Sitting of 22 October 1909

Preamble
Mr. SPEAKER took the chair at Twelve of the clock.
PRIVATE BUSINESS.
Colinton Tramways Order Confirmation Bill [Lords]—Read the third time, and passed, without Amendment.
ORAL ANSWERS TO QUESTIONS.
  FINANCE BILL.

    LICENSED PREMISES (VALUATION).
    Mr. JOHN GRETTONasked the Chancellor of the Exchequer if he can state what will be the cost of valuing all the licensed premises in the United Kingdom and Ireland for the purpose of the new register proposed in Clause 44 of the Finance Bill; and by whom the cost of the valuation is to be defrayed?
    The CHANCELLOR of the EXCHEQUER (Mr. Lloyd-George): The estimate made by the Prime Minister of the cost of the valuation is a comprehensive one. It included the cost of valuation of licensed premises as well as the cost of valuation for the Land Taxes. We are depending on the same staff for both.
    Mr. GRETTON: Would the right hon. Gentleman answer the second part of the question?
    Mr. LLOYD-GEORGE: Of course the cost of valuation will be defrayed out of funds provided by Parliament. It will be the same estimate for both.

    REVISED FINANCIAL ESTIMATE.
    Mr. AUSTEN CHAMBERLAIN: May I ask a question about Business? I think there is some misunderstanding between us, but I am sure it can be cleared up. I understood that the Chancellor of the Exchequer was going to ask the leave of the House to make a financial statement to-day, which it has been promised, as to the effect of the changes in the Finance Bill, so that when he made that
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    statement he might lay a White Paper before us.
    Mr. LLOYD-GEORGE: I believed that after consultation it was understood that the convenient time to do that would be on the Motion for Adjournment. That would enable any questions to be put.
    Mr. AUSTEN CHAMBERLAIN: No doubt the misunderstanding was my fault. I need not say the arrangement is equally satisfactory, provided the Motion for Adjournment takes place at a reasonable time. I think it is evident that we cannot finish the Land Clauses to-day, and I hope the Chancellor of the Exchequer will be able to say that he does not, after the labours of the week, intend to keep us very late to-day.
    Mr. LLOYD-GEORGE: I would be the last man to desire to sit late—I have had so much of it. But I should rather like to have some sort of idea of the view of the Opposition whether, supposing we failed to get the Land Clauses through to-night, it would be possible to get them either by the dinner-hour on Monday, or at what time. Otherwise we might sit a little later to-night. Perhaps the right hon. Gentleman could give some assurance, so that we might rise fairly early, and I am perfectly certain everybody will be pleased if that is done.
    Mr. A. J. BALFOUR: The right hon. Gentleman knows how difficult it is to make anything in the nature of a pledge. Directly a pledge is given everybody has to see that it is going to be carried through absolutely to the letter. As the right hon. Gentleman and the House knows, a full share of the Debates of the last two or three days have been occupied by Gentlemen on the other side by some of the Amendments. I cannot myself imagine, and I do not think it is possible, that the Land Clauses should last over Monday. Personally, I cannot think so.
    Mr. LLOYD-GEORGE: Perhaps there may be another opportunity of saying how far we will be able to go.
    Mr. BALFOUR: I am sure it can be done.
    Mr. LLOYD-GEORGE: Under those circumstances, we ought to be able to adjourn by five or six o'clock, and then I can make my statement.

FINANCE BILL.
As Amended in Committee of the Whole House, further considered.
FINANCE BILL.

  CLAUSE 21.—Deduction of Mineral Rights Duty in Case of More than One Lease.)
  (1) Any immediate lessor who under this Act pays any Mineral Eights Duty, and is himself a lessee of the right to work the mineral or of the wayleave in respect of which the duty is paid, shall be entitled to deduct from the rent paid by him in respect of the right to work the minerals or the wayleave, as the case may be, to his lessor a sum equal to the Mineral Rights Duty on a rental value of the same amount as the rent so paid; and any person from whose rent any such deduction is made may make a similar deduction from any rent paid by him in respect of the right to work the minerals or in respect of the wayleave, as the case may be.
  (2) Any person in receipt of rent from which a deduction may be made under this Section shall allow the deduction, and the person making the deduction shall be discharged from the payment of an amount of rent equal to the amount deducted, and any contract for the payment of rent without allowing such a deduction shall be void.
  (3) If any person refuses to allow a deduction which he is required to allow tinder this Section he shall be liable to a penalty not exceeding fifty pounds to be recovered in the High Court.
  Amendment made: In Sub-section (1) to leave out the words "so paid" ["as the rent so paid"] and to insert instead thereof the word "payable."—[Mr. Lloyd-George.]
  The ATTORNEY-GENERAL (Sir W. Robson)The ATTORNEY-GENERAL (Sir W. Robson) moved, at the end of the Subsection, to insert the words: "(4) Where in any special case Mineral Rights Duty has been charged on a rental value based on a rent which has been substituted under the provisions of this Act for the rent actually payable by the working lessee, or where in any special case the rental value with reference to which Increment Value Duty is charged has been reduced under the provisions of this Act for the purposes of the collection of that duty, the Commissioners shall, on the application of any lessor from whose rent a deduction may be made in respect of Mineral Rights Duty or Increment Value Duty, as the case may be, make a corresponding substitution or reduction as regards that rent, if they consider that the
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  grounds for the substitution or reduction, as the case may be, are applicable in the case of the rent with respect to which the application is made."
  This Amendment is really consequential upon an Amendment which was inserted last night at the end of Clause 20. The result was to enable the lessor to have a rent fixed which would give him an allowance in respect of his expenditure. That only related to the case of the working lessee. Afterwards there was a provision inserted, giving the right of deduction to the intermediate lessor. This Sub-section is to give the right of substitution, not merely in respect of rents paid by intermediate lossors to the head lessor. It is only continuing the same principle. We have had to add to it certain words by reason of the promise given last night to introduce an Amendment in order to meet the case made by the hon. Member for Northants (Mr. Grove). There, again, we had to allow for another deduction from the substituted rent, namely, in cases where the lessor had made expenditure in borings. The Amendment inserted last night in Clause 20 reads:—
  "Provided that if in any special case it is shown to the Commissioners that the rent paid by a working lessee exceeds the rent customary in the district, and partly represents a return for expenditure on the part of any proprietor of the minerals which would ordinarily have been borne by the lessee, the Commissioners shall substitute as the rental value of the right to work the minerals or the mineral wayleaves, as the case may be, such rent as the Commissioners determine would have been the rent customary in the district if the expenditure had been borne by the lessee."
  In other words, it enables the lessor to get the benefit of any expenditure by which he has increased his royalty beyond the normal royalty of the district. They are very wide terms, and they deal with the matter rather by results. It will be observed that the wording of the Clause deals only with the amount paid by the working lessee. It is necessary therefore to continue the benefit in the case of an intermediate lessor. There may be some intermediate lessor or lessee who also on his own account has made some expenditure for which he ought to get an allowance; therefore, the Clause proposed gives the intermediate lessor the same benefit. Then we have had to add slightly

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  to it since last night, because we want to give to the lessor not merely the benefit I have already described, but the benefit of the pledge given to the hon. Member for Northampton with regard to allowing the lessor the benefit in the case of increment value. I assure the House there is nothing in the Amendment to diminish the value of any concession given to anybody; the only alteration made in the Amendment now on the paper is one in anticipation of further criticism.
  Mr. AUSTEN CHAMBERLAIN: I am not certain that this Amendment and the Amendment put in at an early hour this morning quite carry out the intention of the Government, or, indeed, bow they are intended to apply in, for instance, the specific case of the Wemyss Colliery, mentioned last night. Let me state my difficulty. The whole of this Amendment and the provisions of which it forms a part depend upon the customary rent in the district. The royalty given to a proprietor who has expended a considerable amount in developing a mine is not merely a royalty on the mineral worked, but interest on the capital expended in developing the mine. The royalty is raised to that extent, and becomes something more than a royalty. The royalty given to the proprietor may for the purposes of this tax be reduced by the Commissioners to the customary rent in the district. But I am told that in this particular case, which is a striking instance of the kind of thing which the Government desire to meet, there is no rent in the district except the Wemyss rent, so that there is nothing to compare it with. But for the expenditure of the late Mr. Wemyss there would have been no working there at all. This is the only coal of that kind worked under these conditions. In these circumstances, can the Government carry out their intentions, which are exactly what we should wish to see in respect of this matter, merely by reference to a customary rent of the district, which, in fact, does not exist?
  Mr. LLOYD-GEORGE: It is not quite "the customary rent"; the words are "would have been the customary rent." It really depends, not on the district—there is not much difference between one district and another—but rather on the quality of the coal and the difficulty of getting at it. The same quality of coal produces practically the same royalty in every district. The royalties in South
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  Wales, for instance, are very high because of the quality of the coal.
  Mr. AUSTEN CHAMBERLAIN: Subject to communications. The right hon. Gentleman will remember that the most important effect, perhaps, produced by the expenditure of Mr. Wemyss was the creation of facilities of transport which did not exist before.
  Mr. LLOYD-GEORGE: The same thing would apply in districts in South Wales or Northumberland. There may be exceptional districts where the royalties have been less because of that very difficulty. A land agent takes all that into account in fixing the royalty in any part of the country, and there is no difference between a district in Fife and a district in Northumberland, Lanark, or South Wales, so long as the conditions and the quality of the coal are the same. Every mining expert who valued it would take all that into account. The word "district" will have a wider application than the mere county or whatever it may be. As a matter of fact, this question does not rise on the present Amendment; it is a totally different point.
  Mr. AUSTEN CHAMBERLAIN: Does it not depend upon it?
  Mr. LLOYD-GEORGE: No. This is a case where a man takes up an area and sublets it. It is rather to deal with the intermediate case. It has to do with merely boring to find out whether there is coal. The other is a case of very large expenditure on jetties and railways, and the development of a whole district.
  Sir JOHN RANDLES: The Chancellor of the Exchequer refers to the quality of the coal as being the determining factor. Of course, the transportation——
  Mr. LLOYD-GEORGE: I was only replying to the right hon. Gentleman on the coal case.
  Sir J. RANDLES: But I contend that in dealing with iron ore that this tax is going to be more burdensome still. I am now asking for information rather than criticising—for I recognise the value of the concession that the right hon. Gentleman has announced—but what I gather is that in searching, for instance, for a period for iron ore, which requires a great deal more searching for than does coal—for not only must you frequently bore, but borings may be of little use, and there must be a lot of underground shafts and the rest of it—in order to get down you have to undertake

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  very heavy expenditure on machinery for sinking purposes. The case I have in my mind is one like this: Suppose that a lessee had been searching and had spent a considerable sum of money and had not succeeded in securing the ore, and the lessor had bought the plant and held it until he could find some further lessee to try and develop the mine. Some one else comes along. They have got a specially favourable royalty—if you like—for they are going to have the advantage of the experiences of their predecessors; but at the same time they are paying no money for the, lease. They are going to pay if the royalty turns out a success. Is the expenditure which has gone before in searching for the minerals going to come into the account, because it would have a bearing upon the terms of the royalty which the new adventurers might have to pay?
  Mr. LLOYD-GEORGE: As a matter of fact, I am much more disposed to deal with the case referred to by the hon. Gentleman than with the case of coal. I have seen many cases of searching for copper, iron, and manganese ore, and our part of the country is absolutely disfigured by the number of abandoned mines of the character referred to. If the land-owner has spent money as a lessee then that case is covered.
  Sir J. RANDLES: Pardon me a moment. Not the landlord himself, but a previous lessee. That was rather my point.
  Mr. LLOYD-GEORGE: I am coming to that. I am taking two cases. First of all, I am taking that where the land-owner himself spends money, not merely in boring, but, as a later Amendment says, "or otherwise proving the minerals." That will over the whole case. If he gets an increased royalty on his lease owing to the fact that he has spent money in proving the minerals, then he gets the full advantage of that expenditure. But the hon. Gentleman gives the case where first of all there is a lessee who spends money—that there is a succession of lessees, from the man who is always digging holes in order to find ore to the last man who takes the thing in hand: the landlord does not spend anything. If he does he gets the full benefit of it; or if he comes to terms with the lessee, and takes upon himself the burden of any of the expense, he will get a benefit that he would not get—that is, benefit of the money spent by a succession of lessees who have become
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  bankrupt in the operation. He is getting his relief because it is not his expenditure. As to the machinery, the hon. Gentleman knows perfectly well that that machinery as a rule is left derelict.
  Mr. J. FALCONER: In one sentence I should like to make clear the point which evidently was not made clear by me last night with regard to the Wemyss case. According to the Amendment the Government, in the case of the owner of minerals who has made a large exceptional expenditure, if he succeeds in getting a royalty which is in excess of the average royalty of the district as a result of that expenditure, then no doubt he will get the allowance; and it is quite right that he should get it. But a fortiori if the owner of the minerals has made all the exceptional expenditure of the kind I have referred to, and has only succeeded in getting what is the normal royalty, or, rather less, he is left with a large expenditure altogether exceptional upon which he is not getting any return, and to which the development of the minerals is entirely due. I do not wish to argue the case, but I feel I failed to make it clear. But that is the real point: where there is exceptional expenditure of that kind it seems to me to be fair to the owner of the minerals to give him some allowance. I realise the difficulty in framing the Clause, but I think some allowance should be made in respect of this expenditure, otherwise there is no adequate return.
  Mr. BALFOUR: I am not quite sure that I am in order in continuing this discussion, but I want to call the attention of the Government to a matter which can be corrected at a later stage. The hon. Gentleman who has just sat down has pointed out a case which is not met by the Government. All I can say about it is that the late Mr. Wemyss was extremely generous with the public and extremely ungenerous to himself. He spent money which has been of immense advantage to the district, but was uneconomically spent from the point of view of private expenditure. There is another point—as to the interpretation of the word "district." At present it appears as if the district of Fifeshire includes South Wales. That is a very uncommon use of the word, and I think the right hon. Gentleman should make it clear what he means by the word "district."
  Mr. LLOYD-GEORGE: I did not intend that, it should be as wide as that. It is hardly intended that you should widen the area to the extent of making Scotland an

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  annexe of Wales. But you would not confine it to the immediate area in Fifeshire. However, I will consider the suggestion made by the right hon. Gentleman.
  Lord BALCARRES: Are you going to have a definition clause?
  Mr. LLOYD-GEORGE: If it is necessary. I will take an early opportunity of consulting my advisers on the point, which seems a long way off, I am sorry to say.
  Lord BALCARRES: This is really a Very complex Amendment. The rent of collieries in a district is far from a simple matter. The rent very often is tied, and the conditions that determine the rent and the royalty are very often very complex, not only with regard to different collieries, but different seams.
  Mr. LLOYD-GEORGE: I am very loth to raise a point of Order, but we are now discussing an Amendment disposed of last night.
  Lord BALCARRES: I will not press the matter further.
  Amendment made.

