministers when they try to explain them to the Committee, and which, when translated into the concrete transactions of every day life, will cost money to the man who makes the transfer. The hon. Gentleman who has just spoken will, I am sure, not deny that, although he may differ from the estimates of the amount of the cost; and if that is so, you are taxing a man not really upon the increment which he gets, but upon something much more than increment. That must really be the case, and on your own process that must be unjust.
  At all events, the Government have got to defend this, have got to say something more than the Chancellor of the Exchequer has so far condescended to tell us; they have got to explain how it is just and fair, when you are taking 20 per cent. of the increment a man gets from his property, you are taking that 20 per cent. not on what he gets, but on what he gets plus an expenditure on lawyers and surveyors

  1045
  and assistants, whom no one doubts he must call in to assist him whenever this tax becomes due. That is the case, irrespective of the magnitude of the sums concerned. As to the magnitude of the sums concerned, we have a real grievance against the Government, that they give us no assistance or estimate. We shall refer to that later, but at this moment I do not wish to press upon them the magnitude of the burden. I wish to press upon them simply the plain equity of the request, that when you tax a man upon increment it should be really on the increment he gets, and not upon an imaginary increment, and not at a cost which in the view of every man in this House will be thrown upon the owners of this kind of property. I hope the Government will feel that this is not a point which they can really ignore, and that in order to make their Bill just, on their own principles of justice—on that peculiar code of justice which they are now proposing—even in accordance with that, some substantial concession must be made to the principles advocated by my right hon. Friend.
  The CHANCELLOR of the EXCHEQUER (Mr. Lloyd-George): The right hon. Gentleman has chosen to assume that no answer at all has been given by the Government to the Amendment of the hon. Member for Windsor (Mr. J. F. Mason), but I made two answers to it, to not one of which the right hon. Gentleman—I will not use the word "condescended," which he was good enough to apply to me—but not one of which, at any rate, he even claimed to have considered. At any rate, I can claim that either those arguments are really not worth any notice on the part of the right hon. Gentleman or perhaps have been forgotten, but the two answers I gave have never been referred to. It is perfectly true that he went on to answer other arguments advanced by the hon. Member, and he said, "You ought to charge these owners, these unfortunate owners, upon the real increment." That is what you are going to do. It is perfectly true that we make all allowances in respect of anything which has contributed to the value of the land—at any rate, that is our intention. I think we have done it. If we have not done it it can be strengthened, but anything which is done in order to create the increment which we propose to tax shall be fully recognised with regard to it, but we object in the first place to deduct legal expenditure, which in these small cases is never paid by
  1046
  the owner himself but by somebody else; and, in the second place, we object altogether to a deduction in respect to a payment which is only made once for all on fixing the original site value, and which, if it is to be charged at all, ought to go on the fixture of the original site value. The right hon. Gentleman never referred to that argument at all, and never answered it. Let me come to the question of the expense. The right hon. Gentleman complained that we did not give an estimate, but I ask him how is it possible to frame an estimate under these circumstances? He might have used exactly the same argument with regard to the Death Duties. He might have said, "Here you have the value of the land, the value of the buildings on the land, the value of the minerals under the land, all to be valued for the Death Duties. It will involve an enormous expenditure every time, an owner dies, and surveyors must be employed and paid under Hyde's scale." Let me point out, in regard to this expenditure, that every time anybody dies it is capable of being argued in exactly the same way, and the valuation there is quite as important, because 15 or 20 per cent. on the whole has to be paid, while here you are only calling upon a man to pay 20 per cent. on a mere margin, or the halfpenny tax on the part of the property which is undeveloped. The cost of the valuation, therefore, is as important, and more important, in the case of the Death Duty. I agree with my hon. Friend (Mr. Tudor Walters), in his able and interesting contribution to the Debate, that what really happens is, that in all these great estate offices there is a man much more capable of valuing the whole of the estates than anybody from outside, and that is what happens in most of these cases. They are men with great experience. Men who know all the facts. They prepare the valuation and submit it, and put it through. That is exactly what will happen in this case.
  What will happen if there is an allowance made under Ryde's scale? There is no deduction made in the case of Death Duties for valuation, and although hon. Gentlemen opposite have been in office for 10 years after the Finance Act was passed, they have never attempted to introduce this principle into the Finance Act of deduction in respect to the cost of valuation, and it is just as necessary and fair and equitable in the case of the Death Duties as it would be in the case of valuation for this purpose. If the money has to be

  1047
  paid to carry out the obligation of an Act of Parliament, why should there not be a deduction? As a matter of fact, those who do the work now do it as part of their daily work as agents in an office, and they are not paid for it; and if a percentage was to be deducted the whole thing would be whittled away by imaginary expenses which would never be incurred. We took all this into account when we fixed the amount at 20 per cent., and there is no case at this stage for considering the deduction of an amount which may or may not affect the original site value.
  Mr. BONAR LAW: The right hon. Gentleman has stated that the tax which he proposes is very much smaller than the tax imposed in Germany. We shall judge of that better when he has carried out his promise and given us full particulars of what that tax is. In the meantime I will point out that while the percentage, which is taken here is in every case 20 per cent., in Germany it does not arrive at 20 per cent. till the profit has by a great deal exceeded 100 per cent. altogether. Then the right hon. Gentleman says it is on a different principle, and that the profit in Germany is on the total value of the property. I have tried twice on different occasions to prove that that is precisely what is going to be done by the Bill. You are going, in the name of increment profit, to take in reality the whole profit which, in future, is made on the real estate. I tried twice in the small hours of the morning to get an answer from the Government as to whether or not I was right in making that statement; and the only answer I got was in the one case to refer me to a later clause, and in the other to move the closure. I am convinced that I can satisfy the right hon. Gentleman that that difference does not exist between the system in Germany and the system here, but that in both cases the total net profit will be taxed.
  To come to the point which the right hon. Gentleman rose to answer, he first of all gives as his reason why you should not take the tax on the net increment, that he makes allowance for anything that the man has done to improve the property. What in the world has that to do with it? The net increment does not arise—no increment arises until all that has been taken into consideration, and, therefore, that argument falls absolutely to the ground. Then he says it is precisely the same as the Death Duties. No one knows better than he does that there
  1048
  is no comparison as to the difficulty of these two valuations. I believe it is his intention, out of that magnanimous feeling to land-owners which he expressed so fluently in the first Budget speech, to impose this additional burden upon them, but at present the valuation cannot exceed a certain amount of the net annual rent. That at once limits it, and makes the calculation enormously easier than it, is at present.
  The next point I wish to make is to refer to the speech of the hon. Member for Sheffield (Mr. Tudor Walters), which the right hon. Gentleman told us was a most valuable contribution to our discussion. It is evident in how great straits the Government must be when you consider that that speech was any contribution, valuable or without value, to our discussion. He told us, in the first place, that the valuation will present no difficulty to the big estates, because they have people who are capable of dealing with them. Does he not see that that means, at all events, that they are going to impose an immense burden on the class which they profess not to touch—the owners of small estates? Then the hon. Gentleman made another extraordinary statement. He said when you come to value house property, all you have to do is to take one house in a street and value the rest of the street on the basis of the one house. Was ever such a proposal put forward by a sane person? If all you wanted was to have some statistical information to satisfy curiosity, such a valuation might do; but this valuation is one which is going to cost money, and ordinary self-preservation will make it absolutely essential for the owner to get the best advice, so as to see that he is not unfairly treated by the Government. If anyone were asked to lend money on a house, he would have a most elaborate valuation, in order to see that he did not lose his mortgage, and the same principle of self-interest must apply here—you must have a careful and accurate valuation in order to see that when you sell property you do not pay the Government far more than you ought to. It must be thoroughly and carefully made, and it will therefore cost a great deal of money.
  The right hon. Gentleman really has not dealt at all with the point put forward by my right hon. Friend. You profess to tax increment value. On what principle of fairness, or of justice, even taking your own Bill, can you tax a man for an increment value which he does not get? It is

  1049
  perfectly obvious that he does not get the increment value if from the amount of assumed profit you have to deduct the expenses to which he is put by the Bill. That is the point, and there is no answer to it. Surely anyone with any sense of fairness must see that if you are going to tax increment value, and in getting that tax are going to put an enormous burden in the way of valuation upon the owner, the very least you can do is to deduct the expense to which he is put before he pays the tax. That is made much stronger for the reason that the valuation must entail a great expense. It is easy enough for hon. Gentlemen to say that we exaggerate the amount of the expense, but in one of these discussions in the small hours the Attorney-General, who perhaps was not so wide awake as he generally is, made this admission, that the valuation will be elaborate, costly, and extensive. Can you have a valuation which is elaborate, costly, and extensive, and which is not going to cost a great deal of money? This burden is going to be thrown upon the people who pay the tax, and the Government refuse to give us any estimate of what that cost will be. Yet everyone must see that the cost is an addition to the tax, and I say there is no principle, either of fairness or justice, which can make it right for the Government to refuse the Amendment.
  Mr. F. W. LAMBTON: The Chancellor of the Exchequer has compared the cost of valuation under the Bill with the cost of valuation for Death Duties. Like many of his other comparisons, it is more ingenious than ingenuous. The right hon. Gentleman told us that the valuation, though it might be costly, though not so costly as we made out, would only be paid once on the original site value. He seems to have forgotten his own Bill. There is a quinquennial valuation of undeveloped land, so that the cost of valuation will fall upon the owners every five years.
  The CHAIRMAN: I do not see what that has to do with the Amendment. The Amendment is the deduction of the cost of valuation for increment value, and undeveloped land valuation has nothing whatever to do with it.
  Mr. LAMBTON: I think if the valuation is taken quinquennially the cost must be increased. The hon. Member for Sheffield (Mr. Walters) alluded to two fields, one undeveloped, which might have a value put upon it, and if that argument is used I have a right to use the same
  1050
  argument that undeveloped land will come under the quinquennial valuation and will be valued for the purpose of increment. What is the object of quinquennial valuation if nothing is to be based upon it? The right hon. Gentleman is slurring over the point when he says the cost of valuation will only come about once, and only on the site value.
  The CHAIRMAN: That does not come in connection with the Amendment, and the hon. Member has no right to argue it in regard to the Amendment. The Amendment deals with increment value only.
  Mr. LAMBTON: I was alluding to a remark made by the hon. Member for Sheffield.
  The CHAIRMAN: I warned the hon. Member for Sheffield (Mr. Tudor Walters) that he was getting beyond the bounds of order.
  Mr. LAMBTON: The hon. Member for Sheffield, referring to the cost of valuation put upon land-owners, said they had persons employed in their estate offices who would perform the valuation for them. Am I not entitled to reply to that remark?
  The CHAIRMAN: If the hon. Member will go on with his speech I will tell him whether I consider he is out of order.
  Mr. PRETYMAN: On the point of order. The Amendment asks that a remission of Increment Value Duty should be made in respect of all valuations of whatever character in regard to land, whether under this clause or any other, and I submit that that is in order. The suggestion is that this should be deducted. That is the point of the Amendment. Whether the valuation is for increment value or not does not affect the matter.
  The CHAIRMAN: I will hear what the hon. Member has to say.
  Mr. LAMBTON: What the hon. Member for Sheffield (Mr. Walters) said as to the cost of surveying may be quite true. I have no doubt that large land-owners will employ surveyors to make the valuation, but what about the poor land-owners? What about the ordinary squires throughout the country? It is all very well for the hon. Member for Sheffield to talk about the surveyor's work being a cheap matter, but it is not at all a cheap matter to a poor man who has a small estate. If every small land-owner has to employ surveyors and solicitors, it will involve very con-

  1051
  siderable cost. It is all very well for hon. Members to sneer, but I say that the cost will be enormous, and I hope that the Chancellor of the Exchequer may see that this is a matter which ought to be considered.
  Mr. J. ELLIS GRIFFITH: I am not concerned with the question whether this work of valuation will be done by surveyors or by land-owners, and I will not enter into it. The Amendment, as I understand it, covers all costs and expenses connected with the valuation of the land. I think it would be impossible to justify an Amendment so widely drawn as that. The question I want to put to the Government is this: Supposing a man is selling his land, and he employs an auctioneer to sell it by auction. He has the land surveyed. Is he, or is he not, to be allowed to deduct the cost of that from the consideration in the transfer? That seems to me to be a case which ought to be covered by the Bill. The second case which I would instance is this: Supposing a land-owner employs a land agent to get a purchaser for his land, is the landlord entitled to deduct the commission which he pays to the agent in connection with the transaction? I wish to ask whether either or both of these cases are included in the deductions allowed by the Bill? If they are not, I am sure the Government will see their way to put them in.
  Lord WILLOUGHBY de ERESBY: I am inclined to agree with the hon. Gentleman opposite that in the case of large estates in this country there ought to be found some man permanently employed who will be in a position to give fairly and accurately the different valuations required by the Bill. I do not, therefore, anticipate that on the large and rich landowners of this country there will be a heavy burden as regards the cost of valuation, but to some of the smaller and poorer land-owners the cost will be appreciable. Only the other day I tried to find out how many land-owners there were in my own Constituency, which is almost entirely an agricultural Constituency. I found that there were 2,800 ownership voters. I was pleased at this, because I felt that they would vote solidly for me at the next election. Hundreds of these men own only small portions of land, and if each has to send in the different valuations which are required by this Bill it will cause a considerable tax upon them,
  1052
  and a great deal of irritation among them. There can be no doubt that they will be put to large expense, which they will be unable to deduct should a windfall come their way, and should they be able to make a little money out of what may have seemed to them an unprofitable investment. As regards this Amendment, I think the Government ought to make some concession, for the cost of the valuation will be an imposition which will fall very hard indeed on a large number of the smallest and poorest land-owners. I was surprised to hear the Chancellor of the Exchequer refer to the speech of the hon. Member for Sheffield (Mr. Walters) in the terms which he used, because I listened carefully to that speech, and it appeared to me that he took the part of Baalam, inasmuch as he ended by cursing the proposal in the Bill as soundly as he could. The hon. Member said he did not like this method of valuation and the cost falling upon the individual. He considered it would be much better if the Government would prepare their own valuation and pay people to do it. He did not look upon this as more than a temporary measure. The Chancellor of the Exchequer said when you have got the valuation done by this process there would be no other valuation. The whole moral that could be drawn from the remarks of the hon. Member for Sheffield was that he thoroughly disapproved of this method of valuation.
  The original site value is the most important valuation that will ever occur in the whole history of this tax. The Chancellor of the Exchequer referred to the question of the Death Duties. I do not profess to be an expert upon that question. I object very strongly to the Death Duties, because a large proportion of what the heir has to pay does not go to the Treasury, but to lawyers, valuers, and other hangers-on of that description. [Laughter.] I apologise to the legal gentlemen for using that expression. I admit that they are very valuable interpreters of the law, and, perhaps, I may be allowed to withdraw the expression "hangers-on." There was nothing offensive meant by that. I should rather say that they are valuable aids in conducting business of this kind. We are going to have the system to which I object in connection with the Death Duties perpetuated under the tax you are placing upon landowners. We should go in for purity of finance, and see that all the money paid goes into the Exchequer. I always thought

  1053
  that was the great doctrine preached from the Government Benches. When we come to the question of the valuation, it is a far easier thing to arrive at a capital tax than to arrive at those difficult valuations you are going to set up by this Bill. The landowners of the United Kingdom do not all die in one year, so that the number of estates to be valued each year is limited. In connection with the Death Duties the Revenue officials ascertain what a man's income was, and they multiply it by so many years' purchase and say that that is the value of his property. I am not a land valuer, but I could do that myself. Having found out what a man's income is, I could multiply it by 15, 20 or 30 years' purchase and say that the estate is worth BO much. Without any mathematics at all you could arrive at that. This is an entirely different question. When you come to estimate the value of land for this Increment Duty you must go through the process of separating the land from the houses on it. It may be possible to arrive at such a valuation in towns, but I can only say from my knowledge of country conditions that it will be very difficult indeed to arrive at site value when you are dealing with potato fields. A man owning a country estate will have to give the capital value of a site, and the other values as well, and thousands of ordinary land-owners will have to go to large expense in consulting solicitors and land valuers. The Chancellor of the Exchequer ought to adduce some better arguments in support of the proposal than by simply referring to the speech of the hon. Member for Sheffield, which was really against this method of valuation.
  Mr. MUNRO FERGUSON: I am quite sure it is the desire of the Noble Lord to keep the cost of these valuations as low as possible. I do not know that anything is better calculated to add to expenditure on the ubiquitous persons to whom he referred than the Amendment. I think it would be impossible to accept the Amendment, because of the cost it would entail. On the other hand, the question of the incidental methods by which the valuation shall be conducted are most intricate. I do not think it should be assumed that this new general valuation can be counted as exactly the same thing as the existing valuation for the Death Duties. It is a much bigger matter. On the estate with the regular offices the expenditure would not, I think, be large, but there are considerable classes of estates, the mineral and the building estates, without any
  1054
  estate officers where the expenditure might be considerable, and even in these cases I think it would be found very difficult to meet the expenditure by a deduction, as is proposed on the lines of this Amendment. The uncertainty in the matter is as to the attitude of the Inland Revenue Department and the conditions they may lay down, as they have absolute power in this matter. If there was an independent valuation, were the Inland land Revenue and the executor to appoint a valuator mutually, as is done in ordinary valuations, then I do not think the difficulty would arise. But at present it seems to me that they are absolutely at the mercy of the Inland Revenue, who could lay down any condition that they like, and that being a Department which, under the Bill, has absolute authority, might lead to great expenditure on the part of individuals in order to meet the conditions laid down by the Department. I am not quite sure that you can always be certain of the reasonableness of a Government Department. One is often told that in the case of Government Departments behind the frowning countenance you find the smiling face, but it is sometimes the other way round; and I believe that the true solution of the difficulty would be to have the valuation made by a list of recognised valuers who are nominated jointly by the individuals concerned and by the Inland Revenue. What we have to guard against is putting this tremendous power into the hands of the Department and the Department laying down its own conditions and being in a strong position to intimidate the individual.
  The CHAIRMAN: The discussion as to the Commissioners will come on on another Amendment, and ought not to be dealt with here.
  Mr. MUNRO FERGUSON: I did not mean to go into that. I only meant to say that the Government cannot accept the principle of the Amendment; but when we come to deal with the Commissioners we might consider whether in certain classes of cases the Government might contribute something towards the necessary expenses, in exceptional cases, I think in common justice both sides in a case of this kind ought to contribute their share of the costs. That is the ordinary rule, and I think it is a fair one. But those costs would have to be very severely restricted, or the waste which the Noble

  1055
  Lord (Lord Willoughby de Eresby) deprecates would be a regular pandemonium of expenditure under the clause as it would stand if so amended.
  Mr. C. J. O'DONNELL: I think that the Government might accept this Amendment at least as far as rural land is concerned. What the hon. Member for the Brightside Division (Mr. J. T. Walters) said in regard to town land is perfectly true. It is a very simple thing to value property in towns or to value whole rows of houses; and, in fact, the values of land in towns are ascertained. It is constantly changing hands, and it is a very simple thing, therefore, to arrive at what its actual value would be; but the case of the country is entirely different. You do not find rows of fields exactly alike. I am quite prepared to go as far as any Member on this side with regard to the taxation of ground values in the sense of ground rents in big towns. It is an open fact, recognised by both sides in this House, and by none more than by some distinguished Members of the Conservative party, that these vast profits which are made are legitimately made an object of taxation. But rural lands are entirely different. The conditions of rural land vary from field to field, and if the owner of land has got no other income except that derived from land the taxation on him will be extremely heavy indeed. So that while the argument of the hon. Member for the Brightside Division is correct as regard land in towns, it is utterly fallacious as regards rural areas.
  Mr. F. A. NEWDEGATE: I would draw the attention of the Chancellor of the Exchequer to the extreme difficulty of making this valuation with regard to minerals. It is difficult enough on large estates which have been mentioned, but in my own part of the world a company has lately ventured into business over a large area of country, which includes a large number of small owners with 50 acres here and 50 acres there, etc., and how it is possible for these people to make the valuation is in itself a matter of consideration. The reason is that it is an extremely difficult thing in mineral areas to know when these small properties will be worked. For instance, say there is a mineral area of 7,000 acres, which does exist in the county to which I belong, which has become leased to a company, and which is made up of a number of small estates, ranging from 50 to 100 or 200 acres.
  1056
  How on earth is the valuer to find out when 50 acres, we will say at the farthest distance from the pit's mouth, will be worth its value for increment purposes? And I venture to say that the people who own these minerals will be placed in a very difficult position, because if they do not have the valuation made on their account they are liable to have the valuation made by the Government, and they must accept what the Government says as to the value of the minerals without any appeal. And I should also like to mention another circumstance. In the neighbourhood where I come from, and where there are many minerals at the present moment being developed, there are certain agricultural estates on which coal is known to exist, and which do not belong to the great land-owners of whom we have heard so much, but belong to small country gentlemen, also gentlemen of the yeoman class. I venture to urge that it would be a very great hardship on these people if under this Increment Tax, on granting a lease or at a death, they have to pay for this valuation. It is all very well to say that the valuation can be conducted easily. It cannot be conducted easily. It is absolutely essential in valuing land that everything connected with the land should be taken into account. And, in fact, I go so far as to say that even on the great estates of which we have heard, where there are offices, it is extremely difficult for the permanent staff in an agent's office to find the true valuation of the land, although they may know a great deal about the local conditions. And I do not think that the country realises that under this Increment clause a large additional burden is going to be imposed on land-owners situated at various points from time to time in the matter of valuation of land and everything appertaining to it. And I do hope that if the right hon. Gentleman (Mr. Lloyd-George) wishes to make this Bill at all events apparently a fair Bill he will accept the Amendment which has been proposed from this side of the House, and which has got so many adherents on the other side of the House.
  Mr. JULIUS BERTRAM: I would appeal to the Chancellor of the Exchequer to reconsider his attitude, at all events so far as regards sub-section (a). I do not think very much of the objections taken by hon. Members who support the Amendment, so far as regards grants of leases or deaths, but I do think that in the case of sales expenses ought to be deducted. I

  1057
  may suggest one concrete case. An estate is offered for sale by auction, and the sale is abortive. Subsequently it is sold by private contract conducted by the solicitor, and, say, it is sold for £2,000, £100 of that £2,000 purchase money is set down and accepted as representing the amount of increment upon the estate since the last transaction. The expenses of the vendor in that case might easily amount to £8 16s. in respect of that £]00 alone. There would be the solicitors' charges of about £2 10s. for negotiating and carrying out the sale. There would be an apportionable share of the expenses of the abortive auction, which might be put at one-twentieth, which would be three guineas. And possibly three guineas a minimum charge for valuation of the growth of increment since the last transaction. I think it is quite possible in every case of sale that the expenses of the landowner might amount to 8 per cent. The amount of money which the vendor puts in his pocket as regards the £100 increment would be £92 instead of £100, and 20 per cent. on £92 is only £18, while 20 per cent. on £100 is £20; so that the Government would in such a case be getting 2 per cent. more actual duty upon the £100 increment than they are asking for under the Bill. I think, therefore, that in cases of sale there is a very good case made out for allowing the deductions for costs and expenses properly incurred by the vender. I do not think the case of death is quite in point. What you tax for estate duty is either the land which he has not sold or the cash which the man had in his pocket. If a man has land worth £100 and dies you charge the duty on the £100 estimate. If he sold it two days before and has received his purchase-money—that is, £100 less £8, he has only £92 cash, and he has only to pay duty on that amount. From this it would be seen that in cases of sale there is very strong reason for allowing a deduction in respect of costs and expenses properly incurred.
  Mr. LLOYD-GEORGE: With regard to the point raised by my hon. Friend the Member for Hitchin, he was not here during the discussion when quite a similar point was raised by the hon. Member for Windsor (Mr. J. F. Mason), and I pointed out that the concession already made by the, Government more than covered all that question. My hon. Friend presupposed a transaction with an increment of £100 on a £1,000. I propose to deduct
  1058
  10 per cent. in every case, and in the case of £2,000, I do not propose to start charging the increment until it is over £200. That is until it is over the one-tenth of the £2,000. My hon. Friend supposed the case of £100, but in that instance there is no increment at all. That is really the answer to both these cases. If you begin to enter into an elaborate calculation with regard to the charges, at any rate they will depend upon the quality of the work, and they will vary. My hon. Friend will bear me out that it will depend on the quality of the work. Although I do not suggest there would be fraud, I have no doubt at all that the charges put down by the surveyor would never be charged to the owner, but would be made a claim for deduction. It is far better, therefore, to have a hard and fast rule of 10 per cent. to cover all these minor charges. Though in some cases that might not be enough, in other cases it would be more than enough. Having answered all the points that have been put, I do hope that the Committee will now go to a Division.
  Mr. WATSON RUTHERFORD: This Amendment is an attempt to reduce the matter to a business proposition. I was very much struck the other day in looking over the books of a very large firm who buy and sell considerable quantities of property. I knew the amounts which the firm paid for portions of property, and I knew the amounts for which they sold several properties. When I looked at the books in regard to the amounts, I found I could not recognise the figures. I asked a question, and received an answer which conveys the very point I now desire to put to the Committee. Supposing you buy a property for £1,000, what sum of money does a business man put down as the cost? He puts down £1,020, because he has to pay £25 for the stamp and cost of conveyance, and although he has given £1,000 for the property, which is the consideration named in the deed, the actual cost to him is £1,020. Let us take the case of the sale of the same property for £1,200. The amount of the costs which he has to pay is £25. The difference between £1,000 and £1,200 is £200, and, roughly speaking, that is the increment. What, however, is the actual increment? It is £155.
  Mr. LLOYD-GEORGE: The hon. and learned Gentleman is again ignoring the concession made by the Government. The increment in that case would be only £100.
  Mr. WATSON RUTHERFORD: I quite appreciate that you are taking off 10 per cent. I understand that the 10 per cent. is not merely going to be the first 10 per cent., but 10 per cent. in all the transactions, deducting the charges from the balance. I think that is a very great concession, and if it were intended to meet merely this question of expenses I should not have anything more to say. But I would remind the Committee, as on the very Amendment that has been moved, that every concession that has been asked for in every direction, this has been the sole reply—this particular 10 per cent. is to cover the whole position. Instead of £200 being put into this man's pocket on the transaction between the £1,000 and £1,200, the nett amount he receives is £155, and that is the amount which appears in his books, because he has to charge the expense on both transactions. I do not think you ought to pass this Bill in its present state and stereotype for all time that a man makes a nominal profit of £200, while his actual profit is only of £155.
  Mr. SAMUEL ROBERTS: It has been said that in large estate offices expert valuers would be able to make these valuations without any expense to the owners. It is forgotten that the vast majority of people who own land in this country are small holders, and if it happens that there are minerals on their land it is absolutely necessary that they should have expert valuers.
  The CHAIRMAN: The hon. Member is only repeating what has already been said.
  Mr. SAMUEL ROBERTS: I wish to refer to what was said by my hon. Friend the Member for Warwickshire (Mr. New-
  degate). I know that there will be a very great hardship on a large number of small holders, who would be put to the expense of having to engage valuers. The Chancellor of the Exchequer will remember the Report of the Royal Commission on Mines in 1905. The line of the undeveloped coal on the east side of the Midland Coalfield is very largely extended, and there are, it is said, as many as 1,750 square miles in the county of Lincoln alone where the coal is known to exist, but is not proved. It is absolutely impossible for the owner of a small plot of land in that district to make a valuation himself. He must get expert valuers. If he tried to value himself, the probability is that he would make a mistaken valuation, and if he does that what will happen? Although the value of the property may not increase and may remain exactly the same, the Chancellor of the Exchequer is going to tax upon the mis-valuation. I hope the Chancellor of the Exchequer appreciates the point, because I believe it will apply to a very large district in this country—that land will not rise in price, and there will be no increment; but in those cases, although there has been no increase in the value of the land, yet the owner will have to pay the cost of the mis-valuation. My point is this—that it is all important that the owner of a small plot of land should have an expert opinion to assist him in the first instance. If that be so, as a matter of justice, the cost he is put to of employing a valuer and solicitor should be allowed.
  Question put, "That those words be there inserted."
  The Committee divided: Ayes, 104; Noes, 291.

  Division No. 248.]

  AYES.

  [5.40 p.m.

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

  Castlereagh, Viscount

  Gardner, Ernest

  Anson, Sir William Reynell

  Cave, George

  Gordon, J.

  Anstruther-Gray, Major

  Cecil, Evelyn (Aston Manor)

  Goulding, Edward Alfred

  Arkwright, John Stanhope

  Chaplin, Rt. Hon. Henry

  Gretton, John

  Ashley, W. W.

  Clive, Percy Archer

  Guinness, Hon. W. E. (B. S. Edm'nds)

  Balcarres, Lord

  Cochrane, Hon. Thos. H. A. E.

  Haddock, George B.

  Baldwin, Stanley

  Corbett, T. L. (Down, North)

  Hamilton, Marquess of

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

  Courthope, G. Loyd

  Hardy, Laurence (Kent, Ashford)

  Banbury, Sir Frederick George

  Craig, Charles Curtis (Antrim, S.)

  Harrison-Broadley, H. B.

  Baring, Capt. Hon. G. (Winchester)

  Craig, Captain James (Down, E.)

  Hay, Hon. Claude George

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

  Craik, Sir Henry

  Heaton, John Henniker

  Beckett, Hon. Gervase

  Dalrymple, Viscount

  Hermon-Hodge, Sir Robert

  Bignold, Sir Arthur

  Davies, David (Montgomery Co.)

  Hill, Sir Clement

  Bowles, G. Stewart

  Dickson, Rt. Hon. C. Scott-

  Hills, J. W.

  Bridgeman, W. Clive

  Douglas, Rt. Hon. A. Akers-

  Hope, James Fitzalan (Sheffield)

  Brotherton, Edward Allen

  Faber, George Denison (York)

  Kerry, Earl of

  Bull, Sir William James

  Faber, Capt. W. V. (Hants, W.)

  Kimber, Sir Henry

  Butcher, Samuel Henry

  Fardell, Sir T. George

  King, Sir Henry Seymour (Hull)

  Campbell, Rt. Hon. J. H. M.

  Fletcher, J. S.

  Lambton, Hon. Frederick William

  Carlile, E. Hildred

  Forster, Henry William

  Lane-Fox, G. R.

  Carson, Rt. Hon. Sir Edward W.

  Foster, P. S.

  Lee, Arthur H. (Hants, Fareham)

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

  Pretyman, E. G.

  Thornton, Percy M.

  Long, Col. Charles W. (Evesham)

  Randles, Sir John Scurrah

  Tuke, Sir John Batty

  Lonsdale, John Brownlee

  Rawlinson, John Frederick Peel

  Valentia, Viscount

  Lyttelton, Rt. Hon. Alfred

  Remnant, James Farquharson

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

  M'Arthur, Charles

  Penton, Leslie

  Willoughby de Eresby, Lord

  Magnus, Sir Philip

  Renwick, George

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

  Marks, H. H. (Kent)

  Ronaldshay, Earl of

  Winterton, Earl

  Mason, James F. (Windsor)

  Sassoon, Sic Edward Albert

  Wolff, Gustav Wilhelm

  Mildmay, Francis Bingham

  Scott, Sir S. (Marylebone, W.)

  Wortley, Rt. Hon. C. B. Stuart-

  Morpeth, Viscount

  Sheffield, Sir Berkeley George D.

  Wyndham, Rt. Hon. George

  Morrison-Bell, Captain

  Smith, Abel H. (Hertford, East)

  Younger, George

  Newdegate, F. A.

  Smith, F. E. (Liverpool, Walton)

  Oddy, John James

  Starkey, John R.

  TELLERS FOR THE AYES.—Mr. S. Roberts and Mr. Watson Rutherford.

  Percy, Earl

  Staveley-Hill, Henry (Staffordshire)

  Powell, Sir Francis Sharp

  Talbot, Lord E. (Chichester)

  NOES.

  Abraham, W. (Cork, N. E.)

  Davies, Sir W. Howell (Bristol, S.)

  Joyce, Michael

  Acland, Francis Dyke

  Dewar, Sir J. A. (Inverness-shire)

  Kavanagh, Walter M.

  Agar-Robartes, Hon. T. C. R.

  Dickinson, W. H. (St. Pancras, N.)

  Kekewich, Sir George

  Agnew, George William

  Dobson, Thomas W.

  Kennedy, Vincent Paul

  Airsworth, John Stirling

  Duncan, C. (Barrow-in-Furness)

  King, Alfred John (Knutsford)

  Alden, Percy

  Dunne, Major E. Martin (Walsall)

  Laidlaw, Robert

  Allen, Charles P. (Stroud)

  Edwards, Sir Francis (Radnor)

  Lamb, Ernest H. (Rochester)

  Ambrose, Robert

  Elibank, Master of

  Lambert, George

  Ashton, Thomas Gair

  Esslemont, George Birnie

  Lament, Norman

  Asquith, Rt. Hon. Herbert Henry

  Evans, Sir S. T.

  Law, Hugh A. (Donegal, W.)

  Baker, Sir John (Portsmouth)

  Everett, R. Lacey

  Layland-Barrett, Sir Francis

  Balfour, Robert (Lanark)

  Ferens, T. R.

  Lehmann, R. C.

  Baring, Godfrey (Isle of Wight)

  Ferguson, R, C. Munro

  Lever, A. Levy (Essex, Harwich)

  Barker, Sir John

  Freeman-Thomas, Freeman

  Lever, W. H. (Cheshire, Wirral)

  Barlow, Sir John E. (Somerset)

  Fuller, John Michael F.

  Levy, Sir Maurice

  Barlow, Percy (Bedford)

  Fullerton, Hugh

  Lloyd-George, Rt. Hon. David

  Barnard, E. B.

  Furness, Sir Christopher

  Lough, Rt. Hon. Thomas

  Barnes, G. N.

  Gill, A. H.

  Lundon, T.

  Barry, Redmond J. (Tyrone, N.)

  Ginnell, L.

  Lyell, Charles Henry

  Scale, W. P

  Gladstone, Rt. Hon. Herbert John

  Lynch, H. D.

  Beauchamp, E.

  Glen-Coats, Sir T. (Renfrew, W.)

  Macdonald, J. R. (Leicester)

  Beck, A. Cecil

  Glendinning, R. G.

  Macdonald, J. M. (Falkirk Burghs)

  Bellairs, Carlyon

  Glover, Thomas

  Maclean, Donald

  Berridge, T. H. D.

  Goddard, Sir Daniel Ford

  Macnamara, Dr. Thomas J.

  Bertram, Julius

  Gooch, George Peabody (Bath)

  Macpherson, J. T.

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

  Greenwood, G. (Peterborough)

  MacVeagh, Jeremiah (Down, S.)

  Bethell, T. R. (Essex, Maldon)

  Greenwood, Hamar (York)

  MacVeigh, Charles (Donegal, E.)

  Birrell, Rt. Hon. Augustine

  Griffith, Ellis J.

  M'Callum, John M.

  Black, Arthur W.

  Guest, Hon. Ivor Churchill

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

  Boland, John

  Gulland, John W.

  M'Micking, Major G.

  Boulton, A. C. F.

  Gwynn, Stephen Lucius

  Maddison, Frederick

  Bowerman, C. W.

  Hall, Frederick

  Mallet, Charles E.

  Bramsdon, Sir T. A.

  Halpin, J.

  Marks, G. Croydon (Launceston)

  Branch, James

  Harcourt, Rt Hon. L. (Rossendale)

  Marnham, F. J.

  Brigg, John

  Harcourt, Robert V. (Montrose)

  Massie, J.

  Brocklehurst, W. B.

  Hardie, J. Keir (Merthyr Tydvil)

  Masterman, C. F. G.

  Brooke, Stopford

  Hart-Davies, T.

  Meagher, Michael

  Brunner, J. F. L. (Lancs., Leigh)

  Harvey, A. G. C. (Rochdale)

  Meehan, Francis E. (Leitrim, N.)

  Bryce, J. Annan

  Harwood, George

  Menzies, Sir Walter

  Buckmaster, Stanley O.

  Haslam, Lewis (Monmouth)

  Micklem, Nathaniel

  Burke, E. Haviland-

  Hazel, Dr. A. E. W.

  Molteno, Percy Alport

  Burns, Rt. Hon. John

  Hedges, A. Paget

  Montagu, Hon. E. S.

  Burnyeat, W. J. D.

  Henderson, Arthur (Durham)

  Mooney, J. J.

  Burt, Rt. Hon. Thomas

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

  Morgan, J. Lloyd (Carmarthen)

  Buxton, Rt. Hon. Sydney Charles

  Herbert, T. Arnold (Wycombe)

  Morrell, Philip

  Byles, William Pollard

  Higham, John Sharp

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

  Cameron, Robert

  Hobart, Sir Robert

  Napier, T. B.