  CLAUSE 22.—(Special Provisions as to Increment Valve Duty and Reversion Duty in the Case of Minerals Worked or Leased.)
  (1) No Reversion Duty shall be charged On the determination of a mining lease, and no Increment Value Duty shall be charged on the occasion of the grant of a mining lease or in respect of minerals which are comprised in a mining lease, or are being worked, except as a duty payable annually in manner provided by this Act.
  (2) Increment Value Duty shall not be charged in the case of any minerals which were, on the thirtieth day of April nineteen hundred and nine, either comprised in a mining lease or being worked by the proprietor, so long as the minerals are for the time being either comprised in a mining lease, or being worked by the proprietor: Provided that the exemption under this Section shall continue to apply in the case of any minerals, although they cease for a temporary period to be comprised in a mining lease or to be worked, So long as the period does not exceed twelve months.
  (3) Increment Value Duty in respect of the increment value of minerals which are Comprised in a mining lease or are being Worked shall, where that duty is chargeable, be charged annually; and the increment value shall, instead of being esti-
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  mated as a capital sum, be taken to be the sum (if any) by which, in each year during which the tenancy under the lease continues or the minerals are being worked, as the case may be, the rental value on which Mineral Eights Duty is charged in respect of the right to work the minerals exceeds the annual equivalent of the original capital value of the minerals, or the capital value of the minerals on the last preceding occasion on which Increment Value Duty has been collected, as the case may be; and the annual equivalent of any such capital value of the minerals shall be taken to be two twenty-fifth parts of that capital value.
  (4) Increment Value Duty payable annually under this Section shall, instead of being collected as provided by this Act in other cases, be recoverable in the same manner as Mineral Rights Duty, with the same right of deduction.
  (5) Any proprietor or lessor of any minerals who pays Increment Value Duty in pursuance of this provision shall be entitled to be relieved in any year from the payment of Mineral Rights Duty, as such proprietor or lessor, up to the amount paid by him in that year in respect of Increment Value Duty.
  For the purposes of this provision a deduction of any amount from the rent payable to a lessor on account of Mineral Rights Duty shall be deemed to be a payment of that duty, and the relief may be given either by allowance or repayment or both of those means, as the occasion may require.
  (6) Where minerals cease to be comprised in a mining lease or to be worked within the meaning of this Section, the capital value of the minerals at the time shall be specially ascertained in accordance with the provisions of this Act, and the capital value as so ascertained shall be treated as the original capital value of the minerals.
  (7) Nothing in this Section shall apply to minerals which are exempt from Mineral Rights Duty under this Act.
  Mr. JAMES HOPE (for Mr. Lambton)Mr. JAMES HOPE (for Mr. Lambton) moved, in Sub-section (1), after the word "Act" ["in manner provided by this Act"] to insert the words "or in respect of any minerals which are exempt from Mineral Rights Duty under this Act."
  I think the Amendment is merely consequential because if these substances are to be exempt from one tax I do not see

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  why they should be included in the other. These taxes are only to be collected and payable in the manner provided by the Act; the Act only provides for other minerals, and not exceptional minerals.
  Viscount CASTLEREAGH: I beg to second the Amendment.
  Mr. LLOYD-GEORGE: Increment Duty upon all classes of land, whether it has minerals or not, is to be charged. I do not see why this class of land, if sold at enhanced value, not attributable to anything the owner has done himself, should escape any more than an ordinary individual who owns the land with no minerals underneath it at all.
  Amendment negatived.
  Sir J. RANDLES (for Mr. Laurence Hardy)Sir J. RANDLES (for Mr. Laurence Hardy) moved, in Sub-section (2), to leave out the words "so long as the period does not exceed twelve months."
  In the Committee stage the Chancellor of the Exchequer recognised the importance of this point and promised that consideration would be given to it.
  Mr. LLOYD GEORGE: I think I did give a promise, and I am now prepared to extend the period to two years.
  Sir JOHN RANDLES: I think that is very reasonable.
  Amendment made in the proposed Amendment: To leave out the words "twelve months," and to insert instead thereof the words "two years."
  Words, as amended, there inserted in the Bill.
  Further Amendments made: In Sub-section (3) leave out the words "the tenancy under" ["in each year during which the tenancy under the lease continues."]
  In Sub-section (3) to leave out the words "as the case may be" ["Increment Value Duty has been collected as the case may be"], and to insert instead thereof the words "otherwise than as an annual duty if Increment Value Duty has been so collected before the minerals have become comprised in a mining lease or have commenced to be worked."—[Sir W. Robson.]
  Sir W. ROBSON Sir W. ROBSON moved, at the end of Sub-section (3), to add the words, "If in any special case it is shown to the Commissioners that the rental value on which Mineral Rights Duty is charged represents in part a return for money expended within fifteen years by a lessor in boring
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  or otherwise proving the minerals, the rental value shall be reduced for the purposes of the collection of Increment Value Duty by the amount which represents that return."
  This is in fulfilment of a promise made last night with regard to expenditure by the lessor in boring or otherwise proving the minerals within 15 years, and this Amendment enables the reduction to be made for the purposes of Increment Value Duty.
  Lord BALCARRES: Why should this be limited to special cases?
  Sir W. ROBSON: The word "special" has no limiting effect at all. It rather indicates we are dealing with cases that do not come within the general rules laid down. I do not attach any importance to the word.
  Lord BALCARRES: Then I move to omit the word "special" in the proposed Amendment.
  Amendment to proposed Amendment made.
  Question proposed, "That the Amendment, as amended, be there inserted in the Bill."
  Mr. AUSTEN CHAMBERLAIN: I want an answer from the Government to some observations which I made last night as to why they treat the mine-owner differently from the land-owner. The mine-owner is in one sense a land-owner. The Government have decided that the land-owner is not to be charged Increment Duty on; any value which is created by his expenditure. Suppose a man has marshy bog land, and the landlord by a scheme of drainage and reclamation has converted that into building land, no Increment Duty is to be charged upon any of the value he has so created. If, however, on top of the value he has created there is what is called a socially created value due to the growth of population in that district, he may be charged. Why should the owner of mineral property be denied the same advantage as that which has been extended to landowners? According to this proposal the mineral owner is only to be allowed this partial exemption for a period of 15 years. I will give an illustration which has already been placed before the House, Take the case were a former owner of the land has spent something like £250,000 in constructing a railway to a place on the seaside coast where a dock has been built.

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  In that case the Chancellor of the Exchequer said definitely that he desired to protect, and had protected, the whole of the value created by that expenditure, no matter what period of time had elapsed. The value of that property was created by the expenditure incurred by the present owner's predecessor, and the Chancellor of the Exchequer said to that extent the property was exempt from taxation. Why not allow the same advantage in the case of a man who has done a similar thing in regard to mineral property, where he can show that any portion of the value of the minerals is due to his own expenditure? Why should the mineral owner under such circumstances not have the same consideration as that which is shown to the landlord? I cannot see any possible ground for allowing this exemption to the owner of land and refusing it to the owner of minerals. The owner of minerals, if he undertakes expenditure of this kind, probably undertakes it with a greater amount of risk, and certainly with less chance of a profit, than the owner of land, and I think he has at least an equal claim for favourable consideration. The Amendment, I agree, is a concession, but I desire to have some explanation from the Government of the distinction which has been drawn, and some reasoned argument ought to be given in favour of the course which the Government are asking the House to pursue.
  Sir W. ROBSON: The right hon. Gentleman has asked why we propose to make a distinction between the case of a landowner and the mineral owner. So long as we deal with the mineral owner in the same way and on the same footing as the land-owner, he gets the benefit of the same deduction. In the case of the mineral owner we have made a difference in the machinery at his request. When we came to deal with the increment value in these cases we had to put it in a somewhat different category, and we could not allow the same kind of capital deductions as we allowed when dealing with the capital sum. We cannot consider every year a number
  of elements which would be in the nature of a fresh valuation. I am only giving this as a reason for the distinction. I do not attempt to defend an exceptional concession as if it made no kind of difference in the principle of the tax generally.
  Viscount CASTLEREAGH Viscount CASTLEREAGH moved to amend the proposed Amendment by omitting the words "within fifteen years."
  I do not think the Attorney-General has made out a case for retaining this period. I do not see why the mineral owner in regard to the spending of money upon his property should be placed in a different position to the land-owner. We know quite well that in the mining industry before any money can be obtained from a mining property money has to be sunk in the ground for a good many years, and I know a case where 10 years has elapsed, and probably another five years will elapse, before any return will be forthcoming.
  Mr. JAMES HOPE Mr. JAMES HOPE seconded the Amendment.
  Sir W. ROBSON: I think the Noble Lord heard what I said on this point, and I hope he will not think me discourteous for not replying to his Amendment.
  Mr. AUSTEN CHAMBERLAIN: I think it will be necessary for us to press this point to a Division. To treat the owners of mining property different to the owners of land as is proposed under the machinery embodied in the Mineral Clauses will be a very difficult and complicated thing to do. I think the mineral owners are entitled to have a much longer period allowed them than 15 years. If the Government will not give them an exemption for all time like the landowners, I think you ought to give them at least a term of not less than 30 years.
  Question put, "That the words proposed to be left out stand part of the proposed Amendment, as amended."
  The House divided: Ayes, 106; Noes, 24.
  Proposed words, as amended, there inserted in the Bill.

  CLAUSE 23.—(Application of Provisions as to Total and Site Value to Minerals.)
  (1) For the purposes of this Part of this Act, the total value of minerals means the amount which the fee simple of the minerals, if sold in the open market by a willing seller in their then condition, might be expected to realise, and the capital value of minerals means the total value, after allowing such deduction (if any) as the Commissioners may allow for any works executed or expenditure of a capital nature incurred bonâ fide by or on behalf of any person interested in the minerals for the purpose of bringing the minerals into working, or where the minerals have been partly worked, such deduction as is, in the opinion of the Commissioners, proportionate to the amount of minerals which have not been worked.
  (2) For the purposes of valuation under this Part of this Act, all minerals shall be treated as a separate parcel of land; but where the minerals are not comprised in a mining lease or being worked, they shall be treated as having no value as minerals, unless the owner of the land in which they
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  are comprised, in his return furnished to the Commissioners, specifies the nature of the minerals and his estimate of their capital value.
  Minerals which are comprised in a mining lease or are being worked shall be treated as a separate parcel of land, not only for the purposes of valuation, but also for the purpose of the assessment of duty under this Part of this Act.
  (3) Except where the context otherwise requires, any references in this Part of this Act to the site value of land shall, in cases where the land consists solely of minerals, or comprises minerals, be construed, so far as respects the minerals, as a reference to the capital value of the minerals.
  Mr. JAMES HOPE Mr. JAMES HOPE moved, at the end of Sub-section (1), to insert the words: "Provided that the Commissioners shall allow as a deduction from the total value of the minerals any sum which the working of such minerals would detract from the site value of the land wherein they are comprised."
  I move this Amendment with some diffidence, because I quite admit it may possibly be unnecessary, as I am not altogether clear about the proposals as pro-

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  posed to be amended with regard to valuation. What I understand is that in a great number of cases land with minerals underneath it will be absolutely separately valued. One value will be put on the site and another on what is called the capital value of the minerals; and these will be absolutely distinct. The owner will be charged on two values, neither of which he can realise. If he tries to realise on one, he will lose something on the other. I do not profess to know much about this from the colliery point of view, but I understand that very often building on the surface is impossible owing to subsidence. There is the case where the working of the minerals will almost destroy the site value of the land. I am rather sorry the Chancellor of the Exchequer has gone out, because there is a case with which he is familiar. There is a certain golf links at Lewes, in Sussex, on the top of a down, which has been continually cut into by the opening of a quarry. The golf-house is on the top of the ridge, and half-way up there are other houses. This hill, in my time, has been very seriously encroached upon. If you take a site value for a piece of that down where it is valuable for building some part of the way up, there will be a site value and also a mineral value underneath it. Clearly here, if the owner of that land tried to get what he could out of the site value, he would prejudice the working of the minerals. If, on the other hand, he worked the minerals to the fullest degree he actually cuts the site value completely away. Yet under the provisions of the Bill he would be taxed both on site and mineral value. Therefore, I submit that there should be a direction to the valuers to take into account what would be the effect of attempting to develop in either direction when it is quite plain you cannot develop in both.
  Viscount CASTLEREAGH: I beg to second. I think there is a certain amount of substance in what has been said—that the value of the one detracts from the value of the other. There are many such cases in Yorkshire and Durham, where the site value is of no value, because of the borings underneath.
  Sir W. ROBSON: I think the hon. Member overlooks the fact that it would be the duty of the Commissioners, after assessing the amount which is to be made subject to duty, in each case to consider every element that affects the whole. Take
  650
  the case of chalk. Would any valuer say, "I am going to value this land as undeveloped land, and assess the duty accordingly, assuming that it will be treated for building only," and then say, while making the same valuation, "I am now going to value the land as if all the surface were torn off, so that no building could erected"? That would be very unreasonable and perfectly absurd.
  Mr. JAMES HOPE: May I call attention to the second Sub-section, which says: "For the purposes of valuation under this part of this Act, all minerals shall be treated as a separate parcel of land"? Therefore there may be a separate mineral value.
  Sir W. ROBSON: Of course they will be treated as separate. The Clause does not say that they are not to be considered. The hon. Member, in order to get ground for his Amendment, must suppose that one valuer is sent down who would carefully overlook the question of minerals and another is sent down who would carefully overlook the value of the surface. That, of course, is not so, and therefore the Amendment of the hon. Member disappears.
  Mr. AUSTEN CHAMBERLAIN: But the Bill says the Commissioners shall go there. I understand the Government are going to have experts in land valuation and experts in mineral valuation. The Bill: provides that in each case the minerals are to be valued separately from the land. Accordingly the Commissioners will send down one man to value the site for building, and another, an expert in minerals, to look at the value of the minerals, and they will be valued separately. It is, as the Attorney-General says, a perfectly absurd result to arrive at, and one, I have no doubt, the Government did not contemplate. What there is in this Bill to prevent it I cannot see. On the contrary, it appears to me that everything in this Bill points to that course as the one which will have to be taken. It is extremely difficult to amend the Bill at this stage, but I think the Government would be well advised to accept the Amendment of my hon. Friend if only to protect themselves against what they see is a gross absurdity, which they do not desire any more than we do.
  Question put, "That those words be there inserted in the Bill."
  The House divided: Ayes, 32; Noes, 119.

  Division No. 833.]

  AYES.

  [12.55 p.m.

  Acland, Francis Dyke

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

  Collins, Stephen (Lambeth)

  Agnew, George William

  Bryce, J. Annan

  Corbett, A, Cameron (Glasgow)

  Astbury, John Meir

  Burns, Rt. Hon. John

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

  Baring, Godfrey (Isle of Wight)

  Cameron, Robert

  Cornwall, Sir Edwin A.

  Beale, W. P.

  Carr-Gomm, H. W.

  Cotton, Sir H. J. S.

  Beck, A. Cecil

  Chance, Frederick William

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

  Bennett, E. N.

  Channing, Sir Francis Allston

  Edwards, Sir Francis (Radnor)

  Brace, William

  Cheetham, John Frederick

  Erskine, David C.

  Brigg, John

  Cherry, Rt. Hon. R. R.

  Essex, R. W.

  Brooke, Stopford

  Cough, William

  Evans, Sir S. T.

  Everett, R. Lacey

  Leese, Sir Joseph F. (Accrington)

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

  Falconer, James

  Levy, Sir Maurice

  Schwann, Sir C. E. (Manchester)

  Ferguson, R. C. Munro

  Lloyd-George, Rt. Hon. David

  Sherwell, Arthur James

  Fiennes, Hon. Eustace

  Macdonald, J. M. (Falkirk Burghs)

  Soames, Arthur Wellesley

  Fuller, John Michael F.

  Macnamara, Dr. Thomas J.

  Strachey, Sir Edward

  Fullerton, Hugh

  M'Callum, John M.

  Tennant, H. J. (Berwickshire)

  Gibb, James (Harrow)

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

  Thomas, Abel (Carmarthen, E.)

  Gibson, J. P.

  Marnham, F. J.

  Toulmin, George

  Glendinning, R. G.

  Massie, J.

  Trevelyan, Charles Philips

  Goddard, Sir Daniel Ford

  Masterman, C. F. G.

  Ure, Rt. Hon. Alexander

  Greenwood, Hamar (York)

  Morse, L. L.

  Verney, F. W.

  Gulland, John W.

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

  Walsh, Stephen

  Harcourt, Rt. Hon. L. (Rossendale)

  Myer, Horatio

  Warner, Thomas Courtenay T.

  Harcourt, Robert V. (Montrose)

  Nicholson, Charles N. (Doncaster)

  Wason, John Cathcart (Orkney)

  Harmsworth, R. L. (Caithness-shire)

  O'Brien, Patrick (Kilkenny)

  Waterlow, D. S.

  Haworth, Arthur A.

  Parker, James (Halifax)

  White, J. Dundas (Dumbartonshire)

  Helme, Norval Watson

  Ponsonby, Arthur A. W. H.

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

  Higham, John Sharp

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

  Whitley, John Henry (Halifax)

  Hobart, Sir Robert

  Rees, J. D.

  Williams, Sir Osmond (Merioneth)

  Horniman, Emslie John

  Richards, Thomas (W. Monmouth)

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

  Hutton, Alfred Eddison

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

  Wilson, W. T. (Westhoughton)

  Hyde, Clarendon G.

  Ridsdale, E. A.

  Wood, T. M'Kinnon

  Idris, T. H. W.

  Robinson, S.

  Illingworth, Percy H.

  Robson, Sir William Snowdon

  Jones, Leif (Appleby)

  Rowlands, J.

  TELLERS FOR THE AYES.—Mr. Joseph Pease and Captain Norton.

  King, Alfred John (Knutsford)

  Russell, Rt. Hon. T. W.

  Layland-Barratt, Sir Francis

  Rutherford, V. H. (Brentford)

  NOES.

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

  Courthope, G. Loyd

  Renwick, George

  Balcarres, Lord

  Craik Sir Henry

  Starkey, John R.

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

  Faber, George Denison (York)

  Talbot, Lord E. (Chichester)

  Banbury, Sir Frederick George

  Guinness, Hon. R. (Haggerston)

  Valentia, Viscount

  Bertram, Julius

  Haddock, George B.

  Walrond, Hon. Lionel

  Bignold, Sir Arthur

  Harrison-Broadley, H. B.

  Younger, George

  Bowles, G. Stewart

  Hope, James Fitzalan (Sheffield)

  Bridgeman, W. Clive

  Magnus, Sir Philip

  TELLERS FOR THE NOES.—Viscount Castlereagh and Sir John Randles.

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

  Pease, Herbert Pike (Darlington)

  Division No. 834.]

  AYES.

  [1.12 p.m.

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

  Faber, George Denison (York)

  Powell, Sir Francis Sharp

  Balcarres, Lord

  Foster, P. S.

  Randles, Sir John Scurrah

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

  Gordon, J.

  Renwick, George

  Banbury, Sir Frederick George

  Guinness, Hon. R. (Haggerston)

  Starkey, John R.

  Bertram, Julius

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

  Talbot, Lord E. (Chichester)

  Bignold, Sir Arthur

  Haddock, George B.

  Valentia, Viscount

  Bowles, G. Stewart

  Hamilton, Marquess of

  Walrond, Hon. Lionel

  Bridgeman, W. Clive

  Harris, Frederick Leverton

  Younger, George

  Carlile, E. Hildred

  Harrison-Broadley, H. B.

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

  Kimber, Sir Henry

  TELLERS FOR THE AYES.—Mr. James Hope and Viscount Castlereagh.

  Courthope, G. Loyd

  Magnus, Sir Philip

  Craik, Sir Henry

  Pease, Herbert Pike (Darlington)

  NOES.

  Acland, Francis Dyke

  Gibb, James (Harrow)

  O'Brien, Patrick (Kilkenny)

  Agnew, George William

  Gibson, J. P.

  Parker, James (Halifax)

  Astbury, John Meir

  Glendinning, R. G.

  Ponsonby, Arthur A. W. H.

  Baring, Godfrey (Isle of Wight)

  Goddard, Sir Daniel Ford

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

  Barker, Sir John

  Greenwood, Hamar (York)

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

  Beale, W. P.

  Gulland, John W.

  Rees, J. D.

  Beck, A. Cecil

  Harcourt, Rt. Hon. L. (Rossendale)

  Richards, Thomas (W. Monmouth)

  Bennett, E. N.

  Harcourt, Robert V. (Montrose)

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

  Bowerman, C. W.

  Hardy, George A. (Suffolk)

  Ridsdale, E. A.

  Brace, William

  Harmsworth, R. L. (Caithness-shire)

  Robinson, S.

  Brigg, John

  Haworth, Arthur A.

  Robson, Sir William Snowdon

  Brodie, H. C.

  Hazleton, Richard

  Rowlands, J.

  Brooke, Stopford

  Hedges, A. Paget

  Russell, Rt. Hon. T. W.

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

  Helme, Norval Watson

  Rutherford, V. H. (Brentford)

  Bryce, J. Annan

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

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

  Burns, Rt. Hon. John

  Herbert, T. Arnold (Wycombe)

  Schwann, Sir C. E. (Manchester)

  Cameron, Robert

  Higham, John Sharp

  Sherwell, Arthur James

  Carr-Gomm, H. W.

  Hobart, Sir Robert

  Soames, Arthur Wellesley

  Causton, Rt. Hon. Richard Knight

  Horniman, Emslie John

  Strachey, Sir Edward

  Chance, Frederick William

  Hutton, Alfred Eddison

  Tennant, H. J. (Berwickshire)

  Channing, Sir Francis Allston

  Hyde, Clarendon G.

  Thomas, Abel (Carmarthen, E.)

  Cheetham, John Frederick

  Idris, T. H. W.

  Tomkinson, James

  Cherry, Rt. Hon. R. R.

  Illingworth, Percy H.

  Toulmin, George

  Clough, William

  Jones, Leif (Appleby)

  Trevelyan, Charles Philips

  Cobbold, Felix Thornley

  King, Alfred John (Knutsford)

  Verney, F. W.

  Collins, Stephen (Lambeth)

  Layland-Barratt, Sir Francis

  Walsh, Stephen

  Corbett, A. Cameron (Glasgow)

  Leese, Sir Joseph F. (Accrington)

  Warner, Thomas Courtenay T.

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

  Levy, Sir Maurice

  Wason, John Cathcart (Orkney)

  Cornwall, Sir Edwin A.

  Lloyd-George, Rt. Hon. David

  Waterlow, D. S.

  Cotton, Sir H. J. S.

  Luttrell, Hugh Fownes

  White, J. Dundas (Dumbartonshire)

  Edwards, Sir Francis (Radnor)

  Macdonald, J. M. (Falkirk Burghs)

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

  Erskine, David C.

  Macnamara, Dr. Thomas J.

  Whitley, John Henry (Halifax)

  Essex, R. W.

  M'Callum, John M.

  Williams, Sir Osmond (Merioneth)

  Evans, Sir S. T.

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

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

  Everett, R. Lacey

  Marnham, F. J.

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

  Falconer, J.

  Massie, J.

  Wilson, W. T. (Westhoughton)

  Ferguson, R. C. Munro

  Masterman, C. F. G.

  Wood, T. M'Kinnon

  Fiennes, Hon. Eustace

  Morse, L. L.

  Foster, Rt. Hon. Sir Walter

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

  TELLERS FOR THE NOES.—Mr. Joseph Pease and Captain Norton.

  Fuller, John Michael F.

  Myer, Horatio

  Fullerton, Hugh

  Nicholson, Charles N. (Doncaster)