  Causton, Rt Hon. Richard Knight

  Hobhouse, Rt. Hon. Charles E. H.

  Nicholls, George

  Cawley, Sir Frederick

  Hodge, John

  Nolan, Joseph

  Chance, Federick William

  Hogan, Michael

  Norton, Captain Cecil William

  Cheetham, John Frederick

  Holland, Sir William Henry

  Nussey, Sir Thomas Willans

  Cherry, Rt. Hon. R. R.

  Holt, Richard Durning

  Nuttall, Harry

  Cleland, J. W.

  Hooper, A. G.

  O'Brien, K. (Tipperary, Mid.)

  Clough, William

  Hope, John Deans (Fife, West)

  O'Brien, Patrick (Kilkenny)

  Cobbold, Felix Thornley

  Hope, W. H. B. (Somerset, N.)

  O'Connor, James (Wicklow, W.)

  Collins, Stephen (Lambeth)

  Horniman, Emsile John

  O'Connor, John (Kildare, N.)

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

  Howard, Hon. Geoffrey

  O'Doherty, Philip

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

  Hudson, Walter

  O'Donnell, C. J. (Walworth)

  Cotton, Sir H. J. S.

  Idris, T. H. W.

  O'Grady, J.

  Craig, Herbert J. (Tynemouth)

  Isaacs, Rufus Daniel

  O'Kelly, James (Roscommon, N.)

  Cross, Alexander

  Jackson, R. S.

  O'Shaughnessy, P. J.

  Crossley, William J.

  Jenkins, J.

  Parker, James (Halifax)

  Davies, Ellis William (Eifion)

  Jones, Sir D. Brynmor (Swansea)

  Paulton, James Mellor

  Davies, M. Vaughan-(Cardigan)

  Jones, Leif (Appleby)

  Pearce, Robert (Staffs., Leek)

  Davies, Timothy (Fulham)

  Jones, William (Carnarvonshire)

  Pearce, William (Limehous)

  1062

  1063

  Philipps, Col. Ivor (Southampton)

  Schwann, Sir C. E. (Manchester)

  Verney, F. W.

  Philipps, Owen C. (Pembroke)

  Scott, A. H. (Ashton-under-Lyne)

  Vivian, Henry

  Philips, John (Longford, S.)

  Seaverns, J. H.

  Walsh, Stephen

  Pickersgill, Edward Hare

  Seddon, J.

  Walters, John Tudor

  Pointer, J.

  Seely, Colonel

  Walton, Joseph

  Ponsonby, Arthur A. W. H.

  Shackleton, David James

  Ward, John (Stoke-upon-Trent)

  Power, Patrick Joseph

  Shaw, Sir Charles E. (Stafford)

  Ward, W. Dudley (Southampton)

  Price, C. E. (Edinburgh, Central)

  Sheehan, Daniel Daniel

  Wardle, George J.

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

  Silcock, Thomas Ball

  Warner, Thomas Courtenay T.

  Priestley, Sir W. E. B. (Bradford, E.)

  Sloan, Thomas Henry

  Wason, Rt. Hon. E. (Clackmannan)

  Radford, G. H.

  Smeaton, Donald Mackenzie

  Wason, John Cathcart (Orkney)

  Rainy, A. Holland

  Smyth, Thomas F. (Leitrim, S.)

  Waterlow, D. S.

  Raphael, Herbert H.

  Snowden, P.

  Wedgwood, Josiah C

  Rea, Rt. Hon. Russell (Gloucester)

  Soames, Arthur Wellesley

  Weir, James Galloway

  Redmond, John E. (Waterford)

  Soares, Ernest J.

  White, Sir George (Norfolk)

  Redmond, William (Clare)

  Spicer, Sir Albert

  White, J. Dundas (Dumbartonshire)

  Rendall, Athelstan

  Stanley, Hon. A. Lyulph (Cheshire)

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

  Richards, Thomas (W. Monmouth)

  Steadman, W. C.

  White, Patrick (Meath, North)

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

  Stewart, Halley (Greenock)

  Whitley, John Henry (Halifax)

  Richardson, A.

  Strachey, Sir Edward

  Whittaker, Rt. Hon. Sir Thomas P.

  Pidsdale, E. A.

  Straus, B. S. (Mile End)

  Wiles, Thomas

  Roberts, Charles H. (Lincoln)

  Summerbell, T.

  Wilkie, Alexander

  Roberts, C. H. (Norwich)

  Taylor, Austin (East Toxteth)

  Williams, W. Llewelyn (Carmarthen)

  Roberts, Sir J. H. (Denbighs.)

  Taylor, John W (Durham)

  Wills, Arthur Walters

  Robertson, Sir G. Scott (Bradford)

  Tennant, Sir Edward (Salisbury)

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

  Robinson, S.

  Tennant, H. J. (Berwickshire)

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

  Robson, Sir William Snowdon

  Thomas, Abel (Carmarthen, E.)

  Wilson, W. T. (Westhoughton)

  Rogers, F. E. Newman

  Thomas, Sir A. (Glamorgan, E.)

  Winfrey, R.

  Rose, Sir Charles Day

  Thorne, G. R. (Wolverhampton)

  Wood, T. M'Kinnon

  Rowlands, J.

  Tomkinson, James

  Yoxall, Sir James Henry

  Runciman, Rt. Hon. Walter

  Toulmin, George

  Rutherford, V. H. (Brentford)

  Trevelyan, Charles Philips

  TELLERS FOR THE NOES.—Mr. Joseph Pease and Mr. Herbert Lewis.

  Scarisbrick, Sir T. T. L.

  Ure, Rt. Hon. Alexander

  Question, "That the words down to the word 'deduction' ['subject to such deduction'] stand part of the clause," put and agreed to.

  The CHAIRMAN: The Amendment of the hon. Member for London University (Sir P. Magnus) cannot be taken here, because we have no Undeveloped Land Duty in this clause.
  Mr. BALFOUR: I quite appreciate the difficulty you put, but could you advise the Committee or advise my hon. Friend as to the point at which it would be in order? I should have been afraid, if we passed the Increment Duty and these earlier clauses, that when we got to the undeveloped land the question would have been regarded as having been settled, and that we should not be allowed to raise it again. Can you, in view of that, see your way to state the proper place?
  The CHAIRMAN: I will consider the question. It cannot come in here. It can come in under Clause 10, or otherwise it could come in as a new clause. I should prefer to let it come in under Clause 10, but I cannot give a positive answer now. The next three Amendments are all settled.
  Mr. PRETYMAN Mr. PRETYMAN moved in section (2), after the words "subject to" ["subject to such deduction"], to insert the words "of any sum or sums paid for the redemption of Land Tax and." It is obvious that the actual value at the time when the property is being assessed for increment on the second collection has been increased by the redemption
  1064
  of Land Tax, or by commutation of tithes, and that that increase will have been arrived at by the direct expenditure of the owner. It is obvious, I think, that he should be debited with sums which are distinctly outgoings. I await the right hon. Gentleman's reply, and beg to move the Amendment formally.
  Mr. LLOYD-GEORGE: I understand the object of the hon. and gallant Member is to make a deduction where there is an increase in the land attributable to redemptions since the original site value. The words of the Amendment will not carry out that, which, if I may suggest, I think, is a perfectly legitimate object where it is attributable to the redemption of Land Tax. I do not quite agree with the Amendment, which, I think, ought to come in after the word "value" ["that site value,"], where I would suggest to insert the words "or the expenditure of money on the redemption of Land Tax after the 30th day of April, 1909." The hon. and gallant Member can put an Amendment down to that effect, or I shall put it down myself.
  Mr. PRETYMAN: I had written in the original manuscript "Commutation of tithes," as well as "redemption of Land Tax," and I thought it was included. The point is identical, and I desire to add to my Amendment, "Commutation of tithes." The two cases are on all fours unless

  1065
  there may be a question of incumbrances. I am not sure if one is an incumbrance and the other is not. I am aware that the tithe is an incumbrance, and if the Land Tax is not, then I do not wish it added. Perhaps the learned Attorney-General could tell us that.
  Mr. LLOYD-GEORGE: That is rather an important new point, which I have not had time to consider. I can assure him I shall try to think that over. If he will withdraw his Amendment here and put it down in the place I have indicated, I shall have time to consider the additional words suggested now. I am inclined to think that tithes would not be in the same position as the Land Tax. As far as the land is concerned, I fully admit the justice of the statement. I shall certainly accept the first part of it.
  Amendment, by leave, withdrawn.
  Mr. PRETYMAN (for Mr. Clyde)moved, to leave out the words "such deduction (if any) as the Commissioners allow in each case in respect of any part of the value which is proved to their satisfaction to be attributable," and to insert the words "the deduction of any part of the value fairly." This Amendment covers a considerable amount of ground, and is rather an important one. It really opens up the question of the Commissioners. The question of the Commissioners allowing whatever deductions they please, and accepting whatever assessments they think just is one which requires a very great deal of consideration at the hands of the Committee, because it is an entirely new principle in the assessment of taxes that there is to be a decision by an authority constituted directly under the Treasury, and the Government of the day with an appeal to another authority similarly appointed, and not an appeal on the part of the subject, who is taxed to the ordinary courts of law. I do not quite know on what ground this new departure has been taken. It is a very large new departure, which opens up very great constitutional questions of very far reaching aspects that the subject is to be liable to be taxed without appeal to the courts of law, which alone can be considered as definitely and entirely impartial. I would make this observation, which I think is justified, that in this case the whole question of taxes depends entirely on assessment. The tax itself is fixed by the Committee and by the Bill at 20 per cent. With what weight that burden of taxation will fall upon any particular
  1066
  subject who is liable to pay must entirely depend upon the view which the Commissioners take of what his assessment ought to be. This body of gentlemen will no doubt act under professional advice. There is no Member of this Committee who has sat on Committees upstairs who will not be thoroughly aware that professional opinion on questions of fact, particularly as to values, varies in the most extraordinary manner; it is a commonplace, and I see hon. Gentlemen opposite recognise that it is so. Take the ordinary case of the acquisition of land under the Lands Acquisition Act; there is no Member who is not aware that you will have the most extraordinary difference of expert professional opinion as to the value of certain property that is in question before a Committee upstairs. Bearing in mind the extraordinary variety of profesional opinion, I would point out that that variety of opinion will be given fullest play. Under the provisions of this Bill you are not to have one uniform valuation, conducted under the supervision of a few special experts, with a large staff acting under their guidance or under directions formulated by them; but you are going to ask every owner of land to make his own independent valuation. Each owner of land will go to a different expert. One expert may hold the view that land has a high value, while another may hold that land of a similar character has a low value. It is perfectly obvious that the Commissioners, upon whom the whole responsibility will be thrown, can by no human possibility exercise any real personal supervision over the individual valuation for which they are responsible. It cannot be pretended that there will be any real personal responsibility on the part of the Commissioners for the actual assessment of the land of any individual. Therefore it amounts to this: that without an appeal of any description, except to the referee, who, again, is an appointed officer, the subject is to pay a tax according to whatever value a particular valuer may put upon his property. That is not the principle which obtains now. There are heavy burdens of taxation thrown upon us under the Income Tax and Death Duties, but there is an appeal to the High Court in those cases. Appeals can be taken on questions of fact and of opinion in regard to both Income Tax and Death Duties. In this case that principle is departed from. I do not know on what ground that has been done unless I might suggest that the courts of law are guided by certain principles of

  1067
  equity, and that those are not principles which apply to this Bill. If that is so, I can quite understand that the Government do not desire to rest these matters on the decisions of courts which must necessarily be guided by principles quite foreign to the Bill itself.
  The Amendment, if carried, would make no difference to the structure of the Bill. The words "subject to the deduction of any part of the value fairly attributable to the value of the buildings" appear to me to cover the necessities of the Bill, and we can at a subsequent stage provide machinery by which the valuation is to be assessed, and provide for an appeal to the High Court. The point is one of great constitutional importance, and I think the Government ought at this stage to attempt to justify the principle which they have adopted. You have on the one side the Commissioners of Inland Revenue, who are represented in the eyes of the community by the two words "Somerset House," representing the Crown, whose object is to obtain from the subject the utmost possible which the law allows. The subject, on the other hand, naturally desires to defend himself against their exactions; and in the last resort you have the courts of law, the only absolutely impartial authority available, holding the balance between them. But in this case we have a proposal under which Somerset House are put in a judicial capacity. Can they purge themselves under this tax of their natural tendency which so obviously exists under present taxes of attempting to exact the last farthing? The Chancellor of the Exchequer has said across the floor of the House, "It is not to be imagined for one moment that, because somebody sells a small field at high building value, Somerset House will claim that that value should attach to an adjoining property." I know an actual case where that very claim was made. A little piece of land adjoining a residential property of 100 acres was sold for a special purpose at a high building value. When Death Duties had to be paid on the residential property there was set up the very claim which the Chancellor of the Exchequer said would never be made, namely, that the whole property should be valued at the same rate as the particular acre which had been sold by the owner of the adjoining land. The matter went backwards and forwards for a long time, and eventually a considerable reduction on the demand was obtained. But in that
  1068
  case there were the law courts behind, and in this case that will not be so. There would be no protection to the subject if a claim of that kind were made for Increment Value Duty by Somerset House. That is a very serious position. The taxes to be levied under this Bill are extraordinarily complicated and difficult. The questions to be submitted to the Commissioners are hypothetical questions, questions of opinion as well as questions of fact. They are to be asked to do in many directions what has never before been attempted in matters of valuation, and obviously there will be the widest possible field for differences of opinion. Nobody can say to-day, as far as we have got with the Bill, what the tax of any particular piece of land will really be. There is hardly a paragraph in the Bill which does not contain some such words as "as the Commissioners may determine," "in the opinion of the Commissioners," and so on. There is nothing fixed except the rate of the tax. Everything else on which the amount of the tax depends is left to the Commissioners. I can give another illustration of the manner in which Somerset House exercise their powers. A valuation, on death, of the contents of a house was given to Somerset House. That valuation had been made by a valuer of the highest competence, but Somerset House refused to accept it on the ground that it was not high enough, and they sent down their own valuer. When his figures came to be compared, they were found to be lower than the original valuation. Somerset House then refused to accept the valuation of their own valuer, and insisted on payment being made according to the original valuation. These are the gentlemen who are to be given absolute power to levy taxes upon the subject, over a field of such extraordinary difficulty, where there will be such wide scope for the exercise of that rapacity which has distinguished them in many cases in connection with Death Duties. I think we are justified in saying that the subject should receive some protection. The only protection possible is that he should be able to appeal to those impartial courts of jurisdiction under which our taxation has been levied since the days when we became a free people.
  Question proposed, "That the words proposed to be left out down to the word 'allow' stand part of the Clause."
  Sir W. ROBSON: The speech of the hon. and gallant Member has raised two

  1069
  points, both of them interesting and important, but only one germane to this Amendment.
  Lord ROBERT CECIL: I have handed in an Amendment to come after the word "deduction," which would be excluded by the form in which you have put the Question.
  Sir EDWARD CARSON: I also have handed in an Amendment to come after the word "Commissioners."
  The DEPUTY-CHAIRMAN: Yes; both of these Amendments have been handed in in manuscript; I will put the Question in another form.
  Question proposed, "That the words proposed to be left out, down to the word 'if,' stand part of the Clause."
  Sir W. ROBSON: I hope hon. Members will not exercise their right of handing in manuscript Amendments more than is absolutely necessary, as it renders the task of properly dealing with them very difficult. I have on more than one occasion risen to deal with a written Amendment, and found myself mistaken as to its exact terms. The speech of the hon. and gallant Member raises two points, only one of which I submit is really germane to this Amendment. The two points are, first, the tribunal which is to make the valuation or assessment; and secondly, a quite different question—the right of appeal from that tribunal. The Amendment that is under the consideration of the Committee deals with the first point only; what the hon. Member proposes to do is to omit the reference to the Commissioners, and not to insert the name of anyone else. It, therefore, leaves the clause "subject to the deduction of any part of the value fairly attributable to the value of buildings," and so on. That means the clause standing without specifying anybody to make the valuation. It, therefore, leaves the valuation to be ascertained by a Court of Law. It substitutes litigation for valuation. You could not have a worse substitute. A more injurious suggestion to property owners than that which this Amendment proposes could not possibly have been devised. Let us consider exactly what a valuation is as compared with litigation or arbitration. In the case of an arbitration or a lawsuit the value is decided upon evidence generally by someone who is not an expert. In the case of the law courts that is invariably so. To
  1070
  declare every valuation under this Act—and there will be a good many of them—by means of a lawsuit is a preposterous proposal to put before the House. The same observations apply in a scarcely less degree to an arbitration. It has been universally recognised, not merely in the case of taxation, that when you are dealing with the value of property upon any extensive scale valuation is to be preferred to arbitration or litigation. The Amendment is worded in a contrary sense to that proposition. A question of appeal is a totally different thing. Where you have litigation to decide the value there is no appeal except on a question of law. On the mere valuation it is not as a rule desirable that there should be an appeal so far as the dispute is one of fact. The hon. and gallant Gentleman, scarcely with his usual justice, said a great deal about the Commissioners of Inland Revenue, and gave us some hard cases, in which he invites us to believe that they have acted unfairly. I do not think this is the experience of the country generally with regard to these gentlemen. Nobody doubts their high character and good intentions. His speech raised the question as to their efficiency for the work. We have only to look at the results of the number of valuations which these gentlemen have supervised—they do not make them personally. Their number is enormous. They have to act under the Death Duties. Section 7 of the Finance Act dealing with the tribunal in this connection says: "The value of any property for the purpose of Estate Duties shall be ascertained by the Commissioners in such a manner, and by such mean3, as they think fit."
  There is the widest possible discretion given to the Commissioners, and so far as questions of fact are concerned, that discretion has certainly the effect of a final decision. I know you have a general right of appeal; but when you are dealing with questions of fact the Commissioners have such a weight with the Court that I do not think I am putting it too strongly in saying their decision is in effect final. They are a body of Commissioners well tried and proved by experience. This Amendment proposes to displace them, and put no other similar expert body in their place. I am sure my hon. Friend will see that this is quite an impossible proposal. An enormous volume of transactions come under the purview of the Inland Revenue Commissioners, and the law cases arising from them is really phenomenally small.

  1071
  How can it be said that the Commissioners form an unsatisfactory tribunal? They have been described as having a natural tendency to exact the last farthing. I believe they have exactly the opposite tendency. Certainly I think the taxpayer would not like to have his only remedy against the alleged injustices of the Commissioners in the shape of a costly lawsuit, that would add to the burden of the taxpayer.
  Sir EDWARD CARSON: I quite agree with the Attorney-General that the question of appeal only comes incidentally into this Amendment; but it does come in. There are two very important questions in this Amendment, and, to my mind, one of them has not been yet sufficiently touched upon. We want to lay down, I submit to the Committee, what are the deductions that are to be made. There are two different ways you may do that. You may enact absolutely that certain deductions are to be made. That is what I think this House ought to do. What you are proposing to do, and the way in which you are having the Bill framed at present, is not to do that, but to leave the matter entirely in the discretion of the Commissioners as to what the deductions may be. That is the first point, and this is a matter of very extreme importance. We ought to clearly lay down and enact what are the deductions that the Commissioners are to make. We ought not to leave it as a discretionary matter with them at all. They ought to decide upon the matter in accordance with what we have directed by Act of Parliament. It is idle to say that this wide discretion is to be left to Gentlemen who themselves are the taxing body, and who have to collect this money for the Revenue. The difference may seem small to those who are not accustomed to such things, but there is a great difference. There is nothing I object to more in this Bill than the way in which you have set up your tribunal for the assessment of these taxes. The learned Attorney-General seemed to think that to bring one of these cases into court would be entirely an unsatisfactory thing for the taxpayer. I put it to him, in all seriousness, does he think that his method is a better or a fairer one that one of the parties to the litigation should have himself to decide the whole matter? Does he really think that the tax-collector, who has to say what the assessment is to be—whose real and main duty is getting in the revenue for
  1072
  the Exchequer—that it is a fair thing that he should be the judge of how much he has to get in? To my mind it is a monstrous proposal, having regard to the complicated nature of this Bill, that all these various matters should depend upon the judgment of men who are themselves interested for the purpose of getting in the revenue for the Exchequer. In making that statement I am not saying anything against the Commissioners of Inland Revenue, but I think you are putting them in a very onerous and a very invidious position, because whatever has been their duties up to the present they have never had any duty cast upon them in the slightest degree analogous to the duties they will have to discharge under this particular measure. Who are these gentlemen? Do they profess to have any experience in valuing land at all? Will it be their duty when you enact that the Commissioners shall do so and so, will it be their duty to do it at all? You know perfectly well it will not. You know perfectly well that enacting that the Commissioners will do so and so does not mean they do it. There are only two or three or four Commissioners of Inland Revenue altogether, and to suppose that four Commissioners can value for original site valuation, and for original site value which has to be taken into consideration for the purposes of assessing increment—to suppose. I say, that four Commissioners can go through these mathematical calculations and perform the function put upon them by the Act of Parliament is an actual absurdity. It would take two or three hundred of them to do so; therefore let us look at the reality, and see in some practical way how this is going to be carried out.
  What I suppose will be done is that the Commissioners will employ valuers, and they will send them down in the various cases to make these complicated statements on forms which will be supplied them; then they will be submitted to the Commissioners. When the valuation is submitted to the Commissioners to carry out these various duties under the Act will they be bound by that valuation? And if they will not be bound by that valuation, what is it they will be bound by? Is the whole of this matter to be carried out on guesswork? You have no provision in the Bill at all for any hearing before the Commissioners themselves. In a complicated matter of this kind you have made the Commissioners absolutely supreme, and you have not given any opportunity

  1073
  whatsoever to the other parties, to the unfortunate subject who is to be taxed, of being heard in relation to the matter. You merely make the tax-collector the master of the situation. The Commissioners get the valuation from whom they like, and they act upon it to the extent they like. They discard the valuation if they do not like it, and they adopt it if they do, and these gentlemen are not selected with regard to any experience in valuation at all. To tell the taxpayer in these circumstances that whatever the Commissioners of Inland Revenue say you are to be taxed at he must pay, is, I say, acting a tyranny which will be resented by numbers of taxpayers in this country.
  I do not think it is at all unnatural that they should resent it. In this question of valuation, where there are so many different views as to what the value of a particular place is, and as to what a particular site value is, there will be the greatest divergence of opinion, and that there should be so is not in the least to be wondered at. I think if the Attorney-General would consult my hon. and learned Friend sitting behind him, the Member for Reading (Mr. Rufus Isaacs), who has just been eight or nine days in the law courts trying to find out what is the value of a site in Regent-street or Oxford-street, and the divergence of opinion given upon the question, I think he would find out something, because since the right hon. and learned Gentleman the Attorney-General has become an official he has probably forgotten these questions which are open to the law. It is quite true what the Attorney-General says that to have a law suit of this kind in every case would of course be impossible, but what I object to is that the tribunal you set up is a tribunal entirely unconnected with valuation or with experience in valuation, and is a tribunal which can only act upon the advice of delegates over whom neither this House nor the law courts have any control whatsoever, or have any voice in their selection, and you settle this question without any opportunity being given to the parties to be heard. The Attorney-General said that in connection with the Death Duties the Commissioners have to carry out similar functions. That is quite true; but they have always behind them—and I would like to impress this point upon the Attorney-General—the law courts. He said what I think is perfectly right, and what anybody who is familiar with these cases in his Department knows, that
  1074
  although there are a number of cases on appeal brought on points of law to the courts, there are very few on which questions of value arise.
  Why is that the case? Because the Commissioners always have behind them the knowledge that the law courts are there and can be appealed to. Let me take a case which occurred in this House. I happen to know the case, because I was myself asked about it. It arose in reference to a Member of this House, who came in for a small property. The Commissioners of Inland Revenue sent to him saying that they valued his property at £50,000. He wrote back, and said that that was ridiculous. The Commissioners then said, "We will send down the valuer," and they did send down the valuer, and he valued the property not at £50,000, but at £15,000. Still, the gentleman was not satisfied that that was accurate, and when they wrote and told him that they had fixed the valuation at £15,000 he wrote back and said, "I do not think the property is worth more than £10,000." The Commissioners replied that they must adhere to the value as fixed by their own valuer, and he wrote back once more and said, "If you do not take the figure at £10,000, we will go into the Law Courts"; and then the Inland Revenue Commissioners finally said, "Very well, we will make it £10,000." That is what goes on, and that is the reason why there have been so few appeals; and I think it suits, and I think they are well advised in trying, to come to terms over matters of that kind. But, supposing there had been no appeal in this case, and supposing the Revenue Commissioners had said, "We must have the £50,000, we adhere to it," what would be the remedy? No remedy at all, and the subject would have been compelled to pay £40,000 too much. The Attorney-General says that the question of value is seldom, or ever, determined by the courts. I do not think the Attorney-General ought to say that. Surely he remembers the case of the Kennedy judgment.
  The SOLICITOR-GENERAL (Sir Samuel Evans): That was on a question of principle.
  Sir EDWARD CARSON: Yes, it was on a question of principle, and on a very important principle. The Revenue Commissioners valued on the same lines as for the Death Duties for the purpose of compensation under the Licensing Act, and they fixed a certain sum. The owner of

  1075
  the house was not satisfied, he went to the courts, and the famous Kennedy judgment followed, and what happened? The amount was very nearly doubled. There the Revenue Commissioners were keeping it down. In these circumstances, have we not come to a part of this Bill which is of vast importance to the rights of the subject. Let hon. Members notice this question we are now discussing has nothing on earth to say to the merits or the demerits of the tax. What we want to see is that the subject shall be fairly treated, and have his rights fairly guarded under the tax you are setting up under this Bill.
  To tell us now at this time of day that the proper way to enforce new taxes against the subject whom you are assessing perhaps unfairly under an Act of Parliament is to tell him you are not to be allowed to go into the law courts is, I say, a monstrous shame. In setting up a tax under these conditions if you attempt any such thing it will be resented throughout the length and breadth of the land by a combination of the owners of land—I forget how many millions there are—[An HoN. MEMBER: "One million."]——there must be more than one million; there are a large number interested in land who have to be assessed in relation to every transaction, and all these various matters—I should think I should not be wrong if I said there are a couple of millions at least, and if these people believe for one moment that the courts of law are being ousted where they never were ousted before in the cases of valuation, so far as I know—and I have looked very carefully into the matter—when the subject sees that you are for some purpose or other ousting the courts in relation to this matter and that they are at the mercy of the tax-gatherer—I say if they resent it and refuse, as they would have a right to refuse, to send in any returns or to co-operate with you in carrying out what is really a valuation or a revaluation of the whole country—then I say your Bill would become impossible, and the Land Taxes would be in a state of chaos for years to come. Unless with the cooperation of the taxpayers, you will find you cannot carry out a valuation of this kind, and a valuation which will be arising in this complicated way from day to day in every transaction and transfer of property. I say the business before you is a gigantic business, and the only way in which it can be carried out, if at all, is by as far as possible appeasing the apprehension
  1076
  of the taxpayer and taking him as far as possible into your confidence, and with his assistance attempting in some way or other, if you are setting up these taxes, getting him to co-operate in bringing about such a set of circumstances as will make you Bill workable.
  Mr. RUFUS ISAACS: A good many observations have been made by my right hon. and learned Friend who has just spoken with reference to ousting the jurisdiction of the courts. I cannot and that there is anything in the Amendment now before the Committee dealing with that point. The whole question raised by this Amendment is that the Commissioners should not have the jurisdiction which is conferred upon them, and the complaint is further that there is no right of appeal from the Commissioners. To those objections my right hon. and learned Friend (Sir E. Carson) added another, that he objected to the wide discretion given to the Commissioners. The difficulty is that nowhere in this Amendment is there any suggestion as to what is to be the tribunal to decide this important question of the valuation. A good many observations have been made as to the qualifications of those who should be selected, but let the Committee consider the alternative. This Bill lays down that the Commissioner's of Inland Revenue are in the first place to decide. In my observations upon this Amendment I wish to guard myself from the view which anyone might entertain in regard to my remarks that I am favouring the ousting of the jurisdiction of the courts, or that I am agreeing that there should be no right of appeal. When the proper time comes, and when the subject can be more closely discussed, I certainly think that, in regard to the Bill at present before the Committee, there should be a much more extended right of appeal given than is at present contained in the Bill. That matter, however, will come up for discussion upon later clauses, upon which, I hope, the Government will keep an open mind, and give every opportunity for the taxpayer to bring his grievance before a court of law. We may get some suggestion which the Committee will be inclined to agree will prove to be a proper safeguard for the taxpayer.
  Let me now deal with the suggestion as to the tribunal which is to decide this matter, if you do not deal with IT by the Commissioners. Except for lawyers who are hon. Members of this House, I think the prospect of such a course must be somewhat appalling, and, if we take into

  1077
  consideration the congestion of business in the High Courts of Justice, and what would be the state of things if the taxpayer had to go to the High Court to get all these matters settled by a judge and by a jury, who would have to decide them on the valuers' evidence—if any hon. Member contemplates the number of judges necessary to deal with these questions, I venture to say there will be no more lawyers left in this House. The four Commissioners have to deal with this matter upon the valuation before them. No one suggests that the Commissioners will have to go and examine into the details of each particular case. That is a course which is absolutely impossible, which never does take place, nor could take place, nor could a judge do anything of that character. My right hon. Friend referred to a case recently before the courts. If he put forward that case as evidence of the difficulty, there is, in arriving at an agreement between valuers when called upon opposite sides I agree with him, but if it was intended as an instance of a useful way in which we might deal with questions of this character, I would ask the Committee to imagine what the burden is which is going to be imposed upon the taxpayer if he had, in regard to such a question, to litigate for eight or nine days in order to arrive at a solution which he might not think satisfactory after it had been decided by a judge and jury.
  There is only one other course open, and that is arbitration. No lawyer in this House or any hon. Member who has had experience of arbitration would desire to see that tribunal established instead of the High Court. I would prefer a court of justice in full publicity to an arbitration, which is often more expensive and much more protracted. The Government might provide such a right of appeal as is given under the Finance Act of 1894. I do not commit myself to that, but such a right of appeal as is prescribed there would give the greatest control over the Commissioners. I agree with the obervation which has been made, that it is necessary, in dealing with such important matters as those which would come before the Commissioners, that there should be some control over them, so that the important points which arise, both of law and, to some extent, of fact, might be able to be brought before the tribunal. I agree that the mere fact that there is such a right of appeal of itself constitutes a safeguard. I think it is most important
  1078
  that you should have something in the nature of an appeal, and all I desire to say in reference to that part of my right hon. and learned Friend's speech is that. I reserve my criticism upon the question of appeal until we come to a later clause. I do not think it would be strictly in order to discuss the right of appeal now because we can only deal with it generally here so for as it is relevant for the purpose of determining whether or not you should have Commissioners to try these issues.
  The real question resolves itself into this: What does this Amendment do? or any mode of bringing the matter before a tribunal to have the question decided. If it means that there is to be to say that this tax shall be "subject to the deduction of any part of the value fairly attributable to the value of buildings." It does not prescribe any tribunal or any mode of bringing the matter before a tribunal to have the question decided. If it means that there is to be litigation, then really this Amendment instead of giving something to the taxpayer, would impose upon him a most serious burden, and it would be infinitely better for him that he should have an opportunity of raising any question which may be dealt with by the Commissioners in regard to which he is dissatisfied by an appeal to the High Court than there should be substituted for it the appeal suggested by my light hon. and learned Friend. It is only a few days ago that we had an opportunity of discussing a question similar to this in Committee, when a proposal was made that there should be a body of Special Commissioners appointed to deal with the right of appeal. The Leader of the Opposition did not agree with that proposal, at any rate in so far as it proposed that there should be a body of special Commisioners appointed. I think I am accurate in stating that the Leader of the Opposition was careful to state, as the result of his long experience, how admirably the Commissioners of Inland Revenue discharged their duties, and what full confidence he had in them. Therefore, we have the best possible tribute given to the Commissioners by the Leader of the Opposition. Considering that the Commissioners are to be the tribunal in the first instance to deal with the valuation, I submit that every care has been taken to safeguard the taxpayer against any injustice which might otherwise be done by these Commissioners. My right hon. and learned Friend objected to the wider

  1079
  discretion which was to be given to the Commissioners. When you have once decided the first point, which is to whom in the first instance is the jurisdiction to be given to determine the value; when you have once said that this jurisdiction is to be given to the Commissioners, it follows absolutely and quite clearly that you must give them the discretion which is provided for in this clause with which we are now dealing. There is no difficulty in giving the widest possible discretion to the Commissioners, always providing that that discretion is to be exercised with a right of appeal, and, therefore, under the control of the High Courts. I submit that there is no ground for the Amendment which has been moved, and which, so far as I can follow, is based on the reasons given for the insufficient right of appeal. My submission is that the matter which my right hon. and learned Friend opposite and the hon. and gallant Member for Chelmsford (Mr. Pretyman) are so anxious to provide for would be better dealt with upon a later clause. I have great sympathy with their object, upon which I am quite certain the Government will be only too glad to listen to any practical suggestions that may be made.
  Sir JOHN RANDLES: I cannot follow the hon. and learned Gentleman who has just sat down in all the arguments which he has addressed to the Committee. He did, however, make one illuminating remark when he referred to the number of judges which would be required. It is clear that the benches on the Ministerial side of the House would not be able to supply a sufficient staff of judges to deal with the difficult and complicated cases which would probably come before the courts on appeal under this Bill. At any rate, the hon. and learned Gentleman opposite anticipates a very great amount of difficulty in carrying out this portion of the Bill. With regard to the question as to the Commissioners having these powers, it seems to me that the Amendment is directed rather to the establishment of a right of appeal rather than to depend on the sense of justice or whim or the caprice of the Commissioners. If a right of appeal is established by the adoption of this Amendment, the ordinary layman would find some satisfaction in that at any rate, and would feel that, although he might have to go before the Commissioners, he would have questions on which he could say he had a
  1080
  right to be heard and to be considered without the whim of the Commissioners having anything to do with the matter. In dealing with these points, the tribunal seems to me to be of the very first importance. Complicated and intricate questions are to be brought before it, questions, for instance, such as the site value of land, complicated perhaps by there being a mine on the land. There may be a colliery or an iron mine on agricultural land. The site value would be very complicated by the inclusion of minerals, which are treated as land by the Commissioners in dealing with this Act. How are you going to expect the Commissioners to deal with complicated questions when the valuers on whom they must rely can only value after very careful examination, and when they have done their very best you will find there will be other valuers who will entirely upset perhaps all the decisions that may have been come to. This is especially so in the case of minerals. There are unknown bodies of minerals lying in the bowels of the earth with buildings on the surface of the land. The buildings are valuable if those minerals are there, but, if the minerals should turn out not to be there, or not in the quantity required, they become at once of little or perhaps of no value. I, therefore, believe, as an ordinary layman, and without looking at it from the legal point of view, that as a great protection this Committee should adopt the words of the Amendment, and not leave it merely in the power of the Commissioners, but give us a tribunal so that there will be a competent court of appeal to which we can apply. In listening to the Attorney-General, I thought he was arguing that the Commissioners were not good, but that litigation would be very much worse. It seemed to be a case of putting the ordinary layman between the devil and the deep sea, and which is the devil and which is the deep sea one hardly knows. There the difficulty is, and this particular point illustrates how unnecessarily litigation difficulty and obstruction are placed in the path of a man who wants to pay his taxes in a fair and square manner without being imposed upon, or without defrauding the revenue. The object of taxation should surely be to make it easy for the taxpayer to pay his fair share and not to put him in fear that he may have to go before Commissioners, who know nothing of the circumstances of this particular case, and to compel him to pay what he ought not to be called upon to pay. So far as the

  1081
  tribunal is concerned, it is not satisfactory, and, so far as the appeal is concerned, it requires, as has been stated by speakers on the other side, to be given, whether now or later, as a matter for lawyers to determine. It would, however be a satisfaction to me at any rate if the words of this Amendment were adopted and embodied in the Bill.
  Mr. WEDGWOOD: I am rather conscious that the speeches on both sides of the House have been somewhat outside the point of the Amendment, and I wish to say a word or two about this question of appeal rather than the immediate question which I think is almost dead. The question was raised by the right hon. and learned gentleman the Member for Dublin University (Sir Edward Carson), and by my hon. and learned friend the Member for Reading (Mr. Rufus Isaacs). They have both urged that there should be an appeal from the Commissioners, not only on points of fact, but also on points of law. The Bill already provides for appeal from the Commissioners on points of fact to an independent panel of valuers.
  The CHAIRMAN: I allowed the question of appeal to be mentioned, inasmuch as it affects the question whether the Commissioners are a suitable body, but the hon. Member is now discussing the question of appeal by itself, and that is not in order here.
  Mr. WEDGWOOD: I am merely dealing with the point raised by my hon. and learned Friend the Member for Beading.
  The CHAIRMAN: The hon. and learned gentleman the Member for Reading used the question of appeal in a perfectly legitimate way. He explained how and why it should be given. The hon. Member (Mr. Wedgwood) is not using it in the right way. He must not refer to the question of appeal unless he applies his argument to the actual Amendment before the Committee.
  Mr. WEDGWOOD: Then I will deal with the particular question of the Amendment before the Committee, and I trust other Members speaking on the question of appeal will do so in the same way. The question before the Committee is whether the Commissioners or the Law Courts shall do the original valuation. The hon. and gallant Member for Chelmsford (Mr. Pretyman) evidently, as the moving of this Amendment shows, has a certain distrust of Commissioners in all forms and shapes,
  1082
  and particularly Commissioners of the Inland Revenue. It seems to me that this grievance of the hon. and gallant Member dates from a period 15 years back, when the 1894 Finance Bill was before the House. That was when Commissioners with power to value property were invented. Ever since they have been carrying out valuations almost exactly similar in character to the valuations proposed by this Bill. They have carried them out under circumstances of considerable difficulty, because they have not had the powers of getting information which this Bill provides, and all these years they have been recognised as carrying out their duties on distinctly moderate lines without penalising the taxpayer and as giving general satisfaction to the country as a whole. It is true we have had brought before us two or three cases where they have estimated wrongly, taking £15,000 instead of £10,000, or some such figure, but I generally notice that the same case is brought up over and over again by hon. Gentlemen opposite, and, if that is the only objection which can be urged against these Commissioners, I think it is a very small one, considering the thousands of cases there are for valuation for probate and estates duties, It speaks very highly for the Commissioners that they make so few mistakes, and when they do make a mistake they accept the lower valuation without going to law about it. Whether you are considering the Death Duties, Schedule B of the Income Tax, or valuations under this Finance Bill, it is all a question requiring adjustment, and this House should make appeals on points of law unnecessary. We have seen over and over again how appeals on points of law are apt to whittle away the law and introduce judge-made law instead of Parliament-made law. We want no chance of this Bill being whittled away on points of law by decisions of the High Courts, so that the Finance Bill, passed by Parliament and intended to do certain things, shall be altered by judge-made law, and made to do the very opposite things. Therefore, the Chancellor of the Exchequer, whilst standing fast on this Amendment, and making the Commissioners free so fat as it is concerned, should also be very chary in promising appeals on points of law from the Commissioners to the High Courts.
  Mr. BOWLES: The hon. Gentleman who has just sat down, like the hon. and learned Gentleman the Member for Reading

  1083
  (Mr. Rufus Isaacs), has opposed this Amendment, but the two hon. Members have opposed it, as one would expect, for very different reasons. The hon. Member who has just sat down (Mr. Wedgwood) is, as we all know, a land reformer, and he opposes the Amendment because, he says frankly, for his part he is a partisan of the system of taxation by Commissioners. He desires to see the owners of property in this country taxed by Commissioners appointed by the Executive. That is his notion of the proper method of taxation. It is a notion which, I am sure, the Committee will observe with pleasure—certainly I did—is expressly repudiated by the hon. and learned Gentleman the Member for Reading, who says, as one would expect from an hon. Gentleman of his experience, that such a system as that cannot be defended, and some provision should be made which should make the system the hon. Gentleman the Member for Newcastle desires totally impossible. He says an effective appeal to the court is absolutely necessary to the proper working of the Bill. Both hon. Gentlemen, as it seemed to me, misunderstood the Amendment in one important particular. They both asserted that the Amendment ought to be rejected as it stands, because it makes no mention of an alternative tribunal, and they have both spoken as though the effect of this Amendment would be to drive everybody whose property came in for valuation under this Bill necessarily into a court of law for the making of the valuation. I quite agree that if every one of all the innumerable hundreds and thousands of valuations going on all over the country was made perforce to go to a court of law that that would be a cumbrous and an impossible proposal, but that is not the proposal of the Amendment. The question is whether the amount of the deductions to be made is to be determined finally and for ever without appeal from the Commissioners, or whether it is to be subject to an appeal to the court of law. That is a different thing. The Amendment leaves the deduction to be made, and, the deduction having been made by the valuer, would no doubt come under the review of the Commissioners. It would then be a question between the Commissioners and the taxpayer as to whether the deduction made was just and sound. If the taxpayer in his discretion thought it was not, and the Commissioners still held out, then appeal would go to the court of law.
  Mr. RUFUS ISAACS: I would call the hon. Gentleman's attention to this: If the Amendment is carried, the word "Commissioner" would be deleted from the clause altogether. Who, then, in the first instance, is to make the deductions?
  Mr. PRETYMAN: May I ask the hon. and learned Gentleman to look at Clause 14. He will see that there is no mention of Commissioners; it merely states that the valuation is to be arrived at.
  Mr. BOWLES: There is no need to quarrel over this point. What we want to do is to get at the real meaning, and to ascertain what will be the effect of the Amendment. When a man's land falls under this Bill to be valued the valuation will be made exactly as if the Amendment had not been incorporated; the owner of the land will make a simple return, the Commissioners will examine it, and it will be one of their duties to see that in the valuation deductions are made in respect of these things. The only question is whether, that having been done, the thing shall stop automatically; whether the decision of the Commissioners as to the deductions is to be final, or whether the taxpayer, supposing he thinks it to be unfair, is to be allowed to carry the matter to another court. That is the real question. I cannot quite agree with what my hon. and learned Friend (Mr. Isaacs) said. I think we certainly ought to provide an appeal. If we do not do so we are setting up again in England nothing less than a system of taxation by Commission, a system against which the whole of our history in regard to taxation has been one long protest. I do not know what impression the speech of the Attorney-General produced on hon. Gentlemen in other quarters of the House. It perfectly stagggered me to hear a Gentleman occupying a position of tremendous importance and responsibility, representing the Bar of this country, saying that, in his opinion, the courts of law are really incompetent tribunals to deal with matters of this kind. He said: "What a ridiculous proposal! What does it mean? It means that if this Amendment is carried you will substitute litigation for valuation, and nothing could be worse than that." He suggests that there is nothing simpler than valuation—"You take the value put upon you and be quiet." That is the view of the Attorney-General, but it was not the view of John Hampden. He had put upon him a valuation by gentlemen appointed by the Executive, and he preferred litigation. It was because

  1085
  he preferred litigation that we made so long a step towards escaping from that system of taxation by arbitrary irresponsible Commissioners which this Government of democracy and freedom is setting up—and setting up on the grounds put forward by the Attorney-General, that great authority on legal matters in this country, who has given it as his opinion that the courts of law in these matters of valuation are inferior to an irresponsible authority appointed by the Executive. This is a matter involving really grave principles. In talking about John Hampden we are not dealing with matters of musty history. We are really dealing with a point of present importance. We on these benches have spoken of the Tudors and the Stuarts, and these references have usually been received with merriment. But what was the objection to the system of taxation against which the whole of our history has been a reproach? It was that under this system you taxed the subject by the decree of a tribunal appointed by an executive, which made rules for themselves1 as they went along, and from whose decision there was no appeal. Can anyone really differentiate in principle between that system of the High Commissioners of the Star Chamber, as regards taxation, and the system which in this Bill the Government are endeavouring to set up? The Under-Secretary for the Local Government Board suggested, in an interruption, that the difference was that the Star Chamber and the High Commission taxing arbitrarily had behind them no Parliamentary authority. I agree that is the difference, but surely it makes this proposal infinitely worse. What we really have to consider is whether, at this time of day, the English House of Commons is going seriously again to set up a system which has never been set up by Act of Parliament since the reign of Henry VII, when Empson and Dudley went about the country under direct Parliamentary authority, and in a very few years raised such a storm as made their names hated. Is this Government at this time prepared to set up again under Parliamentary authority a system of arbitrary taxation? I hope not. I was astounded that of all persons a Gentleman of the position and experience as the Attorney-General should come down and say that in his opinion such a system was preferable to the ordinary courts of law, of which he is so great an ornament.
  Mr. S. O. BUCKMASTER: I hope I realise the danger of exercising too freely independent and undisciplined judgment upon this Bill. I speak quite sincerely when I say it seems to me that a man has no right to be too minutely critical of the provisions of a measure with the general principles of which he agrees. But at the same time there may be points raised which seem to point to such deep principles that we ought not to let them go by without expressing an opinion upon them. The clause now under consideration is the first clause that deals with the tribunal this Bill sets up for the purpose of determining some of the most delicate and intricate questions that have ever been raised in recent years. I am sorry I cannot quite agree with the view that the difficulty this section raises may well be postponed until we come to the consideration of the question of appeal. Suppose, on the question of appeal, hon. Members who hold the view of the hon. and learned Member for Beading are defeated. Personally, under those circumstances, I would rather accept this Amendment than have this Bill go through as drawn in its present form. If the Government will promise that the right of appeal shall be conceded, I will certainly withdraw my support from this Amendment, but until that promise is given what guarantee have we that the Government will not do what they are entitled to do—that they will not carry their Bill with-the right of appeal absolutely destroyed? I cannot be satisfied with several of the criticisms made even by the hon. and learned Member for Reading on this clause unless you give some right of appeal, a very minute and critical right of appeal from the decree of the Commissioners. This clause appears to invest them with a discretion with which no court can interfere, and the exercise of that discretion must determine matters of enormous importance to every person, rich or poor, who has to come under their jurisdiction. It seems to me, beyond all other things, we ought to show by this Bill that we have no distrust of the tribunals of the country in determining matters of this sort. I for one heard with extreme regret the observations made by the hon. Member for Newcastle-under-Lyme, who positively dreaded the criticism of an independent and, I trust, an upright judge. That is the first time in the history of the House of Commons we have ever heard such fears expressed. At any rate, it is the first time I have heard them expressed, and I

  1087
  must say it appears to me that the whole structure of your legislation must be strangely unstable and frail if you are afraid to have independent criticism upon it. Personally I am anxious to secure it, and I am anxious for several reasons. First, I believe that public criticism will do much to disarm opposition to this Bill; and, secondly, I am satisfied that the only way in which this Bill can be made acceptable to the people of this country, if passed in its present form, is by having the principles upon which these taxes are to be levied publicly discussed in public courts whenever occasion requires. I shall be quite prepared to accept a tribunal of the Commissioners with an appeal, but the Commissioners without appeal appear to me to be one of the most unsatisfactory tribunals which could be conceived. It is always to be remembered that the Finance Act of 1894 gave certain powers to the Commissioners which were protected by this very right of appeal. I submit the people of this country will find when this Bill comes to be discussed again that, unless they have recourse to the courts, it will take away from them the opportunity on which hitherto all Englishmen have looked with pride, the opportunity of obtaining protection against wrong from an independent tribunal.
  Mr. J. A. CLYDE: This is an Amendment which stood in my name, and owing to no fault but my own, was not actually moved by myself. It had for its purpose two objects in view, one of these was precisely to draw attention to that feature regarding the tribunal, about which so much has been said by hon. Members who have addressed the Committee upon this Amendment. I am not going to say anything about that matter, because all that I should have said myself has been said already, and what I had to say was prompted by the same sense of the injustice of these proposals, as tinged the remarks of the last speaker with some tones of indignation, but I had also another and a different object in view altogether, not indeed wholly unconnected with the first, but still as regards its exact subject matter, quite different. I have already had occasion to ask the attention of the Committee to the fact that the two valuations of site value, a comparison of which is to be the measure of increment value, are quite different. I am not going into the details of those differences just now, but I did want to draw the attention of the
  1088
  Committee to this fact, that one of the most salient differences between the valuation of the original site value and the valuation which is to settle the later value, which is to be compared with the original site value—these two valuations differ vitally indeed, in this respect, namely, that the first or original site value prescribes a mode of valuation, which is compulsory on the Commissioners, which they cannot avoid, which leaves no discretion except on the pure question of amount, but prescribes for them a perfectly definite method to which they must adhere. If it is necessary to give the Commissioners any of the large powers which under any scheme I am afraid this Bill gives them, it is surely necessary to make sure that the methods which they ought to follow are prescribed and the most undesirable method to follow is to allow them to follow their own methods and to tell them that they may or may not make allowances for certain things. In this Bill, whereas the method for the first valuation is exactly prescribed and no discretion is allowed to the Commissioners in following it, exactly the opposite method is followed when you come to the second valuation. When you come to the second valuation the whole directions to the Commissioners are that they may make allowances, if any, for the following things; but there is not a single one of the items which it is suggested to them they may take into account—there is not a single one of the items which they must take into account, and the consequence is that in the second valuation the Commissioners are absolutely free, in their own discretion, to include or to exclude every one of the items, which, in the case of the original site valuation, they must include.
  The SOLICITOR-GENERAL (Sir Samuel Evans)dissented.
  Mr. CLYDE: I am glad to see that that; is challenged, because it enables me to bring the hon. and learned Gentleman to book. If he will glance for a moment at section 14 he will see that the site value which they are there to settle is described as a site value, which means a certain thing. If you look at it the only subject which is to be deducted in the second valuation has regard to the buildings.
  Sir SAMUEL EVANS: There are other things.
  Mr. CLYDE: I will deal with the buildings first. They are to make a deduction

  1089
  in respect of the buildings, but if they choose in any particular case to say "We do not think we will make a deduction," they need not do so. I should not expect that the hon. and learned Gentleman, who is accustomed to the construction of these Acts, would say that the provisions of section 14 in sub-section (4), that the Commissioners shall allow these deductions from the site value of the land—the things mentioned in sub-sections (a) and (b)—nobody would say that is the same thing, as to say that it shall be subject to such deduction (if any) as the Commissioners allow in each case. Let the hon. and learned Gentleman look at the things which in Clause 14 are to be regarded by the Commissioners as compulsory in regard to deduction, if they have any value, and compare how that is dealt with in sub-section 2 of Clause 2, where it is to be "subject to such deduction (if any) as the Commissioners allow." Every item here prescribed is compulsory for the consideration of the Commissioners under Clause 14, but they are not compulsory under Clause 2, where the Commissioners may or may not allow anything, and have an absolutely unfettered discretion.
  The second purpose, apart from the tribunal I had in mind, in altering the phraseology of this particular section, was to get rid of this unlimited discretion on the part of the Commissioners, by making Clause 2 prescribe to the Commissioners what the method was they were to follow, just as section 14 does; or, in other words, to make applicable to the process of Clause 2 the same plan of giving the Commissioners definite directions to follow, which the framers of the Bill have adopted in section 14. After all, if you are going to arrive at increment value by a comparison of two valuations, is it not reasonable that, as far as possible, the two valuations should be arrived at by equal, or at least similar methods. Let the Committee observe that all this freedom given to the Commissioners to make deductions, or to refuse them, is in the second of the two valuations, which, if it is bigger, will produce an increment value, and if it is not bigger will produce no increment value at all, and the result is that by any item of deduction which the Commissioners in their absolute discretion see fit to disregard, the valuation under section 2 would be increased and the increment value would be correspondingly increased, although the elements of increment may be totally independent of the site value increment, which alone is supposed to be
  1090
  of any importance. Therefore it seems to me that the phraseology and the frame of this section should be the same as the frame of section 14 and tell the Commissioners in terms what they ought to do, and give them their scheme, beyond which they are not to stray. Otherwise there will be, compared with the valuation made on a definite scheme, a valuation which may be made upon any scheme whatever. The hon. Member for Reading (Mr. Rufus Isaacs) said, with regard to the idea of an appeal to the law courts, that the result of any such appeal would be to flood the law courts.
  Mr. RUFUS ISAACS: I think I said, in as plain terms as I could, that I was courting appeals in the widest possible form, but in so far as I stated it, my objection was to going to the court in the first instance.
  Mr. CLYDE: I do not think there is very much difference between us, but the hon. and learned Member talked about exhausting the legal Members, and I thought he was thinking of submitting questions of value.
  Mr. RUFUS ISAACS: No.
  Mr. CLYDE: Oh, I see. Then there is no difference between them. In Scotland, under our Land Valuation Scheme, we have an appeal to the High Court, and that appeal is unlimited, but the Land Valuation Court very seldom deals with the question of increment. But what it does do is this: it ensures that there shall be uniformity in regard to the methods employed, and it is to that Act that we owe the uniformity which exists; but I do not know of any cases which come before our land valuation courts which are anything like so difficult as those which will have to be brought forward if the present Bill becomes an Act. But the point is that the end which we secure by means of the Land Valuation Court is that no hard and fast system of valuation is prescribed at all, but when you have two valuations which must be prepared such a procedure can only be maintained by giving a definite system of valuation for each, and compelling the Commissioners to discharge their duties in each case under that system. One word more. The original valuation under section 14 is subject to revisal by the Commissioners, subject to sections 16 and 17. So is the valuation in section 2, which begins with the return of the owner and with the review by the Commissioners. Why should not the function in each case

  1091
  be equally definite and equally regulated? Why, in regard to the second valuation—which no doubt the right hon. Gentleman would like to see larger in order to make increment—should not the Commissioners try to make the increment value upon its true measure?
  Sir SAMUEL EVANS: The hon. and learned Gentleman is the author of this Amendment, and he has made his speech within the strict limits of it. Other speeches have been made on both sides of the House, upon what has been brought into the Amendment upon the subject, which has been called incidental to the Amendment, viz., as to whether there ought to be a right of appeal to the Court. I am going to refrain from discussing that because I do not think we should finally dispose of it, for, as has been said, it is only incidental, and therefore in such observations as I have to make I shall abstain from discussing it until we come to the proposal that there is to be a definite appeal to the High Court. I entirely agree with the Attorney-General when he said that in his opinion the judges in courts of law are by no means the best judges of questions of fact which arise from the valuation of land or building.
  The hon. and learned Gentleman (Mr. Clyde) said you have two values to make. One you have to make in accordance with the provisions of Clause 14. I take that first because it is the original site value. The other value you have to make under Clause 2, and his complaint is that the regulations for valuation, chiefly for deductions in arriving at the valuation in Clause 14, are compulsory in character, where the regulations for deductions in Clause 2 are left entirely at large in the discretion of the Commissioners. I submit that there is a complete fallacy underlying the criticism of the hon. and learned Gentleman. The criticism is made merely upon two words, as far as I can see, in Clause 14, and the whole superstructure of his speech is built upon that very narrow and slight foundation. The words are: "The Commissioners shall allow as deductions from the site value of any land," so and so, and so and so. No doubt "shall allow" means that the Commissioners, if there are any deductions to be made, allow those deductions. It is compulsory in form, but you do not, by the employment of those words to indicate compulsion, get rid of what he complains of, namely, the discretion of the Commissioners, because
  1092
  in Clause 14 you will find that they "shall allow" the deduction.
  "Any part," and that is the offensive word which he finds "of that site value which is proved to the satisfaction of the Commissioners to be correctly attributable to——,"and in sub-section (b), "any sums which in the opinion of the Commissioners it would be necessary to expend in order to divest the land of buildings, "and so forth. Therefore, there is a discretion left in the Commissioners under each of these sub-clauses, but if they find in their discretion that there ought to be these deductions, no doubt the clause makes it compulsory on them to allow the deductions.
  Now I come to Clause 2, and I submit that the hon. and learned Gentleman seeks to deduce a great deal too much from the words "if any." That does not import to the Commissioners a further discretion if those words were not in. There are several matters dealt with here, a deduction in respect of what is attributable to the value of buildings, a deduction in respect to goodwill a deduction in respect of other matters personal to the occupier, and so forth, subject to such deductions, if any, as the Commissioners allow in each case in respect of these matters. I have no hesitation in saying that these rules are as binding upon the Commissioners as the rules which are set out in Clause 14. The words "if any" do not import any other discretion under Clause 2 than they have under Clause 14. It may be said—and this argument I could understand if hon. Gentlemen were bold enough to bring it forward—that although the Acts of Parliament indicated to the Commissioners the deductions they ought to make, they nevertheless may thrust them entirely aside. That is not the argument of the hon. and learned Gentleman. The conclusion of the matter, I think, in Clause 2 is that if there are any of these matters in respect of which deduction ought to be made, it is the rules and regulations laid down in the Act of Parliament which will compel these Commissioners to make the deduction.
  Mr. CLYDE: Who will compel them.
  Sir S. EVANS: They themselves. Who will compel them under Clause 14?
  Mr. CLYDE: Does the right hon. Gentleman mean that if the Commissioners disregarded express directions in Clause 14, and then an attempt was made to levy the tax on that basis, the tax could not be successfully resisted in the courts of law?
  Sir SAMUEL EVANS: It follows from that there is an appeal in every case now if that is so, but that is not so in my judgment. When I say the Commissioners themselves will have to decide, I mean that they will be told it is their duty to make these deductions according to the principles laid down in the clause, and you cannot import wholesale discretion which they can use or not, just as they please, from the insertion merely of the words "if any," or from the form of words of the clause as it stands. The result in each case, whether it be of valuation under Clause 2 or under Clause 14, would be exactly the same. If the deduction is not made which ought to be made in the one or in the other there is an appeal from the Commissioners to the referee. That is, I think, under Clause 22. Then we have provided already that the referee himself, where there is a refusal to allow deductions, may state a case for the opinion of the courts.
  Lord ROBERT CECIL: I am not quite satisfied with the view of the hon. and learned Member (Mr. Rufus Isaacs), though I quite agree that what we want is an appeal to the courts to control the jurisdiction of the Commissioners. Where I differ from him is in thinking that, unless some such Amendment is carried, the objects that he and I have in view cannot be carried out, and it seems to me that these words which it is proposed to omit give, and are intended to give, to the Commissioners absolute discretion as to whether they shall or shall not admit these deductions. The words are extremely wide and precise in that respect. Not only is the deduction, if any, to be as the Commissioners allow, but it is to be proved to their satisfaction. Assume that you gave an appeal by those words, simpliciter, and said there should be an appeal to the courts, would it not be an answer by the Commissioners to say "this was proved to our satisfaction." It is no use your going on to say "it ought not to have been proved to your satisfaction." In fact, it was, and your appeal is disposed of. We have exercised our discretion, and the only thing you can go to the courts about is to see whether the Commissioners have not exercised their powers of discretion fairly and properly. The moment they can satisfy the court that they had exercised their discretion—that is the end of the appeal, and the matter cannot be carried any further.
  Mr. RUFUS ISAACS: Would it make any difference supposing you eliminated altogether these words "to their satisfaction"? In every case, wherever the matter is tried, the court will say it has been proved to their satisfaction. It means nothing more than that.
  Lord ROBERT CECIL: That very interruption shows that these words are absolutely meaningless, and if they are meaningless, why are they there? A Court would say at once these words must have some meaning. They give the Commissioners complete discretion in the matter, and no appeal lies the moment they have exercised that discretion. If these words are meaningless, and they do not carry the matter any further, let the Government accept the Amendment lower down and strike the words out of the clause. The question is whether by the words as they stand you are not cutting out the appeal to the courts, or at any rate jeopardising it. That is my view of the effect of the words, and I press upon the Committee the enormous importance of giving a really satisfactory and clear appeal to the court without any possibility of doubt. I desire to appeal to hon. Members opposite to look at the legislation of recent years, and consider how, in Act after Act, we are perpetually giving uncontrolled discretion to some Department of State or other. It is becoming a very serious public evil. The hon. Member for Norwood (Mr. Stewart Bowles) referred to the days of the Stuarts and the Tudors, but in reality the tyranny of an absolute monarchy is much less dangerous to the liberty of the individual than the tyranny of the democracy, because behind the absolute monarch you always have an appeal to the people at large. Ultimately, the absolute monarch, be he ever so absolute, can never defy the people whom he governs if they are really determined on any course of action. But you have no appeal from a democracy at all. You cannot go to any other power behind them and demand justice. Therefore, it is essential that democracy itself should take care that nothing that it does is liable to create injustice to the individual. I press this matter very earnestly. I do not wish to import party prejudice into the matter, but we feel bitterly that in some recent cases the Executive charged with judicial functions has not exercised them in a judicial manner. The Swansea case has burned very deeply into the minds of some of us, and we are not disposed without

  1095
  struggling to the utmost to confer upon the Executive uncontrolled power for dealing with the property and liberty of the subject.
  Mr. W. P. BYLES: I am not surprised that the Noble Lord should be afraid of the democracy of the country and should express his candid preference for an absolute monarchy. I am not afraid of the democracy. If the monarch of the country, acting through his constitutional Ministers, should do an injustice to the people of the country the people of the country would very soon bring them to book. The argument on this Amendment has been largely conducted by lawyers, but I should like to express to the Committee how it strikes a plain man. Taxes in this country are levied and collected by the Government, and those who pay them have very little to say about the amount of them. It may be necessary in certain cases, perhaps in this case, to have a right of appeal, but to pretend that courts of law should settle the amount of a tax which is levied by the State is, to me, to set up an impossible machinery. Taking that view, I hope I am not saying anything disrespectful to the memory of John Hampden, who was quoted against this side of the House a little while ago by the hon. Member for Norwood (Mr. Stewart Bowles). It is just because we have faith in the people of this country that we are not afraid of what John Hampden was afraid of in his day. The same hon. Gentleman referred to "Somerset House" as a modern Star Chamber. I am bound to say that I have never observed any conduct on the part of officials there which entitles them to the characterisation which the hon. Member gave them. I make bold to say that the King, subject to his Ministers, is in regard to this Amendment and in regard to the whole of the Increment Tax, in precisely the same position to the people that a landlord is in to his tenants. The landlord of an estate has certain tenants occupying his various farms. Suppose that a town arises in the neighbourhood or a railway is brought near it, or there is a market opened, or some other circumstances occur which raise the value of the farms, the landlord puts up the rents. The tenant has no right of appeal against his arbitrary power. I maintain that the King is in precisely the same position towards his people. The theory is that the Monarch grants an estate in land to a certain landlord. If the value of that land
  1096
  has enormously increased, as is postulated in the Government proposal, surely it is within the power of the nation to put a good tax upon it. The machinery of the Government, acting for the Monarch, is the proper machinery to determine what the amount should be. Otherwise the land of the country has gone away from the people of the country. We have been hearing much of intolerable injustice, but it would be the greatest of all intolerable injustices not to allow this Increment Tax to be imposed.
  Mr. LLOYD-GEORGE: I have not heard the whole of the discussion, but I have heard a great deal of it. I do not want to discuss the question of the appeal at this stage. I do not wish to prejudice that question. The Noble Lord seems to think that if we leave in the words "to their satisfaction" it will be quite impossible to consider the question of the appeal on its merits when we arrive at that stage, because these words would give a certain sanction to the action of the Commissioners and would limit the power of the Court of Appeal. I agree that we ought not to prejudge this very important question, and I am quite willing to consider the point urged in regard to the appeal. If the Noble Lord is of opinion that the leaving of the words "to their satisfaction" in this clause would prejudice the very important question in regard to the appeal which will have to be decided, I am quite willing at this stage to leave them out. That will leave it open to the Committee afterwards to consider the nature of the appeal and of the tribunal for hearing the appeal. Therefore if that would meet the view of the Committee I am perfectly willing to omit the words.
  Mr. BALFOUR: I should like to know whether that is to be put in the form of an Amendment?
  Mr. LLOYD-GEORGE: Will the proposal I have made prevent the discussion later on of the question of the appeal?
  The CHAIRMAN: I do not think it would. I certainly have not formed the opinion that it would prevent the subjects on which appeals can be made from being increased.
  Lord ROBERT CECIL: The Amendment I have to move is in manuscript, and

  1097
  I am afraid some inconvenience may have been caused to the Government through its not being on the Paper. I move to insert after the word "deduction" ["subject to such deduction"] the words "as shall equal any addition to the value caused by a general rise in prices estimated by reference to an index number to be fixed by the Board of Trade, and such." The object of the Amendment is to secure that the increment value shall be charged not on a fictitious improvement in value, but on a real improvement in value. It is obvious that it may well happen that the fact that property appears to be worth more than it was worth when the original site value was taken may be due not to communal or other reasons of that nature, but to the fact that the price of everything has gone up. A reference to history will show what I mean. If you go back a couple of hundred years you will find that land instead of being worth £100 per acre was worth 50s. per acre, or it might be £10. That is possibly because money has become less valuable than it was in those days. It is unnecessary to elaborate that point, because another discussion which took place some time ago made us familiar with the unwisdom of comparing the amounts of exports in one year with the amounts in another year, unless you have regard to the prices which prevailed as to these particular exports. It is equally true of land that the prices go up and down. When you say that the value of money is less now than in former times, all that is meant for the purpose of this discussion is: How many golden sovereigns have you to hand over in order to get a particular piece of land or a particular interest in land? It is essential if you are to compare that you must have regard to that matter. You may charge a tax on a nominal value, whereas the true value is estimated by the price of other commodities. That is the only true way of getting at the value of land. I think the question raised by this Amendment is one of substance, which ought to be dealt with in some way by the Government. It is not my own invention, it is derived from a letter by a Cambridge professor, which I know the Prime Minister is familiar with, because he has quoted from it in a public speech. It is the letter dealing with the windfall theory, which we discussed at considerable length yesterday. Even if the Government do not see their way to accept these particular words I hope they will, at any rate, meet my point in some way or
  1098
  other. I may remind the Chancellor of the Exchequer that the idea of making a tax dependent on prices generally is not a new one. The land tax used to rise and fall with the price of corn, and tithes to this day rise and fall in the same manner. If that idea had any value as applied to ordinary taxes, it is of particular value here, for you are taxing not a man's general property, but the profit he makes on a particular kind of transaction.
  Mr. LLOYD-GEORGE: Of all the remarkable Amendments moved to this Bill I think this is the most amazing. I can quite understand why the Noble Lord has only moved it in manuscript. If he had seen it in print I am perfectly certain he would not have got up and moved it. It is difficult for me to deal with the Amendment in language which will pass muster with the Chair. What does it mean? Our tax is to depend on prices according to some index number fixed by my right hon. Friend the President of the Board of Trade.
  Lord ROBERT CECIL: Not by the President of the Board.
  Mr. LLOYD-GEORGE: The Noble Lord cannot possibly have considered what the Amendment means.
  And it being a quarter past eight of the clock, and private business being set down by direction of the Chairman of Ways and Means under Standing Order 8, further proceeding was postponed without Question put.

PRIVATE BUSINESS.

  SOUTH-EASTERN AND LONDON, CHATHAM AND DOVER RAILWAYS BILL [Lords.]
  Order for Second Reading read.
  Motion made and Question proposed, "That the Bill be now read a second time."
  Mr. T. B. NAPIER Mr. T. B. NAPIER moved to leave out the word "now," and at the cad or the Question to add the words "upon this day three months."
  This Bill has three principal objects. With two of these I have no concern. I do not know that they are of any great public importance. Certainly they raise no point of principle. But with the third object, which occupies the greater portion of the Bill, and which may be said to

  1099
  be its main object, I have some concern. It relates to a bridge over the River Swale, on which tolls are charged. The South-Eastern and London, Chatham and Dover Railway have the right at present of charging for carriages, carts, and other vehicles crossing that bridge, and also for foot passengers. The River Swale is not a river at all. It is an arm of the sea towards the mouth of the River Thames. The companies show no inclination at all to compromise, so that there is no course open to me but to ask the House to reject the Bill. The Swale bridge is the sole bridge which connects the island of Sheppey with the mainland. Sheppey is a little island seven or eight miles long and about three miles wide, and to a very great extent it consists of marsh land. The whole of this island, which has a population of about 22,000 people, has two main roads. One is the main road running from the main land to the town of Sheerness, and about two or three miles in length. The other, running the length of the island, is a road, which, after leaving the principal town of Sheerness, loses itself in the marsh land some seven or eight miles away. The 22,000 people living on the island of Sheppey have no communication with the rest of the United Kingdom, except that which they are able to derive from this particular bridge in order to cross which they have to pay heavy tolls. The clauses in the Bill to which I object are undoubtedly supported by the Kent County Council, and by the rural district council of Sheppey, which contains about 4,000 inhabitants. They are strongly objected to by the Sheerness Urban District Council, which contains 18,000 out of the 22,000 inhabitants of the island, and they are, I venture to say, objected to by everyone in Sheppey who desires to stir more than six miles from his home on Saturday afternoon or any other holiday in the year.
  The bridge is now subject to heavy tolls. If you want to take a cart across with bricks in it you have got to pay 1s. 6d. If you want to take the empty cart back you have got to pay another 1s. 6d. If you want to take something bigger than a cart, say a wagon of bricks, you have got to pay 2s. For a horse or an ass the toll is 3d., and for a single person a penny, and a penny if he wishes to come back again. The effect of this heavy toll is seen in the cost of a great deal of produce, which, I am told, is dearer in the town of Sheerness than in the neighbouring town of Sitting-
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  bourne, seven or eight miles away. The development of the town of Sheerness has been stopped to a very considerable extent by the existence of these tolls. As regards the bridge the Bill proposes to perpetuate and extend these tolls. The tolls were first established in the year 1856, and now, after the lapse of 50 years, Parliament is asked not only to sanction a continuance of these tolls but to render them rather more burdensome. I do not lay much stress on the additional burden, but what I complain of is the continuance of the original burden and the absence of any effort to free the place from it. The additional burden is comparatively a small matter. In the second place, the Bill proposes, as regards the cost of repairing this bridge, which under the original Acts of Parliament under which the bridge was made was thrown on the railway company, that the greater portion of that cost in the next ten years should be thrown on the ratepayers of the county. As part of the concession which was granted to the railway company in 1856 to run a line from Sittingbourne, eight or nine miles away, to the island of Sheppey, the then company was put under an obligation to make the bridge and keep it in repair. A question no doubt arises as to what repair meant. The company say that the obligations then put upon their predecessors in title—because this little company merged in the much large undertaking of the South-Eastern and London, Chatham and Dover Railway Company—was to repair the bridge, having regard to the type of vehicle which was then going over the bridge. They say that during recent years the vehicles have become very much heavier and the strain on the bridge is very much greater, and therefore it requires a very much larger sum to be spent on repairs; and they say that they are not bound in law or in equity to incur that expense. I do not think it is advisable for lawyers to give a gratuitous opinion on the law, and therefore I do not want myself to lay any stress on this, but I can hardly imagine anyone who reads the clause in the original Act of Parliament not distinctly coming to the conclusion that the obligation placed on the company was that they should repair the bridge whatever the traffic of the day might be which went over the bridge.
  Whatever the law may be, I am perfectly clear that no Parliament ever dreamt that such an argument would be advanced in the future on the part of the railway company. So that the position is this: The company

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  say they are not bound to repair the bridge, having regard to the increase of traffic, and they have agreed with the county council and the rural district council, who in my opinion ought to have enforced the liability of the company at law, to spend £2,200, and in return for spending that amount the county council agree to let the railway company spending this money—proaches to the bridge for a period of ten years. That is the main part of the repair to the bridge. The evidence before the Committee of the House of Lords as to the cost of repairing the bridge itself was comparatively slight, and that the cost of repairing the approaches was about £180 a year. They also, in consideration of the railway company spending this money—which they are bound to spend—confirm and extend their system of toll. The complaint which I think I may justly make in this matter is that they have entered into this improvident agreement with the railway company without having in any way consulted the persons most nearly concerned in the matter, namely, the Urban District Council of Sheerness. I have copies of letters in which the urban district council asked to be consulted. They never were consulted. This agreement, which has the effect of keeping 22,000 people to their island home, was entered into without one word of communication to the Sheerness Council. I oppose the Bill, because I think the time has arrived when an arrangement ought to be made to diminish, and presently to abolish, all the tolls which are referred to in this Bill.
  I agree that the railway company have power to charge tolls, and I also agree that it would be inequitable to ask that those tolls should be straightway abolished. But I do say that their existence is an anomaly, and is a kind of thing which this House would certainly not allow now to be set up. The House has now an opportunity of declaring in point of principle that this is a kind of thing which ought not to be tolerated in this country, and the way to do that is by rejecting this Bill. Under the original Act of Parliament of 1856 the railway company were bound to keep separate accounts in separate books. They say they have kept separate accounts, but they admit that they have not kept separate books. I do not know that much importance need be attached to that, but of course there is the argument that if the railway company mix these accounts with its general accounts it would be very easy to make more profit than they admit they have actually made. At all events what
  1102
  they were bound to do under the original Act, after having paid the expense of repairs to the bridge, was to carry the surplus to the general objects of the company. That company was practically a company to supply to the Island of Sheppey communication with the mainland. It was a line nine miles long, and the original intention was that any surplus remaining after the repairs to the bridge should be carried to the maintenance and improvement of this short railway. The little line has been bought up by the big company, and the surplus is being applied not to the benefit of the line serving the island, but to the benefit of people in places many miles away from Sheppey. Taking the accounts of the company I find that the toll derived from the bridge for eight years amounts to £6,000. During the same eight years the company have spent on the bridge £3,035. In that amount is included 10 per cent. for cost of superintendence. So we see the railway company has made a yearly profit. That profit is increasing by leaps and bounds. Last year the amount of the tolls was £991, and the cost of repairs £415, so that the railway company put into its pocket the sum of £576, derived from the industry and the growth of the population of Sheerness.
  The company state that they are going to spend £2,200 under an agreement with the county council to put the bridge in repair, and they are going to go back during ten years the sum of £180 a year, the estimated cost of repairing the approaches. Practically, therefore, under this agreement they are only going to spend the sum of £400 in doing what, according to my contention, they are bound to do—i.e., to spend the sum of £2,200. We may be told in the course of the Debate that the railway company has recently spent the sum of £48,000 on the bridge. The bridge carries the main Continental line, and also the road. The company are bound to spend that sum in order to make the bridge fit to carry the new and heavy engines they are using. They admit that it will require an additional £2,200 in order to put the road into a state of repair, so that it may be brought into compliance with the statutory obligations of the company. They could not help spending this large sum of money in order to fit the railway bridge for the heavy Continental traffic. If the sum of £48,000 is brought forward in the House as showing what the railway company has done, I beg the House to remember that it is a figure in the air, and