  Sir W. ROBSON Sir W. ROBSON moved, in Sub-section (2), to leave out the words "owner of the land in which they are comprised," and to insert instead thereof the words "proprietor of the minerals."
  Mr. J. BERTRAM: I put a question some time ago to the Attorney-General on this subject. I know he has got the word "proprietor" in the Definition Clause, and the only question is whether any obligation is thrown by the Bill upon any person defined as proprietor to make a return for this purpose. There is an obligation on the owner of the land to make a return, but very often the owner of the land is not the owner of the minerals, and I cannot
  652
  find that there is any obligation put upon the proprietor to make the return which is required.
  Sir W. ROBSON: I do not think there is anything in the hon. Member's point, but I will see between now and the time when we get to the Clause dealing with the returns whether there is. We have defined "proprietor" in Section 24, and it is obviously better that we should deal with him as the proprietor throughout rather than as the owner of the land. The proprietor of the minerals is not always the owner of the land.
  Amendment made.
  Sir J. RANDLES (for Mr. Laurence Hardy)Sir J. RANDLES (for Mr. Laurence Hardy) moved, in Sub-section (2), after the word "value" ["his estimate of their capital value"], to insert the words "and the capital value so returned shall be treated as the original capital value of the minerals."
  The object of this Amendment is simply to secure that the value shall be a fixed value settled by the owner or the proprietor in connection with the Increment Duty or the Increment Tax, and it fixes the point, at any rate, at which the proper deductions would count.
  Mr. JAMES HOPE Mr. JAMES HOPE seconded the Amendment.
  Sir W. ROBSON: The hon. Member has not explained the exact effect of the Amendment in relation to the Clause to which it is to be added. The description of the Clause reads, "Application of provisions as to total and site value to minerals," and he proposes to add words at the end of Sub-section (2), which reads, "For the purposes of valuation under this Part of this Act, all minerals shall be treated as a separate parcel of land; but where the minerals are not comprised in a mining lease or being worked, they shall be treated as having no value as minerals, unless the owner of the land in which they are comprised, in his return furnished to the Commissioners, specifies the nature of the minerals and his estimate of their capital value." Then the hon. Member desires to say that any return thus made by the owner shall be treated as the original capital value, giving no discretion whatever to the Commissioners in fixing the value. If that were adopted a man could fix what value he pleased.
  Amendment negatived.
  Sir W. ROBSON Sir W. ROBSON moved, at the end of paragraph two of Sub-section (2), to insert: "(3) The provisions of this part of this Act with respect to valuation shall not apply to minerals which were, on the thirtieth day of April, nineteen hundred and nine, either comprised in a mining lease or being worked by the proprietor, so long as they are for the time being either comprised in a mining lease or being worked by the proprietor."
  Perhaps I had better explain this Amendment as it is not a drafting one. The House will remember that minerals now comprised in a mining lease, or being worked by the proprietor, are subject only to a Royalty Duty, and they are not subject to Increment Value Duty.
  654
  The Royalty Duty is payable upon the amount of royalty, and it requires no valuation whatever—that is to say, you want no valuation of existing mineral property for the purpose of the Royalty Duty. Therefore, what is proposed by this Amendment is to exempt from valuation all those mineral properties which will pay royalties without paying Increment Value Duty. Of course, the Increment Value Duty falls on properties which are not being worked. There are two classes of mineral properties, properties which are unopened and which are valued like parcels of land, and upon which Increment Duty is paid in a capital sum—these minerals must be valued for the purpose of duty—and mineral property comprised in existing mining leases.
  Mr. BALFOUR: The reason, I understand, why the Government except this particular class of minerals from valuation is that they do not pay taxes. There may be a good deal to be said in favour of that, but it is not consistent with the general principles of the Bill. They have not confined valuation, in regard to other classes of property, to cases in which the tax is to be levied upon the valuation. On the contrary, land is to be valued, as I understand, all over the country, even land where no tax has to be raised at all. After all, the property dealt with by this Sub-section is going to be taxed and to have a special tax levied upon it. It is quite true that the tax can be estimated without going to the expense of valuation, but a great deal of land in this country is not going to have any tax put upon it at all under the Bill—or, at all events, that is the profession of the Government—and yet that land is going to be valued. There is an a fortiori argument for omitting that land from valuation, and, although that question is not before us in substance, I should like to know what principle the Government have now discovered that when you are not going to tax land it is useless to value it for the purpose of taxation.
  Sir W. ROBSON: I think if the right hon. Gentleman's point is answered it may remove some misconception as to the scope and necessity for the valuation. The right hon. Gentleman has said that in several cases we are insisting on valuation where no tax will be levied. That is not the case. Take, for instance, agricultural land. We say, and I think rightly, that while agricultural land has only an agricultural value it will not be taxed. We

  655
  exempt it from all taxation in respect of its agricultural value. But agricultural land may become subject to Increment Value Duty. Supposing it passes from that category into the more important category of building land, it comes under taxation, and we must have a datum line from which to calculate our Increment Value Duty. Therefore we cannot help a universal valuation in order to get that datum line—I wish we could. But it should not be said that therefore, in that particular case, we are inflicting a valuation without reference to the existence or possibility of a tax.
  Mr. BALFOUR: May I ask if the Government are valuing Snowdon? A building value may accrue there in course of time.
  Sir W. ROBSON: If the right hon. Gentleman had been apprehensive about Snowdon he might have moved to exempt that particular eminence.
  Lord CASTLEREAGH: May I ask whether this is in the nature of an exemption? An exemption was made in Clause 22 with regard to increment when one lease was made, and then after an interval a second lease was made. Would it not be advantageous if this exemption was also put into this Amendment?
  Sir W. ROBSON: The case the Noble Lord refers to is dealt with in Sub-section (6) of Clause 22.
  Amendment made to proposed Amendment: To add at the end the words "nor shall such provisions apply to any minerals which cease for a temporary period to be comprised in a mining lease or to be worked so long as the period does not exceed two years."—[Sir John Randles.]
  Proposed words, as amended, there inserted in the Bill.
  Further Amendments made: In the first paragraph, to leave out the word "beneficially."
  In the same paragraph to leave out the words "to any freehold estate."
  In the same paragraph to leave out the word "in" ["possession in the minerals"], and to insert instead thereof the word "to."
  In the same paragraph to leave out the words "including a mortgagor in possession, and," and to insert instead thereof the words "or to the rents and profits there of or any part of those rents and
  656
  profits, but does not include a person entitled as lessee other than."—[Sir W. Robson.]
  Sir W. ROBSON Sir W. ROBSON moved, in the second paragraph, to leave out the words "includes yearly or other rent, toll, duty, royalty, or other reservation by the acre, the ton, or otherwise, and includes," and to insert instead thereof the words "shall in addition to the meaning assigned to it for the general purposes of this Part of this Act, be construed as including."
  Mr. JAMES HOPE: Is not this rather, an extension of the meaning of the word "rent"?
  Sir W. ROBSON: Does the hon. Member complain at all? All that we are doing is this: Rent is already defined in the general definition clause. This drafting Amendment is dealing with the definition of the word "rent," and what we say is that, in addition to the ordinary meaning of rent, it shall include "any fine, premium, or foregift, and any payment, consideration, or benefit in the nature of a fine, premium, or "foregift." It is not an addition, and therefore there is no ground for the hon. Member's complaint. The Clause deals with matters which ought to be taken into account in estimating the value. If the lessee has paid a fine premium, or foregift, it is to his advantage that it should be taken into account.
  Mr. JAMES HOPE: I submit that this Amendment is out of order, because it increases, or may increase, the charge on the subject.
  Mr. SPEAKER: On the contrary; the effect, if any, is to relieve the charge.
  Mr. JAMES HOPE: In some cases it would have a contrary effect. Under these mineral provisions there is to be a tax on rent, and the more there is included in the word "rent" the more tax can be levied from the subject. Under this Amendment there would undoubtedly be included in the tax receipts which would not under the present definition of rent be included. Therefore there would, in certain instances, be an increased charge on the subject, for the purpose of Mineral Duty.
  Mr. SPEAKER: The Bill states: "The expression 'rent' includes yearly or other rent, toll, duty, royalty, or other reservation, by the acre, the ton, or otherwise, and includes any fine, premium, or foregift, and any payment, consideration, or

  657
  benefit in the nature of a fine, premium or foregift."
  Amendment made.
  Drafting Amendments also made.
  Sir J. RANDLES: I beg to move, in paragraph (7), to leave out the words "being worked by a lessee" ["if the minerals are being worked by a lessee"] and insert instead thereof the words "comprised in a mining lease." It appears to me that "lessee" is rather a limiting word. I hope the Attorney-General will have no difficulty in accepting this small Amendment.
  Sir W. ROBSON: I must say that the hon. Gentleman has not given much explanation of the Amendment. In a previous part of the Bill it is provided that a proprietor who works the minerals himself is to have the same benefit as if they were worked by a lessee.
  Sir J. RANDLES: A colliery may be in a mining lease, but it may not necessarily be worked by the lessee.
  Mr. SPEAKER: I am not quite sure that the Amendment would not impose an increased charge, on the subject. It might mean that minerals, though not worked at all, if comprised in a mining lease, would be liable to the duty.
  Sir J. RANDLES: If that would be the effect, I beg leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Sir W. ROBSON: The Leader of the Opposition pointed out that some ambiguity might arise from the use of the word "district" in relation to the Mineral Rights Duty, and we have drafted a paragraph which, we think, will meet the point. We propose to insert it at the end of Clause 24. I am disposed myself to think that the courts would find no difficulty in construing the word "district." After all, the courts, when dealing with exemptions and with provisions for the benefit of the subject, do their best to give effect to what they believe to be the intention of the Legislature. The paragraph which we propose to insert is in these terms: "Where the circumstances in a district are such that, in the opinion of the Commissioners, it is impracticable to fix any sum which satisfactorily represents a rent customary in the district, the rent which would be paid under similar circumstances and ordinary conditions elsewhere, shall
  658
  be substituted for the rent customary in the district."
  Amendment made.

  VALUATION FOR PURPOSES OF DUTIES ON LAND VALUES.

    CLAUSE 25.—(Definition of Values of Land.)
    (1) For the purposes of this Part of this Act, the total value of land means the amount which the fee simple of the land, if sold at the time in the open market by a willing seller in its then condition, might be expected to realise.
    (2) For the purposes of this Part of this Act the site value of land means the amount which the fee simple of the land, if sold at the time in the open market by a willing seller, might be expected to realise if the land were divested of any buildings and of any other structures (including fixed or attached machinery) on, in, or under the surface, which are appurtenant to or used in connection with any such buildings, and of all growing timber, fruit trees, fruit bushes, and other things growing thereon.
    (3) For the purposes both of total value and site value, land shall be deemed to be sold free from incumbrances, but subject to any rent-charge and to any burden, charge, or restriction arising by operation of law or imposed by any Act of Parliament or in pursuance of the exercise of any powers, or the performance of any duties under any such Act, and to any right of common and to any easements affecting the land, and to any covenant or agreement restricting the use of the land where, in the opinion of the Commissioners, the restraint imposed by the covenant of agreement is reasonably necessary in the interests of the public, or in view of then character and surroundings of the neighbourhood, and the opinion of the Commissioners shall in this case be final, and not subject to any appeal.
    (4) The Commissioners shall allow as deductions from the site value of any land—

    (a) Any part of that site value which improved to the Commissioners to be-directly attributable to work executed or expenditure of a capital nature (including any expenses of advertisement) incurred bonâ fide by or on behalf of any person interested in the land, or arising from the dedication for open spaces of any part of the land of the same owner for the purpose of improving the value of the land as building land, or for the purpose of any business, trade, or industry other than

    659
    agriculture, or to the expenditure of money on any redemption of Land Tax, or any rent-charge as defined by this Act, or other fixed charge not being an incumbrance within the meaning of this Act, or on the enfranchisement of copyhold land or customary freeholds, or to goodwill or any other matter which is personal to the owner, occupier, or other person interested for the time being in the land, provided that where any works executed or expenditure incurred for the purpose of improving the value of the land for agriculture have actually improved the value, of the land as building land, or for the purpose of any business, trade, or industry, other than agriculture, the works or expenditure shall, for the purpose of this provision, be treated as having been executed or incurred, also for the latter purposes; and

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

    and the site value as reduced by those deductions shall be taken to be the site value as ascertained for the purposes of this Part of this Act.
    (5) The provisions of this Section are not applicable for the purpose of the valuation of minerals.
    Mr. LLOYD-GEORGE Mr. LLOYD-GEORGE moved, in Subsection (1), to leave out the word "total" ["total value of land"], and to insert instead thereof the word "gross."
    Mr. BALFOUR: What exactly is aimed at by this Amendment?
    Mr. LLOYD-GEORGE: I am not sure if the right hon. Gentleman is not himself responsible. He pointed out that the words "site value" defined so many different things that it was really confusing. I thought at the time there was a great deal in it. The draftsman considered it very carefully, and we have come to the conclusion that it would be better to make perfectly clear what the various site values are. There is no difference at all in substance. The same deductions are made and the same processes will be gone through by the valuers in order to ascertain what the taxable subject is.
    Mr. BALFOUR: It is merely a question of terminology.
    Mr. LLOYD-GEORGE: Terminology.
    Amendment made.
    Drafting Amendments also made.
    Sir W. ROBSON Sir W. ROBSON moved, in Sub-section (2), after the word "the" ["the site value"], to insert the word "full."
    Mr. JAMES HOPE: This is a new term. Does it make any difference in substance?
    The UNDER-SECRETARY for the HOME DEPARTMENT (Mr. Masterman): No. It was pointed out that we had two entities, "site value" and "site value for the purposes of this Act." One is now called "full site value" and the other is called "assessable site value."
    Amendment made.
    Drafting Amendments also made.
    Mr. JAMES HOPE Mr. JAMES HOPE moved, in Sub-section (2), to leave out the word "buildings" ["any such buildings"], and to insert thereof the word "land."
    This is a matter of some substance. As the Clause stands, the divestiture comprises buildings and structures on or under the surface which are used in connection with any such buildings. I think that it does not apply to such matters as field drains. I certainly gathered that it was the intention of the Government to include such things which have been provided in connection with the land, and I submit that my hon. Friend's Amendment is necessary.
    Mr. G. D. FABER: In seconding the Amendment I seem to remember in the dim and distant past an Amendment moved by my hon. Friend the Member for Ayr Burghs (Mr. G. Younger), touching upon this point, and I understood that the Government were going to give their kindly consideration to it on the Report stage.
    Mr. LLOYD-GEORGE: If the hon. Member will look down the Paper he will find that later on we have an Amendment that where expenditure which may be incurred purely for agricultural purposes does improve the land as building land he would get the benefit. Obviously drains would be included.
    Mr. G. D. FABER: Does the Amendment to which the right hon. Gentleman has referred cover the substance of this Amendment?
    Mr. LLOYD-GEORGE: I would hardly like to say that. I think that this goes a little beyond what we could accept, but our Amendment covers all the cases that were put to us in Committee, and it amply redeems the pledge we gave.
    Sir W. ROBSON Sir W. ROBSON moved to leave out from the beginning of Sub-section (3) to the word "and" ["and to any right of common"], and to insert instead thereof
    Question put, "That the word 'buildings' stand part of the Bill."
    The House divided: Ayes, 133; Noes, 43.

    Division No. 835.]

    AYES.

    [1.55 p.m.

    Acland, Francis Dyke

    Harcourt, Rt. Hon. L. (Rossendale)

    Ponsonby, Arthur A. W. H.

    Agnew, George William

    Harcourt, Robert V. (Montrose)

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

    Astbury, John Meir

    Hardy, George A. (Suffolk)

    Rees, J. D.

    Barker, Sir John

    Harmsworth, Cecil B. (Worcester)

    Richards, Thomas (W. Monmouth)

    Barnard, E. B.

    Harmsworth, R. L. (Caithness-shire)

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

    Beale, W. P.

    Haworth, Arthur A.

    Ridsdale, E. A.

    Beck, A. Cecil

    Hedges, A. Paget

    Robertson, Sir G. Scott (Bradford)

    Bennett, E. N.

    Helme, Norval Watson

    Robinson, S.

    Berridge, T. H. D.

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

    Robson, Sir William Snowdon

    Bowerman, C. W.

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

    Rose, Sir Charles Day

    Brace, William

    Herbert, T. Arnold (Wycombe)

    Rowlands, J.

    Brigg, John

    Higham, John Sharp

    Russell, Rt. Hon. T. W.

    Brodie, H. C.

    Hobart, Sir Robert

    Rutherford, V. H. (Brentford)

    Brooke, Stopford

    Hodge, John

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

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

    Horniman, Emslie John

    Schwann, C. Duncan (Hyde)

    Bryce, J. Annan

    Hutton, Alfred Eddison

    Schwann, Sir C. E. (Manchester)

    Burns, Rt. Hon. John

    Hyde, Clarendon G.

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

    Buxton, Rt. Hon. Sydney Charles

    Idris, T. H. W.

    Soames, Arthur Wellesley

    Cameron, Robert

    Illingworth, Percy H.

    Steadman, W. C.

    Causton, Rt. Hon. Richard Knight

    Jones, Leif (Appleby)

    Strachey, Sir Edward

    Cheetham, John Frederick

    Keating, M.

    Thomas, Abel (Carmarthen, E.)

    Cherry, Rt. Hon. R. R.

    King, Alfred John (Knutsford)

    Thorne, William (West Ham)

    Clough, William

    Layland-Barratt, Sir Francis

    Toulmin, George

    Cobbold, Felix Thornley

    Leese, Sir Joseph F. (Accrington)

    Ure, Rt. Hon. Alexander

    Collins, Stephen (Lambeth)

    Levy, Sir Maurice

    Verney, F. W.

    Corbett, A. Cameron (Glasgow)

    Lloyd-George, Rt. Hon. David

    Villiers, Ernest Amherst

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

    Luttrell, Hugh Fownes

    Walker, H. De R. (Leicester)

    Cornwall, Sir Edwin A.

    Macdonald, J. M. (Falkirk Burghs)

    Walsh, Stephen

    Cotton, Sir H. J. S.

    Macnamara, Dr. Thomas J.

    Wardle, George J.

    Craig, Herbert J. (Tynemouth)

    M'Callum, John M.

    Warner, Thomas Courtenay T.

    Crossley, William J.

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

    Wason, John Cathcart (Orkney)

    Dunn, A. Edward (Camborne)

    M'Micking, Major G.

    Waterlow, D. S.

    Edwards, Sir Francis (Radnor)

    Mallet, Charles E.

    White, J. Dundas (Dumbartonshire)

    Erskine, David C.

    Marnham, F. J.

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

    Essex, R. W.

    Massie, J.

    Whitley, John Henry (Halifax)

    Evans, Sir S. T.

    Masterman, C. F. G.

    Williams, J. (Glamorgan)

    Everett, R. Lacey

    Molteno, Percy Alport

    Williams, Sir Osmond (Merioneth)

    Falconer, James

    Morgan, G. Hay (Cornwall)

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

    Fiennes, Hon. Eustace

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

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

    Foster, Rt. Hon. Sir Walter

    Murray, James (Aberdeen, E.)

    Wilson, W. T. (Westhoughton)

    Fuller, John Michael F.

    Myer, Horatio

    Wood, T. M'Kinnon

    Fullerton, Hugh

    Nicholson, Charles N. (Doncaster)

    Gibb, James (Harrow)

    O'Brien, Patrick (Kilkenny)

    Gibson, J. P.

    O'Connor, John (Kildare, N.)

    TELLERS FOR THE AYES.—Mr. Joseph Pease and Captain Norton.

    Glendinning, R. G.

    Parker, James (Halifax)

    Goddard, Sir Daniel Ford

    Pearce, William (Limehouse)

    NOES.

    Balcarres, Lord

    Gibbs, G. A. (Bristol, West)

    Powell, Sir Francis Sharp

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

    Gordon, J.

    Randles, Sir John Scurrah

    Banbury, Sir Frederick George

    Goulding, Edward Alfred

    Renwick, George

    Bertram, Julius

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

    Starkey, John R.

    Bignold, Sir Arthur

    Haddock, George B.

    Talbot, Lord E. (Chichester)

    Bowles, G. Stewart

    Hamilton, Marquess of

    Thornton, Percy M.

    Carlile, E. Hildred

    Harris, Frederick Leverton

    Valentia, Viscount

    Castlereagh, Viscount

    Harrison-Broadley, H. B.

    Walker, Col. W. H. (Lancashire)

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

    Heaton, John Henniker

    Walrond, Hon. Lionel

    Channing, Sir Francis Allston

    Hope, James Fitzalan (Sheffield)

    Wolff, Gustav Wilhelm

    Courthope, G. Loyd

    Hunt, Rowland

    Younger, George

    Craik, Sir Henry

    Kerry, Earl of

    Faber, George Denison (York)

    Kimber, Sir Henry

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

    Ferguson, R. C. Munro

    Magnus, Sir Philip

    Fletcher, J. S.

    Parkes, Ebenezer

    Foster, P. S.

    Pease, Herbert Pike (Darlington)

    the words, "The total value of land means the gross value after deducting the amount by which the gross value would be diminished if the land were sold subject

    663
    to any fixed charges and to any public right of way or any public rights of user."
    Mr. AUSTEN CHAMBERLAIN: I am not quite certain as to whether this proposal makes any change. Perhaps the Attorney-General will explain whether it does so or not.
    Sir W. ROBSON: I think it makes no change whatever. We are showing the meaning of the various definitions, but they will make no difference to the incidence of the tax; they do not alter it. These Amendments are simply to ensure that the various explanations which were given during the Committee stage shall be put into the Bill. "Total value" is the rent of the land, with hereditaments, as it stands, subject to certain restrictions and qualifications, which are preserved here and must be such as are approved. The Amendment is: "The total value of land means the gross value after deducting the amount by which the gross value would be diminished if the land were sold subject to any fixed charges and to any public rights of way or any public rights of user." As to the assessment of the site value, the total value is after making all deductions, which are set out in the definitions. We have already passed the "gross value": that is the value of the land, with the buildings upon it, and taking no account of restrictions. We have passed also the "full site value," which is the land without the buildings, and taking no account of restrictions. And now we come to the "total value," which is the land with the buildings on it, and taking account of restrictions. We come next to the "site value," which is the total value reduced by all the deductions which we provide. We have used so many expressions, like "gross value," "full site value," and others, that it was desirable to put those expressions into the Act. They are also useful in this respect, that they are directions to the valuer which he must obey, and they will assist the subject if he seeks to appeal from the valuer's determination. Otherwise, a valuer might say, "I fix the value at so and so," and the subject would have difficulty in appealing. By the Amendments inserted in the Bill the valuer has to make his valuation with all deductions. In that way the subject will be able to put his finger on the spot where he finds cause of complaint. They are, therefore, really drafting Amendments.
    Mr. AUSTEN CHAMBERLAIN: I understand that the valuer is to give a figure under each of those values. It might be that the total and the assessable value were the same thing, but he will have to set out a figure under each one of those separate values, so that the subject will be able to see at once where the valuer's valuation differs from his. Assuming that they are both agreed as to the market price of, say, £10,000, but that they differ as to the amount on which the tax ought to be levied, the subject will see at a glance, if I understand the Attorney-General, at each stage of those proceedings.
    Sir W. ROBSON: That will be the effect.
    Sir FREDERICK BANBURY: I do not rise to object to the Amendment, because I think it will make the Bill more complicated than it is, and I have no objection to the Bill being so complicated that it will make it very difficult to work. I should have thought it would have been much better to have left the Clause as it stood, instead of putting in all these provisoes, because it is quite evident that the valuer must, in valuing the land, take into account all the ordinary conditions, and this is one of them.
    Amendment made.
    Mr. MASTERMAN Mr. MASTERMAN moved, in Sub-section (3), to leave out the word "where" ["the use of land where"], and to insert instead thereof, "entered into or made before the thirtieth day of April, nineteen hundred and nine, and to any covenant or agreement restricting the use of the land entered into or made on or after that date, if."
    This is a concession promised in Committee allowing the full value of any restrictive covenants to be taken off the total value of the land.
    Amendment made.
    Mr. MASTERMAN Mr. MASTERMAN moved, in Sub-section (3), after the word "agreement" ["imposed by the covenant or agreement"], to insert the words "so entered into or made on or after that date."
    Amendment made.
    Mr. MASTERMAN Mr. MASTERMAN moved, in Subsection (3), to leave out the words "is reasonably necessary" ["is reasonably necessary in the interests of the public"], and to insert instead thereof the words "was when imposed desirable."
    Mr. AUSTEN CHAMBERLAIN: This Amendment really raises the question of the manner in which the Commissioners are to exercise discretion as to the covenants. Covenants, owing to the concessions which the Government have just made, entered into before the passing of the Act, cannot be included, but I do not know what meaning the Government attach to those words. They give the Commissioners an enormous discretion in dealing with land, for instance, in the neighbourhood of great towns, such as that part of the City of Birmingham which is known as Edgbaston. The Courthope estate in Edgbaston has been developed for some generations on a settled plan, excluding from the land, or the greater portion of it, any public-houses, or practically excluding public-houses, factories, or shops. The result is that it is entirely a residential quarter, and I think that that serves undoubtedly the needs of the town, and that it is to its advantage to have a district of that kind. Is a matter of that kind to be left to the discretion of the Commissioners in regard to any restrictive covenants entered into after the passing of the Act? Is a Commissioner wholly unacquainted with the circumstances of Birmingham, and who does not hear on the subject any local representations, except from some party immediately interested, to settle what is in the interests of Birmingham and how Birmingham ought to be laid out? I think the Government take some credit to themselves for a Town Planning Bill, which was in another place, and which has come back to us, but has not yet been considered. There their object is to give the local authorities, as I understand, power to direct and settle the limits, as prescribed in the Bill, of what the planning of new districts in the neighbourhood of those towns should be. Here you give that power, not to a local authority, but to a Commissioner sitting in London, and the Commissioner has no interest in seeing that the town is developed in the best interests of the inhabitants. The Commissioner's interest is to put an end to the covenant which lessens the value of the land, and to hold that it is an unreasonable covenant and restricts the value of the land. That is not a personal interest, but it is his official interest. If he admits that the covenant is reasonable then he loses the tax. He is a Revenue official whose business is to get taxes where he can. I do not mean to say for a moment that the
    666
    Inland Revenue officials, or any officials of the Government, have regard solely to the possibility of wringing the utmost farthing out of the taxpayer. I think they try to exercise their authority and powers reasonably. What I do suggest is that they are not really competent to judge of these cases, and that they are necessarily advised against what may be the interests of the community. The wording adopted by the Government appears to me to lend itself to misconception or misapplication. The Commissioners may say, "We are not considering Birmingham, as a whole, or greater Birmingham; we are regarding this particular piece of land. Here is an improvident landlord who has entered into restrictions which deprive his land of its highest economic use"—the highest economic use being interpreted to mean the use which will produce the greatest amount of revenue. Thereupon they dispute the covenants. An appeal appears to me to be absolutely necessary. If there is one matter more than another in which the taxing authority should not be also the deciding authority as to the reasonableness of covenants, it is this. Even with an appeal, the hardship on the subject might be very great. You cannot take a matter to the High Court for nothing. You must have the best advice, which is always very expensive. If, there being no appeal, the whole matter is left to the discretion of the Commissioners you may have the whole local opinion and knowledge overriden by Commissioners sitting in London, who, having no local knowledge themselves, are obliged to trust to an agent whom they send down. I do not think that either the rights of the landlord or the rights of the community, which, in such a case as I have named, are concerned even more than those of the, landlord, ought to be submitted to the uncontrolled discretion of the Commissioners in matters of this kind.
    Mr. G. A. YOUNGER: The words now being introduced do not in the slightest degree remove my objection to the Clause. It is a perfect absurdity to place in the hands of mere revenue officials the power of saying whether restrictions of this kind are to be allowed. The local representative of the revenue authorities is the man who will practically settle these matters, a gentleman who, after a few years at Somerset House devoted to Income Tax collection or exaction, goes to a locality for a brief period, perhaps four or five years, where he learns at the expense of the community a certain amount of valuation