  1103
  has nothing whatever to do with the performance of the railway company's obligations in relation to this road. I think the House will agree to one of two propositions—first, that the isolation of a little place like this from the rest of the country is anomalous, and ought quickly to be brought to an end. Secondly, I think that the House will agree that we cannot expect the railway company—it would not be fair—to give up all the tolls at once. To that I quite assent. I hold the opinion myself that railway companies in these days are a great deal too hard pressed; the country has a great deal too little consideration for the circumstances in which railways were born. I am quite certain that I approach this matter entirely without prejudice. What I think ought to happen is this. I think the county council and the railway-company and the Urban District Council of Sheerness ought quickly to come to an arrangement under which the tolls which are charged for crossing this bridge should immediately be somewhat lessened, and finally, and in a reasonable time, be entirely abolished. I think the Government ought in their own interests to interfere in this matter. Sheerness is entirely a naval and military place. The Government very wisely have entered into an arrangement under which they are able to take Government material over this bridge without any charge at all. I think it was rather hard on the part of the Government entering into that arrangement without extending their beneficent action to the people of Sheerness. I am certain of this, that the town has a very good claim on the county to come to some arrangement in this matter. The town already contributes to the 200 bridges or more which are being repaired by the county council, and it has not itself a single bridge.
  I think it has an equitable claim on the county council in this matter. It would not require very much, as the tolls amount to about £700 per year, but they form a very, very heavy burden upon this poor little town. For the most part the tolls fall heavily on young men who want to take some exercise on Saturday and Sunday morning. Sixty thousand cyclists paid tolls on crossing the bridge last year. In fact, you cannot stir out of the town or go anywhere, except for a short cycle ride of five or six miles in the island, without going over the bridge. Last year the railway company made £240 out of the artisans of Sheerness, few of whom are probably
  1104
  earning more than 35s. per week. I may be told this ought to go to a Committee. I venture to say, in the first place, this is a point on which all the facts are absolutely clear. There is no need for any investigation, we are practically agreed as to what the facts are. In the second place there is really here a great point of principle, although it affects a little, humble place, and it is a question for the determination of this House and not for the determination of a Committee. The real question is whether the time has not arrived when no single place in the United Kingdom should be cut off, and isolated from the rest of the kingdom by a bridge of this kind, to cross which you have to pay very heavy tolls. If the clause is withdrawn our opposition to the Bill is withdrawn. If the clauses are not withdrawn this is really more than what an opposition to a Railway Bill usually is. I do not believe you ought to oppose a railway company's Bill because you have some dissatisfaction with the way in which it carries out its business, but I do think, when the Bill asks, as this does, to perpetuate a state of things which no man in this House will defend, then that is the moment for the House to say this is an important principle, and we will not have this Bill. I beg to move.
  Mr. A. PAGET HEDGES: I desire to second the Motion of my hon. Friend and colleague, and I should like to disassociate myself from having any personal interest in the matter except in so far as I am one who pays county rates. That is such a small matter, it could hardly enter into one's consideration. I recognise the serious responsibility which rests upon anyone who tries to stop the progressive action of a railway company in extending its facilities to the public. When I first came across the situation which is disclosed by the Bill now before the House, it seemed to me, on broad grounds of public policy, that this House ought to take cognisance of such a condition as has been disclosed by my hon. Friend in his speech. It is all very well to say that these matters are threshed out by the Committee upstairs. As having sat on one of those Committees. I should be the last to suggest that they were not competent to deal with the various interests which come before them for discussion and for decision. I do think this particular case is one of such exceptional interest—not only because of the specific details but also because it is a typical case—that it

  1105
  is one which ought to be decided on lines such as my hon. Friend has suggested. It is not right, in the twentieth century, for a populous, crowded neighbourhood like Sheerness to be practically ostracised from the rest of the world in consequence of a bridge in the hands of a railway company. It would hardly be believed, unless it could be shown, as it has been shown to-night, that a town about an hour and a-half's journey from London was in this position in a country of such advanced civilisation as is this country of ours. To say that that is anomalous and archaic is only to use the most moderate language.
  I think we are perfectly justified by any means we can use on an occasion like this to bring before the notice of the public such a condition of things. I myself, in company with my hon. Friend, am very much surprised that the county council of Kent and of the rural districts have been so easily persuaded into withdrawing their opposition, or not putting forward any opposition, when the interests of the county and the borough are at stake. I think they should have taken notice, and have appeared before the Committee, and urged the claims of the county as a whole. Far be it from me to suggest any sinister influences, but it does strike me as an actual outsider that a Bill of this character should have been so feebly opposed by those whose interests were most seriously affected. I notice the South-Eastern Railway Company, against whom I have no grudge whatever, magnanimously refrained from opposing an application for a locus by the Urban District Council of Sheerness. I think their magnanimity might have been shown in a very much more extended direction by taking this opportunity of approaching those who were opposing this Bill in order, as my hon. Friend has suggested, to free this island from the incubus under which it has been so long labouring. I think that the opposition to private Bills of this character, and desiring to stop them from going to a Committee upstairs, is a serious one, and I myself have never adopted that attitude upon any of the various Bills which have been brought before this House, on matters which are not at all germane to the Bill itself. Without any disrespect to my hon. Friend the Member for Sutherlandshire (Mr. A. C. Morton), I think it is absurd to oppose a Bill which deals with general matters because he cannot get third-class sleepers to the North of England. Here
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  we have an opposition on the grounds of the Bill itself, and therefore I appeal to my hon. Friends on both sides that they should take particular notice of the question, which is one of broad public interest. I have pleasure in seconding the Motion of my hon. Friend.
  Question proposed, "That the word 'now' stand part of the Question."
  Mr. JAMES ROWLANDS: I thought that somebody representing the company would have had the courage to say a word in reply to the speeches which have been delivered, as it is only right that we should have an opportunity in Debate of expressing our views on the case of the railway company; but as the representatives of the company do not seem prepared to state their case, preferring for some reason that it should remain uncontested, it rests with us who oppose this Bill to reinforce the statements which have already been made. I take a much wider view with regard to the opposition of Bills on Second Reading. When an authority comes here and asks for Parliamentary powers, I believe we have a perfect right on Second Reading to criticise the whole of the position in connection with the authority promoting the Bill. So far as the present Bill is concerned, my hon. Friend (Mr. Napier) has made out a case which ought to have been immediately answered by the representatives of the company. He has treated them throughout in a very just manner. All he wanted them to do was to take steps with other authorities to get rid of this great difficulty which hampers the people in the Isle of Sheppey. I should have thought that the company, from its own point of view, would have been only too glad to get this difficulty out of the way, because it must be a benefit both to the company and to the whole of the locality that that which prevents the locality from developing should be removed.
  The scale of charges in the Bill is really monstrous when we consider that it applies to working people. It may be urged that a penny is nothing for a young man to pay when he crosses the bridge on a bicycle. But how often do working men have to pay that penny during the year? In some households where there are two or three machines the penalty is a most excessive one. The whole amount derived from these fines must necessarily be paid by the small population inhabiting the island, as it is not a place to which people go for amusement or recreation. Con-

  1107
  sequently a large proportion of the money is represented by penalties imposed upon working people who desire to enjoy the same recreation that other people can get. I hope the company will consider the case put forward by my hon. Friend, and see if there is not some way by which this bridge after a moderate period of time can be freed. Everyone knows what the difficulty of a toll bridge is. I remember the time when Waterloo Bridge was a toll bridge. It was then a desert. But what a difference was made the moment it was freed. I know that that bridge links up two parts of London, and I do not suggest that the freeing of the bridge with which we are now concerned would lead to the same amount of traffic across it; but certainly it would help to develop the locality, which would be a benefit to the company itself.
  I have a notice of Motion upon the Paper, because I hold that it is right when you have a grievance to seize the opportunity which Parliament in its wisdom has given you. Parliament has always adopted the policy that railway companies must periodically come before the House for extra powers, to raise extra capital, and so forth. That is done on purpose that difficulties which exist may be dealt with. I desire to bring forward a grievance in connection with my own Constituency. I would first refer to the inconsistencies of the company in regard to fares. This may seem a simple thing to some people, but it is not to a working-class Constituency like mine. From Gravesend, which is 24 miles from London, you can get three trains a day and a return ticket for 1s. 6d. But those trains are not allowed to stop at Greenhithe, 19¾ miles from London; there they have only one train once a week by which cheap fares are available. Why cannot the company stop these cheap trains at some of the other places, and give to people nearer London similar advantages to those enjoyed by the people of Gravesend? I shall be told that these charges were fixed many years ago. I would point out, however, that during the last few years there has been an enormous development of population in places nearer London than Gravesend. Besides Greenhithe, there is Dartford, with a population of 23,000. and Erith, with a population of 25,000, at which these trains do not stop. In the statement which has been circulated by the promoters of the Bill, it is stated that certain stocks have not paid a dividend for a number of years, and that
  1108
  ordinary stockholders have never received a dividend. If my memory serves me rightly, that stock was issued by the contractors at £22 10s. per £100 stock. What amount of capital did they expend on the line when they were offering a nominal £100 stock for £22 10s.? I suppose about £18. We all know that that stock has never paid any dividend. If you give advantages in any direction to the users of the railway, or if matters remain in the same position as to-day, it will never pay any dividend. What is the value of that stock at the present time. I do not think it has a very large market.
  Mr. SPEAKER: This is not a shareholders' meeting. The hon. Member is going a long way outside the limits of the Bill.
  Mr. ROWLANDS: I should not have dealt with the point if a statement had not been circulated to Members of the House, putting forward these reasons. They are not my reasons; I was only replying to them. I thought, of course, that having been circulated among the Members of the House in opposition to the position which I was taking up, that it would be easier and necessary for me to say a word or two in reply to that statement which might have influenced the Vote. There is one other point I should like to draw attention to, so that it may be seriously considered. That is the issue of workmen's tickets down that industrial portion that I have mentioned from Gravesend to London. I do not think they will chide me for bringing this under their attention. Indeed, they should be pleased to have it brought under their notice. In the main I stand by my hon. Friend in his opposition to the principal portion of the Bill—that portion that deals with his constituency and for which I think he has a just case.
  Mr. AKERS-DOUGLAS: I shall endeavour at once to reply to the questions of the Mover and Seconder in the fewest words I can. The proposals contained in the Bill are of a limited character, and I think we ought to direct our attention chiefly and entirely to the questions involved and not to questions outside. The hon. Member for Faversham (Mr. T. B. Napier), I am bound to say, has made his statement in the most fair spirit, although I do not agree with him with regard to his championship of the interests of his Constituency. I had the privilege of representing that district for some years in

  1109
  Parliament, and therefore I know that bridge well. But the question which is particularly put by the Mover and Seconder is as to whether this Bill is to be rejected or not on the second reading. The hon. Member who has moved the Amendment started his speech by saying that this Bill raised no question of principle. I have been for many years in this House, and I have always thought that what we voted for on a second reading was a question of principle.
  Mr. NAPIER: I said no question of principle except one.
  Mr. AKERS-DOUGLAS: Then I take it the hon. Gentleman assents to the whole of the rest of the Bill?
  Mr. NAPIER: Except the points I mentioned.
  Mr. AKERS-DQUGLAS: That renders my task very much easier, because I need only deal with what he has said regarding the Swale Bridge. That bridge, as my hon. Friend stated, was constructed under the Act of 1856. It has since been maintained first of all by the Sheerness Railway, then by the Chatham and Dover Company, and then by the present company, as they acquired powers from this House. It has always been a combined road and railway bridge. It has been maintained by the company for the actual traffic for which it was originally constructed. I think that is the chief difference between us. The hon. Member thinks that the bridge ought to have been maintained not only to meet the requirements of the traffic for which it was originally constructd, but to meet the requirements of the traffic as that traffic might grow. That is not my view, nor do I think it is the view of the Kent County Council, who have been in negotiations with the railway company with regard to this matter. I am not going to differ with the hon. Members with regard to their desire to see some day a free bridge constructed, but I do not see why the building of that bridge should be thrown upon the railway company. The hon. Member opposite assents to that proposal of mine, but yet he asks the House to reject this Bill because, apparently, we are not prepared at once to say that we will free the bridge at our own expense.
  Mr. NAPIER: I do not agree with that.
  Mr. AKERS-DOUGLAS: What the hon. Member wishes—that is the only case for the opposition to this Bill—is to drive the county council and us to come to some
  1110
  agreement whereby one or other of us may free this bridge at our own expense, and for the benefit of those who happen to live in Sheerness at the present time. The hon. Member has most fairly said that the opposition to this Bill comes entirely from the Urban District Council of Sheerness. The rest of the county, as represented by the Kent County Council, and the various district councils, and especially by the district council of the Isle of Sheppey immediately adjoining Sheerness, think that the compromise which has been come to between the county council and the railway companies is a fair one, and they are supporting this Bill in consequence. Further than that, I have no doubt they have no desire to be placed in the position they would be placed in, supposing this Bill were rejected and that matters remain as they are at present. Heavy traffic would be unable to get into the island except over the railway bridge, or they would have to go over the bridge at their own risk. Therefore I think the House must see that the case put by the hon. Member opposite cannot be considered to be very strong.
  There are two or three statements which I think it is right that I should answer. Two suggestions or proposals have been made by the speakers. One seems to imply that the company hold the bridge as in trust for the public. That is certainly not so. We are no more trustees for the public with respect to this road bridge than we are with respect to any other part of the railway system. The bridge was never the property of the public. It takes the place of a private ferry, and the only obligation imposed upon the company with regard to the road bridge was that in the first place the tolls which were taken should be used for managing, maintaining, repairing, lighting, and working the bridge.
  It was specifically provided by the Act of 1856 and by an amending Act of 1866 that the balance should be applied to the general objects and purposes of the company. The hon. Member has said that we have made many hundreds a year, and he has suggested that the amount the company has received has been more than enough to maintain the bridge, and further that it has been suggested—I do not think it was by the hon. Member himself—but in the statement of the case which the Sheerness Urban District Council circulated—that the money has been improperly demanded and improperly applied. That certainly is not so. Let me

  1111
  take the two points. First, with regard to how the balance has been expended; and next, whether it would have been expended in any other way. We have heard statements of the kind for the past eight years. In two of these eight years there has been a debit balance, and in the other six years the profit has varied from £190 to £385. In no year has there been enough to provide the interest, or even 4 per cent., upon the cost of the bridge itself, which was £19,700. Then the hon. Member said that we were not answerable to any duly constituted authority; the only duly constituted authority that we were responsible to were the shareholders of our company, and the accounts were presented and audited by auditors appointed for the purpose; and I do not think that there can be any object in any one raising an objection that the money has been improperly accounted for.
  The hon. Gentleman said, quite truly, that the Act of 1856 stated that the accounts ought to be kept in separate books. That is perfectly accurate. They were kept in separate books, but in recent years, since the undertaking has been taken over specially, they are not kept in separate books, though all the accounts have been kept separately. They have been presented to a Committee of the House of Lords, and they will be presented again to a Committee upstairs. If the House, as I hope it will, sends this Bill to a Committee, the promoters of the Bill are perfectly willing and able to satisfy anyone that the account of tolls which have been levied are not excessive and that they have all been utilised for the purposes of maintaining the bridge and for paying interest upon its cost of construction. The hon. Member for Dart-ford (Mr. Rowlands) has raised a point in regard to cheap trains. He pointed out that there are certain trains which run daily between Gravesend and London, but do not call at certain stations in this constituency, and that on these trains cheap fares have been instituted. These cheap fares have been in existence for a very long period under special arrangements, and have been available for certain trains for certain passengers travelling between Gravesend and London. He says that the passengers using the intermediate stations should have these cheap fares also. There is nothing in this Bill which deals at all, or asks for any powers in connection with,
  1112
  capital expenditure, except one point, namely, the question of tolls upon the bridge, and, therefore, I venture to think that this is not the proper occasion on which to ask us to go into the question of reorganisation of the fares of our railway. I must certainly say it would be impossible for us to favourably consider the hon. Member's wishes in regard to the three or four stations which he mentions. If you are going to extend these particular fares which were granted to particular stations you would have nearly every other station on the railway asking for similar facilities, and it would be quite impossible for the promoters of the Bill to grant these facilities I do not make any suggestion that the hon. Member wishes to take advantage of the Bill for the purpose—I do not use the word in anything like an offen size sense—of blackmail. I do not think a Bill of this sort, dealing, as the hon. Member pointed out, with only one question of principle, should be made use of for the purposes which the hon. Member suggests. He may take it from me that now that he has made this complaint I will undertake, not for a moment that the fares shall be reduced, or that special facilities shall be given to the people for whom he desires them, but at all events that the facts he has mentioned and the points he has brought out shall be inquired into.
  Mr. JAMES ROWLANDS: And the workmen's trains?
  Mr. AKERS-DOUGLAS: Yes, I quite understand. Cheap fares for certain trains, and cheap workmen's tickets. My impression is that we as a railway company have more workmen's trains and more workmen's tickets than other companies. I do not, therefore, for a moment say that we shall be able to increase these facilities; but I do certainly say that as a matter of courtesy they will receive our close attention. I only want to further appeal to the House, that after all this Bill is a Bill to which no objection in principle is taken, and that there is no reason why it should not go to a Committee upstairs to be carefully considered by them. I trust the House will agree to that proposal and allow the Bill to be read a second time. The hon. Member would then be in no worse position, because we have purposely refrained from objecting to his locus standi with regard to this question of the bridge.
  Mr. J. D. REES: As has already been stated, this is not a shareholders' meeting, but I trust there is no impropriety in an hon. Member making a few remarks from the point of view of that friendless creature the railway shareholder. The proceedings to-night illustrate the great difficulty railway companies experience in putting any Bill through the House of Commons. It has been suggested that some harm will be done by this measure to the island of Sheppey, but I really cannot see that much injury is done except the one alluded to in regard to cyclists. It is said that bicyclists cannot get out of the town without paying tolls. I do not see why bicyclists should have these privileges free any more than any other class of people. I maintain that the bicycle is the most dangerous conveyance on the roads, and even if bicyclists are kept at home to a certain extent it does not seem such a serious matter as to call for the rejection of a Bill like this. It seems to me that a railway company represents practically an individual interest, and it should not be called upon in this communal aspect when it wishes to acquire additional powers. The hon. Member for Tonbridge complains that the island of Sheppey is ostracised by this Bill, but there is no obligation thrown upon a railway company to provide any particular section of inhabitants with a bridge to cross the intervening water at the expense of the company. It has been suggested that there is some sinister influence at work in regard to this measure. As one who spends his days in the city, I should like to ask what is the sinister influence which the South-Eastern Railway Company desire to exercise? It is the nature of an island to be surrounded by water, but surely this railway company is not responsible for that, nor is it bound to convey people across the water free of expense and in any manner they desire. The hon. Member for Dartford (Mr. J. Rowlands) very truly said that railway companies have to come periodically to the House of Commons for extra powers, but it seems to me when they have to do this they are very much to be pitied. The hon. Member also said that the fact that they have to come to this House for those extra powers affords an appropriate occasion for squeezing them as regards workmen's trains and stopping trains.
  Mr. ROWLANDS: The hon. Member is not quoting words.
  Mr. REES: No, I was summarising him, and I hope I was doing so with absolute fairness. I understood the sense of the hon. Member's speech to be that when a railway company came up for extra powers that was a proper occasion upon which to demand concessions. In any case, I do not think it is right, if a railway company makes out a good case for extra powers, that it should be penalised with regard to the smallest matter before it can obtain the second reading of the Bill. The right hon. Gentleman the Member for the St. Augustine's division (Mr. Akers-Douglas) who spoke on behalf of the promoters of this Bill, was absolutely driven to make something like a "deal" with the hon. Member for Dartford on account of his opposition to this measure. I am speaking here as a shareholder, and I have no desire whatever to conceal my position in the matter. I submit as a shareholder that the attitude taken up which compelled the right hon. Gentleman opposite to treat in this manner is not a proper position to take up. When there is a good case for a Bill I think it is wrong that this attitude should be taken up on some trivial matter, and promises of this kind exacted in order to buy off opposition.
  Mr. J. G. TALBOT: I desire to support the second reading of this Bill. It is quite a harmless measure, and it happens to contain a number of proposals which have taken some time to arrange, but which have been arranged satisfactorily between the county council affected and the South-Eastern and Chatham Railway Company. I cannot understand why hon. Members wish to prevent what is really a public benefit to the whole of the neighbouring community. This is a bonâ fide attempt on the part of this railway company and the county council to provide further access to the Island of Sheppey, and make provision for conveying heavy traffic to that island, such as agricultural machinery. I cannot help thinking, in view of these facts, that the hon. Member opposite has been wrongly instructed in this matter, and I am afraid the facts have not been put before him as they really exist. I am not concerned to discuss these details now, but what I am concerned about is that this Bill should receive a second reading, and that the matters which have been raised in opposition should be fully considered by the Committee. The provisions contained in the Bill have been fairly and frankly considered by the county council. If the hon. and learned Gentleman says

  1115
  the county council ought to free the bridge, he knows it means an additional burden on the county. Why should they be called upon all over the county to contribute towards the expense of freeing this bridge? If there is a case for that, and if he thinks that is reasonable, it would be fully considered by the Committee when the Bill goes upstairs. It has been considered by a Committee of the other House which heard the evidence—amongst others, of one of the members of the county council, and which, after very careful consideration, passed the Bill. I hope the House will give a second reading to this Bill. If its provisions are not satisfactory, of course hon. Members can oppose it if they like, but I am afraid if they do there is little chance that the Bill will pass its final stages. It is a matter of detail, and I venture to assure the hon. Gentleman that the interests of his constituents have not been neglected. On the contrary, it is the object of the county council to provide as much accommodation for inter-communication between the Isle of Sheppey and the main land as possible.
  The PARLIAMENTARY SECRETARY to the BOARD OF TRADE (Mr. H. J. Tennant): I am not sure I can add much to what has been said on this subject, but it may be right that the Board of Trade's view should be known to the House before it comes to a decision. I was glad my hon. Friend who moved the rejection (Mr. Napier) stated that there was no point of principle involved in his objection, though he afterwards stated his objection to the Bill was a point of principle. I should have thought it was more a matter of detail than principle. I dare say many of us feel that tolls are objectionable things and we should like to get rid of them in
  every case, but I notice my hon. Friend in his objection to this Bill said he would not go so far as to ask the railway company to give up all their tolls at once. He merely wanted them to give up this particular toll. My hon. Friend felt very strongly against this, and very likely it is as he says, an objectionable toll, but you have to consider what is the alternative, and the alternative, I venture to say, is very likely to have no bridge capable of carrying this heavy traffic at all; it is not bicycle traffic so much as heavy traffic, traffic of agricultural machinery, to which the right hon. Gentleman the Member for Oxford University (Mr. Talbot) referred. Although tolls may be objectionable, I should not have thought that this toll would involve, as the hon. Member asserted, so drastic a thing as the ostracising of the island. I should not have thought that all the disabilities to which he alluded were involved in the toll. Objectionable in character as tolls may be, I do not think you ought to take the very drastic measure of asking the House of Commons to decline to send the Bill to a Committee upstairs for so small a point. I feel this is not a Bill which ought to be debarred a second reading on the ground of that objection. Dealing with the point raised by the hon. Member for Dartford (Mr. Rowlands), I might point out that the companies are under an obligation to issue workmen's tickets within 20 miles of London. My hon. Friend is, no doubt, aware of that. If there is a need for such trains beyond 20 miles, the Board of Trade inquire into it if they receive any applications, but up to now no application has been received.
  Question put, "That the word 'now' stand part of the Question."
  The House divided: Ayes, 183; Noes, 97.

  Division No. 249.]

  AYES.

  [9.33 p.m.

  Abraham, W. (Cork, N. E.)

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

  Carlile, E. Hildred

  Acland, Francis Dyke

  Bethell, T. R. (Essex, Maldon)

  Carr-Gomm, H. W.

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

  Bignold, Sir Arthur

  Cecil, Lord R. (Marylebone, E.)

  Adkins, W. Ryland D.

  Boland, John

  Chance, Frederick William

  Ainsworth, John Stirling

  Bowles, G. Stewart

  Cheetham, John Frederick

  Ambrose, Robert

  Bramsdon, Sir T. A.

  Cherry, Rt. Hon. R. R.

  Armitage, R.

  Branch, James

  Clive, Percy Archer

  Astbury, John Meir

  Bridgeman, W. Clive

  Clough, William

  Balcarres, Lord

  Brocklehurst, W. B.

  Coates, Major E. F. (Lewisham)

  Balfour, Robert (Lanark)

  Brooke, Stopford

  Collins, Stephen (Lambeth)

  Banbury, Sir Frederick George

  Brotherton, Edward Allen

  Cornwall, Sir Edwin A.

  Barlow, Sir John E. (Somerset)

  Brunner, J. F. L. (Lancs., Leigh)

  Cotton, Sir H. J. S.

  Barnard, E. B.

  Brunner, Rt. Hon. Sir J. T. (Cheshire)

  Courthope, G. Loyd

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

  Bryce, J. Annan

  Craig, Charles Curtis (Antrim, S.)

  Beale, W. P.

  turns, Rt. Hon. John

  Craig, Captain James (Down, E.)

  Beck, A. Cecil

  Burt, Rt. Hon. Thomas

  Crossley, William J.

  Bell, Richard

  Buxton, Rt. Hon. Sydney Charles

  Davies, David (Montgomery Co.)

  Bellairs, Carlyon

  Cameron, Robert

  Davies, Sir W. Hawall (Bristal, S.)

  Dewar, Sir J. A. (Inverness-shire)

  Joynson-Hicks, William

  Rea, Walter Russell (Scarborough)

  Dickinson, W. H. (St. Pancras, N.)

  Kennedy, Vincent Paul

  Rees, J. D.

  Duncan, J. Hastings (York, Otley)

  Kimber, Sir Henry

  Remnant, James Farquharson

  Evans, Sir S. T.

  King, Sir Henry Seymour (Hull)

  Renwick, George

  Everett, R. Lacey

  Laidlaw, Robert

  Robinson, S.

  Faber, George Denison (York)

  Lamb, Ernest H. (Rochester)

  Robson, Sir William Snowdon

  Fletcher, J. S.

  Lamont, Norman

  Roch, Walter F. (Pembroke)

  Fullerton, Hugh

  Law, Andrew Bonar (Dulwich)

  Ronaldshay, Earl of

  Furness, Sir Christopher

  Layland-Barrett, Sir Francis

  Runclman, Rt. Hon. Walter

  Gardner, Ernest

  Lewis, John Herbert

  Rutherford, W. W. (Liverpool)

  Gladstone, Rt. Hon. Herbert John

  Lloyd-George, Rt. Hon. David

  Samuel, S. M. (Whitechapel)

  Glen-Coats, Sir T. (Renfrew, W.)

  Lonsdale, John Brownlee

  Schwann, Sir C. E. (Manchester)

  Goddard, Sir Daniel Ford

  Lundon, T.

  Silcock, Thomas Ball

  Gooch, George Peabody (Bath)

  MacCaw, Wm. J. MacGeagh

  Simon, John Allsebrook

  Gordon, J.

  Macdonald, J. M. (Falkirk Burghs)

  Soares, Ernest J.

  Gulland, John W.

  Macnamara, Dr. Thomas J.

  Stanger, H. Y.

  Haddock, George B.

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

  Stanier, Seville

  Hamilton, Marquess of

  Magnus, Sir Philip

  Stanley, Hon. A. Lyulph (Cheshire)

  Harcourt, Robert V. (Montrose)

  Marnham, F. J.

  Stewart, Halley (Greenock)

  Hardy, Laurence (Kent, Ashford)

  Mason, James F. (Windsor)

  Stewart-Smith, D. (Kendal)

  Harmsworth, Cecil B. (Worcester)

  Massie, J.

  Sutherland, J. E.

  Harris, Frederick Leverton

  Meagher, Michael

  Talbot, Lord E. (Chichester)

  Hart-Davies, T.

  Middlebrook, William

  Talbot, Rt. Hon. J. G. (Oxford Univ.)

  Harvey, A. G. C. (Rochdale)

  Molteno, Percy Alport

  Taylor, Theodore C. (Radcliffe)

  Heaton, John Henniker

  Morpeth, Viscount

  Tennant, H. J. (Berwickshire)

  Helme, Norval Watson

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

  Thomas, Sir A. (Glamorgan, E.)

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

  Nicholson, Wm. G. (Petersfield)

  Thomasson, Franklin

  Herbert, T. Arnold (Wycombe)

  Nolan, Joseph

  Toulmin, George

  Hermon-Hodge, Sir Robert

  Norman, Sir Henry

  Ure, Rt. Hon. Alexander

  Hill, Sir Clement

  Nuttall, Harry

  Valentia, Viscount

  Hobhouse, Rt. Hon. Charles E. H.

  O'Brien, K. (Tipperary, Mid)

  Vivian, Henry

  Hooper, A. G.

  O'Brien, Patrick (Kilkenny)

  Wason, John Cathcart (Orkney)

  Hope, James Fitzalan (Sheffield)

  O'Connor, John (Kildare, N.)

  White, Sir George (Norfolk)

  Hope, W. H. B. (Somerset, N.)

  Oddy, John James

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

  Horridge, Thomas Gardner

  O'Malley, William

  White, Patrick (Meath, North)

  Houston, Robert Paterson

  O'Shaughnessy, P. J.

  Whitley, John Henry (Halifax)

  Howard, Hon. Geoffrey

  Pease, Rt. Hon. J. A. (Salt, Wald.)

  Williams, W. Llewelyn (Carmarthen)

  Hunt, Rowland

  Peel, Hon. W. R. W.

  Williamson, Sir A.

  Hyde, Clarendon G.

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

  Wilson, Henry J. (York, W. R.)

  Idris, T. H. W.

  Priestley, Arthur (Grantham)

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

  Illingworth, Percy H.

  Randles, Sir John Scurrah

  Wortley, Rt. Hon. C. B. Stuart-

  Jones, Sir D. Brynmor (Swansea)

  Raphael, Herbert H.

  Jones, Leif (Appleby)

  Ratcliff, Major R. F.

  TELLERS FOR THE AYES.—Colonel

  Jones, William (Carnarvonshire)

  Rawlinson, John Frederick Peel

  Warde and Viscount Castlereagh.

  NOES.

  Barker, Sir John

  Henderson, Arthur (Durham)

  Radford, G. H.

  Barlow, Percy (Bedford)

  Higham, John Sharp

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

  Barnes, G. N.

  Hodge, John

  Richardson, A.

  Berridge, T. H. D.

  Hogan, Michael

  Ridsdale, E. A.

  Black, Arthur W.

  Hudson, Walter

  Roberts, G. H. (Norwich)

  Boulton, A. C. F.

  Jenkins, J.

  Roberts, Sir J. H. (Denbighs.)

  Bowerman, c. W.

  Johnson, W. (Nuneaton)

  Rowlands, J.

  Brodie, H. C.

  Jowett, F. W.

  Scott, A. H. (Ashton-under-Lyne)

  Burnyeat, W. J. D.

  Joyce, Michael

  Seddon, J.

  Byles, William Pollard

  Lehmann, R. C.

  Shackleton, David James

  Cawley, Sir Frederick

  Lever, A. Levy (Essex, Harwich)

  Smyth, Thomas F. (Leitrim, S)

  Cleland, J. W.

  Levy, Sir Maurice

  Snowden, P.

  Clynes, J. R.

  Macdonald, J. R. (Leicester)

  Straus, B. S. (Mlle End)

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

  Maclean, Donald

  Summerbell, T.

  Cowan, W. H.

  Macpherson, J. T.

  Taylor, John W. (Durham)

  Crooks, William

  MacVeagh, Jeremiah (Down, S.)

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

  Davies, Ellis William (Eifion)

  MacVeigh, Charles (Donegal, E)

  Tomkinson, James

  Davies, Timothy (Fulham)

  Micklem, Nathaniel

  Walsh, Stephen

  Dobson, Thomas W.

  Mond, A.

  Walters, John Tudor

  Duncan, C. (Barrow-in-Furness)

  Morgan, J. Lloyd (Carmarthen)

  Walton, Joseph

  Edwards, A. Clement (Denbigh)

  Nicholls, George

  Ward, John (Stoke-upon-Trent)

  Esslemont, George Birnie

  Nicholson, Charles N. (Doncaster)

  Wardle, George J.

  Flynn, James Christopher

  O'Doherty, Philip

  Watt, Henry A.

  Gill, A. H.

  O'Grady, J.

  Wedgwood, Josiah C.

  Glendinning, R. G.

  O'Kelly, Conor (Mayo, N.)

  Wiles, Thomas

  Glover, Thomas

  Parker, James (Halifax)

  Wilkie, Alexander

  Greenwood, G. (Peterborough)

  Pearce, Robert (Staffs, Leek)

  Wills, Arthur Walters

  Greenwood, Hamar (York)

  Philipps, Col. Ivor (Southampton)

  Wilson, John (Durham, Mid)

  Hall, Frederick

  Philips, John (Longford, S.)

  Wilson, W. T. (Westhoughton)

  Hardie, J. Keir (Merthyr Tydvil)

  Pickersgill, Edward Hare

  Yoxall, Sir James Henry

  Hardy, George A. (Suffolk)

  Pointer, J.

  Haslam, Lewis (Monmouth)

  Power, Patrick Joseph

  TELLERS FOR THE NOES.—Mr. Napier and Mr. Hedges.

  Hazel, Dr. A. E. W.

  Priestley, Sir W. E. B. (Bradford, E.)

  Hazleton, Richard

  Bill read a second time, and committed.

GATESHEAD AND DISTRICT TRAMWAYS BILL [By Order]
Order for second reading read.
Motion made and Question proposed, "That the Bill be now read a second time."
Mr. SUMMERBELL: Although I have an Amendment in my name, that the Bill be read a second time this day three months, it is not my intention to press it to a Division, but, on behalf of my colleagues and myself, I desire to say a few words in justification of our opposition to the Bill. It seeks power to extend the tramways in the Borough of Gateshead, and in order to enable that to be done the tramways company is to get an extension of its lease for eight years. Our objection in regard to this Bill, is that the people of Gateshead have had no opportunity to express any opinion on the action of the Gateshead Corporation in voting away their rights, in extending the lease of the tramways. A statement has been issued on behalf of the company in which it is suggested that the opposition to the second reading of the Bill is at the instance of a body representing a small minority of the working classes in Gateshead, but I have here a large number of letters containing adverse resolutions passed at public meetings with unanimity and enthusiasm, supported by representatives of large societies, who feel that they ought to have had an opportunity of expressing their opinions before this arrangement was come to. The statement goes on to say that the Newcastle and Gateshead Labour Council is not opposing this Bill, but they do not state that they are not supporting the Bill, and I think, therefore, that particular paragraph is calculated to lead to a wrong inference. It is said that the Corporation of Gateshead are in favour of the Bill. It is true it has been carried by a large majority, but surely it is the duty of this House to see that the people whose interests are concerned should have an opportunity of expressing their opinion in regard to matters of this nature. I am an ex-chairman of the Tramways Committee, and I know perfectly well that when a municipality deals with a matter of this kind it is compelled to call a town meeting, so as to get the opinion of the ratepayers, but nothing of the kind was done in this case, and the working men of Gateshead had no opportunity of stating their views. This is our justification for the opposition
1120
we have offered to this Bill. We object to handing over the rights of the people for another eight years to this company. I hope that in regard to Bills of this character great precautions will be taken to see that the same principle applies to a company as applies to a municipality. A municipality has no right to take over matters of this kind according to law without convening a meeting of the ratepayers, in order to have an expression of their opinion, and the same ought to apply to a company. If that had been done the Labour Party would not have taken the course they have in endeavouring to prevent this Bill being rushed through, but we have no desire to prevent it being read a second time, or going to a Committee. We do, however, protest against its being passed without our having an opportunity of expressing an opinion.