    667
    and other business, and then probably goes to a more important district. That is the kind of man who will have the responsibility of advising the Commissioners in these matters. Could there be anything more ridiculous? There is the local authority, who, surely, is the proper body to say whether or not the restrictions are reasonable and ought to be maintained. I wish the Attorney-General, when amending the Bill, had paid some attention to the criticisms made in Committee on this point. In my opinion the words now proposed do not improve the Clause in the least degree.
    Sir W. ROBSON: We are here discussing a somewhat limited Amendment, which substitutes words more favourable to the subject than those in the Bill. The general principle of the Clause the Government must now take as settled. When dealing with restrictions, which might be created on a scale that would practically nullify the provisions as to the tax, we must have some kind of check. As the Bill left the Committee the check was that the Commissioners should be entitled to disregard any diminution of value due to those restrictions if they thought the restrictions "reasonably necessary," The words "reasonably necessary" no doubt narrowed the discretion of the Commissioners in a sense adverse to the subject more than the words now proposed. Instead of finding the restrictions to be reasonably necessary, they have only to find that they were when imposed desirable. The right hon. Gentleman (Mr. Austen Chamberlain) referred to the discretion of the Commissioners. I think that point must be regarded as settled. The only question is what direction shall be given to that discretion. It is very favourable to the subject. The Commissioners are to allow the diminished value where they think the covenant is in the interests of the public—which in itself is a wide discretion—or desirable in view of the character and surroundings of the neighbourhood. I think that, that meets the case put by the right hon. Gentleman. Where, in view of the character and surroundings of a neighbourhood, the Commissioners thought it was desirable that a certain district should be confined to residential purposes, they would say, "We will not consider the interests of the public in the wider sense; we will regard only the interests of the neighbourhood." It is objected that there is no
    668
    appeal. There is this House. The shadow of this House is always resting on every official and every Department, and I do not think you will find the executive any less amenable to that influence. The executive see what is the spirit of the Act, and they will be very anxious not to infringe it. I can scarcely conceive a case where, in view of these words, the Commissioners would insist upon applying the tax to property such as that described by the right hon. Gentleman.
    Amendment made.
    Mr. JAMES HOPE (for Lord Robert Cecil)Mr. JAMES HOPE (for Lord Robert Cecil) moved, in Sub-section (3), to leave out the words "and the opinion of the Commissioners shall in this case be final and not subject to any appeal."
    It is true that on another and similar occasion on this point the Government undertook to look into the matter, and an Amendment was not on that account pressed.
    Mr. MASTERMAN: It was pressed.
    Mr. JAMES HOPE: The Amendment was, by leave, withdrawn by the hon. and learned Gentleman the Member for Kingston on the assurance of the Secretary for War. I know, of course, what happened later on another Amendment, that there was the Closure and a Division. But my learned Friend withdrew his Amendment, and the House was satisfied at that time that something would be done. When you consider the amenities of the locality, the very last persons who ought to decide the questions involved are the Commissioners. The learned Attorney-General spoke of the shadow of this House being over the Executive, and as to their correct interpretation of the spirit of the Act. I think the shadow of the Executive is much moreover this House. And as to their interpreting the spirit of the Act, well, there is the Swansea case. It was certainly not interpreted by the Executive in the spirit of the Act.
    I would suggest to the hon. and learned Gentleman that he might even now accept what was laid before him last night by my hon. Friend. I quite see these are not proper cases to go into the law courts. I believe they are cases neither for the Commissioners nor for the law courts. But I believe all my hon. Friends will be satisfied if the appeal is to the Referees and their decision may be final. They would consider matters in an impartial way, for I believe everyone agrees that the appointment of Referees, as now provided for by

    669
    the Bill, is quite satisfactory. But it is necessary that these words should be left out.
    Mr. GEORGE RENWICK: I second this Amendment because, unlike the hon. Baronet the Member for the City of London (Sir F. Banbury), I want to see this Bill made as clear as possible. At present it is nothing of the sort. I am certainly not in favour of leaving the decision of important questions such as covenants, easements, etc., in regard to land to the Commissioners. Who are these Commissioners? Are they men accustomed to deal with questions of this sort? Are they to form a new Department? Have they any legal knowledge, or have they had any legal training? We ought—I have asked for it before—to have some idea of what their status will be, and from what body they will be selected. We might then have some confidence in them. I am absolutely surprised at the childlike faith some hon. Gentlemen seem to have in the Commissioners. The word "Commissioner" is a blessed word, and one to which they seem to attach great importance. People outside do not attach that great importance to them, but have the greatest fear of how they will deal with some of these matters. I quite agree that the Referees will be a body in whom, at any rate, we will have some confidence.
    Mr. MASTERMAN: I do not rise to reargue the question, but only to correct a point of fact which we regard as important. The assertion has twice been made by the hon. Gentleman the Member for Sheffield (Mr. James Hope) that we promised to make an Amendment to the Bill on this point, and that we have not fulfilled our promise. That is not a fact. The whole of this Amendment moved by him was moved in Committee, also on Friday afternoon, and was fully discussed. The points that have been placed before us to-day were placed before us by many Members, including—with considerable force—the hon. Baronet opposite. There was no Closure, and the Committee decided by a large majority against the appeal. It is perfectly true that we promised before to consider whether it would not be desirable to have an appeal to such a body as the Local Government Board. That was advanced from the opposite side, and was immediately repudiated by the right hon. Gentleman the Member for South Dublin (Mr. Long), who thought it was quite inadvisable that the Local Government Board should be the body.
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    After the fullest discussion we found, I think with the general agreement of the Committee, that there was no more suitable tribunal to decide the questions concerned than the Commissioners who were ultimately responsible.
    Mr. AUSTEN CHAMBERLAIN: I think, speaking subject to correction, that there is a difference in the position now and before as described by the hon. Gentleman. We did not at that time know exactly what the appeal was going to be. The Government had proposed to allow an appeal and gradually as the discussion went on the idea of the appeal widened. But what exactly was its scope we did not know, for the matter we were debating was changing its aspect day by day. Now we know what the appeal is. At that time it is perfectly true, as the hon. Gentleman reminded us, there was an admission from this side that there was a certain inconvenience in referring speculative matters of opinion for decision by a court of law, although, as I ventured to observe last night on a similar though different point, courts of law do as a matter of fact have to decide such speculative questions as between man and man, and citizen and citizen, on the private litigation which comes before them. Whether a covenant is reasonable or not is a matter that is often the subject of legislation, and so are many matters of trade, and the decisions of courts of law on these subjects are often more difficult to understand than upon any other they have to deal with. They often deal with these subjects, but I admit they are not an ideal body for dealing with them. On the last occasion when this subject was under discussion the Secretary of State for War, who was in charge, admitted that neither the Commissioners nor the courts of law were satisfactory tribunals to deal with this subject. On that occasion we had half convinced the Secretary of State for War, and having been half convinced he disappeared. Now we have to deal with the Under-Secretary to the Home Department.
    Mr. MASTERMAN: I was present all through on the last occasion.
    Mr. AUSTEN CHAMBERLAIN: But was not half convinced, and though the hon. Gentleman will be half convinced when we have done with him to-day, on neither this nor the last occasion had we the advantage of the presence of the Chancellor of the Exchequer.
    Mr. MASTERMAN: The Chancellor was fully through these Debates, and spoke several times.
    Mr. AUSTEN CHAMBERLAIN: Then he is like the Secretary of State for War—being half convinced, he remained away. I know the Chancellor is doing extremely hard work, and has had a strain upon him that can hardly be paralleled by anything that has fallen upon Ministers in recent times; but I must observe that never has there been a Finance Bill, or any other Bill, from the discussion of which the Minister in charge has been so often absent. I do not make that as a charge against the Chancellor, whose conduct has been admirable; but it renders it extremely difficult to deal with the matter, because of having to argue with different people at different times. I do not derogate from the position of the hon. Gentleman the Under-Secretary, or suggest for a moment he does not do his work admirably, but he has not the authority to deal with this matter that the Chancellor of the Exchequer, or indeed any Cabinet Minister would have. If I convinced him now that our proposal was a reasonable one he could not accept it. We are dealing not with a plenipotentiary, but with somebody who only give the answer he has been told to give beforehand. I do not complain of the Chancellor, but I complain of the injustice it is to the House not to have any one upon the Government Bench with full powers to deal with this matter.
    This matter does not stand now where it did when we raised it in Committee. Then we were discussing on the one side a proposal giving absolute discretion to the Commissioners, and on the other an appeal to the courts of law. We admitted that an appeal to the courts of law was not entirely satisfactory in our view. The via media suggested at that time was an appeal to the Local Government Board, and Members on both sides of the House, with the curious unanimity which had nothing to do with the character or abilities of the present President of the Board, decided that the Local Government Board was not the body to whose tender mercies they desired to entrust this matter. We do not ask now for an appeal to the Local Government Board, but we still maintain, as the Secretary for War admitted, there is great inconvenience in allowing the matter to be decided by the Commissioners, and we suggest now that the appeal should go to the Referee. The
    672
    Attorney-General yesterday thought there was a great deal to be said for that suggestion. All he said against it was that it came upon him with surprise. There has been time since for considering the matter, and therefore I hope now that the Gentlemen representing the Government will take it upon themselves to accept this compromise as being reasonable and right, or else send for the Chancellor and ask him to come in and hear the arguments. We ought not to have an Amendment of this kind refused simply because the only Minister who has authority to accept it is not here to say "Yes."
    Sir W. ROBSON: I submit to the House that to introduce the Referee as the Court of Appeal and to ask his opinion instead of the Commissioners' is really only changing one person, whose opinion is in no way above the Commissioners for the Commissioners themselves. There is really nothing between the two. The Commissioners are just as likely to fulfil their duties as satisfactorily as the Referee.
    Mr. BERTRAM: I have no particular predeliction for a Referee, but I have no confidence whatever in the unrestricted powers of these bodies of Commissioners. I feel most strongly that in no part of the taxation under the Finance Bill should the taxpayer be deprived of the right of appeal ultimately to a court of law. I should like to remind the House of a case that occurred a few days ago, which shows how completely and quite bonâ fide in the case of the Revenue authorities the public can be mulcted in matters of this kind. For some years Messrs. Whiteley had to pay at the request of the Revenue authorities male servants' Licence Duty for the men in their employment. Some time ago some doubt arose as to whether that tax ought to have been paid or not. An action was brought, and the courts held that the money ought not to have been paid, but no refund was possible on the ground that the money was not paid under duress. If the Revenue Commissioners collected this tax there will be no duress, and the taxpayer will have to pay without being able to obtain any redress.
    Mr. GEORGE YOUNGER: There is no part of the whole Bill under which it is more important to have an appeal than this. In a matter of this kind, where a man may be taxed upon a purely hypothetical value, it is more than ever necessary that there should be an appeal. I

    673
    cannot see why there should not be an appeal in this matter. I do not know whether it is possible to move the Attorney-General on this point, but where you have these hypothetical difficulties arising in the future you will prevent people undertaking covenants of any sort or kind in connection with the amenities of a town. I think it is very necessary and desirable that the Government should meet us on this point.
    Sir HENRY CRAIK: The Attorney-General was in such a hurry to reply that he did not give us a chance of putting our arguments. Surely it is reasonable that we should have one system in this Bill, and that there should be some sort of consistency between the different parts of the Bill. We have long ago ceased to hope for any such consistency, but surely it is too much that on one page of the Bill we should find flagrant inconsistencies with regard to this question. In regard to the matters dealt with in Sub-section (3) the opinion of the Commissioners is to be final. The next Sub-section permits the Commissioners to allow certain deductions, and in paragraph (b) of Sub-section (4) it says "any sum which in the opinion of the Commissioners." Having pointed out all these inconsistencies surely it is very hard that we should be precluded by necessity from having any sufficient answer on these points simply because both representatives of the Government have exhausted their right to speak?
    Mr. A. C. BECK: Even at this late stage of the proceedings, I hope the Government will see their way to make this small concession. Yesterday the Attorney-General was most sympathetic on this point, and he admitted that an appeal might be desirable in certain cases. I think he said these questions of fact to be settled by the Commissioners were so trivial that it would be a waste of time to go to a court of law, and I think he suggested that it would be a happy compromise to have one of these Referees as a final arbiter. One argument used by the Attorney-General struck me as being a somewhat unhappy one. He said that there was a great deal in what the Opposition had said on this point, but it should have been dealt with during the Committee stage of the Bill, and it could hardly be expected that the Government could consider it now. That may be the case, but it will be somewhat hard on the individuals who will have to suffer to tell them that if this matter had been raised at an earlier stage they might
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    have got a substantial measure of justice. This is a fundamental question, although perhaps the principle will not affect a large number of people. The Commissioners, under the Bill as it now stands, will be the judges in their own case. On every rural bench of magistrates the justices who are interested in a case which comes before them retire from the bench, and it is one of the most fundamental principles of justice that a man interested should not be a judge in his own case. Under this Clause the taxing authority will be the judges in their own case.
    Mr. G. D. FABER: I was surprised to hear the Attorney-General say that this question would not be in a better position if it was decided to refer it to a Referee. If that is so, why have the Government deliberately provided that a Referee shall hear an appeal under Clause 34? Is that observation warranted in fact? The Commissioners are the taxing authority, and they are, therefore, interested parties; as they are only human beings, their personal feelings must enter into the matter. They are also interested in making the revenue as large as possible, and it is perfectly clear that there ought to be an appeal of some kind from the decisions of the Commissioners. If you have an appeal to the Referees, they are an independent body. Clause 34 provides that the Referees shall be "Fellows of the Surveyors' Institution, or other persons having experience in the valuation of land." The rules under which they will act will be made by the Reference Committee, which consists of the highest judicial officers in the country. Surely the Attorney-General must have used his arguments in despair, because when they are probed into they are not warranted by the facts. I know it is not his will; he is utterly unable to deal with the matter. He has no power. Really the case has been left untouched, and we labour under a grievance because the Secretary of State for War many weeks ago distinctly intimated to us some way out of the difficulty, and now, when the time has arrived for finally determining the matter, he is no longer here and we have nobody here to carry out that promise. Therefore, I suppose the matter has got to go by the board.
    Mr. MUNRO FERGUSON: It is obvious when operations begin with the valuations which will have to be conducted they will be of an extraordinarily intricate character; and, excellent as the Commissioners may in many respects be, I think