FINANCE BILL.
Considered in Committee.—[Eighth Day.]
[Mr. EMMOTT in the chair.]
(IN THE COMMITTEE.)

FINANCE BILL.

  CLAUSE 2.
  Postponed Proceeding resumed, on Amendment [Lord Robert Cecil], after the word "deduction" to insert the words "as shall equal an addition to the value caused by a general rise in prices, estimated by reference to an index number to be fixed by the Board of Trade, and such."
  Mr. LLOYD-GEORGE: I do not know whether it is necessary for me to say anything more about this Amendment, but I should have thought it was disastrous to have any scheme of this kind. The Noble Lord takes the case of tithe rent charge, which is fixed in accordance with the rise and fall in price, but I do not think anyone is satisfied with that particular method of regulating the amount of tithe,, and I am perfectly certain that it would not be fair in this case, and a scale of that kind is perfectly impossible. If the Noble Lord is going to use it all round, I am not sure that a decrement may not be claimed instead of an increment. Supposing the price of gold appreciates, and land which is worth £2,000 now was sold 30 years hence for £1,900. There is are apparent decrement of £100, but as a matter of fact, it can be proved on a scale of

  1121
  this kind that an apparent decrement of £100 was really an increase of £300 or £400. I really hope the Noble Lord will not press this Amendment.
  Mr. BONAR LAW: The right hon. Gentleman before the private Bill was introduced spoke of this Amendment as if it were more or less in the nature of a joke, but I am bound to say that if the Amendment had been put down upon the Paper, and hon. Members had had an opportunity of seeing what it is, they would have seen that whatever the difficulty is in point of practice, the object at which it aims is perfectly fair, and that object is to take the mean value of the land. I have no doubt my Noble Friend drew this Amendment from the letter which appeared in "The Times" from a very distinguished professor at Cambridge. The Prime Minister was beside the Chancellor of the Exchequer at the time that he made the statement, and it is hardly for a Member of a distressed Government to bail as if it was a word of inspired wisdom the word "windfalls." The professor explained what he meant, and he said that you might have an apparent increment where there was a decrement and it is hardly fair to treat that as a a joke. The meaning of the Amendment is perfectly plain to any Member who has taken the trouble to read it. It amounts simply to this: that if you extend the operation over a long period, there may be an apparent rise in the value of land which has not really risen at all, and which is represented by a corresponding rise in everything else, and which, therefore, means that the man who sells it will not be able to buy anything else at a bit better advantage than if land had remained at the old price. That is the point, and the Government claim—as one of the first merits of this proposed tax—what an immense advantage it would have been to the country if this sort of thing had been established 100 years ago. It is apparent to anyone that an apparent rise in the value of land 100 years ago is not really a rise, because there is a corresponding rise in almost all other things, and, indeed, I think a greater rise. But even supposing I am wrong, that does not take away from the fact that there is a possibility of an apparent rise in the value of land which is not a real one. Then the right hon. Gentleman told us that it was impossible to work it, and that all that it would mean would be that he would go to the Board of Trade and ask his right hon. Friend to arrange index numbers in
  1122
  such a way as to give a higher tax. That is not possible. That is the way in which platform speeches of hon. Gentlemen opposite on the fiscal question have been arranged, but that is not the way in which the statistics of permanent officials have been arranged. These index numbers are perfectly understood now by the Board of Trade and they are used regularly for the very purpose of showing how the whole value of commodities has risen or fallen throughout a particular period, and all that my Noble Friend wishes is that something of that principle should be adopted, so that, in the words of Professor Pigou, it should be found, when you are taking increment value, that you are taking the real and not the apparent value. I admit it is very difficult to work this, but the principle which lies at the bottom of it is sound, and if the principle is sound, it is only right, in some shape or another, the attempt should be made to distinguish between apparent and real increment value.
  Mr. STEWART BOWLES: The right hon. Gentleman the Chancellor of the Exchequer begun by saying that he did not think the Amendment could be adequately dealt with on that bench in language which was even Parliamentary, so ridiculous did he regard it. This Amendment may be wise or unwise, but really it is not ridiculous. It raises in the clearest way a point, which it seems to me the Committee will have to consider, and ought to consider very carefully, if these duties are to be, even in theory, fair and calculated to carry out the objects which the Government have in view.
  I have on the Paper lower down an Amendment on exactly this subject, and I have proposed that the Commissioners should be bound to take into consideration in calculating the value not merely all the various matters which they are directed to in this clause, but also the changes in the value of land due to a decrease in the value of money since the original site value was taken. That avoids the introduction of the expression "index numbers," which I observe is regarded as a sort of inscrutable mystery, and which, perhaps, complicates in appearance, though not in reality, the simple point my hon. Friend desires to raise. Is it not quite obvious that, if the scheme of these duties is really to be carried out, if you are to start in regard to all the land in the country from 30th April last as a fixed immovable quantity, and if for all time to come it is to be a permanent growing part of our fiscal system,

  1123
  and for all the alterations of the general level of prices you are to refer back to that original value which is the scheme of the Government, you really must, if the duty is not to be fantastic, have some reference to the general level of prices ruling at the time you take the tax? It is true that this consideration would not arise in the next few years, because prices would not move much. But suppose at this moment one valued land by reference to its value 50 or 60 years ago. In that time the value of land expressed in sovereigns was very much increased. But that is not a real increase, because the price of everything else has increased as much, or even more, and all the time there is the possibility of a sudden discovery of gold, which will immediately inflate the price of everything, and if you merely take the money value of land at any moment, year after year, or 20 years after 20 years, and refer it back to this fixed and immovable money value of 30th April, 1909, you will inevitably, unless you are to assume that the price of everything is going to remain at the level of 1909, inflict very great injustice, and you will be charging people upon a fictitious and not a real increment. The point is quite simple, and it ought to be considered as something more than a joke. This is a new principle. Never before have you taxed a man on the difference between the value of his property at a particular moment arbitrarily chosen, and the value of the same property on a given date, except, perhaps, to some extent in the case of the tithe-rent charge, and there a provision was made of this same character with regard to the general level of prices. I am perfectly persuaded that this is a genuine point, and it seems to me quite clear that if the Government refuse to accept it they will be laying up an injustice which will increase as time goes on.
  Mr. STUART-WORTLEY: I think it reasonable that not only the longer and more secular fluctuations, but the shorter fluctuations in the value of money ought to be taken into account. This Amendment is the converse of the one which proposes that the factor of the value of money should be taken into account in the valuation. Surely it is not a reasonable thing that valuers are to value enormous estates and to be debarred from taking into consideration all possible factors. I have it positively from those in a better position than I am to speak with authority on the
  1124
  matter that fluctuations in the value of money will make so great a difference, for instance, in the value of freehold ground rents, that they will fluctuate between 25 years and 29 years purchase. If we are told the Amendment must be rejected on the ground of its impracticability or its want of precedent, it is open to us to remind the Government that in 1887, when it was found necessary to revise the operation which the State had undertaken in 1881 of valuing the land in Ireland, it was enacted that there should be a revision of that valuation in the shape of a revision of the judicial rents. Parliament then provided that the Land Commission, not merely as regards the whole of Ireland, but as regards counties, Poor Law unions, and other smaller areas, should be allowed to revise judicial rents with direct reference to what the Statute calls prices affecting agriculture in those districts. You could not have a more direct precedent, or one which, in the experience we have had of its smooth working, shows that the thing is practicable.
  Mr. W. PEEL: I think some such Amendment is very necessary, because one is almost inclined to forget what is the principle at the root of the proposals contained in these clauses. It is that the State, after all, should take for itself a portion of that amount which is due to the collective action of the community. With regard to this question of gold, it is perfectly clear that if the increment arises in this way, it cannot in any sense be due to the action of the particular community in which the rise of land takes place. I was astonished that hon. Members opposite seemed to challenge the argument of the hon. Member for Dulwich (Mr. Bonar Law) when he talked about these fluctuations. But in the fifties there was an enormous upset in all prices through the immense discoveries of gold in America.
  More recently, as those who follow the effect on prices know, the discoveries of gold in South Africa had a similar effect. It was a great disturbing element introduced into all prices merely through an accident—the fact that a certain amount of gold was found on a few farms in the Transvaal. Increment due to causes of that kind cannot by any hypothesis be put down to the action of a particular community in this country. I think the proposal of my noble Friend (Lord R. Cecil) goes further than he has suggested because there are a great many increments in land in this country which are in no sense due to the action of the community or a

  1125
  development of towns, but which are due it may be to bad harvests in other countries, or, as in the case of Argentina, to the extraordinary demand for high-class cattle in this country. These are some of the subsidiary causes which affect prices of land in this country. In connection with the question of currency there are certain persons who wish to establish a double standard of gold and silver. If you take these things into consideration, they are far wider than questions as to the rise and fall in the price of commodities produced all over the world. If the whole or any proportion of the increment which is due to these causes is charged on the individual holding land, you will see that not only he but the community of which he is a member are innocent and unresponsible for the rise in prices in one quarter or another.
  Mr. J A. SIMON: The hon. Member for Dulwich (Mr. Bonar Law) said he thought some people were treating this proposal as a joke. Whether it is a joke or not certainly the circumstances in which it is recommended by certain hon. Gentlemen opposite are truly humorous. The hon. Member who made the proposal (Lord R. Cecil) and the hon. Member sitting on the same Bench with him (Mr. Stewart Bowles) hold fiscal views which many of us observe with sympathetic interest. They both very clearly apprehend the truth of the statement that when you are comparing what appear to be equal sums of money, either at times or in countries, it should be remembered that money is not necessarily of equal value. The humour of it is that the bon. Member for Dulwich, who is fond of quoting without any reference to index numbers, the rate of wages in America.
  Mr. BONAR LAW: The hon. Member, as a matter of fact, is clearly wrong. I have never used as an illustration the higher rate of wages without at the same time taking into account the buying power of money.
  Mr. SIMON: All I can say is that I hope that the calculation which the hon. Member always observes will soon be distributed in a Tariff Reform leaflet. The real objection to the Noble Lord's proposal, and what makes the proposal really humorous, is not an objection of principle, but an objection of common-sense and vulgar practice. Theoretically the Noble Lord is absolutely right, but if he is right
  1126
  about this he and those who support him must remember that other consequences follow. The State says that nobody with an income of less than £160 a year need pay Income Tax, and, of course, according to the Noble Lord, you must not be so absurd as to say that the tax depends upon the number of sovereigns a man gets. You must apply an index number. In the year 1904 the Leader of the Opposition was responsible for a great Irish Land Act. On that occasion it was not a purchase between one person and another, but between one country and another. This country undertook to purchase the land. In return for what? Not in return for a series of annual payments to be ascertained by index numbers, but on the principle of rough-and-ready justice of paying so many pounds, shillings, and pence. If this proposition were seriously entertained and adopted, instead of our wanting a Court of Appeal and legal luminaries to revise the decisions of the Commissioners, we should really have to go to a court of Cambridge professors.
  Mr. BALFOUR: I suppose it is the Oxford prejudices of the hon. and learned Gentleman which are responsible for the closing sentences of his speech, or else a vague consciousness that a Cambridge professor has in the last two days lured the Prime Minister into a bog from which he has not extricated himself in connection with the principle underlying the Finance Bill. The hon. and learned Gentleman, in answer to my Noble Friend (Lord R. Cecil), took two illustrations. One was the Income Tax and the other the Irish Land Bill. The Income Tax as an illustration is an utter absurdity. That tax is levied each year from the income of that year on the inhabitants of the country, and the rise and fall in the real value of money has nothing whatever to do with it. The hon. and learned Gentleman has, I believe, studied this question, and he must know, if he gives it a moment's thought, that there is not a single economist on the other side of the House who will get up and say either that the hon. and learned Gentleman appreciates really the Question before us, or that he has not spoken in haste.
  Mr. SIMON: I do not rise with any idea that I am one of the economists on this side of the House, but to explain what I meant. The reason why our Income Tax does not tax the first £160 is because it is necessary to leave people a nucleus of money with which to provide the neces-

  1127
  saries of life, and I should have thought it was not irrelevant to point out that £160 will not buy as much of the necessaries of life at one time as at another.
  Mr. BALFOUR: We deal with the Income Tax every year, and if a change in the value of money was of so great a character as to make £160 different in the power of buying the necessaries of life, of course the Income Tax would be changed in the year in which the change in the value of money took place, but you cannot compare that with the proposition of the Government in connection with this Bill. I very much doubt whether the hon. and learned Gentleman knows what the Bill is. The Bill lays down that a certain valuation in land shall be made in 1909, and that for all time—not for 60, 120, or 240 years—the increment in the land of the country is to measured from that date. Of course, if the value of money was to be constant the tax might be consistent, but the tax to be paid 100 years hence on the increment of a particular estate, whether just or unjust, is to be measured on equal terms by money value. That is quite plain. The only possible way, if you will have these contracts bearing on the obligations of individuals extended over an indefinite period, is to try to invent a standard, if you have not got it, which will give something like equality of value as between one generation and another. That is perfectly true, and I think it a much better illustration of the hon. Gentleman's point of view. For instance, the National Debt is different in value now from what it was 100 or 200 years ago. That is a contract which the State deliberately chose to enter into for its own interest. It is not a burden thrown on particular members of the community. At any rate, it does not tax for an indefinite period. The truth is, I quite agree that if the allegation of the hon. Gentleman was that this scheme of my
  Noble Friend introduces great complications into the Bill, that it would be difficult to work, and that to fix on some standard of value other than money which is to resist the assaults of time, is not an easy job for even the best of economists, I would agree with him; but then it would be a condemnation of the tax, because the whole system of the tax implies eternity; the whole theory of the Government in devising this tax is that you may take the value of land at a given moment of time, and you have a right to tax the increment on that value for every succeeding generation as far as the human imagination can reach. That is the theory of the Government, but that theory implies a standard of value which is not subject to mutations in these long periods. We have not got that standard. We never had it; and the changes produced in standards of value are well known to all economists in this House, to whatever school they may belong. In these circumstances, although I will not suggest that my Noble Friend's scheme would be easy to work, I do say and I say quite distinctly, that the fact that you cannot work it shows how absurd the plan of the Government is which works everything upon a particular valuation taken in a particular year when this Government happened to be in office. Of course, if they changed that standard, as has been proposed, from year to year, and did it for a particular period, that objection would not hold. But if you insist that 1909 shall be the golden year, shall provide that fixed base line from which for all time the value of land in these islands is to be estimated, then you must find some more stable measurement of that value than that which is provided by the present process.
  Question put, "That those words be there inserted."
  The Committee divided: Ayes, 85; Noes, 277.

  Division No. 250.]

  AYES.

  [10.20 p.m.

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

  Clive, Percy Archer

  Guinness, Hon. W. E. (B. S. Edm'nds)

  Anson, Sir William Reynell

  Clyde, James, Avon

  Haddock, George B.

  Balcarres, Lord

  Coates, Major E. F. (Lewisham)

  Hamilton, Marquess of

  Baldwin, Stanley

  Courthope, G. Loyd

  Hardy, Laurence (Kent, Ashford)

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

  Craig, Captain James (Down, E.)

  Harris, Frederick Leverton

  Banbury, Sir Frederick George

  Dickson, Rt. Hon. C. Scott-

  Harrison-Broadley, H. B.

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

  Douglas, Rt. Hon. A. Akers-

  Hay, Hon. Claude George

  Beckett, Hon. Gervase

  Faber, George Denison (York)

  Hermon-Hodge, Sir Robert

  Bignold, Sir Arthur

  Faber, Capt. W. V. (Hants, W.)

  Hill, Sir Clement

  Bowles, G. Stewart

  Fletcher, J. S.

  Hills, J. W.

  Brotherton, Edward Allen

  Forster, Henry William

  Hope, James Fitzalan (Sheffield)

  Carlile, E. Hildred

  Gardner, Ernest

  Houston, Robert Paterson

  Castlereagh, Viscount

  Gordon, J.

  Hunt, Rowland

  Cecil, Evelyn (Aston Manor)

  Gretton, John

  Idris, T. H. W.

  Cecil, Lord R. (Marylebone, E.)

  Guinness, Hon. R. (Haggerston)

  Joynson-Hicks, William

  Kerry, Earl of

  Newdegate, F. A. N.

  Sheffield, Sir Berkeley George O.

  Kimber, Sir Henry

  Nicholson, Wm. G. (Petersfield)

  Stanier, Beville

  King, Sir Henry Seymour (Hull)

  Oddy, John James

  Starkey, John R.

  Lambton, Hon. Frederick William

  Pretyman, E. G.

  Talbot, Lord E. (Chichester)

  Lane-Fox, G. R.

  Randles, Sir John Scurrah

  Talbot, Rt. Hon. J. G. (Oxford Univ.)

  Law, Andrew Bonar (Dulwich)

  Ratcliff, Major R. F.

  Valentia, Viscount

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

  Rawlinson, John Frederick Peel

  Walker, Col. W. H. (Lancashire)

  Long, Col. Charles W. (Evesham)

  Remnant, James Farquharson

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

  Lonsdale, John Brownlee

  Renton, Leslie

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

  MacCaw, William J. MacGeagh

  Renwick, George

  Wortley, Rt. Hon. C. B. Stuart-

  Magnus, Sir Philip

  Ronaldshay, Earl of

  Wyndham, Rt. Hon. George

  Mason, James F. (Windsor)

  Rutherford, W. W. (Liverpool)

  Younger, George

  Mildmay, Francis Bingham

  Sassoon, Sir Edward Albert

  TELLERS FOR THE AYES.—Mr. W. Peel and Viscount Morpeth.

  Morrison-Bell, Captain

  Scott, Sir S. (Marylebone, W.)

  NOES.

  Abraham, W. (Cork, N. E.)

  Davies, Ellis William (Eifion)

  Jowett, F. W.

  Acland, Francis Dyke

  Davies, Timothy (Fulham)

  Joyce, Michael

  Adkins, W. Ryland D.

  Davies, Sir W. Howell (Bristol, S.)

  Kennedy, Vincent Paul

  Ainsworth, John Stirling

  Dewar, Sir J. A. (Inverness-shire)

  Laidlaw, Robert

  Alden, Percy

  Dillon, John

  Lamb, Ernest H. (Rochester)

  Allen, A. Acland (Christchurch)

  Dobson, Thomas W.

  Lambert, George

  Allen, Charles P. (Stroud)

  Duncan, C. (Barrow-in-Furness)

  Lamont, Norman

  Armitage, R.

  Duncan, J. Hastings (York, Otley)

  Layland-Barrett, Sir Francis

  Ashton, Thomas Gair

  Edwards, A. Clement (Denbigh)

  Lehmann, R. c.

  Asquith, Rt. Hon. Herbert Henry

  Edwards, Sir Francis (Radnor)

  Lever, A. Levy (Essex, Harwich)

  Astbury, John Meir

  Elibank, Master of

  Levy, Sir Maurice

  Balfour, Robert (Lanark)

  Esslemont, George Birnie

  Lloyd-George, Rt. Hon. David

  Baring, Godfrey (Isle of Wight)

  Evans, Sir Samuel T.

  Lundon, T.

  Barker, Sir John

  Everett, R. Lacey

  Lyell, Charles Henry

  Barlow, Sir John E. (Somerset)

  Falconer, James

  Lynch, H. B.

  Barlow, Percy (Bedford)

  Ferguson, R. C. Munro

  Macdonald, J. R. (Leicester)

  Barnard, E. B.

  Flynn, James Christopher

  Macdonald, J. M. (Falkirk Burghs)

  Barnes, G. N.

  Fuller, John Michael F.

  Maclean, Donald

  Barry, Redmond J. (Tyrone, N.)

  Fullerton, Hugh

  Macnamara, Dr. Thomas J.

  Beale, W. P.

  Furness, Sir Christopher

  Macpherson, J. T.

  Beauchamp, E.

  Gill, A. H.

  MacVeagh, Jeremiah (Down, S.)

  Beck, A. Cecil

  Gladstone, Rt. Hon. Herbert John

  MacVeigh, Charles (Donegal, E.)

  Bell, Richard

  Glen-Coats, Sir T. (Renfrew, W.)

  M'Kean, John

  Bellairs, Carlyon

  Glover, Thomas

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

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

  Goddard, Sir Daniel Ford

  M'Micking, Major G.

  Berridge, T. H. D.

  Gooch, George Peabody (Bath)

  Mallet, Charles E.

  Bethell, T. R. (Essex, Maldon)

  Greenwood, G. (Peterborough)

  Marks, G. Croydon (Launceston)

  Black, Arthur W.

  Greenwood, Hamar (York)

  Marnham, F. J.

  Boulton, A. C. F.

  Griffth, Ellis J

  Massie, J.

  Bowerman, C. W.

  Guest, Hon. Ivor Churchill

  Masterman C. F. G.

  Bramsdon, Sir T. A.

  Gulland, John W.

  Meagher, Michael

  Branch, James

  Gwynn, Stephen Lucius

  Micklem, Nathaniel

  Bridgeman, W. Clive

  Hall, Frederick

  Middlebrook, William

  Brocklehurst, W. B.

  Harcourt, Rt. Hon. L. (Rossendale)

  Molteno, Percy Alport

  Brodie, H. C.

  Harcourt, Robert V. (Montrose)

  Mond, A.

  Brooke, Stopford

  Hardie, J. Keir (Merthyr Tydvil)

  Morgan, J. Lloyd (Carmarthen)

  Brunner, J. F. L. (Lancs., Leigh)

  Hardy, George A. (Suffolk)

  Morse, L. L.

  Brunner, Rt. Hon. Sir J. T. (Cheshire)

  Harmsworth, Cecil B. (Worc'r)

  Morton, Alpheus Cleophas

  Bryce, J. Annan

  Hart-Davies, T.

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

  Buckmaster, Stanley O.

  Harvey, A. G. C (Rochdale)

  Napler, T. B.

  Burns, Rt. Hon. John

  Hazel, Dr. A. E. W.

  Nicholls, George

  Burt, Rt. Hon. Thomas

  Hazleton, Richard

  Nicholson, Charles N. (Doncaster)

  Buxton, Rt. Hon. Sydney Charles

  Hedges, A. Paget

  Nolan, Joseph

  Byles, William Pollard

  Helme, Norval Watson

  Norman, Sir Henry

  Cameron, Robert

  Henderson, Arthur (Durham)

  Norton, Capt. Cecil William

  Carr-Gomm, H. W.

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

  Nuttall, Harry

  Causton, Rt. Hon. Richard Knight

  Herbert, T. Arnold (Wycombe)

  O'Brien, K. (Tipperary, Mid)

  Cawley, Sir Frederick

  Higham, John Sharp

  O'Brien, Patrick (Kilkenny)

  Chance, Frederick William

  Hobart, Sir Robert

  O'Doherty, Philip

  Cheetham, John Frederick

  Hobhouse, Rt. Hon. Charles E. H.

  O'Donnell, C. J. (Walworth)

  Cherry, Rt. Hon. R. R.

  Hodge, John

  O'Grady, J.

  Cleland, J. W.

  Hogan, Michael

  O'Kelly, Conor (Mayo, N.)

  Clough, William

  Holland, Sir William Henry

  Parker, James (Halifax)

  Clynes, J. R.

  Hooper, A. G.

  Pearce, Robert (Staffs, Leek)

  Cobbold, Felix Thornley

  Hope, John Deans (Fife, West)

  Philipps, Col. Ivor (Southampton)

  Collins, Stephen (Lambeth)

  Hope, W. H. B. (Somerset, N.)

  Philips, John (Longford, S.)

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

  Horridge, Thomas Gardner

  Pickersgill, Edward Hare

  Cooper, G. J.

  Howard Hon. Geoffrey

  Pointer, J.

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

  Hudson, Walter

  Ponsonby, Arthur A. W. H.

  Cornwall, Sir Edwin A.

  Hyde, Clarendon G.

  Power, Patrick Joseph

  Cory, Sir Clifford John

  Illingworth, Percy H.

  Price, C. E. (Edinburgh, Central)

  Cotton, Sir H. J. S.

  Isaacs, Rufus Daniel

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

  Cowan, W. H.

  Jenkins, J.

  Priestley, Arthur (Grantham)

  Crooks, William

  Johnson, John (Gateshead)

  Priestley, Sir W. E. B. (Bradford, E.)

  Crossley, William J.

  Jones, Leif (Appleby)

  Radford, G. H.

  Davies, David (Montgomery Co.)

  Jones, William (Carnarvonsh.)

  Raphael, Herbert H.

  1130

  1131

  Rea, Rt. Hon. Russell (Gloucester)

  Soares, Ernest J.

  Warner, Thomas Courtenay T.

  Rea, Walter Russell (Scarborough)

  Stanger, H. Y.

  Wason, Rt. Hon. E. (Clackmannan)

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

  Stanley, Hon. A. Lyulph (Cheshire)

  Wason, John Cathcart (Orkney)

  Richardson, A.

  Steadman, W. C.

  Watt, Henry A.

  Ridsdale, E. A.

  Stewart, Halley (Greenock)

  Wedgwood, Josiah C.

  Roberts, Charles H. (Lincoln)

  Stewart-Smith, D. (Kendal)

  White, Sir George (Norfolk)

  Roberts, G. H. (Norwich)

  Strachey, Sir Edward

  White, J. Dundas (Dumbartonshire)

  Roberts, Sir J. H. (Denbighs.)

  Straus, B. S. (Mile End)

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

  Robertson, Sir G. Scott (Bradford)

  Summerbell, T.

  White, Patrick (Meath, North)

  Robinson, S.

  Sutherland, J. E.

  Whitley, John Henry (Halifax)

  Robson, Sir William Snowdon

  Taylor, John W. (Durham)

  Wiles, Thomas

  Roch, Walter F. (Pembroke)

  Taylor, Theodore C. (Radcliffe)

  Wilkie, Alexander

  Rogers, F. E. Newman

  Tennant, Sir Edward (Salisbury)

  Williams, W. Llewelyn (Carmarthen)

  Rose, Sir Charles Day

  Tennant, H. J. (Berwickshire)

  Williamson, Sir A

  Rowlands, J.

  Thomas, Abel (Carmarthen, E.)

  Wills, Arthur Walters

  Runciman, Rt. Hon. Walter

  Thomas, Sir A. (Glamorgan, E.)

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

  Samuel, S. M. (Whitechapel)

  Thomasson, Franklin

  Wilson, Henry J. (York, W. R.)

  Schwann, Sir C. E. (Manchester)

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

  Wilson, John (Durham, Mid)

  Scott, A. H. (Ashton-under-Lyne)

  Thorne, G. R. (Wolverhampton)

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

  Seddon, J.

  Tomkinson, James

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

  Seely, Colonel

  Toulmin, George

  Wilson, W. T. (Westhoughton)

  Shackleton, David James

  Trevelyan, Charles Philips

  Winfrey, R.

  Shaw, Sir Charles E. (Stafford)

  Ure, Rt. Hon. Alexander

  Yoxall, Sir James Henry

  Silcock, Thomas Ball

  Vivian, Henry

  Simon, John Allsebrook

  Walsh, Stephen

  Smeaton, Donald Mackenzie

  Walters, John Tudor

  TELLERS FOR THE NOES.—Mr. Joseph Pease and Mr. Herbert Lewis.

  Smyth, Thomas F. (Leitrim, S.)

  Ward, John (Stoke-upon-Trent)

  Snowden, P.

  Wardle, George J.

  Question, "That the House doth agree with the Committee in the said Resolution," put, and agreed to.

  Captain CRAIG: I espy strangers. Mr. Lumley, land agent, of St. James's, is occupying a seat under the Gallery, and I ask your ruling whether that is permissible. During the Debate on the alteration of the Chamber it was stated by the First Commissioner of Works that the facilities to be gained by the alteration were for private secretaries and permanent officials of the various offices. Throughout the Debate that was distinctly understood. I should like——
  The CHAIRMAN: I quite appreciate the point of the hon. Member. I consider that the matter has already been settled. The gentleman to whom the hon. Gentleman refers is an official of the Treasury, and has a right to be under the Gallery.
  Captain CRAIG: May I ask what official position he holds in the Treasury?
  Sir A. ACLAND-HOOD: Under what Vote is his salary put down in the Estimates of the current year?
  The CHAIRMAN: I shall be prepared to deal with that in Committee of Supply.
  Mr. CLAUDE HAY: May I ask, with all respect, upon what authority you stare that this gentleman is an official of the Treasury?
  Mr. CLYDE: In view of what the Chancellor of the Exchequer has said with regard to the question of appeal being discussed at a later stage, I do not think if would be reasonable to press a further Amendment on the point.
  Mr. LLOYD-GEORGE: What I stated was that I thought the appeal of the
  1132
  Noble Lord that nothing in this clause should prejudice the discussion of the question of appeal, and the conditions under which there should be an appeal, was perfectly fair, and therefore I agreed to the elimination of words which would have prejudiced that discussion later on.
  Mr. BALFOUR: I quite recognise the conciliatory spirit which the Chancellor of the Exchequer showed earlier in the evening on the question of appeal. As I understand it, the Amendment to which reference is now made deals not with the appeal, but with the hearing before what I may call the court of first instance. The Commissioners of Inland Revenue, in dealing with the question of valuation, are bound to hear the persons interested. That is what this Amendment deals with. But that has nothing to do with an appeal to a higher court. Therefore this is rather important, whatever decision the Chancellor of the Exchequer may subsequently come to in regard to establishing an appeal, either to the High Court or to some other tribunal.
  Mr. LLOYD-GEORGE: The right hon. Gentleman is right, and if I may say so, he is also wrong. There is an appeal to the referees, and also to the court in the second instance.
  Mr. ALFRED LYTTELTON: It is rather absurd that what my right hon. Friend has called the court of first instance should not hear the parties according to certain definite rules, and that the Court of Appeal should. I judge the reply of the Chancellor of the Exchequer to intimate that he will leave open for our

  1133
  future consideration whether or not both parties should have the right to be heard in the first instance by the Commissioners, as well as that both parties should also have the right to be heard on appeal.
  Mr. LLOYD-GEORGE: I should say that that would rather arise under Clause 4. You submit particulars to the Commissioners. That is not a hearing in the ordinary sense, and that is one of the questions to be discussed, whether it is a valuation or an ordinary hearing. On the particulars supplied the Commissioners adjudicate. If the parties are not satisfied they appeal. It is a question of the procedure to be followed; whether there shall be a hearing in the ordinary sense of the term, or purely a valuation.
  Mr. H. W. FORSTER: We have rather wandered from the point. As I understood it, it was that, in view of the promise given earlier by the Chancellor of the Exchequer, that the House should have the opportunity of a full and free discussion upon the question of appeal.
  Mr. LLOYD-GEORGE: Certainly. I thought I had made that perfectly clear; and I think it is very important that the question should not be prejudiced by any words incorporated here.
  Mr. BALFOUR: If this Amendment is not moved, will it be open to us at any subsequent period to suggest that in addition to the particulars in writing to be laid before the Commissioners of Inland Revenue, there shall be a hearing, or oral communications, between the parties interested and the Commissioners. That really is the point.
  Mr. LLOYD-GEORGE: Yes, I quite see the point. It would not, first of all, be a hearing in the ordinary sense of the term; but, if the solicitors representing the parties are not satisfied with the Commissioners' adjudication, there is an appeal. Then arises the question as to whether the hearing at first is to be a hearing in the ordinary sense of the term, or whether it is going to be a valuation purely. That is a question, I think, the Committee should be free to discuss when we arrive at that stage
  Mr. BALFOUR: We want elasticity.
  Mr. LLOYD-GEORGE: Yes.
  Mr. BALFOUR: If the parties desire it, they ought to be heard. That will be the first appeal. There are two questions of appeal.
  Mr. LYTTELTON: The parties can come before the Commissioners, and then, if they are dissatisfied there will arise the question of the appeal.
  Mr. LLOYD-GEORGE: It is quite unnecessary to have any words for the purpose of enabling the parties themselves to come in that instance. It is so now in regard to the question of affixing stamps, but the right hon. Gentleman wants to guard the question of appeal, and that is absolutely safeguarded
  The CHAIRMAN: The next Amendment in order is that of the hon. and gallant Member for East Down.
  Captain CRAIG: I presume your ruling refers to my Amendment after ["In each case in respect of"], to leave the words "of any part."
  Mr. JAMES HOPE: May I ask, on a point of order, in respect of which Amendment of the hon. and gallant Member have you called upon him?
  The CHAIRMAN: I took it the hon. and gallant Member did not want to move his Amendment to insert the word "shall" after "Commissioners"; he could not discuss it on the question of its being mandatory on the Commissioners. Besides, the Amendment would not have the effect, and, therefore, I took it, he did not want to move it.
  Captain CRAIG: I understood, in the first instance, it was out of order, but as it is not out of order, I shall move the Amendment which is to insert the word "shall" after the word "Commissioners." Of course, if the right hon. Gentleman can persuade me that the insertion of this word will not have the effect, I will consider the advisability of withdrawing it. As the clause reads at the present time, it is "Subject to such deduction (if any) as the Commissioners allow." That has the effect, so far as I read it, of giving the Commissioners an option as to whether they allow any deduction at all, and it seems to me we ought to have the word "shall."
  The CHAIRMAN: The Amendment would not be in order on that ground.
  Mr. JAMES HOPE: I propose to move: After the word "Commissioners" to insert "or the tribunal of appeal as hereinafter provided." I move the Amendment under better auspices than I could have hoped for earlier in the evening,

  1135
  because I now understand the Chancellor has allowed that there shall be some sort of an appeal to the Commissioners. The words I have sought to put in here would not prejudice the nature of the appeal. It is quite true that on Clause 22 there is an Amendment down in the name of the hon. Member for Basingstoke (Mr. Clavell Salter) and myself, which was intended as a complement to this Amendment, but the words of my hon. Friend's Amendment will leave the nature of the tribunal perfectly open. There is a very general sense of feeling in the Committee that there must be an appeal from the judgment of the Commissioners.
  Mr. LLOYD-GEORGE: On a point of order, I should like to ask whether this Amendment does not practically raise the same issue as that which we have been debating, and which, I understood, by the common consent of the Committee, was to be postponed to a later stage, the Government having agreed to eliminate any words which would in the slightest degree prejudice the discussion of this very issue. I submit, therefore, that it is completely out of order. At any rate, if we discuss it now, I submit that it cannot be discussed a second time.
  The CHAIRMAN: I can only take this Amendment now as practically a verbal Amendment. If it is to be moved as a matter of substance, I think it would prejudice the further discussion of this point at a subsequent stage.
  Mr. JAMES HOPE: Without prejudicing the future discussion, I think the insertion of these words would be a great advantage, because I foresee some difficulties if words of this kind are not inserted. I do not say that they are absolutely necessary as a matter of substance, and I merely move them as a matter of drafting.
  The CHAIRMAN: If it is a mere matter of drafting, I cannot say that the Amendment is out of order. On the other hand I cannot say that the moving of this Amendment now will not prejudice the whole question at a subsequent stage.
  Mr. A. J. BALFOUR: I understand that we are agreed on both sides that there should be a fair opportunity of discussing the whole question of appeal without prejudice, and the Government have consented to certain quasi-verbal Amendments with a view to leaving the future
  1136
  discussion of this question untrammelled. Does the Amendment of my hon. Friend help that course? If so I would suggest that it should be accepted. If it will limit the discussion of this point at a later stage perhaps my hon. Friend will take the view that we had better defer the whole discussion of that point until the subject is taken in its entirety.
  The CHAIRMAN: I never can feel sure until an Amendment is moved what arguments can legitimately be used. I am afraid if this Amendment were moved at this stage it might prejudice any future discussion. I do not see any object to be gained in moving it now.
  Mr. JAMES HOPE: Then I will not move my Amendment.
  Mr. LLOYD-GEORGE: I move to leave out the words "to their satisfaction."
  Question, "That those words stand part of the Clause," put and negatived.
  Mr. LAURENCE HARDY Mr. LAURENCE HARDY moved after the word "attributable" ["which is proved to their satisfaction to be attributable"] to insert "to minerals underneath the surface of the land or."
  In this proposal we at last get to a really tangible Amendment dealing with minerals in connection with the Increment Duty. I do not desire to go through the whole substance of the case, which I made in connection with the Debate which took place on Clause 1 standing part; but I do think we have had some rather valuable information from the Government since that date, and I hope that, in approaching this Amendment, they will be able to give us some definite account of how they intend to apply minerals to this particular duty. I rather understood, from what the learned Attorney-General said at a rather late hour last night, or early this morning, that the Government intended that minerals should be divided into two classes. Where a separate valuation of minerals took place, which I suppose would apply to coal, ironstone, and such classes, the Increment Duty was not to be charged. They would come under the Mineral Eights Duty. Where there was a genuine question whether there were minerals or not under the land, they would be included in the value of the land, and the Increment Duty would therefore be taken upon them. Whether I understood what the hon. and learned Gentleman said, I am afraid, without the Hansard Report, I am not able

  1137
  to say; but I do think it is very necessary, before we pass from this clause, that we should have some definite explanation given to us as to how they intend to apply this Increment Duty. It does seem to me that by far the simplest thing would be to exclude minerals altogether from this tax; but, however you desire to do it, minerals stand in such an entirely different position from land that you cannot expose them to this tax and to the Ungotten Mineral Tax and to other things without having necessarily a duty doubled upon the same article, and not only upon the same article, which may eventually be gotten under the ground, if it is ever got, but upon an article which in some cases may become non-existent altogether. It should not, therefore, be subject to such a tax as this Increment Tax. I will take the county in which I at present reside. How can anybody say how the Increment Duty is to be applied to the Kent coalfield? We have had a large amount of money spent on the Kent coalfield, and we have had borings made which are said to prove that a number of valuable beds of minerals lay under the Kent coalfield, but no coal has been got. Is it fair, before that Kent coalfield has been proved to exist in a workable fashion, that all the land-owners round that part should be exposed to the extreme difficulty of valuing the minerals under their land, such valuations to be the Domesday Book of minerals for ever afterwards, so that, if anything does occur to bring the minerals into working order, they should always be bound by a valuation taken at a time when it is absolutely impossible for them to give any true valuation at all. I believe, however, that the Government have already seen to some extent the difficulty of this particular duty. In every speech which has been made, in every answer to a question there has been a disinclination to deal with the substance of the question; the inclination has always been to ask for alternatives. They tell us how the site value of minerals is to be arrived at, and how the Increment Duty is to be charged in all the varying circumstances which must arise in connection with minerals. Is it not well known that in no case does a person ever take minerals in the manner suggested? We have had very fair arguments addressed to us which go to prove that this duty is one not upon persons, but upon land, and upon each portion of land in separate occupation. Is it possible you can get any fair valuation of minerals in this manner? When people
  1138
  take minerals they take a large field with the knowledge that they have to equalise all the different circumstances which must arise. They do not take minerals by the acre or part of an acre, but they average it over a large area, knowing very well that the working of the minerals may be subject to faults. I must ask the Government for some more definite information as to the manner in which they propose to apply this duty on minerals. At present there is a great amount of doubt on the point, and if they have not made up their minds I suggest it would be better for them to accept my Amendment and leave the matter perfectly free to be dealt with when the mineral clauses come up for discussion. Probably by that time the Government will have come to a definite decision as to how they are going to deal with minerals in the future. I beg to move.
  Sir W. ROBSON: Whatever conclusion the Government may come to with regard to the precise manner in which minerals shall be dealt, the proper occasion will not arise on this Amendment. The hon. Member is proposing that the value of the minerals shall be made a deduction from the site value when the tax comes to be imposed. When we deal with Clauses 15 and 16 we shall of course, go into the question of the capital value of minerals, and to the fact that minerals have to be included in a separate return, and all these are matters very proper for discussion on that clause. We are now dealing with land in the ordinary sense, and we must deal with land in regard to some other value when the occasion arises.
  Mr. S. ROBERTS: I am very pleased that we are to have another opportunity of trying to find out what is meant by minerals, and the way in which the Government mean to tax minerals. Under this Bill minerals are to be taxed three times, for Increment Duty, Reversion Duty, and then in regard to minerals, and for all these purposes all the minerals of the country have to be valued. How is it going to be done? The Chancellor has never given us the slightest information as to how these valuations are to be carried out. There are large areas where no one knows whether there is coal or not. By the Report of the Royal Commission of 1905 the Midland coalfield, that is to say the coalfield of the East of Yorkshire, Nottinghamshire, and Derbyshire, has been extended to a tremendous area, and the Commissioners

  1139
  find that in the county of Lincoln alone there are 1,750 square miles where they believe that minerals exist, but they cannot say what those minerals are, because they have not been proved. Certain boreholes have been put down, but it is quite impossible to tell from the small amount of testing that there has been whether minerals are under this land or not. Under this Bill each little plot, each field is to be valued, and, not only that, there is to be a separate valuation for minerals alone in order that they may be separately taxed. The Chancellor received a deputation from the mining association, on which I had the honour to be, with great courtesy, and he asserted that it was not his intention in any way to tax the coal industry. What he was aiming at, in popular language, was to tax the mineral owner, to tax his royalty, and he said he was quite prepared to accept an alternative proposal. It is not for us to give an alternative proposal. It is for the Chancellor of the Exchequer himself to submit his proposals. The right hon. Gentleman admitted to that deputation that he thought an alternative might be arrived at by taxing the output of coal. If it is to be taxed at all that is the only way of doing it, We object entirely to this industry, which is the raw material of all the industries of the country, being taxed further in any way. It has already to pay Income Tax and local rates, and very heavy charges have been placed upon it by the working of the Compensation Acts. It has been said that coal has been held up. That is not true. Owners of minerals are only too anxious that they should be developed, and if it is the object of the Chancellor of the Exchequer to make the mineral owner develop his coal fields he is on the wrong tack.
  With regard to these valuations, it is all uncertainty and guesswork except where the coal is being worked. I have an instance in mind where a large colliery is sinking a pit. There are no end of owners, and each of them is going to be taxed before he can draw any money, and many of these will have to wait perhaps 50 or 60 years until they get any royalty at all. There really is a case for consideration, and if the Chancellor of the Exchequer will consent to postpone the question of the Increment Duty until we arrive at the Mineral Rights Duty he would probably find a solution. I hope he will give us a clear explanation of what he means by
  1140
  Increment Duty on minerals, and what he means by minerals. We ought to have a list of what would be included.
  Mr. F. A. NEWDEGATE: When the mention of minerals was first introduced some hon. Member said something like 1s. or 1s. 6d. a ton was paid as royalty on minerals. I want to disabuse the Committee on that. Possibly in some parts of England it may be paid, but in the part of England which I come from the lowest royalty is 2½d. a ton and the highest is 5½d. a ton.
  If you want to catch the people fairly who obtain the royalties, I would urge the Chancellor of the Exchequer to restrain the excessive nature of the taxation. I want to point out certain cases of hardship. There are some in the county I come from in connection with undeveloped coalfields. I know of an estate in which boreholes have been sunk and coal has been found of good quality at a depth of 800 yards. It is impossible for the owner at present to let the coal because of the depth. In that particular neighbourhood a depth of 800 yards is prohibitive, and yet under the Bill if the owner were to die his successor would have to pay owing to the fact that coal has been found on the estate. There is no doubt whatever that some day, from twenty to fifty years hence, the coal will be worked. That would add increment value to the estate. I venture to say that it is hard that this estate should be mulcted because coal has been found. I would direct the attention of the Chancellor of the Exchequer to how hard the tax will fall on small owners of land. The county of Warwick is made up of a few large estates and a great many small estates. When a person has managed to save a little money it has always been the practice in that county to invest it in two or three fields. We have in our midst a mineral estate which is made up of a very large number of small holdings. I venture to say that as regards these small holdings that the charging of Increment Duty on the separate plots of land would be to place a real hardship on them.
  As regards the Bill as a whole I would say that the method of valuing minerals seems to be extremely bad and unsatisfactory. Hitherto, in connection with the Death Duties, in a rough way the value of minerals has been discovered by calculating the value of royalties over a certain number of years. Under this Bill you propose to levy a tax on undeveloped

  1141
  minerals if you can find what is underground, but there are risks of all sorts, such as faults and wash outs and water and the thousand and one things which mining engineers have to contend with. I was glad the Chancellor of the Exchequer gave an assurance last night that he was prepared to consider, not only the question of increment as regards minerals, but also the question of decrement. I understood the right hon. Gentleman to say that if duty has been paid on minerals which do not exist the person who has paid will receive an allowance in respect of such payment. Did I misunderstand the Chancellor of the Exchequer?
  Mr. LLOYD-GEORGE: I did say last night that supposing there was a lease of minerals, it being supposed at the time that they were used, and that it was discovered in the course of two or three years that the minerals were not workable, there are provisions in the Bill which meet a case of that kind, and I made a promise to the hon. Member for Brighton (Mr. Ridsdale), that in a case of that kind it will be made perfecly clear that the rest of the charge would not be imposed.
  Mr. NEWDEGATE: That shows how badly a layman like myself dealing with these complicated questions expresses himself, because I understood that the point I put before the hon. Gentleman was supposing something goes wrong with the minerals the unfortunate owner is to be given an allowance? At all events, we would like to understand clearly on this side of the House that an allowance is to be given. It seems to me a great hardship if, as often happens, a person was to purchase 1,000 acres of land at, say, £30 an acre. Owing to minerals proved to exist in the neighbourhood the Commissioners might declare that the value of the land had risen from £30,000 to £100,000. As the Bill stands, if the purchaser of the land was to sell the land before he died he would have to pay Increment Value at the rate of £100,000, although he may never have worked the minerals, because the minerals were known to exist. That seems to me to be another point which ought to be looked into before this Bill becomes law. Then supposing the owner of these minerals where they are proved, leases the minerals he has to pay for doing so, on the supposition that these minerals are worth £100,000, a tax to the State of £20,000 for unseen minerals. Then, supposing having done so in the next year the owner
  1142
  dies, in that case it appears to me his estate will have to pay another sum of £20,000. So it is quite possible that £40,000 will be paid in respect of these minerals, which are worth £100,000, before any money at all had been got from the development of these minerals. That seems to me to appear in the Bill as it stands at present. Then another point is the great difficulty of valuing the capital value of minerals for taxation. You may possibly arrive at the value of the minerals and may tax the owner up to a certain point which the Commissioners may consider right. But I happen to know of a case in which there is coal which is valued in one place at 5½d. a ton royalty, in another place at 4d. a ton royalty, and in another place at 2½d. a ton royalty. The coal is exactly the same value and adjoining, and before capitalising it to pay its Increment Duty you could not make the coal in this radius of different value. Yet in one case the royalty owner only gets 2½d. a ton, in the other case 4d., and in the other case 5d. a ton, but according to this Bill, if he was to die without entering into a lease—it is extremely difficult to state a complicated case like this when the Chancellor of the Exchequer, in charge of the Bill, and the Prime Minister, carry on a conversation when I am trying to put certain questions. The Prime Minister and the Chancellor of the Exchequer are in charge of the affairs of the Government, and all we can do on this side of the House, if we consider an injustice is done, is to bring certain definite cases before them. It is a little hard, especially, as in my case, when one speaks very seldom—I was ten years in the House and scarcely lifted up my voice—that one should not receive attention when one is dealing with what we consider an extreme hardship. I have a definite case given by a distinguished mining engineer in the Midlands, who makes the following statement:
  "I have the management of an estate in which we have bored and proved the coal, and from the condition of trade and our position in the coalfield, where there are other minerals nearer the surface and more accessible to the market, it will be probably ten years at least before we can find a lessee to take our mines. Consequently, in the present value for this tax, the annuity value to be derived from them for, say, 20 years must be deferred 10 years, so that, assuming figures and periods, a long way under the mark, to illustrate the matter, the revenue or annuity of £1,000 per annum, for 20 years, deferred 10 years, valued upon the Somerset House basis for Death Duties on the 10 per cent. tables for mining risks, would be £2,810. At the end of the 10 years, supposing we lease the mines, the £1,000 per annum will be immediately expectant, and under this Bill it looks as if the unjust advantage of claiming Increment Duty would be

  1143
  exercised, when the valuation would come out at £7,290, and the fallacious increment at £4,480, in which case the State would be depriving the owner of £896, the one-fifth. There are thousands of instances of this kind."
  I will not weary the House by reading further passages, but I think it might be well for the Chancellor of the Exchequer to look into that passage which I have quoted. I want to go into the case of pillars of coal left in many parts of England. Are they to be taxed? Pillars of coal are left to prevent houses from falling; they are left under docks, railways, reservoirs and canals, and especially at the boundaries of collieries. Is this coal, which is not got, to be taxed, or will the Chancellor of the Exchequer put a clause in the Bill?
  The CHAIRMAN: The hon. Member seems to me to be referring to ungotten minerals. This is a question of the increment value of minerals.
  Mr. NEWDEGATE: With all deference, suppose the case of an estate on which a person dies. The point which I venture to make, with all deference to your ruling, is this, supposing a person who owns an estate dies, and under his house or any section of his estate a quantity of coal is left, his heirs will have to pay Increment Duty according to this Bill on that coal. I think possibly I may have been in order in mentioning that matter.
  The CHAIRMAN: The hon. Gentleman was speaking of ungotten minerals. If he puts it forward as a serious argument that those pillars will be taxed for increment value, that is an argument he can make.
  Mr. NEWDEGATE: That is what I was trying to argue. If the Chancellor of the Exchequer will at once say no Increment Duty will be charged in such cases then this argument falls to the ground and I will not discuss it any more. It is well-known that minerals are of no value at all until they are proved and brought up to the surface. Under the Houses of Parliament, where we are now sitting, there may be a most magnificent seam of coal, and in all this neighbourhood; but it is of absolutely no value until it is brought to the surface. It seems to me that in the case of a large estate those minerals may be valued at £100,000, and that a sum of £250,000 may be spent in sinking and developing those collieries. That gives a sum of £350,000. According to this Bill, it seems to me that the
  1144
  unfortunate owner, although he may lease the coal and get a very small royalty, will have to pay Increment Duty on the £350,000. And if the colliery was paying a revenue of £50,000 a year to the colliery company the valuation by the Commissioners might bring up the sum of £500,000 on which the owner would have to pay increment of £100,000, although his interest would hardly be worth that sum. This is another hard case which ought to be looked into by the Chancellor of the Exchequer and by those Gentlemen who are in charge of this Bill. I can only say, with all the seriousness I can command, that if these taxes are intended as regards minerals the effect will be that people in this country, instead of doing their best to develop the minerals, will do their utmost to conceal the fact that minerals may exist under the land which they possess, because they will know that if they develop the minerals, or if they let the Commissioners know that minerals exist they will, under this Bill, be mulcted to an extent that it will hardly pay them to work them.
  The PRIME MINISTER: I can assure the hon. Member opposite (Mr. Newdegate)—and that is the reason I have risen—that there was no intention of discourtesy in what passed between the Chancellor of the Exchequer and myself; we were really listening closely to his argument and simply exchanging ideas as to the best way in which to meet it. I have observed from the reports in the newspapers that some remarks have been made by various speakers, including the Leader of the Opposition himself, commenting, I will not say with severity, upon my absence from the proceedings of this Committee. I am sure the House knows me too well to believe that I should be guilty of any disrespect to the House. I entertain the very strongest opinion, founded now upon a long experience of the proceedings of this House, that for a Minister or even an ordinary private Member to intervene spasmodically in technical complex discussions upon a Bill in Committee, without having been able to give close and continuous attendance to the proceedings, leads to waste of time, friction, inconvenience, and general misunderstanding. The Committee will believe me when I say that, particularly at this moment, with the various duties which lie upon me, I am not able, with the best wish in the world, to give that

  1145
  close and continuous attendance. It is for that reason that I have refrained from taking part in these debates. My right hon. Friend the Chancellor of the Exchequer and I are in constant consultation on all the important points in the Bill, and I leave it with the utmost confidence to him, the Minister of Finance, and the person primarily responsible for the Bill, to conduct it through Committee. I trust the Committee will accept that assurance of mine that it is for this reason, and this reason alone, that I have not been more constantly in attendance and more frequently intervening in the Debates.
  In regard to this particular Amendment, while I listened with great interest to the speech of the hon. Member (Mr. Newdegate), I must profess my complete inability to understand what relevance it has to the point now before the Committee. I agree that the point he put forward ought to be, and will be, considered when we come to deal with the mineral clauses. The only point raised by the Amendment is whether, in what I may call the second site value—the site value when the Increment Duty falls and has to be paid—you ought to deduct the minerals from the value of the land. If you do it in one case you surely must do it in the other. If the minerals have been included in the original valuation, it is obviously unfair that they should be excluded from the second valuation. As I read Clause 1, which uses the word "land"—and land, as everybody knows, is a comprehensive term, which includes everything, unless it is specially excepted, that is naturally or artificially inherent in the soil—I read the word "land" as including minerals, and if it includes minerals in the original site value it must surely include it in the latter. It is quite true that sub-section 2 of Clause 16 says: "Where land comprises minerals, a separate return shall be made under this section of the value of the minerals." That clearly contemplates this: that if in the original site value these minerals have been excepted they may be equally, and of necessity, excepted from the second site value. Therefore what is the necessity for this Amendment? If carried, this Amendment would have the extraordinary, and I think absurd consequence, that although minerals have been included in the original site value, yet when you come to compare the second valuation with the first, you would exclude what might be just the
  1146
  element in its value that is the real source of increment, namely, the minerals under the land. Whatever course therefore may or may not be adopted in the various cases of hardships, it is abundantly clear that we cannot possibly accept this Amendment.
  Mr. A. J. BALFOUR: The right hon. Gentleman's observations require qualifications as to my comments upon his absence in the course of these Debates. It is quite true that I did, in the Debate in which I recalled the particular utterance outside the House, point out and showed to my own entire satisfaction, at all events, that the official statements of the Government inside and the statements outside the House were quite inconsistent with each other. The Committee will probably admit that under the circumstances I am rather justified in saying that the Prime Minister is perhaps more free with his comments on the Bill outside than inside the House. But, if I may say so, while the Prime Minister, I think, may give us his valuable assistance when big principles come up at stated intervals under this Bill, I do agree, speaking from a long experience, that there cannot be two people in charge of the Bill. To that broad principle I assent. I hope I have said nothing inconsistent with that either last night or on any other occasion. The Prime Minister has replied. The Prime Minister must remember that we have not yet discussed, or been allowed to discuss, whether minerals are, or are not to be included in the original site value. The issue is that the word "land" in Clause 1 minerals are ipso facto included. I am told by a right hon. and learned Friend near me that that is not only contrary to ordinary usage but contrary to the settled law of the land, and that land, for instance, when compulsorily taken for a railway company does not include minerals. I am not going to intervene further in the collision which I perceive imminent between high legal authorities on all sides of the House, but speaking as a layman, and in no way endeavouring to interpret what the Courts call land and what they do not call land, I can assure the Prime Minister we have not been allowed to determine whether or not in the original site value minerals are to be included or not, and if the Prime Minister will look at Clauses 1 and 2 up to the point at which we have arrived he will see the word minerals does not yet occur. It is perfectly true we are engaged

  1147
  in discussing the occasion of the second or occasional valuation. The reason of that is that the first or original valuation does not come on for detailed discussion until Clause 14, and we really have had no alternative. I agree it seems to be useless to discuss the omission of minerals in the second valuation until you have discovered whether or not it has formed part of the first. But we have not been allowed to discuss the first valuation and shall not be allowed until we come to Clause 14. Therefore, I think the Prime Minister and the Chancellor of the Exchequer will see that my hon. Friends had no alternative whatever but to raise, upon this occasion, the question whether we shall or shall not include minerals on any valuation either first or second. That, I think, is not an exhaustive treatment of the subject raised by my hon. Friend, but it is I hope a complete and adequate reply to the observations made by the Prime Minister, who shows conclusively he has not fully appreciated the order in which we have presented to us the various topics in this extremely complicated Budget.
  Mr. IVOR GUEST: In connection with a similar subject which I brought to the attention of my right hon. Friend, he said he would be prepared to consider an alternative tax in Clause 12 for the halfpenny there proposed. The ground upon which I ventured to draw the right hon. Gentleman's attention to the alternative proposal was the difficulty of estimating the value of the ungotten minerals, and I think it was upon that ground that he answered the question I put. My point is this: if there is a difficulty in estimating the value of ungotten minerals in the annual tax, there surely is equal difficulty in valuing the increment on ungotten minerals under the present clause. It seems to me that the two points stand together. If there is great difficulty in determining what the increment of the annual value is there must be equal difficulty in determining what the increment is upon the occasion of the death of the owner of the minerals. I should like to ask whether, in view of the proposed change of front in regard to increment of minerals, it would not be more convenient to omit minerals altogether from the valuation, both on the first fixing of site value, and also on the second. I submit it is quite a different point from increment on land which can be always estimated and determined. I think it can, and I do not
  1148
  think there is any difficulty in estimating the increment on land. When, however, you come to ungotten minerals then I think we get into regions of very great difficulty. I think it would be better to disentangle this question and adopt a better scheme of taxing receipts. If the Government accede to that view it would be politic to accept this Amendment, and also accept a similar proposal on Clause 4, which would cut out minerals from the increment liable to taxation. We should then disentangle the two subjects, and we should be able to deal with them in a more satisfactory manner.
  Lord BALCARRES: I think the Government are under some obligation to explain how they mean to arrive at the increment value. Can they now give us a definition of the Government proposal? The Attorney-General stated categorically that he saw no difficulty in arriving at the valuation for the purposes of the Increment Duty. All I can say is that people who have spent long lives successfully in looking after minerals are absolutely puzzled as to how this increment value is going to be determined. I will give in a sentence or two some of the difficulties. Take a purely arable farm in Lincolnshire sold or transferred at any date after the specified date in the Bill for the original valuation. You have got somehow or other to determine the value of the minerals for the purposes of the Increment Duty. We assume, geologically speaking, that the minerals are there, and that there is good reason for believing that they are there. Everybody knows that this great coalfield is only at this moment being developed, and you have to arrive at some decision without having any accurate data to work upon. Take a much simpler case of a mine where we know that the minerals are there, and you have to arrive at the Increment Duty. I do not know how you are going to arrive at it, because it is not defined in the clause. This clause deals primarily with the surface of the land, and so far as Increment Duty is concerned it would really appear that the Increment Duty is an after thought. How are you going to arrive at it? If you take a year when there is a coal boom the price of the mineral that year may be 40, 50 or 60 per cent. above the price of the year before or the year after. The difficulties of ascertaining the value of ungotten minerals for the purposes of this tax are indeed very great, but in one sense they are not so great as the difficulties to be

  1149
  encountered in regard to the Increment Tax. Take the case of a big mine in Lancashire in which there are minerals under 80 different freeholds. Now, whenever there is a death or a reversion, or if the colliery were to become a limited liability company, the Increment Duty would be raised on each one of those 80 freeholds. The Attorney-General dismissed this airily and in a genial speech of just two minutes, but I assure him in all sincerity that this is a subject which is troubling the minds of professional men who have been occupied in dealing with colliery business years and years. Take a very natural difficulty which would occur at once. There is a great pit which has got to be taken for minerals under 80 different freeholds. Perhaps some of them will not be approached for thirty years. Each time a death occurs or when the company is made into a limited liability company, there would be an increment and gradually by your 20 per cent. tax you might take away the greater part of the profits of that mineral.
  It is not the fault of the freeholder or of the proprietor that the field is not worked. These things cannot be rushed into the market. When making his Budget speech, the Chancellor of the Exchequer talked about undeveloped land, and he painted rather a lurid picture of the dreadful conditions under which people lived because of capricious landowners holding up land. His next sentence was that on similar principles he proposed to tax minerals. There is a profound fallacy underlying that land, the right hon. Gentleman says is held up. It may be held up in a few cases. There are 1,200,000 freehold owners of land in this country, and it is a very small proportion who hold up land. What about the minerals on which he is going to put the tax? It is a great mistake to suppose minerals are held up for nefarious purposes. Minerals are certainly held up for good objects. It is absolutely necessary that at the foot of every shaft thousands of tons should be held up for the maintenance of the shaft, and that has got an Increment Value. It is the last bit of coal to be worked, and at the end of the lease it has an Increment Value. Coal is also held up for the purposes of reservoirs, railways, canals, and different things, and it is just as good as the coal which is being worked in a normal way. Subject to the discretion of the Commissioners, that coal has got a market value. It could be worked, but it would be most unwise, for it might be disastrous to the whole coal
  1150
  field. The question I should like to ask the right hon. Gentleman now, I have asked frequently, and always without success, his colleague the Financial Secretary. We are, by this Amendment, trying to exclude minerals from the Increment Duty, and by refusing to accept it the Government make themselves responsible for including minerals. I beg to ask the Chancellor of the Exchequer what minerals are? We have asked this question in various forms, but the only satisfaction we have received up till now is that peat is not going to be considered as a mineral.
  We were told by the Financial Secretary to the Treasury it would confuse matters to say what is going to be taxed under Clause 1 of the Finance Bill. I asked what was the definition of minerals upon which the Increment Tax was to be levied. Was not that a plain question which the Government might well be called upon to answer? I want to know is marble, is fire clay, is shale, is slate a mineral? Coal and ironstone we know are staple minerals. Let the Government tell us what other minerals are going to be made subject to this Duty. Why do they refuse to tell us? They say it may lead to confusion ! But surely the confusion cannot be anything like so great as that which now exists in the minds, say, of the landowners of Cheshire, under whose land salt or brine is universal. There is not a man in Cheshire who can tell whether the subsoil of his property contains brine or salt, which is going to be taxed under this clause. In answer to one of our questions we were referred to the Carpalla case, and then when we inquired if the decision in that case was to be accepted by the Government as defining minerals, the Secretary of the Treasury simply replied: "How very interesting indeed." We could get no definition, however, of the word "minerals" under this clause. In view of the fact that Reversion Duty, Increment Duty and Ungotten Minerals Duty must be determined in relation to the articles upon which the charge is to be levied by the State, we say it is the absolute duty of the Government to make up their minds at once what are the minerals which are to be subject to this tax. Let us have a schedule. It is not merely unfair to the House to keep back this information, but it is unfair to the people who own what may or may not be minerals and who cannot tell whether or not they are going to be taxed. Salt is a very obvious case in point. Then there are mineral oils and mineral

  1151
  waters. The waters of Harrogate, Bath, and Cheltenham must all be taxed, and it is the duty of the Government to let us know what is going to be done, and up to the present I can assure the Prime Minister we have had no serious answer to the very serious questions which have been put upon a very important subject.
  Mr. GEORGE CAVE: The reasons given to us for not answering the questions put are really not sufficient. My hon. Friend has put forward a perfectly clear case, and said deal separately with surface and minerals. If by communal process value is added to the land the action only affects the value of the surface, but when increased value is due to mines it is not owing to local or communal action, but to some much wider reason, and because a demand springs up not in the locality but in the whole world for a particular mineral. Therefore, while an increase of the site value may be due to the community, the price of minerals is not a local price, but a world price, and therefore the hon. Member says deal separately with surface and minerals, and exclude minerals altogether from Clause 14, which deals with surface site value, and Clause 2, which deals with taxable site value. Two reasons are given to us for not giving an answer. First we have the reason of the Attorney-General, who says if you exclude minerals from taxable site value you ought to exclude them from original site value, and he says in Clause 14 the minerals are included, and therefore we cannot discuss the exclusion of minerals on Clause 2. The answer to that is really too obvious. We have not reached Clause 14. When we do my hon. Friend will propose that the minerals which are shut out from Clause 2 shall be shut out from Clause 14 also. They must be shut out from both, but we must raise the point on the first clause in which the point can be raised. That disposes of the Attorney-General's reason for postponement. Then we had a reason from the Prime Minister. He says: "We cannot deal with an Amendment on Clause 2 because land in Clause 1 includes minerals." In fact, in his view, the question is already dealt with. There are two answers to that, one is that the point was raised on Clause 1, and we were told, "No, raise it on Clause 2"; and if I may say so, we were told that perfectly correctly, because in Clause 2 you are defining the meaning of increment value in Clause 1. All we have done so far is to say that the duty shall be levied
  1152
  upon the increment value of land. Now in this clause we are defining the meaning of the term the increment value of the land. It is defined by reference to site value. The proposal now before the Committee is to exclude from that artificial term, site value, the minerals under land—a perfectly reasonable proposal and quite consistent with Clause 1 as already passed. That is an answer to the Prime Minister's reason for not dealing with the matter now. We really ought to know what the view of the Government is on the merits of the question. We ought to be let into the secret hitherto religiously kept as to whether they agree with the principle of the Amendment or not, and whether they think increment value duty ought to be levied on the minerals as well as on the surface of the land. The value of the surface is affected by local conditions and the value of the minerals is not. Therefore if you are right in levying Increment Value Duty on the surface, it does not follow that you are right in levying it on minerals.
  Mr. LAMBTON: It is quite obvious that the Government have never thought out the question. The Commissioners are directed to make deductions in certain cases, but there is no mention whatever of rights in regard to minerals or mineral leases. That shows that it was in the mind of the Government that they would not have to deal with minerals until they came to Clause 12 or 14, and that the Increment Tax would be on land only. Now, having hurried Clause 1 through, they find minerals are included, and they have made no reasonable deductions for minerals. But we have never had a definition of minerals. May I ask the Prime Minister if he would define minerals as windfalls? If not, according to his speech last week, I maintain that these minerals do not come under Increment Duty at all. In his speech at Newport he laid down that increment value was to be charged upon any increment which came through the efforts of the community, but he will not maintain that the community made minerals. The right hon. Gentleman also said these taxes were justified, because there were a large number of persons who held up land and did not sell it. But that reasoning does not hold good with regard to minerals at all. I defy anyone to point to any part of the country where minerals are held up. Take the case of an area of coal, which is let to a colliery with perhaps 80 holders. Each one, when a new lease

  1153
  is made, has to return the value of his lease. I presume any increase of value would be increment, and the increment value would have to be capitalised. Perhaps 30 or 40 of the holders never have their coal worked at all. They would pay their increment, but would never bring their coal to the surface. How are they going to get back the increment they have paid? The colliery owner works one corner or the other, and one gets his coal worked and the other does not. And yet they are both charged the same Increment Duty. I am pointing out a simple fact. I think these minerals ought to be exempted from the general provisions in regard to the leasing of land. The lease of a coalfield may apply to coal which is not to be worked during the next 50 years, and yet at the beginning of the lease the Increment Duty is to be charged. It is a perfectly impossible situation. Not only will the Increment Duty be paid at the beginning of the lease, but during the running of the lease there will also have to be paid the halfpenny tax. It will be charged not only on the original site value, but on the increment.
  Mr. BALFOUR: I wish to point this out to the Prime Minister and the Chancellor of the Exchequer. It must be admitted that the subject raised on my hon. Friend's Amendment is one of the most important that can be raised. It touches very large and very varied interests. It raises questions of the utmost difficulty, delicacy and complexity. I am by no means anxious to discuss it at this time of night (12.10 a.m.). The interests involved are so great that there really ought to be some better opportunity for stating what are the views held on this side of the House, and of hearing what are the views of the Government. If the Government take the view that this is not the proper place to raise these great questions, what, in their opinion, is the proper place? This is the first occasion on which we have been able to discuss how these mineral values are to be taken into account for the purpose of duty. If these questions are not discussed now, the Chairman may get up at a later stage and say that we have decided on Clause 2 that minerals are to be taxed, and that we cannot go back to the discussion of the proposal. I do not imagine that my hon. Friends care when it is discussed, provided that it can be raised at a convenient hour and without prejudice to the whole area of the question. I am quite sure that
  1154
  the Government must feel that elaborate and detailed comments on the proposal in the Bill have been made by my hon. Friends. They have not attempted to reply to those comments.
  The PRIME MINISTER: The question does not arise on this Amendment.
  Mr. BALFOUR: The Amendment does raise this question. At any rate, the Chairman has not suggested that it is out of order to discuss the question now. I assure the right hon. Gentleman that we do not want to press it at this hour, but what we do honestly want as soon as possible is a declaration of the policy of the Government on this all-important question and a real attempt to grapple in detail with the comments which have been made. It is a substantial question, and considering that Great Britain is becoming more and more a great manufacturing country dependent on her coal supplies, I think everybody will agree that we must have the assistance of the Government in dealing with this question. It is in no captious spirit that I ask: When are the Government going to give us an opportunity for discussion? My hon. Friends who have spoken are intimately acquainted with the industry of which they speak, and so far there has really not been any attempt on the part of the Government to deal with the difficulties which have been laid before the Committee.
  Mr. LLOYD-GEORGE: This is a question which obviously ought to be debated, and debated under conditions which will enable the Opposition to raise the question whether minerals should be subject to any Increment Duty, and also whether they should be subject to other taxes. There are several questions raised, some of them at the tail of Clause 12, and some which could have been raised on Clause 1. Who is to blame for these not being raised on Clause 1 I would rather not say at the present moment. But the right hon. Gentleman (Mr. Balfour) says how is it to be raised in future? Take the question raised by the Noble Lord. That is a question preliminary to the consideration of the Increment Duty. What is a mineral, to begin with? Does he deny that in discussing the whole of that question we are bound to do it in Clause 12? Then, when you come on to Clauses 14, 15, and 16, they raise the whole question of minerals in reference, not merely to occasional valuations, but Increment Duty as well. Then take the question raised by the hon Member for Warwick (Mr. Newdegate). That

  1155
  undoubtedly has got to be considered. I think it is covered already, but if not I propose to make it perfectly clear. Railways and canals, I agree, should not be charged, but they could not be considered on this Amendment. With the best wish in the world, the Government could not make any concession at this stage. That is a question which has got to be considered either in the form of separate clauses or as an Amendment to the valuation clauses. There are questions as to which the Government themselves will put down special Amendments dealing with them. It would be quite impossible on this Amendment to discuss all the issues that have been raised. Certainly we could not raise the question that has been referred to by the right hon. Gentleman with regard to the Increment Duty on minerals.
  Mr. BALFOUR: Suppose we do not discuss on this clause whether the increment value of minerals should be included when you come to discuss the occasional valuation of land which is the subject-matter of this clause. Can we ever go back if once it be admitted that minerals are to be included? Can we ever reverse that decision, and, if so, at what stage?
  Mr. LLOYD-GEORGE: Before the Chairman replies we have got to consider minerals, not in reference to deductions, but in reference to original value. Otherwise it would be quite impossible to discuss them. One of the difficulties in discussing it here is we are discussing it purely in reference to deductions and not in reference to original value. I submit that it would be competent to discuss It on Clauses 14, 15, and 16.
  Lord BALCARRES: May I ask a question as to the definition of minerals? The Chancellor of the Exchequer has just informed us that Clause 12 is the place where the definition of minerals must arise. I submit that we cannot offer to leave out the word minerals, because that would make nonsense of the text, and we cannot move to leave out that portion of the section, because, according to your recent ruling, that would leave the rest of the section inoperative. Unless it is made a general debate, which may range over the whole question of mineral duties, we shall never be able to get a concrete definition—which the Government apparently wishes to avoid—of the term "minerals."
  The CHAIRMAN: Several points of order have been raised. With reference to that of the Noble Lord, I really cannot answer the question as to sub-section 1. If sub-section I does involve the whole clause I could not allow that to be moved out, but I have not had time to examine the case. If one sub-section is independent of the other, or practically independent, sub-section I can be moved out. In regard to the question, what are minerals, an Amendment can be moved leaving out the word "minerals" and inserting certain specific minerals. The particular point could be raised in that way.
  Lord ROBERT CECIL: The question whether Increment Duty is to be charged on minerals is, of course, distinct from the question of whether there shall be a duty on undeveloped minerals. The two are quite distinct, and depend on different considerations. Therefore the discussion of Clause 12 would evidently not enable us to raise any question adequately dealing with Increment Value Duty, as that clause deals with undeveloped minerals. As to Clause 14, the difficulty, I submit, is this: Supposing exceptions were inserted in Clause 14, excluded minerals under that clause would be obviously, by the elementary rules of construction in Clause 2, and the result would be that you would exclude minerals from the original site value, while you include them in increment site value, which would be an absurd result, and evidently could not be discussed on Clause 14. As to Clauses 15 and 16, they refer not only to Increment Value Duty, but to all three duties, and a discussion cannot take place. I submit very respectfully, on Clauses 15 and 16, as to whether minerals should be included in the Increment Value Duty. This is very important, both on the ground of practical difficulties, and also on the whole question of the theory of the tax. Minerals rest on a wholly different footing from the land, and I submit the only place on which the point as to minerals can be discussed is on Clause 2.
  The CHAIRMAN: I do not see at present very clearly how the question of increment value on minerals can be raised other than at or about this point. It is possible that it might be raised in some other form if this Amendment were by general leave withdrawn.
  The PRIME MINISTER: Let me make a suggestion. It is that the question could be properly and appropriately raised on the second sub-section of Clause 14.