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    there ought to be an appeal to the Referee. It is too much absolute power over such an extremely intricate and important valuation to entrust to any single representative of the Inland Revenue. When once the new proposals are in working order an appeal to a Referee may not be necessary; but I do think that in the first instance there ought to be such an appeal. There will be a want of confidence in the initial valuation unless that appeal to the Referee be given, because we may be sure that the Referee will be a person to whom confidence will be extended, whilst the number of the Commissioners must be so great that it is as yet uncertain what their character will be. It is simply handing ourselves bound hand and foot to the bureaucracy unless there is an appeal to the Referee. I have tried to give that the go-by wherever possible under this Bill. In dealing with these very intricate valuations leading questions in the first instance ought to be decided by persons in whom there is general confidence, and you have that confidence in the persons to be appointed as Referees. You could not possibly extend that confidence to the several hundred gentlemen who will act as Commissioners in the first instance under this scheme. I am quite sure the number of appeals will be limited, but there are some points which are left in a very uncertain condition in the Clause as it stands—such, for instance, as the question of field drains, which has been discussed to-day; and, in the first instance, I am clearly of opinion that we should not be asked to rely solely on any one of these Commissioners, but that there ought to be an appeal to a Referee.
    3.0 P.M.
    Mr. E. G. PRETYMAN: I know the hon. and learned Gentleman can not speak again, but there is a general concensus of opinion on both sides of the House. [HON. MEMBERS: "NO."] Well, so far as vocal opinion exists it is all on one side. It is a perfectly simple point. You have on the one hand the Commissioners representing the tax collector, and on the other hand the individual representing the taxpayer; and the only answer given by the Attorney-General is that there is no advantage in bringing in a third party. That answer is obviously so incomplete and inexact that I am sure he would not wish to adhere to it. It cannot be pretended that it is a reasonable answer, because the
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    Attorney-General used the words that the Referee is no better than the Commissioners.
    Sir W. ROBSON: No, I did not. I said it was purely a matter of opinion and discretion, and that the discretion of the Commissioners was as likely to be as good as that of the Referee.
    Mr. PRETYMAN: The hon. and learned Gentleman cannot maintain that for a moment. It is not a question of whose opinion is best. It is not a question whether the Commissioners are as wise as the Referee. It is a question whether parties are to be allowed to be judges in their own case. When you call in a third party to decide between two individuals, you do not do so because he is wiser or because his abstract opinion is better than the persons between whom he has to adjudicate, but because he is an impartial, unbiassed individual who has no reason to do otherwise than weigh the thing fairly. Although his decision may be in favour of one party or the other, it is accepted because no one could say that he could in any possible way have any bias in the matter. It is not only necessary to have this appeal for the sake of justice, but for the sake of public credit as well. Surely it is just as much in the interests of the State which is exacting the tax as in the interests of the individual who is to pay the tax, that when there is a dispute, in a question such as this rather intricate and difficult matter, the State should not have the discredit for doing a thing it has not done. The Commissioners might give a perfectly fair decision, but I do not think it likely that a subject who felt himself aggrieved by that decision would consider it fair, and he would have an obvious case. He could say: "Here is a decision given against me; I consider it grossly unfair. It was made against me by a servant of the State which is exacting the tax." I am really ashamed of arguing such a point; it is so obvious. May I just state the issue to the Chancellor of the Exchequer, now he has come in? It is a question of an appeal from the Commissioners. It was debated in Committee and we decided against an appeal. It was argued, and no doubt with great force, that to take matters, some of which might be trivial, to a court of law, and involve very great expense, would be both unnecessary and undesirable. Therefore the Committee came to a decision against that appeal. Since that

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    decision was come to it has been suggested that instead of taking the case to the courts of law a compromise might be effected, and the appeal might lie solely and only to the Referee, and that there would be little or no expense attached to that course. The case has been expressed on both sides of the House, and had the Chancellor of the Exchequer been here during this Debate I think he would have found that every speaker in this House has endorsed that opinion. The only answer that the Attorney-General has been able to give us is that he can see no advantage in bringing in a third party, whose opinion might be no better than the opinion of the Commissioners. The answer to that is that we do not set up a claim that the opinion of the Referee is any better than the opinion of the Commissioner. All we ask is that there should be an unbiased Referee to decide between the two in cases of dispute. That is absolutely necessary in the interests of the credit of the State for justice, and in the interests of the taxpayer also that he may obtain justice. The expense would be so small that I think everybody who has heard this Debate will agree that the Chancellor of the Exchequer would be doing what is best from every point of view if he accepted this suggestion and allowed appeal, not only to the courts of law, but to the Referee.
    Mr. F. W. VERNEY: I join in the appeal to the Government on this matter. I see that Clause 33 deals with appeals generally, and it gives the right of appeal to an aggrieved person except as expressly provided in the Act. We get an exception at the end of Clause 25, now under discussion. I have not had the advantage of hearing the Attorney-General, but I should like to ask why the exception is put into this Clause. Why do we have the words "the opinion of the Commissioners shall in this case be final and not subject to any appeal"? I should very much like to know the reason for the appeal being denied in this particular case when in general terms it is granted under Clause 33. There must be a reason for the exception, and I have not heard any explanation. Anybody who knows what an appeal is must know that it is not a question whether one judge is better than another judge in a court of law, but a question of having a fresh and impartial mind on the point. The man who has had nothing to do with the case before has no preconceived opinion. His intellect and judgment may not be any better than the judg-
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    ment of the person who has given his opinion before, but, at any rate, he has no preconceived idea, and is an impartial man. The person aggrieved has a right to that fresh opinion and judgment, and if he gets that opinion he goes away satisfied that justice has been done. It is for that reason I venture to appeal to the Government on this occasion to explain why this special exception is put in at the end of the Clause.
    Sir W. ROBSON: I have already said, and I have not altered my opinion, that the matter, which is purely one of discretion, might very well be left without being made the subject of any further proceedings. I think it is now agreed that there should be no appeal to the court of law. In turning to the Debate in Committee, the difference seems to have arisen as between the final decision of the Commissioners and an appeal to the court of law, and it was in that sense I dealt with the matter yesterday. The suggestion was thrown out that there might be appeal to the Referee. I said it was somewhat late in the day to make that suggestion, but it is not one which the Government need have any hesitancy in accepting if it is the will of the House. In view of the opinion expressed on both sides of the House, the Government will insert that there shall be some appeal. The Amendment now is to omit from "neighbourhood" to the end of the Clause. I propose to add the words, "shall in this case be subject to an appeal to the Referee, whose decision shall be final."
    Mr. DEPUTY-SPEAKER: The Amendment proposed then had better be withdrawn and moved in the other form.
    Sir W. ROBSON: I move, in Sub-section (3), to leave out the words ["the opinion of the Commissioners shall be"] to the end of the Sub-section, and to insert instead thereof the words "subject to an appeal to the Referee, whose decision shall be final."
    Mr. AUSTEN CHAMBERLAIN: I am very glad that the Government have met us, as they have absolutely met us on this point, and I do not want to appear ungracious in treating any concession which the Government have made, but I do just wish to draw the attention of the House, and of the Government particularly, to the position in which we find ourselves. The suggestion which my hon.

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    Friend fathered to-day was a little child which I produced yesterday on Clause 17, where the character of the discretion entrusted to the Commissioners was exactly similar to that which was entrusted to them in this Clause. I then suggested, for reasons which have now commended themselves to the Government, that whilst these matters were not matters for a court of law they were not of a character which should be left to the uncontrolled discretion of the Commissioners. Clause 17, Sub-section (3), says that the decision of the Commissioners in regard to questions arising under it shall be final and shall not be subject to any appeal. The questions there are as to what is reasonable access by the public to woodlands, parks, or gardens, whether the access is a public benefit, and whether circumstances render it probable that use by the public will continue. These questions are exactly parallel to those which arise under this Section. They are not suitable for a court of law, but they ought not to be left to the decision of a taxing or biassed authority to decide. We have, unfortunately, passed from that stage, and the Chancellor of the Exchequer was not here, and did not, as in this case, come in at the time and assent to an amending of the Clause. Therefore the two parts of the Bill are no longer in harmony one with another. We cannot go back on that decision here, but I hope when the Bill reaches another place the Government will restore harmony and introduce the necessary Amendment.
    Mr. LLOYD-GEORGE: I do not think I can respond to the last appeal at any rate. I would rather recommit, but it is unnecessary. It is rather a different case. I can understand a Referee being a very good judge of a restrictive covenant, because you have always to consider the effect of restrictive covenants in cases of assessing the value of property, but when you come to the other question it is not a question of valuation at all.
    Mr. AUSTEN CHAMBERLAIN: It is not a question of value, but of the reasonableness of the covenant.
    Mr. LLOYD-GEORGE: I know; but these covenants are covenants which have constantly to be considered by the authorities, but the other is purely a public question, which ought to be decided by a public authority. I do not think they are quite in the same position.
    Amendment made.
    Sir W. ROBSON Sir W. ROBSON moved, in Sub-section (4), to leave out the words "The Commissioners shall allow as deductions from the site value of any land," and to insert instead thereof the words:—
    "The assessable site value of land means the total value after deducting—
    "(a) the same amount as is to be deducted for the purpose of arriving at full site value from gross value; and
    "(b)."
    Mr. RENWICK: I do not quite know what the meaning of these words which it is proposed to omit is, but I very much regret that it should be proposed to leave them out, because I like the words, "The Commissioners shall allow as deductions," and I think all those who are interested in this Bill will agree that where we have a clause practically and distinctly saying that the Commissioners shall do a certain thing it is something that they can understand, and fortifies them in giving power to that body. Therefore I very much regret that these words are to be left cut which say what the deductions are in order to arrive at the assessable site value of land. The deductions are so involved that I am quite sure the lay mind will have great difficulty in arriving at what is meant. It is also noticeable that if this Amendment is carried at the beginning of Sub-section (4), the two words, "The Commissioners," disappear. It is rather remarkable that for the first time we find a weakening of faith in the Commissioners on the part of the Government. They seem hitherto to have had absolute faith in them, but we have just listened to a weakening of faith on the part of the Government, and this is a further sign that they are still further weakening. Considering that the land is first of all to be valued by valuers, and then it is to come before Commissioners, I think the Government ought to hesitate before they leave out these words, "The Commissioners shall allow as deductions from the site value of any land." I do not quite know what the idea of the alteration is, and perhaps we shall have an explanation. Whatever that explanation is, I hope, before the House finally decides, the difference between the words will be fully explained.
    Sir W. ROBSON: I do not think the hon. Member has looked at the White Paper.
    Mr. RENWICK: I have the White Paper.
    Sir W. ROBSON: Then, with great respect, I do not think he has read it.
    Mr. RENWICK: I have read it.
    Sir W. ROBSON: Of course the Commissioners have put upon them the general duty of valuation, and all that we are doing is that we are re-arranging the Clause for the purpose of dividing into sub-sections the parts of a long and troublesome clause. It is merely for the sake of simplicity of statement, and when we give the assessable site value we do not mean to repeat that the Commissioners shall make deductions. We say the assessable site value shall be so and so, and there is no occasion to repeat the words as to the Commissioners allowing deductions.
    Amendment made.
    Drafting Amendment also made.
    Mr. T. H. IDRIS Mr. T. H. IDRIS moved, in paragraph (a), to leave out the word "directly" ["to be directly attributable"].
    I have been a supporter of the taxation of unearned increment and the diversion of it all my life. That led me in the early days of the garden city movement to take some active part in this work, because one of the main objects of the Garden City Company was to obtain the unearned increment for those who earned it. This Garden City is unique, and it merits special consideration. There is nothing like it. It is a self-contained city. The directors knew from the beginning that they could make a good profit out of a garden city suburb, but they were determined to have a self-contained city in order to carry out the ideas of Mr. Ebenezer Howard, and selected a site far away from all centres of population in order that the whole of the increment produced on that area should be produced by the people themselves and enjoyed by them. The whole of the unearned increment obtained in connection with it must, by the circumstances of the case, be due to the work of the people on it. We were careful to make sure that we should not be influenced in any way by adjoining towns by putting aside an agricultural belt of considerable extent to separate us from all other towns. Clause 17, as amended, gives protection to that agricultural belt, but it does not affect building land. It does not protect those who produce the increment on the building portion of the city. Every bit of the increment must of necessity be produced by the
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    promoters and inhabitants. Great sacrifices were made of work, of capital, and of interest, and of many other things in order to ensure this object. In calculating the value of the increment no other factors can be taken into account. We have deliberately risked or incurred heavy losses in providing electric power works, gasworks, and factories, and many other inducements to manufacturers and residents. We have tempted manufacturers to come by heavy sacrifices in the way of low ground rents, assistance of capital, and special facilities in order that we might obtain the increment. Roughly, probably about half of the increment is due to direct expenditure of capital. The other half is due to indirect expenditure. Shareholders have put down £170,000, prepared to make considerable losses at the outset in order to promote garden city ideals. By the Memorandum of Association it is only possible under the most favourable circumstances to pay a maximum dividend of 5 per cent. The influence of the Garden City has extended not only over our own country, but over other countries as well. We have hopes of support in work and money being continued to promote this slowly struggling enterprise.
    We have not put down this Amendment with any idea of objecting to the taxation of unearned increment; we thoroughly support that principle. We have put the Amendment down entirely with the object of preventing what we conceive to be an instance of the taxation of earned increment. If the Government will not adopt this Amendment, we still hope that the Chancellor will recognise the great public utility of this movement, and we shall still hope that the Amendment to Clause 35 will be favourably received by the Government. As the Clause stands we cannot, in ascertaining the increment to be paid, deduct any value attributable to our expenditure, unless we can prove that it is "directly" so attributable. On the other hand, by the Amendment introduced by the Attorney-General to Clause 13 on Wednesday night, the owner of a reversion may deduct all "value attributable" (not merely "value directly attributable") to his own expenditure. The omission of "directly" in Clause 13 makes it clear that the deductions allowed under Clause 25 are narrower than under Clause 13, and the omission of "directly" in one case, and its retention in the other will necessitate its being strictly interpreted against the taxpayer by the courts. Under Clause