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  Let me point out the prefatory words of Clause 2, which provide "For the purposes of this part of this Act the increment value of any land shall be deemed to be the amount (if any) by which the site value of the land, on the occasion on which Increment Value Duty becomes due, exceeds the original site value of the land." Therefore you have got to find out somewhere else in the Act what the original site value of the land is, and, amongst other things, whether it includes minerals. In Clause 14, sub-section (2), that term is defined: "For the purposes of this part of this Act the site value of land means the amount which the fee simple of the land…might be expected to realise if the land were divested of any buildings…and of all growing timber, fruit trees, fruit bushes, and other things growing thereon." I submit it would be open to any hon. Gentleman to move to include minerals in the things which would be excluded from section (2) of Clause 14.
  Lord ROBERT CECIL: That would apply to all three duties and not to the Increment Duty alone.
  The PRIME MINISTER: I agree, but, at any rate, it could apply to either one of the three. Attention has been called to the fifth section of Clause 14, which says: "The provisions of this section are not applicable for the purpose of the valuation of minerals." I do not think that has any effect whatever on section (2). I think it refers to section (4). We will be able to deal with section 2 before we come to section (5), and the question whether for the purposes of Increment Duty or the other two duties, minerals should or should not be included.
  Mr. PRETYMAN: I do not think the Prime Minister has quite realised that site value as denned is two totally different things in Clause 14 and in Clause 2, and that the words "site value" have not the same signification in Clause 2 as in Clause 14. If in the manner suggested you define site value in Clause 14 as excluding minerals, that does not debar you in any way from holding that in Clause 2 minerals would not be excluded. Section (2) states: "The site value of the land on the occasion on which Increment Value Duty becomes due shall be taken to be." What the site value would be taken to be by that section is quite different from what it is established as being for original site value purposes in Clause 14.
  The CHAIRMAN: A question has been put on a point of order. I think it is quite clear that sub-section (2) of Clause 2 refers only to site value of the land on the occasion on which increment value duty becomes due, or what the Leader of the Opposition called, the occasion at site value. Sub-section (2) of Clause 14 does, I suppose, from what has been said, refer to the original site value. I am not at all sure, and I really could not bind myself to say that the question of the Increment Tax on minerals could be dealt with on Clause 14. I may point out that not infrequently a Bill is altered in Committee, with a promise of consequential alterations on Report. If this Amendment is withdrawn by general consent, I am not quite sure how far the question can be raised on Clause 14, sub-section (2). These discussions are so complicated that I cannot, with the best will in the world, say without examination what can and what cannot be done.
  Mr. BALFOUR: I do not rise to suggest that we should report Progress, and so prevent further proceeding. Without any evil intention, we are obliged to put to the Chairman questions of very great difficulty, simply because of the drafting of the Bill. I do not criticise the draftsman or the Government; but everybody knows that the Bill is one of extraordinary complexity, and we have to put questions which the Chairman cannot answer off hand. How are we to get out of the present difficulty? The Chairman evidently thinks that this is the only place where he is quite sure we have the right to raise this point. Personally, I do not think that this is an hour at which any really important question can be debated with advantage; I would rather have it raised at a more convenient hour; but I could not—and I think I speak for my friends as well—consent to our losing what may prove to be the only opportunity, inconvenient as it is, of discussing one of the greatest and gravest problems raised by the first portion of the Bill. Under these circumstances, I should hope the Government would consent to our proceedings being now concluded for to-night; or, if not, that they will endeavour to deal with the big problems which have been raised.
  Mr. LLOYD-GEORGE: I think the Amendment to be moved by the Attorney-General immediately after this will enable the Opposition to raise the whole issue on Clause 14. The Attorney-General pro-

  1159
  poses to add after "structure" the words "or other things." That means that there will be a deduction in calculating the increment of all the things of which the land can be divested for the purpose of ascertaining the original site value. When we come to Clause 14, we divest the land of trees, bushes, and buildings. All you have to do is to add the word "minerals." Assume that the Committee adopt that Amendment, what would happen? The words "or other things" in Clause 2 would cover minerals for the purpose of increment value. If the word "minerals" is moved in Clause 14, the words "or other things" here would cover both. Therefore, I submit that the question could be raised then.
  The CHAIRMAN: On the point of order, if the Amendment is withdrawn now I am not quite sure how far the question of minerals can be raised on a subsequent section.
  Lord ROBERT CECIL: I do not think the Chancellor of the Exchequer has really grasped the difficulty that we on this side feel very much. The Amendment he suggests would have the effect of striking minerals out of three land taxes. That may or may not be a proper course, but it would have to be defended by totally different arguments, and raises a totally different point to striking the minerals out of the increment taxes at all. It is really a serious point, and I do ask the Chancellor of the Exchequer to try and realise it. It is that we wish for a discussion on the question as to whether minerals should be excluded in the Increment Value Duty. His suggestion would not enable us to raise that question, and that question only. I would ask as to whether this Amendment is regarded by the Chairman as in order, because I never heard of a proposal to divest land of minerals. My point is that it does not enable us to raise the question.
  Mr. GEORGE WYNDHAM: It does seem on the face of it very doubtful as to whether the suggestion of the right hon. Gentleman can be carried out. The whole of Clause 14 as drafted contemplates the exclusion and reservation of minerals. The clause adjoins the question of the valuation of minerals until the next clause. In Clause 15 it is brought in by a reference that the site value is to be ruled by a reference to the capital value of the minerals. I think it would be very
  1160
  difficult to remodel the structure of these two clauses in order to carry out the suggestion.
  The PRIME MINISTER: Clause 14 applies a definition to land. It is intended to apply to land and minerals, which are really one subject. In Clause 15 minerals are treated as a separate subject. I say most emphatically, so far as I can, consistent with the rules of order, that it is our intention, whether minerals are or are not excluded, whether for the purposes of Increment Duty alone, or for the purposes of other duties, that the question can be most properly raised on Clause 14.
  Mr. LAURENCE HARDY: The short title of Clause 14 explains what it is. Whether or not it will be possible to raise the question as suggested, seems to me, by the Chairman's ruling, to be an extremely doubtful point. I should be reluctant to withdraw my Amendment in this particular place, unless I have some very much more certain assurance than has been given up to the present. Allusion has been made as to whether the question should have been raised on Clause 1. When I had an Amendment on Clause 1 of the very first word "land" to exclude minerals, I did not move it at the very special request of the Chancellor of the Exchequer, who suggested that it would be better raised on Clause 2. When I put down several Amendments at the end of the clause I was ruled out of order, because it was considered better it should come on on Clause 2. I did my best to raise it on Clause 1. We have at last obtained an intimation that it is in order, but the Government have given us no clue as to this important decision, though they admit it deserves very considerable and careful debate. I think we are justified in asking at this late hour that the Government should take time to consider the matter.
  Mr. BALFOUR: I venture, with no obstructive desire, as I am sure the Committee will admit, to move that you. Sir, do report Progress, and ask leave to sit again. It is evident, I think, that this is the proper place to discuss the question of minerals in relation to the increment, and it is certainly time, in the second place, that with the best will in the world, we are not in a position to enter usefully upon that discussion now. I do not believe the discussion would be useful now, and I venture to move, "That the Chairman do report Progress, and ask leave to sit again."
  The PRIME MINISTER: I very much hope the right hon. Gentleman will not press that Motion, because I really think we might make some further progress. There are some non-contentious points in the next two or three lines. If the Chairman ruled that the matter could not be raised in its fullest and most comprehensive sense at a later stage, then I agree there would be some ground for the right hon. Gentleman's contention, but I did not understand the Chairman to give any such ruling, and I have stated most emphatically on the part of the Government, if this Amendment is either withdrawn or negatived, that the whole matter would be open upon Clause 14. In other words, it would be entirely without prejudice to the discussion of Clause 14 as to whether minerals are to be included in the value of the land, both for the purposes of Clause 1 and Clause 2. I agree it is a very serious matter, and cannot be conveniently discussed at this hour. So far as the Government are concerned, they desire to make it perfectly clear that they will interpose no obstacle to its discussion.
  Mr. BALFOUR: I desire to ask your ruling, Sir. Is this not the proper place on which to raise this isolated issue, namely, whether minerals should be calculated for the purpose of taxing increment values of land? In other words, I wish to know whether we may raise that isolated point, which is an extremely important point, on other clauses of the Bill with equal convenience?
  The CHAIRMAN: I am hampered in giving a decision by not knowing whether it is intended to withdraw the present Amendment. If the present Amendment is negatived it puts a different complexion upon my ruling in regard to this matter. Assuming this Amendment is withdrawn, assuming the Government could deal with the matter comparatively soon—I do not mean to-night, of course—but at some early date, no doubt the same point could be raised on a proviso to this clause. The right hon. Gentleman has asked me whether the point could be raised on Clauses 14 and 15 as applied to the increment value. I wish someone would suggest the actual way.
  The PRIME MINISTER: My suggestion is to add at the end of Clause 14, subsection 2, words providing that for the purposes of increment it shall not be deemed to include minerals.
  Mr. F. W. LAMBTON: I suggest that we should take the discussion on this question at the end of Clause 2, and that would give the Chairman time to consider this point.
  The CHAIRMAN: I really should prefer to have more time to consider this question. I have not had time to study Clause 14, and I do not want to give a ruling which I might find cause to regret.
  The PRIME MINISTER: I agree that this is a complex matter. If to-morrow you decide that in your judgment this question cannot be raised on Clause 14 the point can be held over until we reach the end of Clause 2. I think this Amendment should be withdrawn.
  Mr. LAURENCE HARDY: I do not wish to harass the Government in any way, and I am perfectly willing to withdraw my Amendment. I do so, however, upon the understanding that the Government will allow a full discussion. If it is decided that the matter can be better raised on Clause 14 I shall be quite ready to move it then.
  The CHAIRMAN: Will the Leader of the Opposition withdraw his Motion to report Progress?
  Mr. BALFOUR: Yes, I am willing to withdraw my Motion.
  Motion to report Progress, by leave, withdrawn.
  Mr. LAURENCE HARDY: I beg leave to withdraw my Amendment.
  Amendment, by leave, withdrawn.
  Sir W. ROBSONmoved to omit the words "the value of" ["attributable to the value of"].
  It is a drafting Amendment intended to exclude the value of the land attributable to the buildings upon it from the tax. As the Bill stands the deduction which is to be allowed in respect of buildings might be so read as to be limited simply to the cost of the buildings. We desire to strike out the words "the value of" following the word "attributable" in order that, in addition to the cost of the buildings, the value added to the site by the buildings shall also be deducted. This makes clear the full scope and benefit which is intended to be allowed to the taxpayer for the deduction. Supposing you had a site value of £100, and the buildings on it cost £1,000, it would not be fair to take the total value as being £1,100 because the

  1163
  mere fact of buildings being upon the site brings in an additional value. We therefore strike out the words "the value of" in order that the taxpayer may get the full benefit of the deduction in so far as the total value is due to the buildings, not merely the cost of the buildings, but any value they give to the site. It is only to make sure that you do not bring in for the purpose of the tax any value the buildings give to the site that the Amendment is moved.
  Question proposed, "That the words proposed to be left out stand part of the Question."
  Mr. PRETYMAN: It is quite clear this Amendment may cut both ways, and it is also clear that it makes the clause very much more vague. It is very difficult to see how you are going to take a site value which in one sense may be less than the veal site value. The Attorney-General will admit that it is a much more difficult task to put upon a valuer to take the value attributable to the buildings upon the land than merely the value of the buildings. The value attributable to the buildings might be less than the cost of the buildings, and it is extremely important from our point of view. It might be held that the land was not being put to its best use, and that the kind of buildings put upon it, instead of increasing the value to more than their cost, might decrease the value to less than their cost. This might be easily settled. There is an Amendment in the name of my hon. Friend the Member for Basingstoke (Mr. Clavell Salter) to this effect: After "value" to insert "being in no case less than the cost of constructing such buildings or structures as at the date of valuation, but subject to an allowance for depreciation (if any) in respect of their state of repair." If the Government are prepared to accept that proviso to their Amendment, then it would be perfectly clear that what they suggest would be given effect to, and they were really conferring a benefit, without at the same time running a risk of doing a very considerable injury. If we are given to understand that the Amendment of the hon. Member for Basingstoke will be accepted, then I think we might agree to the Amendment of the Attorney-General without further discussion.
  Sir W. ROBSON: I do not think it should be made a condition of the acceptance
  1164
  of this concession that the Government should agree to make a further concession later on. I can only point out that if these words are left standing they will have a very detrimental effect.
  Mr. PRETYMAN: It is quite impossible for us to discuss one point without the other. I do not think the Attorney-General was here when we debated this point at some little length, and when we got the statement from the Lord Advocate that the best way, in his opinion—and there is no greater authority in the House—of arriving at the value of buildings was cost less depreciation. That depends on this Amendment.
  Sir W. ROBSON: This can be discussed at a later stage.
  Mr. PRETYMAN: But why cannot we have some indication at this stage whether or not the Government will be prepared to accept this Amendment. What the Amendment of my hon. and learned Friend (Mr. Clavell Salter) provides for is exactly what the Lord Advocate told us was the intention of the Government. Now the Government say they wish to go a step beyond, and to give us any further value that may be attributable to the buildings on the land. We say we will gratefully accept that, provided the Government will see that in the case where the owner has honestly put buildings on the land which may not contribute so much to its value, he is not to be prejudiced by the Amendment, and that he shall be allowed the actual cost—less depreciation—of the buildings. I submit that that is a reasonable request, i.e., that the Government, in extending the Amendment in favour of the subject, shall not at the same time deprive him of something previously given to him by the explanation of the Lord Advocate.
  Mr. J. H. M. CAMPBELL: I think we all appreciate the object of the Attorney-General in introducing this Amendment. It is to cover cases in which the actual value of the property may not be sufficient to cover the cost of the buildings on it. Where you have a valuation wholly in excess of the cost of construction that case will be met by leaving out the words "the value of the buildings." But there undoubtedly will be cases in which the buildings will diminish the value of the property. The result would be that if the words of this Amendment were accepted the owner would be getting, as regards the deductions in respect of the value of his buildings, a sum far below the actual cost of

  1165
  his premises. I have had ample experience, of this in connection with land legislation in Ireland. In this case the Government will fail to carry out the purpose they profess to have in view unless they accept the Amendment of the hon. and learned Member for Basingstoke (Mr. Salter), because what that Amendment does is to say that in no case shall the deduction be less than the cost of constructing such buildings or structures as at the date of valuation, but subject to an allowance for depreciation (if any) in respect of their state of repair.
  Mr. LLOYD-GEORGE: That is a different matter.
  Mr. CAMPBELL: It is not a different matter if the right hon. Gentleman sincerely means to give the owners the benefit which he says his measure contemplates. This Amendment before the Committee, without some such safeguard as has been suggested, would be a real trap to the owners in all cases in which the buildings, having regard to the changed circumstances, do not enhance the value of property but actually diminish it. I hope the Chancellor of the Exchequer will consider the Amendment of the hon. and learned Member for Basingstoke, and I think we might safely stop at this stage and deal with the matter the first thing to-morrow.
  Mr. LLOYD-GEORGE: The right hon. and learned Gentleman wants us to decide now not merely the Amendment under consideration, but at the same time another Amendment which I do not propose to take to-night. I think it would be better if the right hon. Gentleman did not press the Government to give a definite answer now. This Amendment is really a concession to a claim put forward by the hon. and gallant Member for Chelmsford (Mr. Pretyman). It is his case of the brickyard again. What is it we are trying to arrive at? We are trying to arrive at the increment in the site value. When you come to structures they may contribute in two ways. They may contribute in excess of the money spent upon them. I think it is conceivable they may depreciate. But why should the State be called upon to suffer an increased deduction where the structure counts for a larger increment than the money which is spent upon it? Where, on the other hand, the site value has depreciated, it is suggested that the State is to get no credit. Surely the right hon. Gentleman
  1166
  cannot possibly say that is fair? I cannot really argue the other Amendment at the present stage. I do not wish to press this concession upon him; but he really cannot have it both ways. I ask him whether he is prepared to take this concession at this stage? If so, we will consider the Amendment of the hon. and learned Member for Basingstoke when we arrive at it.
  Earl WINTERTON: I only desire to put a point in connection with a matter in which I am personally interested. My hon. and gallant Friend did not suggest that the Attorney-General had any evil intention with regard to this Amendment. I understand that the Attorney General wishes to remove what he thinks is a justifiable grievance, and therefore he has put down the Amendment. But the feeling is that the Amendment is more dangerous than the Bill as it stands. Now this is the point I wish to put to the Chancellor of the Exchequer or to the Attorney-General. It frequently happens that buildings are put up upon land that costs a great deal, and which are, perhaps, known as model dwellings, which really are relatively of less value than smaller or even more old-fashioned dwellings upon the land. It is very difficult to gauge the value of buildings in that way, and it would undoubtedly happen in quite as many cases as not that the owner would benefit in these matters. The Chancellor of the Exchequer engaged in a dissertation as to the knife cutting both ways. Is not that a little beside the question, because the whole point of this Amendment is to benefit owners of property, and to remove a grievance which may arise under this Bill? In some working class districts people desire to live in flats, as under the German system, and in other cases the people wish to live in small houses. In these circumstances I hope the hon. Gentleman will not press his Amendment, and that he will agree to the Amendment which will be proposed by the hon. and learned Member for Basingstoke (Mr. Salter), which really carries out what the Government intends.
  Lord WILLOUGHBY de ERESBY: I hope my hon. Friends will accept this Amendment. In my opinion it is certainly a concession on behalf of the Government, and it is one we ought to accept. The only instance in which it might possibly go against our case is that of agricultural land, where undoubtedly in better times extensive buildings have been

  1167
  put up, which, owing to another kind of cultivation coming in, the Amendment might not benefit the owner to the same extent. As a matter of fact, having regard to the previous clause, I do not think agricultural land will come into the increment value. On the other hand, when different amusements came into fashion, a man might put up a skating rink on his property, which may cost him very little money, and he might get off the increment value. I think it would be far better to accept the Amendment and hope for further concessions later on.
  Mr. PRETYMAN: The Chancellor of the Exchequer having promised that he will consider the further Amendment, although he is perfectly free to decide one way or the other upon it, I should advise my hon. Friends to accept this Amendment.
  Amendment agreed to.
  Mr. STEWART BOWLESproposed to leave out the words "buildings or structures," and to insert the word "anything."
  It is quite true that the point raised by my Amendment is met to a certain extent by that standing in the name of the learned Attorney-General, but I think mine is better.
  Sir W. ROBSON: I think mine is a little more generous.
  Mr. STEWART BOWLES: If, as is suggested, minerals are going to be included in the things of which the soil is to be divested for the purposes of this valuation, it seems absurd that they should be included in Clause 14 by a reference to buildings, growing timber, fruit trees, fruit bushes, and other things. What you really have to do is to divest the land of anything to which value may be attributed.
  Sir W. ROBSON: The reason why I have chosen the words "or other things" is that I desire not merely to cover buildings, structures, and other things, but to establish parity between this clause and Clause 14. That clause sets out timber, fruit trees, and so forth. In drafting Clause 2 we only repeat Clause 14, and I have chosen phraseology which follows Clause 14.
  Mr. STEWART BOWLES: If the learned Attorney-General desires to follow the phraseology of Clause 14, sub-section 2, it is quite clear that he has not done so.
  1168
  He must say that the deductions shall be in respect of any part of the value which is proved to be attributable to buildings, 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. If it is true that all these are covered by the phrase "other things," they are equally covered by the word "anything." The learned Attorney-General has not been able to explain why he attaches such importance to the words "or other things," and is unwilling to accept the shorter, simpler, and more comprehensive direction given by my Amendment.
  Mr. CAMPBELL: There is a difficulty in using the words "or other things," without enumeration, namely, that the Court or the Commissioners will have to construe them on the principle of in justem generis, if they are left alone without any reference to Clause 14, subsection 2. Instead of enumerating the things in that sub-section the learned Attorney-General proposes to summarise them in the words "other things." Any court and any lawyer must construe those words as if they were ejusdem generis. The whole difficulty will be got over by retaining the words suggested by the learned Attorney-General and adding to them "as defined in Clause 14, section (2)."
  Mr. STUART WORTLEY: With the greatest respect for all these high authorities, and with a total absence of obstructive intentions, I wish to say that I have come to the conclusion that the Attorney-General is wrong, especially as in Clause 14, section (2) there is the use of the word "other things." His copying of the language of Clause 14 is, therefore, the more unfortunate.
  Mr. SCOTT DICKSON: I should like to suggest the words "any other things."
  Sir W. ROBSON: This, as I have said, is almost purely a drafting Amendment, and the course I have adopted is the ordinary course, when it is desirous to establish a connection between two clauses in different parts of a Bill. I do not need to repeat Clause 14. All I have to do is to use such phraseology as to show that Clause 14 is in contemplation when we are dealing with Clause 2, and I trust the Committee will, without further delay, accept the words.
  Mr. STEWART BOWLES: I do not think that, under the circumstances, I should be justified in putting the Committee to the trouble of a division. I still think that the learned Attorney-General is wrong, but if the Committee takes another view I will withdraw.
  Amendment, by leave, withdrawn.
  Sir W. ROBSONmoved to leave out the word "or" ["to the value of buildings or structures of which the land is deemed to be divested under this Act"].
  Sir W. ROBSONmoved after "structures" to insert the words "or other things."
  Mr. PRETYMAN: I have an Amendment down to leave out the words "the land" ["of which the land is deemed to be divested"], and to insert "any land wherever situate," but I do not propose to move it, because I think the point is covered by the first part of an Amendment standing in the name of my hon. Friend the Member for Liverpool (Mr. Watson Rutherford), which, in his absence, I am prepared to move.
  Amendment proposed, after "value" ["for the purpose of ascertaining the site value"] to insert the words "or to the owner's expenditure on any adjoining property or property in the neighbourhood."—[Mr. Pretyman.]
  Mr. LLOYD-GEORGE: It was agreed that the Committee should report Progress at this stage, and I move "That the Chairman do report Progress, and ask leave to sit again."
  Progress reported; Committee to sit again this day.

LABOUR EXCHANGES (SALARIES, ETC.).
Resolution reported, "That it is expedient to authorise the payment, out of moneys provided by Parliament, of the salaries and remuneration of officers and servants appointed under any Act of the present Session to provide for the establishment of Labour Exchanges and for other purposes incidental thereto and of any expenses incurred by the Board of Trade in pursuance of such Act."
Motion made and Question proposed, "That the House doth agree with the Committee in the said Resolution."
Captain CRAIG: I rise to object. I wish to appeal to the Parliamentary Secretary to the Board of Trade not to press this Resolution to-night. In Committee on the Resolution some of us were able to put forward our views with regard to the extraordinary expense that we feel may be incurred in connection with this matter, and we pressed the President of the Board of Trade, who was present on that occasion, to make some statement with regard to the moneys to be expended. Now, after discussing the Finance Bill till half-past one, we are asked suddenly to go into this matter again without our being able to visit the library and refresh our memories as to what was said by the President of the Board of Trade on the former occasion. The whole arrangement appears to me to be somewhat surprising, because, for anything we know, other Bills and Motions which stand on the Order Paper might have been taken just as well as this particular Resolution. It cannot be expected that, after giving close attention to the Finance Bill, we should be prepared, practically at a moment's notice, to discuss with the attention it deserves any business which the Patronage Secretary may choose to select to be taken at this hour of the night. I therefore move, is an Amendment, to add after the Resolution "not exceeding the sum of £210,000 in any one year."
Mr. DEPUTY-SPEAKER (Mr. Emmott): That cannot be moved. I put the Question "That the House doth agree with the Committee in the said Resolution."
Mr. CLAUDE HAY: I appeal to the hon. Gentleman who represents the Board of Trade, not to take this very important matter at this time of the night. The House has been sitting in Committee since early yesterday afternoon discussing the Finance Bill, and for the Government to ask us now to go into a question involving ultimately £2,000,000 of expenditure and the interests of large numbers of the working classes is, I venture to say, not only trifling with the House of Commons, but with the interests of the wage-earners, whose welfare is supposed to be bound up with this Resolution. The Secretary to the Board of Trade shows by the fact that he has not risen in response to the remarks of my hon. and gallant Friend (Captain Craig), that he thinks this stage of the Resolution is nothing more than a formality. In that view I beg to differ from him. I do not think it is fair to expect any Member of this House to discuss this

1171
matter now and do his duty to his constituents. It is all very well for hon. Members below the Gangway to act as though in connection with anything concerning the working classes that comes before this House, their interests are best protected by interrupting speakers who believe that such matters should be discussed by proper daylight and working hours. Therefore I earnestly hope that the hon. Gentlemen will see fit to listen to the appeal which has been made from these benches, and defer this matter until a time when it can be fully discussed.
The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. H. J. Tennant): I am sorry I cannot see my way to accede to the appeal, because I should naturally wish to meet the wishes of hon. Gentlemen in every possible way. We did not press the matter yesterday and I do think we ought to be allowed to proceed now. The hon. Gentleman says we are trifling with the interests of the working classes in this matter. Just the reverse is, of course, really the case. If the hon. Gentleman really knew the facts of the case, he would realise that it is important we should have this stage, which is really only formal, taken now.

IRISH NATIONAL SCHOOLS (HEATING AND CLEANSING) BILL.
Order for Second Reading read, and discharged; Bill withdrawn.
And, it being after half-past Eleven of the clock on Tuesday evening, Mr. Deputy-Speaker adjourned the House without Question put, in pursuance of the Standing Order.
Adjourned at Twenty-three Minutes before Two o'clock (Wednesday, 7th July).

  Construction of Destroyers.
  Construction of Destroyers.
  Naval Dockyard Facilities.
  Naval Dockyard Facilities.
  Death in Poplar Workhouse (Diana Green).
  Death in Poplar Workhouse (Diana Green).
  Territorial Force (Railway Season Tickets).
  Territorial Force (Railway Season Tickets).
  Land at Tonlegee (Offer of Estates Commissioners).
  Land at Tonlegee (Offer of Estates Commissioners).
  Balfe Estate, County Roscommon.
  Balfe Estate, County Roscommon.
  Mr. T. Butler's Estate, County Kildare.
  Mr. T. Butler's Estate, County Kildare.
  Mail Service, Cappoquin and Cahir.
  Mail Service, Cappoquin and Cahir.
  Post Office (Higher Division Clerks).
  Post Office (Higher Division Clerks).
  Postal Facilities, Granagh, County Limerick.
  Postal Facilities, Granagh, County Limerick.
  Flogging for Prison Offences (India).
  Flogging for Prison Offences (India).
  Registration of Army Compounders.
  Registration of Army Compounders.
Preamble
The LORD CHANCELLOR acquainted the House, That the Clerk of the Parliaments had laid upon the Table the Certificate from the Examiners that the further Standing Orders applicable to the following Bill have been complied with:
LONDON AND NORTH WESTERN RAILWAY.
Also the Certificates that no further Standing Orders are applicable to the following Bills:
METROPOLITAN COMMONS PROVISIONAL ORDER.
  SEA FISHERIES (TEES) PROVISIONAL ORDER.
  The same were ordered to lie on the Table.
STANDING ORDERS COMMITTEE.
Report from, That the further Standing Orders not complied with in respect of the

KILKENNY, CASTLECOMER, AND ATHY RAILWAY BILL
ought to be dispensed with, and the Bill allowed to proceed, provided that Clause 62 be struck out of the Bill:
Read, and agreed to.

MALVERN HILLS BILL. [H.L.]
Commons Amendments considered, and agreed to.
ALDERSHOT GAS AND WATER BILL.
Reported, with Amendments.
MARRIAGES PROVISIONAL ORDER BILL.
Brought from the Commons.

ELECTRIC LIGHTING PROVISIONAL ORDER (No. 2) BILL. [H.L.]
GAS ORDERS CONFIRMATION (No. 2) BILL. [H.L.]
BRISTOL UNIVERSITY BILL. [H.L.]
WAKEFIELD CORPORATION BILL. [H.L.]
Returned from the Commons, agreed to, with Amendments.

SOUTHPORT AND LYTHAM TRAMROAD (ABANDONMENT) BILL. [H.L.]
Returned from the Commons, agreed to, with Amendments: The said Amendments considered, and agreed to.
WALLASEY TRAMWAYS AND IMPROVE- MENTS BILL.
Returned from the Commons, with the Amendments, agreed to.

ELECTRIC LIGHTING PROVISIONAL ORDERS CONFIRMATION (No. 1) BILL. [H.L.]
(Chesham (Extension) Order.)
Report from the Select Committee, That the Committee had not proceeded with the consideration of the Chesham (Extension) Order no parties having appeared in opposition thereto; read, and ordered to lie on the Table; The Orders made on the 25th and the 26th of May last, respecting the commitment of the Bill to a Select Committee in regard to the said Order, discharged.

RISCA URBAN DISTRICT COUNCIL BILL. [H.L.]
Reported, with Amendments.
EDUCATIONAL (SCOTLAND) FUND.
Petitions for an Address to His Majesty, praying him to withhold his assent to the Minute of the Council of Education in Scotland, dated 3rd June, 1909, of the School Boards of the following parishes: Clackmannan — Shotts — Carmunnock — Old Monkland: Read, and ordered to lie on the Table.
PROFESSIONAL ACCOUNTANTS BILL. [H.L.]
Petition against or (in event of the Bill being read 2a) to be heard by Counsel against; of the Central Association of Accountants, Limited; read, and ordered to lie on the Table.
MARRIAGES PROVISIONAL ORDER BILL.
Read 1a; to be printed; and referred to the Examiners. (No. 100.)
ARDROSSAN HARBOUR ORDER CONFIRMATION BILL. [H.L.]
Read 2a (according to order) and (pursuant to the Private Legislation Procedure (Scotland) Act, 1899) deemed to have been reported from the Committee: Bill to be read 3a on Thursday next.
GREAT NORTH OF SCOTLAND RAILWAY ORDER CONFIRMATION BILL.
Read 3a (according to order), and passed.

SMALL HOLDINGS AND ALLOTMENTS (SCOTLAND) BILL. [H.L.]
[SECOND READING.]
Order of the Day for the Second Reading read.
THE EARL OF CAMPERDOWN: My Lords, the object of the Bill to which I am going to ask your Lordships to give a Second Reading to-day is to create, or, rather, to provide for the creation of, small holdings and allotments in Scotland, a small holding being defined as a holding which either does not exceed £50 in rent or does not exceed fifty acres in extent. This Bill is identical with the one which your Lordships were so good as to accept from me last year, and its procedure—in fact, I may say almost the whole Bill—is identical with the Small Holdings Act of 1907 which applies to England. The procedure and details of that Act are very well known to your Lordships, and I explained this Bill to the House in some detail last year. Therefore on this occasion I hope it will not be necessary for me to trouble your Lordships at any very great length. I shall content myself, at this stage at all events, by simply presenting to your Lordships in skeleton the main principles of the Bill.
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The first five clauses contain the words which provide how schemes are to be framed, how they are to be originated, and how they are to be carried out. If your Lordships will look at the Bill you will see that two persons are to be appointed by the Board of Agriculture who are to be called the Small Holdings Commissioners. They are to be persons with a knowledge of agriculture, who, acting under the directions of the Board, are to ascertain the extent to which there is a demand for small holdings in the several counties, or would be a demand if suitable land were available. They are then to report to the Board and to state whether it is desirable in their opinion that a scheme should be made, and they may indicate the nature of the proposals which they consider ought to be embodied in the scheme. When the Board are of opinion that it is desirable that this should be done, the report is to be forwarded, with any modifications which the Board think desirable, to the county council, and it is then to be the duty of the county council to prepare one or more draft schemes; but if the county council decline to undertake this duty, or within six months after receiving the report fail to prepare a scheme, then the Board may direct the Commissioners to prepare one or more draft schemes. There is an alternative procedure. The county council itself, without waiting for the report, may initiate a scheme and may lay it before the Board in the same manner as the Commissioners can; and after due consideration, either of a scheme put forward by a county council or a scheme put forward by the Commissioners, the Board may confirm the scheme. After that it shall be the duty of the county council to carry it out, and if the county council fails in that duty the Board may order the Commissioners to carry the scheme into effect.
Clause 6 provides that for the purpose of providing small holdings a county council may either purchase or hire land, voluntarily, if possible, and, if not, by compulsion. That differs from the English Act in this, that in the English Act there are no compulsory powers of purchase. I do not see what objection there can be to inserting in a Bill for providing small holdings a power to purchase. There is no obligation whatsoever to buy, but surely it is an advantage that a county council should have the power.

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Under Clause 7 the county council may, for the purpose of small holdings, adapt the land for sale or letting, and the amount of money which they expend for that purpose will, in accordance with the provisions of the Act of 1892, be taken into consideration in fixing the rents. The expenses of the Board under this Bill are to be provided for by an account which is to be called the Small Holdings (Scotland) Account, and which is to consist of such moneys as may be voted by Parliament for this purpose. This your Lordships will find in Clause 18. Beyond that there are certain restrictions placed upon certain descriptions of land which may not be taken for this purpose. Those restrictions your Lordships will find in Clause 27. They are identical, I think, or very nearly identical, with a clause contained in the Bill which was put forward recently by the Scottish Office. At all events, I am sure there is no great discrepancy between the two.
Now we come to the manner in which land may be taken by compulsion, either for purchase or hiring. That will be done by an order, which must be applied for in the first instance by the county council and which must be approved by the Board of Agriculture. Your Lordships will find those provisions in the First Schedule. The order is to be in a prescribed form. It must be published, and the Board, in cases where objection is taken to the order, must hold an Inquiry. And with regard to compulsory hiring, the order is to determine "the terms and conditions of the hiring other than the rent;" and, with regard to the rent, if that matter becomes a question of dispute it is to be settled by a valuer appointed by the Board. I think I have now given your Lordships, in skeleton, the principles of the Bill, with the exception of that part which relates to allotments, and on which I do not think I need detain your Lordships long at this moment. The purpose of those clauses is to make the law the same in Scotland as it has hitherto been in England. The Bill provides for the transfer of powers from the county council to the parish council, and in the event of the parish council not doing its duty with regard to allotments, then it is made imperative on the county council, and, failing the county council, on the Board, to see that those provisions are observed.
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I said that I would not detain your Lordships long on the provisions of the Bill, and I think I may conclude with a few remarks upon the main principles of the Bill. Your Lordships will observe that to the Board of Agriculture is entrusted the power of supervision under this Bill and of seeing that small holdings are provided. The Board under the Bill is given very extensive powers. It has the power of approving of the starting of schemes, of having schemes considered, and, when the details are concluded and arranged, of confirming them and seeing that they are carried out. It has the power of taking land by compulsion either for hiring or for purchase, and it has the appointment of the valuer who is concerned with the fixing of the rent. The advantage, as it seems to me, of having the Board of Agriculture in this position is this. The Board of Agriculture not only has professional advisers and also great experience in these matters, but is responsible to Parliament. Your Lordships will see in the Bill that when the Board of Agriculture takes away from the county council the power of carrying out an order—that is in Clause 5, subsection (3)—and when it makes an order directing the Commissioners to take the place of the county council and carry the scheme into effect, then that order has to be laid before both Houses of Parliament as soon as may be after it is made. I lay great stress upon this, because by this procedure you avoid the practice—the bad practice, as I think—which is becoming more and more common, of setting up and establishing separate authorities independent of Parliament and very often not subject to the control of the law; and it seems to me that the Board of Agriculture, which is not independent and has nothing in the nature of a Land Court —a thing which is, in my opinion, most objectionable—is a proper body for being placed in control of small holdings.
The next point to which I would call attention is that this Bill proceeds as far as possible on principles of mutual help and co-operation. Compulsion is avoided until it becomes absolutely necessary. It is said that the local authorities, the county councils, have been somewhat backward in carrying out these schemes of small holdings. Even if that were true, I cannot help thinking—and I am sure the noble Earl the President of the Board of Agriculture agrees with me—that it is most desirable

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able to enlist on your side the local authorities, who know the facts, and who necessarily are better acquainted with local circumstances than any outside body could be. This has been the endeavour of the noble Lord (Earl Carrington) from the very first passing of his Bill, and I am glad to know that he thinks this action on his part has been justified by the event. My noble friend, as your Lordships know, does not hide his opinions under a bushel, and he not infrequently gives utterance to them on public platforms in a manner which is both instructive and amusing. In February of the present year, in the course of a speech at Slough, he said—
"We have always kept in view the great advantages which would be gained if this Act were administered by men possessing local knowledge, both in the nature of the land to be cultivated and the character and ability of the applicants. I am no lover of bureaucratic methods, and I am satisfied that I could secure more and better practical results by enlisting the help of local representative men instead of attempting to do everything from Whitehall."
Of the many wise things my noble friend has said, he never said anything wiser than that. He went on to say—
"My policy in this matter was much criticised at the time, and I was told that I was a very simple-minded person indeed to believe that county councils would be able and could be trusted to carry out the provisions of an Act of Parliament so revolutionary in character. But, looking back at the work which has been done, I do not for a moment regret my decision."
The noble Earl proceeded to say that most of the county councils had done their work admirably, and I can only hope that he will instil that doctrine into his noble colleague (the Secretary for Scotland) who sits by his side.
The way in which the English Act has been worked by the English county councils also had testimony borne to it only a few days ago by no less a person than the Prime Minister. Mr. Asquith quoted figures—supplied, of course, by the Board of Agriculture—in order to show how well this Act had worked. He said that of holdings which had been acquired by voluntary purchase or voluntary hiring by the end of June, 1908, there were 2,000 acres; at the end of March this year, 27,000 acres; and at the end of June no less than 36,000 acres. All that area, my Lords, had been acquired by voluntary arrangement and without the interference of any outside court or similar body.
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But, besides that, 5,000 acres were already acquired where the Board of Agriculture had had recourse to compulsion. Assuming this to be correct—and, of course, it is—it shows that the English Act, working on this voluntary principle and avoiding compulsion as far as possible, has attained very considerable success. It has been said that the Scottish county councils did not carry out the Act of 1892. Exactly the same remark was made with regard to the English county councils. But those who say that because Scottish county councils may not have been very active in carrying out the Act of 1892, therefore they are unlikely to carry out the English Act if applied to Scotland, forget this, that until two years ago there was no. power of compulsion at all, and therefore if a county council was unable to obtain land voluntarily it was unable to purchase land at all.
I will now say a few words as to the position of the small holder as it will be under the Bill. In the first place, he will have security of tenure which will very nearly amount to fixity. The county councils are empowered to hire land for fourteen or thirty-five years, and at the end of that term they are empowered, if they see fit, to renew the lease, so that any small tenant holding under this tenure has a tenure which really amounts to fixity. In the next place, if a small tenant has been unable to agree about his rent, he has a fair rent fixed by the valuer appointed by the Board. Again, under this Bill the small holder is treated on exactly the same terms as any other holder; and it stands to reason that if a small holding is a self-supporting mode of occupation it must rest upon its own merits and must not be supported by any outside advantages. In England at the present time small holders have to pay all the money spent upon the holdings by the public. What has been spent on their holdings is taken into consideration in fixing the rent. That is a perfectly sound and legitimate procedure, and I venture to think that it is the only procedure upon which small holdings can be justified. In my opinion it is by no means an economic principle upon which to conduct business that small holdings should be propped up by money taken from the taxes.
Under the Bill all present contracts are left untouched. I appeal to noble Lords

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from Scotland whether in their knowledge there are not many small holders who at the present time are not only perfectly satisfied with the conditions of their tenure but who would be extremely indignant if they found that by some Bill or another they were deprived of their present tenure. If, however, they are not content with their present tenure, then their course would be to give up the holding and apply for a small holding under this Bill. I have now concluded all that it is necessary to trouble your Lordships with at this stage, and I ask you to give a Second Reading to the Bill.
Moved, That the Bill be now read 2a.—(The Earl of Camperdown.)
THE SECRETARY FOR SCOTLAND (LORD PENTLAND): My Lords, on behalf of the Government I welcome this Bill and the discussion which it brings. Nobody can be in any doubt as to the question being one of great importance, and any evidence is welcome that your Lordships' House recognises the importance of increasing the number of small farmers and small holdings in this country and thereby promoting the growth of the rural population. For my part I consider this one of the most vital questions that Parliament can discuss at the present time.
If history teaches us anything, it is that no great country can long survive the decay of its rural population, and when I reflect that we are behind nearly every other country in Europe in the proportion which our rural population bears to the rest of our population, I cannot help believing that it is high time that Parliament should attend to this subject. Taking the United Kingdom as a whole we have a smaller rural population, we have a smaller percentage of people employed in agriculture, than is the case in any one of the great nations which compete with us. We are not even making the best of our own resources. During the last twenty years—of course, statistics can be multiplied on this question, but I do not wish to trouble you with more than one or two to emphasise the importance of the subject—during the last twenty years something like two million acres of land in the United Kingdom have gone out of cultivation; in Germany, on the other hand, they have added three-quarters of a million acres to their cultivated area; and in Denmark they have added about a
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million and a quarter. And if you look at the proportion of the population engaged in agriculture you find that whereas in the United States there are 1,500 to every 10,000, and in Germany something like 1,400, in this country, in the year 1901, there were only 495, as compared with 711 some twenty years before. In these circumstances the importance of the question cannot be denied, and I am glad that this House sees fit, at the instance of the noble Earl opposite, to give a short time to its consideration.
The subject opens a very wide field, but I will follow the noble Earl in his example of brevity, not because there is not much to say which is of importance, but because your Lordships are familiar with the subject. You have frequently debated it in recent years, and I will therefore confine myself to discussing this Bill on its merits and indicate briefly one or two reasons why I believe it is not a workable scheme. I join in congratulating my noble friend the President of the Board of Agriculture on the success of his measure for England. That is a proof that the Government recognise the importance of this question. There are legislative proposals in regard to land for Ireland now before Parliament, and your Lordships are familiar with the legislation which has been attempted on this subject for Scotland. I notice two directions in which the noble Earl who moved this Bill seems to have advanced upon the position taken up not very long ago. He emphasised one himself in introducing the Bill to the notice of your Lordships—namely, that he has added compulsory powers of purchase to the former proposal. I notice this other feature. Your Lordships may recollect that the Government's proposals were severely criticised for not recognising the difference between the crofter districts of Scotland and the Lowlands. The noble Earl follows our example. The machinery of his Bill is applicable to the whole of Scotland from North to South, and in that I agree with the noble Earl.
So far as I can discover, the principle upon which this Bill is based is that what is good for England must necessarily be good for Scotland. I believe that is a sound Unionist doctrine, but it is not the principle that has built up the British Empire; it is not the principle which has conciliated Ireland, and it is apt to be

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misleading even when it is applied to Scotland. Look at the experience of Scotland. Take the Small Holdings Act of 1892. In England it has had some operation. Nine county councils—very few, I admit—worked the Act to the measure of supplying something like 800 acres for small holdings. In Scotland, with the exception of one instance—Ross-shire—where twenty-five holdings and a total area of eighty-five acres were provided, the Act has been an absolute and entire failure.
THE EARL OF CAMPERDOWN: Forfarshire on two or three occasions asked for applications, but received none.
LORD PENTLAND: I know. I was going on to argue that the very fact of the failure which the noble Earl quotes shows the unwisdom of proceeding on the same lines in the Bill now before the House. I will ask the noble Earl also to look at the operations of the Allotments Act which has worked hand in hand with the Small Holdings Act in the two countries. In Scotland under 200 people have received allotments, whereas in England nearly 50,000 tenants have been created under the Allotments Act. Is that not significant of the wide distinction between England and Scotland? Is it not remarkable that the same legislation should have had no operation in Scotland whereas it has had very considerable operation south of the border?
Then may I remind your Lordships that the farming habits and customs are completely different in the two countries? Take the conditions of work of the labourer. In Scotland he is a half-yearly or a yearly servant; he gives his whole time to the farm, and lives in a cottage on the farm; he has grazing for a cow, and, if he is unmarried, he lives either in the bothy with other unmarried men or with a relative in one of the cottages. His whole time is given to the working of the farm under the direction of the farmer. In England, broadly speaking, the conditions of the farm labourer are entirely different. He lives in the village, renting his own house. He is hired by the month, week, or day. He does not give his whole time, and he is obliged, and anxious, to supplement the wages which he receives from the farmer by working on some allotment or small garden ground, whatever he is able to secure. The conditions of the two men are
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wholly different. If it is from any class in particular that you are to rear up a race of small holders it is from the farm labourer class who have gained experience in farming; but their conditions are entirely different in the two countries.
What is the bearing of this difference upon the endeavour to create small holdings? It is this, that the wants of the two men are widely different. Whereas in England the man wants an allotment or garden ground which is accessible from his own house and on which he can labour in the evening, in Scotland the farm servant, as we call him, wants nothing of the kind. What he wants is a small holding upon which he can live and make his home—anything up to 100 acres. According to the quality of the land the size of the farm must vary. There are plenty of ambitious, industrious, enterprising farm servants in Scotland who are willing and anxious to invest their savings in this manner provided they can be given a proper opportunity. In Aberdeenshire there are more than 5,000 holdings under twenty acres and 4,000 up to the limit of 100 acres. There are between 9,000 and 10,000 small holders in Aberdeenshire, the most successful farming county in Scotland, under the limit of 100 acres, and it is the same in other counties to a less degree. Berwickshire, Midlothian, and Roxburgh-shire are conspicuously counties of large farms, yet there is a total of over 1,200 of the smaller size farms under twenty acres, and 500 from twenty to 100 acres. In every county of Scotland there are these men, and it is in that direction that the ambitions, the needs, and the hopes of the Scottish farm servant lie.
But it is a very different matter to equip an allotment in England—and the large demand in England is for allotments—and, on the other hand, a small holding in Scotland. The equipment for an allotment is a tool shed and a fence at the most, whereas in Scotland you require fencing, adaptation possibly, roads, a house, farm buildings, and all the rest of it. You propose by this Bill to lay upon county councils the duty of working out these schemes. The small holder will not take your small holding unless, in the first place, it is offered to him at a fair rent. I say it is quite impracticable, so far as such examination of this Bill as I have been able to give it shows me, for a county council

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to do the work which the noble Earl seeks to lay upon it. The cost is too great.
THE EARL OF CAMPERDOWN: County councils are obliged by the Bill to do the work.
LORD LEITH OF FYVIE: The statement which has just been made by the Secretary for Scotland is quite incorrect. We can do it and we are looking forward to doing it. We are prepared at any time to take it up in Aberdeenshire.
LORD PENTLAND: I shall be very glad to follow the suggestion of the noble Lord and meet his argument. The noble Lord is aware, of course, that under Lord Camperdown's Bill—the noble Earl himself stated it very clearly—this is not to be a charity business. All expenses of acquiring and adapting the land to small holdings are to be recouped to the county council in the form of rent. We all know that the great difficulty in the creation of small holdings has been the expense of buildings. In many cases there has been no desire to withhold land or to prevent its being broken up into small holdings. The real truth has been that owners of land have not been able to afford to do so. The cost of the buildings makes the whole thing prohibitive. They could not lose money upon it. They have, therefore, declined to do it. Is it conceivable that a county council is going to carry out this business of going into the market, purchasing land, equipping it, and adapting it for small holdings at a lower cost than a private individual? I have yet to learn that that has ever been done, or is likely to be done.
LORD LEITH of FYVIE: It can be done in a business way—in the same way as it has been done before, and as we would propose to do it.
LORD PENTLAND: That is a matter of opinion, and, with the greatest respect to the House, I am expressing my opinion and giving reasons which induce me to hold that opinion. I do not believe that it is a practicable proposition. Obviously no men will come forward to take small holdings unless they can be let at a fair rent and one which will enable them to live and work and thrive upon the holdings. When you take into consideration the expenses which have to be thrown into the rent, you are faced with two alternatives. You must
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either fix the rent of the holding at a figure which will attract no offers, or you must subsidise the rent, which is forbidden in the noble Earl's Bill, from the rates—a proceeding to which I should have myself the very greatest objection. I do not understand the motives or the intentions with which the scheme in this Bill has been framed, but in my humble judgment it is an absolutely unworkable scheme.
May I remind your Lordships that this is not a difficulty which I have conjured up in order to criticise the noble Earl's Bill? It is a difficulty that the Government were obliged to face in the Bill which they had the honour of laying before Parliament. We were obliged to face this difficulty, and we faced it with some support from experience which cannot be said to be the case in this instance. I do not propose to trespass upon the House by discussing the Government's proposals or defending them in any sense, but I may remind your Lordships that the way we met this difficulty was to provide funds by which the cost of adaptation should be borne by the Exchequer. Believing, as we did, the provision of small holdings to be a vital necessity, recognising that it was not fair to lay upon the landowner the cost of the adaptation of the land for use as small holdings, and recognising, further, that you could not lay upon the small holder the cost of adaptation without obliging him to sit at a rent which would be unfair, we provided funds by which the cost of adaptation was to be borne, in part, at any rate, by the community. Conceiving that this was an object of national concern, we provided the funds by which this difficulty could be met. Your Lordships may read in the Reports of the Congested Districts Board instance after instance in which tenants have been placed upon land in Scotland by the operation of precisely the methods which I have described, as exercised now by the Congested Districts Board. Something like 900 small holdings have been created in Scotland by our system, which is more, I think, than can be said—
THE EARL OF CAMPERDOWN: Does the noble Lord mean crofts?
LORD PENTLAND: Yes.
THE EARL OF CAMPERDOWN: I do not call those small holdings.
LORD SALTOUN: Do you include cottars?
LORD PENTLAND: Some of the people who are now crofters may have been cottars. Some quite successful crofters may have been cottars. I have yet to learn that it is any disgrace to live in one part of Scotland more than another, and to be called a crofter rather than a small holder. In essence, I submit, they are the same people if they are living and working under the same conditions.
If your Lordships will allow me, I will put one or two other objections, which seem to me obvious, to this Bill. In the crofter districts to which the noble Lord has alluded and in the neighbouring districts where for years the small holders have looked forward to obtaining for themselves the protection of the Crofters Acts, the noble Earl by his Bill proposes to run, side by side with the machinery which there exists, a system of creating small holdings by the county councils and the Board of Agriculture and Fisheries. You are, therefore, to have in the same counties two separate sets of machinery for creating small holdings—one which the people know, of which they recognise the benefits, working through the Crofters Commission and the Congested Districts Board, which has, as I say, in the last twelve years created 900 holdings of this kind by purchase and by tenancy schemes, and, on the other hand, the system set up by the machinery of the noble Earl's Bill. Apart from its impracticability, on its merits, as applying anywhere in Scotland, it is not, I think, likely to have any operation whatever in the Highland counties. I have not said a word about the question of compensation, but if I were not trespassing on your Lordships' indulgence I would say that the question of compensation, the question of the freedom of cropping, must be considered when schemes for the establishment of small holdings are framed. I do not think that in these respects the scheme in this Bill is likely to meet with success, and, further, it is obvious that a scheme of this kind, involving the ownership of land in every county of Scotland by the county council, is likely to be most costly to work. For these and other reasons I shall be compelled, if the noble Earl presses his Bill to a vote, to record my vote against it.
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I do not believe that this Bill—and it has been before the country for some time—has any support whatever in Scotland. The Government Bill was originally introduced in July, 1906. Ten months at least elapsed before the English Bill, upon which this Bill is founded, was brought forward. During the whole of that period there was never a suggestion in Scotland, though there was much criticism of the Government Bill, that the work of creating small holdings should be committed to the county councils; nor do I think there is any hope of progress whatever on those lines. For myself I can say truly that I am willing to consider any proposals dealing with this subject; but it is not enough to pass Bills into law; they must be framed to meet the end in view after considering the whole of the circumstances bearing upon the case. If proposals are to succeed, they must be framed with regard to the conditions of the problem.
There is one step gained in the appearance of this Bill—the noble Earl is now willing, or seems to be willing, to legislate for Scotland as a whole. But in so doing you must not ignore either the failure of the Small Holdings Act or the Allotments Act in Scotland or the existence of the crofter system in that country—the largest small holding system in operation in these Islands. I believe an increase in the number of small holders is vital to us as a country; and in providing them you must see that by the provisions of your scheme your small holder has security of tenure, a fair rent fixed by an independent tribunal or one in which he has confidence, compensation for his improvements, and freedom to use to the utmost for himself and in the interests of the community his capital, his labour, and his intelligence.
LORD SALTOUN: My Lords, I have listened with interest to the speech that has just been delivered by the noble Lord the Secretary for Scotland, and I confess that, in my view, his criticisms of my noble friend's Bill have been remarkably weak. He seems to me to have brought out hardly any point against the Bill except that no money is provided. But the noble Lord's own Bill only provided £65,000 for small holdings, and I think that sum would have produced hardly one small holding per annum in each county in Scotland. The noble Lord then made a great point of the difference in the conditions

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of small holders in England and in Scotland. That is perfectly right. They do exist under thoroughly different conditions in the two countries. In Scotland the farm servant is hired for a particular period which gives him security for his labour, and if he is a careful man he saves money and looks forward to the time when he will himself take a croft or small holding. Personally I am always very glad to welcome these men when they come to me and ask for a croft. It is not always possible, however, to comply with their request, but when an opportunity occurs they are always the men who are selected for these crofts. That is the way in which farmers are made. When a man becomes a crofter he does not intend to remain a crofter. The labourer becomes a crofter; he then goes on to a small holding, and so on. That is the case not only in Aberdeenshire, but throughout the whole of Scotland. Indeed, I do not see that in the speech of the noble Lord the Secretary for Scotland there was any real criticism of the Bill now before the House. It is true that in Scotland the labourer is provided with a house and in many cases also with a certain quantity of food, but that is always taken into consideration in the wages paid. The provision of a house is part of the labourer's wages. Another criticism was that there would be under the Bill two systems of acquiring land in the different counties. The areas which both bodies—the Congested Districts Board and the county council—look after are very well defined, and there would be absolutely no difficulty in carrying out the work of both bodies side by side. As showing how much the people in Scotland appreciated the Bill which the noble Lord the Secretary for Scotland introduced in the House of Commons but which was rejected in your Lordships' House, I have had more than one man come to me with a desire to take a small holding and ask whether I could not make the acreage a little more or the rent a little larger so that he would not come under the Bill. That has happened on three or four occasions, and if that is the case in one part of Scotland I have no doubt it is the same in other parts. I must say I thoroughly support Lord Camperdown's Bill. In spite of what the Secretary for Scotland has said, I think that it is a most workable Bill, and that county councils when they got to understand its provisions would, if it were passed, take it up most heartily and do their utmost
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to carry it into effect. My opinion is that the majority of small holders and farmers would greatly prefer to have the two Bills which have been introduced by Lord Camperdown and Lord Lovat to the cumbrous arrangements in the measure of the Secretary for Scotland. I therefore hope your Lordships will support the Second Reading of the Bill now before the House.
THE MARQUESS OF LANSDOWNE: My Lords, the noble Lord who spoke from the Front Bench opposite began his remarks by according a welcome to my noble friend's proposals so cordial, almost glowing in its terms, that I began to hope that His Majesty's Government were, after all, going to relent, and to see that my noble friend's proposals contained features in many respects preferable to their own. But as he went on he proceeded to damn my noble friend's Bill in the most emphatic terms.
Now although I fully realise that, in view of the attitude of His Majesty's Government, there is no prospect whatever of this Bill being persevered with in another place, I am glad that my noble friend has taken another opportunity of putting on record views entertained by himself, and, I believe, by many other members of the House, as to the manner in which this small holdings question should be dealt with in Scotland. We agree with the noble Lord opposite in holding that the question is one of very great importance; and we are ready to deal with it, and to deal with it upon lines which we conceive to be eminently just, reasonable, and practical lines; and I say that the more confidently because the principles upon which this Bill is based are, after all, the same principles upon which the English legislation so warmly supported by His Majesty's Government was also based. It seems to me, so far as principle is concerned, that it is really impossible for His Majesty's Ministers to challenge the soundness of the grounds upon which my noble friend is proceeding.
What is the first principle on which my noble friend relies? It is, I think, this, that the duty of providing these small holdings is one which, in the first instance, belongs to the local authorities of the country, acting under the general supervision and direction of the central Government. My noble friend quoted with much effect the utterances of the President of the Board of Agriculture in regard to

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the importance of obtaining the co-operation of the county councils. Only last night, if my memory serves me, he ended his speech by once again expressing the great obligations under which he lay to the county councils for the manner in which they had given effect to the policy of the English Small Holdings Act. We remain of opinion that, as a matter of principle, it is better to rely upon the existing local authorities of the different parts of the United Kingdom rather than to set up new tribunals with autocratic powers—tribunals of a kind which, as my noble friend pointed out, we are very fond in these days of setting up, for one purpose or another, by different Statutes.
There is another principle upon which my noble friend relies—one which seems to me to be of the utmost importance. My noble friend insists upon the fundamental distinction between a crofter and a small holder. I heard with bewilderment the statement made by the noble Lord a few moments ago to the effect that crofters and small holders were in essence the same. I say, on the contrary, that in essence they are different. The noble Lord has been concerned in the affairs of Scotland for a long time, and surely he must know by now that the crofter is a man who finds himself on a small lot which has probably been occupied by his predecessors in title for many generations—a small lot on which the improvements have been executed by the man himself and by his predecessors. Their position is wholly exceptional. It is entirely different from the position of the farmer as we know him in other parts of the United Kingdom. I say by all means, where you find these crofters deal with them as tenderly and as justly as you can. But I say do not go out of your way to extend the crofter system where it does not already exist. We have it in evidence from numerous sources that the crofter system has led to agriculture more miserable and to conditions of existence more squalid and wretched than any other system with which we are familiar in these islands, and it seems to me, I must say, midsummer madness to endeavour to spread that system where it does not exist already.
There is a third principle which underlies my noble friend's proposals. He desires, while giving ample opportunities for the creation of small holdings where they
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do not exist and where they are required, not to break down the existing Scottish agricultural system; and, my Lords, surely we are not wrong in saying that the Scottish agricultural system is not one of which any country need be ashamed. It has led to cultivation of the soil more scientific and more successful probably than any which we know in any other part of the United Kingdom, and I have never been able to see what arguments could be advanced in favour of breaking down that system and of introducing sporadically, here and there, little patches of that system of Irish land tenure of which we have had such disastrous experience in other parts of the United Kingdom—a system which, pray let us not forget it, Parliament is at this moment endeavouring to put an end to by means of a very large expenditure from public funds.
I also notice with pleasure in this Bill those provisions which are designed to facilitate, not only the hiring of land for small holdings, but also the creation of a proprietary right in such holdings. That has always seemed to me to be one of the objects at which our land legislation should aim, and I have always regretted that it should have been studiously put on one side in the measures lately proposed by His Majesty's Government.
The noble Lord, in his criticism of my noble friend's Bill, dwelt upon the fact that in some respects Scottish agriculture and the conditions of agricultural life in Scotland differ from those which obtain in this country. I have no doubt they do. The noble Lord told us particularly that whereas in England we had agricultural labourers living in cottages provided for them, in Scotland you have what is known as the bothy system, and farm servants hired by the year or by the half-year; and he has a great desire that some means should be found for enabling the more deserving members of that class to establish themselves upon the land. I entirely agree with him, but then I say my noble friend's Bill contains clauses which are intended for that very purpose. If the noble Lord will look at the second and third clauses, I think they are, of the Bill, he will see that elaborate machinery is set up for enabling small holdings to be provided for these and other deserving members of the community.

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The noble Lord went on to say that the question of equipment stands in Scotland on an entirely different footing from what it does in England. He said that in England the question of equipment very often resolved itself merely into the provision of a tool shed, whereas in Scotland a much more substantial and expensive equipment in the shape of buildings and fences and so forth was necessary. But does the noble Lord suppose that the equipment difficulty does not exist in England also? Your Lordships remember very well some discussions we had in this House, I think two years ago, upon the alleged failure of many of the local authorities to give effect to the Small Holdings Act. What was the difficulty that was pleaded—pleaded, I have no doubt, with absolute honesty—by the different local bodies? The difficulty that they pleaded was that the great expense of providing equipment was the main obstacle they had to overcome in dealing with the provision of small holdings. That I am sure, is within the memory of the House.
The noble Lord the Secretary for Scotland, I understand, proposed to solve the difficulty by a grant from the Exchequer. My recollection is that the total amount of the grant proposed was something like £65,000 a year—an amount which, when you had sub-divided it amongst the different claimants, and after they had been provided with suitable homes in which to live, would not, I venture to think, have left a very large margin for other kinds of equipment. But be that as it may. The real difference between the policy of the noble Lord opposite and the policy of my noble friend behind me is not that the one policy is based upon subventions from public funds and the other is not. The real difference between the two is that the system which we prefer on this side is a system which has been tried, which has succeeded and can be made to succeed, whereas the other, in our view, is a new and dangerous experiment likely to have most unfortunate results upon Scottish agriculture, and likely to work with the utmost injustice both to the owners and occupiers of land in that country. If my noble friend goes to a Division I shall very gladly give him my vote.
THE LORD CHANCELLOR (LORD LOREBURN): My Lords, I do not propose to say much, because I look upon this as a very barren controversy, and I am afraid
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that it will remain so as long as the majority of this House take the view of, and the attitude towards, ministerial policy which they now take. Although reminiscences are by no means agreeable and are very often not useful, let me say a word or two by way of reminiscence. That the subject is of immense importance no one can dispute, because the people of Scotland are more and more, and in a rapidly increasing volume, emigrating from Scotland and from the agricultural parts of Scotland. There is no doubt about that, and it is an evil which everyone is anxious to remedy. For the first time during the last fifteen years, when we came into office we proposed a Bill dealing with the subject. Your Lordships will recollect it. It was met by Lord Rosebery with the objection that what was wanted was a purchase scheme and not a hiring scheme at all. Now, there is no authority in Scotland who will say that, and I believe that the noble Earl who moved this Bill will not say it.
THE EARL OF CAMPERDOWN: No.
THE LORD CHANCELLOR: Yet it was received with great acceptance in this House, and it was one of the main reasons, only eighteen months ago, for the refusal of your Lordships to even give a Second Reading to our Bill. The second objection of Lord Rosebery was that it was an insult—a gross insult, I think he said—to the county councils of Scotland. Does the noble Earl know of a single county council in Scotland which has expressed its desire to have these powers? Not one. Yet that was the spirit in which honest proposals to try and meet this problem were met. After that I appealed to the House. I was acting in concert with my colleague the Secretary for Scotland, and I went through a painful, tedious analysis of the English clauses and the Scottish Bill, and I told you that I was prepared to try and meet every difficulty that could arise by any Amendment that with reason I could accept. I said that I would do my best to meet the views of noble Lords on this subject—I did not say that without meaning it, for, as I have said, I was acting in conjunction with my colleague the Secretary for Scotland—but the noble Marquess the Leader of the Opposition, sword in hand, followed by his supporters, boarded our ship and asked us to scuttle our own vessel. I admit the grace with which he did it, but the end was that a

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Second Reading was refused to our measure.
Now the noble Earl brings in his Bill. I congratulate him upon one or two things. In the first place, I congratulate him upon having in this measure agreed to the fixation of fair rents.
THE EARL OF CAMPERDOWN: It was in last year.
THE LORD CHANCELLOR: I am glad that it is in the Bill again this year. I congratulate the noble Earl also upon having agreed to fixity of tenure.
THE EARL OF CAMPERDOWN: No; security of tenure.
THE LORD CHANCELLOR: It is a perpetually renewable provision; it is security of tenure for ever, and that is fixity enough. I also congratulate the noble Earl on something uncommonly like the creation of a fair-rent Court. It is not a Court which always consists of the same persons, but there is a valuer who has complete control to fix the rent himself without appeal. I congratulate my noble friend upon that. It is something to think we have got so far.
I now come to the characteristic differences on which the noble Marquess relied —the differences between what you would not even examine eighteen months ago and what you welcome with alacrity now. This policy of having to go to the county councils is not desired in Scotland. It is not desired by the county councils, it is not desired by the people of Scotland, and it is only because the provision is in the English Act that now you want to insert it in the Scottish measure. But the provision in the noble Earl's Bill enables the county councils to be overriden by a bureaucratic central department. Those, however, are only matters of detail which in connection with the former Bill, if you had only been prepared to allow it to be considered, we could have discussed in Committee.
I agree also with the noble Marquess that crofters are different from small holders, but when one speaks of crofters as men on small patches of soil cultivated by needy people, hardly able to subsist in the remote and desolate parts of the
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Highlands, the conception presented is that you do not want to increase this misery. Of course not. The real point, however, is not the question whether crofters should be placed in other parts of Scotland, but of giving security of tenure. The truth is that people seem to be alarmed at the idea of crofterising Scotland. We do not desire to crofterise Scotland, nor to compel the people to purchase their land—because they have not the money to do this—but to give reasonable tenure and fixity of tenure with some method of ascertaining fair rents in a method which would be conformable to the customs and habits of the people. We should not try to import county councils where no one wants them and where they would not really be of service.
As regards the proposals of the noble Earl, I am afraid they offer no prospect of success, for instead of accommodating your legislation to the wishes of the Scottish people, the noble Earl wishes to accommodate it to the English precedent. I do not know whether the noble Earl remembers it, but in the amusing "Letters of Malachi Malagrowther" Sir Walter Scott gives numerous reasons why the laws of Scotland should not be always assimilated to the laws of England. Why should they be the same? With all respect I ask whether it is not pedantry if a system has nothing wrong in it to refuse to give it to Scotland because the same scheme does not exist in England? I think I have fairly put the points of difference between us. Is it not rather, I will not say a scandal, but a reproach that, eighteen months after having refused even to discuss the proposals of the Government, noble Lords are now discussing the same subject under different proposals and without having been able to come to any accommodation, because one of the great points of difference still remains unsettled? Your Lordships say you will have it either by means of purchase or by means of the county council; but you will not allow it to be settled in the way in which the Scottish people think most useful. There is no principle in it. It is, if I may say so, nothing but obduracy which prevents this business from being, as it ought to be, settled.
THE EARL OF CAMPERDOWN: My Lords, perhaps I may be allowed to say a few words in reply. I have been very

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much struck by the speech which has just been delivered, because it is so entirely different in its tone from the speech which the noble and learned Lord delivered last year. He was then endeavouring to induce your Lordships to give a Second Reading to the Bill of the Government, and he tried to persuade us by every means in his power—and he has, as we know, great powers of fascination and of cajoling the House—that these two Bills were very much the same. He said that fixity of tenure is very little more than what we had proposed, that the fixation of fair rents was to be found in both Bills, and so on. He said that, after all, there is not very much difference between a county council possessing purchasing powers, and so on, which are put in force by the Board of Agriculture, and a Court which has to fix fair rents. It is just there that the whole difference lies. The noble and learned Lord even went so far as to assure us that this Court, which was to be entirely independent of law, to be above all law and not responsible in any way to Parliament, and which was to have the most absolute powers of doing whatever it chose —that this really was no very great advance. It is just there that we meet him. We say, What is the reason for setting up an independent land Court? After all, if the noble and learned Lord is right, and if there is really not very much difference between the land Court and the procedure proposed in this Bill, pray why is the noble and learned Lord so obdurate, if I may use his own phrase, as to refuse to accept the terms in this Bill?
The noble and learned Lord said that I had made great advances. The noble Lord the Secretary for Scotland said the same thing. Certainly. We have made all the advances that we possibly can in the direction of the proposals of His Majesty's Government. If this Bill became law Scottish county councils would, for the first time, have the power of hiring land by compulsion, and I am sure that the members of the county councils would do their best to carry out the provisions of the Bill. Turning to what was said by the noble Lord the Secretary for Scotland, I must admit to being a little perplexed by his criticism; and a person who, I think, must be more perplexed than I am is the noble Earl the President of the Board of Agriculture, who is sitting at this moment so peacefully at his side. I am
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surprised that the noble Earl did not at once rise to defend his bantling the English Act. Did the noble Earl hear his colleague say that England requires allotments, not small holdings; that Scotland requires small holdings, not allotments? Does the noble Earl agree with that? And did he hear his colleague say that the whole system of compensation in his Act is wrong, that the systems of cropping are most unsatisfactory, and that they will not do for Scotland?
Then the noble Lord the Secretary for Scotland made an assertion which has just been contradicted from the Woolsack. He said that there was nothing about fair rents in this Bill. The noble and learned Lord on the Woolsack knows better. He knows that there is fixation of fair rents in the Bill, and if the noble Lord the Secretary for Scotland would only read the Bill he would see that it is so. Then there was another still more surprising assertion which the noble Lord made, and which I do not think is altogether complimentary to Scotland. He said that in Scotland you cannot set up a small holding without providing for its adaptation out of the taxes. Does the noble Lord really mean that? It seemed to me quite inconsistent with another remark he made —namely, that there were a great many farm labourers who had saved money and were ready to take up small holdings but only wanted the land. Why could not they put a portion of their savings into the equipment of the small holdings?
The noble Lord naturally got on to his Bill, and he said that in his Bill provision had been made in this direction. Does the noble Lord remember how much that provision amounted to? He provided a total of £65,000 to be spread over the whole area of Scotland. That sum was all that there was to provide buildings and equipment. The noble Lord, although he offered the equipment as a gift, did not go so far as to include the buildings. I would ask your Lordships, supposing this desire for small holdings to be as general as the noble Lord says, and supposing also that his Bill worked with the celerity which he imagines it would—I think, however, it would be found very different when put into practice—and that a large number of small holdings were created and a large sum of money required for buildings and

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equipments, how far would £65,000 go? Not very far. I think he would have found that there would have been a general complaint at once all over the country from small holders who had been led to believe that the noble Lord was going to equip their holdings.
The noble Lord said that this Bill of mine creates two different systems. Yes, it does. But there are two different sets of people—one the crofters and the other the small holders. The greater part of, the noble Lord's crofters are people whose crofts do not amount to £5 a year, and even then, as he knows, they do not pay their rent. But the small holder is a different person altogether, and should be dealt with by a different procedure. The crofter is a person whose rent may rise as high as £30; a small holder's rent may rise as high as £50. Therefore it seems to me that, so far from its being any disadvantage to a crofter, it is a great advantage to him that there should be two systems, because if he has enough money to start a small holding he can then apply to the county council for one and get it. The noble Lord said that my plan would prove most costly. I wish lie had gone on to tell us where all this cost was going to arise which would not necessarily arise under any other proposal. He also said the Bill was unworkable. Well, assertions are not arguments, and I must say I did not hear in the course of the noble Lord's speech anything to establish either of those last two propositions. I shall certainly ask your Lordships to read the Bill a second time. It represents what in my opinion, and, I believe, in the opinion of many noble Lords on this side of the House, is a good and workable system of small holdings for Scotland. At all events, I hope that the noble Lord the Secretary for Scotland, whichever way he votes upon it, will not say again, as he did the other day, that this House had stopped all proposals for the creation of small holdings in Scotland.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

HIGH COURT OF JUSTICE (KING'S BENCH DIVISION).
Commons Message considered (according to order).
Moved, That this House do concur in the Resolution communicated by the Commons, viz.: "That it is expedient that a Joint Committee of Lords and Commons be appointed to consider the state of business in the King's Bench Division of the High Court, and report thereon, and whether any increase is desirable in the number of Judges of that Division, and to make such recommendations as they see fit."—(The Lord Chancellor.)
On Question, Motion agreed to, and a Message ordered to be sent to the Commons to acquaint them therewith.

CITY OF LONDON (STREET TRAFFIC) BILL.
LONDON COUNTY COUNCIL (TRAMWAYS AND IMPROVEMENTS) BILL.
GAS LIGHT AND COKE COMPANY BILL.
CENTRAL LONDON RAILWAY BILL.
WATFORD URBAN DISTRICT COUNCIL BILL.
OLDHAM CORPORATION BILL.
HOLYWOOD TRAMWAYS BILL.
HULL AND BARNSLEY RAILWAY BILL.
LLANELLY WATER BILL.
Report from the Committee of Selection, That the following Lords be proposed to the House to form the Select Committee for the consideration of the said Bills (viz.)—

E. Stradbroke,

L. Clifford of Chudleigh (chairman),

L. Digby,

L. Wynford,

L. Glantawe;

agreed to; and the said Lords appointed accordingly: The Committee to meet on Tuesday next, at Eleven o'clock; and all Petitions referred to the Committee, with leave to the Petitioners praying to be heard by Counsel against the Bills to be heard as desired, as also Counsel for the Bills.
House adjourned at a quarter past Six o'clock, till To-morrow, a quarter past Four o'clock.