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    25, therefore, as it stands, a man is to be taxed on some part of the value attributable to his own expenditure. We ask that "directly" should be omitted in Clause 25, as in Clause 13. No one will wish to cripple an industry like the Garden City. Its retention will make the starting of any future garden city so difficult that it is improbable that anyone will attempt it. I have no intention of pressing the Amendment to a Division. We have put it down mainly with a view of influencing the Government to recognise our position and, if necessary, to look into it more carefully, because we are quite sure that everything I have stated can be fully maintained, and I sincerely hope we shall be met in this for the public good.
    Mr. A. W. WILLS: I beg to second the Amendment. The word "directly" does not seem to me to have any effect, except as limiting the discretion of the Commissioners. I believe the Chancellor of the Exchequer has considerable faith in the Commissioners, and I have also. I think the Commissioners will be men of common-sense, and will not go too wide in their attempt to discover value not really due to reasonable expenditure upon the development of an estate. But I particularly hope that the Government will be able to grant us some concession in this matter, because I think we really touch what is a danger-point in the whole of this part of the Bill. Of course the Garden City is perhaps the most salient instance of an association which actually produces what is commonly called unearned increment. It actually produces by its own operations, and mainly by indirect expenditure that value which is to be the subject of this tax. If the word "directly" is eliminated from this portion of the Bill it will affect not only garden cities, but all developing building estates. One must first of all premise that it will chiefly help those developing such estates, who approximate in their particular operations to the methods of the Garden City. It will not help the owner who sits down and spends nothing. The Amendment is to help the man who spends money on his estate, but who has to go somewhat outside ordinary business operations to attract people to a particular place. They all deserve consideration when they are doing work to encourage which is essentially one of the objects of this Bill. I hope we shall not have the answer given to us that the Garden City must be very
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    lucky indeed if it has such an increment as will result in a taxation of £8,000. I say it is a substantial sum at any rate. The main proposition that we make is that in these cases this is not really a tax upon net increment, but upon gross increment. Of course, everyone who knows the operations of the association knows that their expenditure, I will not say mainly, but as regards one of the principal items, is expenditure which is entirely indirect in its nature. I cannot see why expenditure of a direct nature should be deducted and indirect not, provided both produce the value. The may be given that if the Clause were made too wide, the Commissioners would have all sorts of nonsensical claims made, but the Commissioners will be men of common-sense, and will disregard them. Lastly, I would express the hope that the argument will not be used that there must be hard cases. Of course, there must be hard cases, but this particular case is one that does not present any of the evils with which this portion of the Bill seeks to deal. What garden city is ever likely to hold land up or levy blackmail? The objects of the Garden City, as everyone knows, are consistent not only with the general principles of Liberalism, but with the very principles which this part of the Bill is meant to help. I believe thoroughly in the Land Clauses of the Budget; but, if it is pointed out to me by people who understand their business that this proposal is to be a machine not only to tear up the wheat with the tares, but, in a sense, to collect the wheat for destruction even more than the tares, I shall deeply regret that the Government put it forward. I do not lay particular stress on the omission of the word "directly." I shall be content to accept any form of Amendment which will protect value produced by the owner. I think that the word "reasonably" would be quite sufficient for my purpose, but I do think that to limit the discretion of the Commissioners by ruling out all indirect expenditure is likely to do harm to the principles which Liberals hold dear.
    Mr. LLOYD-GEORGE: After listening carefully to both of my hon. Friends, I am not sure that even now I know what they mean. The hon. Member for North Dorset (Mr. Wills), in one part of his speech, spoke as if there was to be some great injustice inflicted on the Garden City. Then he said that these words made very little difference one way or another.
    Mr. WILLS: No. I think they will make a difference.
    Mr. LLOYD-GEORGE: There I agree with him. I think they will make a very considerable difference, and it is for that reason that the Government must stand by them. I will tell the House why. As to the objects of the Garden City we are in complete agreement. I hope and believe that the movement will extend. I tell the hon. Member that nothing will extend garden cities more than this Budget. It will have a great effect, not merely in developing land for building, but in doing so on rational lines, which is the whole focus of the garden city movement. My hon. Friends have presented the case of one garden city. With the exception of the directors of Letchworth Garden City, the representatives of all the other garden cities concerned have expressed complete satisfaction with the concessions which the Government have made. What have the Government done to meet the case of the garden cities? They have, first of all, included in the Bill the admission that all the money spent in preparing land for development shall be deducted. They have also got in this very Clause an Amendment which provides that where "any part of the total value which is proved to the Commissioners to be directly attributable to the appropriation of any land or to the gift of any land by any person interested in the land for the purpose of streets, roads, paths, squares, gardens, or other open spaces for the use of the public"; that is to be taken into account. My hon. Friends never mentioned that. Then, in Clause 17, it is provided that Undeveloped Land Duty shall not be charged "on the site value of any land where it is shown to the Commissioners that the land is being kept free of buildings in pursuance of any definite scheme, whether framed before or after the passing of this Act, for the development of the area of which the land forms part, and that it is reasonably necessary in the interests of the public, or in view of the character of the surroundings or neighbourhood, that the land should be so kept free from buildings." Under that provision, if a whole area in the middle of a town is left unbuilt upon as part of the plan to give air space and to provide lungs for the locality, there will be exemption from the duty. We have introduced these substantial Amendments entirely to meet the case of the garden cities, and I want to put it to my hon. Friends that if we do not accept this Amendment, it is not because we have not
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    gone out of our way to meet the case of the garden cities and safeguard their interests against anything like the nature of burdensome taxation.
    One reason why we cannot accept the Amendment is that it would let in all kinds of expenditure, not only in their case, but in innumerable other cases, which are not justly attributable to any scheme of building development. We want to leave the word "directly" in the Bill to indicate to the courts when interpreting the Clause that there must be some direct connection between this expenditure and the actual development of the land. [An HON. MEMBER: "That is in the Bill."] We want it to remain in the Bill. It is of the first importance. I think my hon. Friends have grossly exaggerated the case. I do not believe that it will make the slightest difference to them to have the word "directly" included in the Clause, but it would make a difference in a large number of cases I know of. We discussed some of them yesterday. They are cases where there may be an expenditure, not merly for the purpose of land development, but for railways, docks, and other purposes. This would lead to the exemption of the whole of the building land in the neighbourhood of many towns and cities. He knows the danger of vague, obscure words and the necessity of making what the intention is absolutely clear. My hon. Friends, I believe, do not want to knock out the whole of these taxes. They believe in the Land Taxes, and sincerely support them; and yet when they want to knock out words which are deliberately put in and which are of essential importance in the construction of the machinery of this Land Tax I do not think they are acting consistently with their professions. And this is done purely in the interests of a body which is not really damnified.
    Mr. WILLS: I consider that other developing owners who do the same work are equally entitled to consideration. I do not suggest that it should be confined to the Garden City.
    Mr. LLOYD-GEORGE: All those are amply protected. But there are cases where it might be argued, especially if you leave out the word "directly," that it is expenditure which has a value in improving the property. It might be said that docks down in Cardiff improved the value of the whole of South Wales, unless you make it clear that what you mean is that the money must be spent directly for that purpose. That is the case here. The

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    money has been spent directly for the purpose of improving the value of that spot. My hon. Friends are simply going out of their way not to fight the battle of the garden city, but that of the great urban landlords in other districts. They have been misled entirely by figures for which there is absolutely no justification. The £8,000 is a ludicrous figure. It could only be charged on the assumption that Letchworth is going to make enormous profits in the course of the next five years; because all these things have to be deducted, and it means not so much profit made by Letchworth as what they spend, because all that is taken out. It means profit made by Letchworth on the purely prairie value of the soil after every value which they have created has been deducted. Eight thousand a year profits for five years, made after every deduction for every expenditure, and not merely that, but for every value which is created, would represent profits beyond the dreams of most landlords. In the course of the next five years they are not merely going to get back the whole of the money spent, the whole value they have created, but in addition they are going to make £40,000 profit on the prairie value of the soil which they bought. That is a most extraordinary statement and ought to send up Letchworth shares in the market instantly. The two Amendments have been moved together. That is perfectly right, I understand. The other is with reference to expenditure of a capital nature. Every man of business knows what that means. It is expenditure which you may not expect a return on that year, but which you make part of your capital in that year. All that will be deducted. But that all the expenditure on your office, or on rail-way and tram fares, and every little item of expenditure, current expenditure of the year, should be deducted, would mean such an examination by the Commissioners into the ménage of every urban landowner that you could not begin to collect the tax for many years to come. I trust therefore that my hon. Friends will be satisfied with the very substantial concessions that have been made to meet that case, because we recognise that there are great merits in the garden cities, and we have met them amply. They will not be taxed in the slightest degree on any value which they themselves have created, but will only be taxed on the improved prairie
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    value, after every value which they themselves create has been deducted.
    Mr. BALFOUR: I cannot help thinking that the right hon. Gentleman who has just sat down has been a little hard on his two Friends, because though their speeches may have been strong their action is very weak. The Mover of the Amendment (Mr. Idris) prefaced his speech by saying that he did not propose to divide on it. That is a very innocuous form of criticism from followers of the Government, and one which should have been more highly commended than the right hon. Gentleman (Mr. Lloyd-George) seemed disposed to think. With the speeches of the hon. Members I largely agree, especially with the speech of the Seconder. Those speeches, I agree with the Chancellor of the Exchequer in thinking, have no meaning from hon. Gentlemen who believe in a Land Tax. You cannot possibly argue the case of a garden city and then claim that it should be treated differently from the case of other land. It is perfectly true that the contention is that the original intention of the Government was that they were going to tax that portion of the land which had nothing whatever to do with the expenditure of the owner. But that was only a platonic statement of principle. The Chancellor of the Exchequer told us that if the suggestions made were embodied in the Bill there would be nothing left to tax. I quite admit that if the Bill did what the authors of the Bill say it was intended to do in this part of the Bill, it would produce nothing at all. I also agree with the hon. Gentlemen who moved and seconded the Amendment that this is no argument against the equity of their proposal. Their proposal is perfectly equitable. At the same time I believe the theory of the Mover of the. Amendment was a little shaky. He gave an explanation to us of the method of the garden city operations, and he said the garden city is so arranged that every atom of increment value is due to the action of individuals belonging to the garden city, and that nothing whatever will be due to society at large. He told us that the garden cities propose to give special encouragement to manufacturers to come into garden cities. When manufacturers come into the garden cities, as I hope they will, and when they establish prosperous works, as I hope they will, if the value of the land accrues from their enterprise, their risk, their energy, and their labour, the effect of that on the garden city will not be due to the garden

    689
    city itself, but will be due to the manufacturers in the garden city, and to the people who buy the produce of the manufacturers and the general conditions in which the society of the garden city finds itself. Carry off Letchworth to the middle of the Sahara, and what is the value of it? What would be its value in any part of the world where civilisation and manufactures have not reached the point of development which they have reached here? Letchworth is no more separated from the general communal action of the society in which Letchworth is situated than any other body, or corporation, or any professional man, or capitalist, or any workman or anyone else. Every single member of society is dependent upon that society. Make what arrangements you like, you cannot limit the action of that society or its prosperity. Therefore the argument of the Mover of the Amendment, from that point of view, entirely breaks down. Although he supported the discussion on those lines I am not disposed to follow him any further on those lines. I wish to go back to the narrower point, which really was raised yesterday, in connection with the Trafford Park Estate. Is it the policy of the Government that they should discourage indirect expenditure for the development of land? That really is the vital issue. One form of indirect expenditure we had yesterday in connection with the Trafford Park Estate. The Government would not hear anything of that. Now we have another form of indirect expenditure brought before us. I agree with all that has been said in favour of garden cities. It may be that it has been in a very small way, but I have done my best to foster the idea. I think the two hon. Gentlemen are right. I think this Bill does discourage indirect expenditure. I do not think anybody will start a new Trafford Park Estate, and I agree with the Mover that nobody will start a garden city.
    4.0 P.M.
    Can you conceive a greater condemnation of the lines on which the Bill is drawn? Can there be a worse thing done to the community than that this particular form of expenditure should be discouraged? I think that the Chancellor of the Exchequer rather realised that when he turned, as he always does when he is in distress, to the dukes. He asked his faithful supporters below the Gangway, "Do you really mean to throw in your lot with the great urban landlords?"
    690
    As far as I can make out, they are worse than any duke. When I heard the Chancellor of the Exchequer dilate on the gigantic profits that Letchworth was going to make, when he forecast the future of that city, it justified the allegations of the Mover and Seconder of the Amendment, that this tax is going to-mean £8,000 on the profits of Letchworth. Really, where are we? The dukes are not in it. The real blackmailers are the garden cities, and the representatives of the late Mr. Gorringe sitting on those benches opposite. I feel now that all our ideas of what is enterprise for the good of the community, what is philanthropy, and what is expenditure beneficial to the public are becoming so confused that we really do not know on what lines we ought to legislate. We start by taking unearned increment. We define unearned increment in our speeches as being that which a man has done nothing whatever to obtain. But in the Bill you find that that is not in the least what you intend to do, and if you did it you would get no money at all. We go a step further. Protest is made by gentlemen who are giving a great deal of money for indirect expenditure which will, no doubt, have a great effect in developing land. They make a very natural protest. The Government say, "Do you mean to join yourself to those wretched landlords, who may have done something to improve their land, but who are dukes? They are rich." You say you are going to make £40,000 increase on the prairie value of the land in five years. Robbers, spoliators, blackmailers, bloodsuckers! Here these hon. Gentlemen come before us pleading for their great philanthropic institution, and asking the mercy of the Government. If they want mercy from the Government they must not begin their protest by saying they do not mean to divide.
    Mr. WILLS: We shall divide.
    Mr. BALFOUR: The Seconder means to divide.
    Mr. WILLS: Yes.
    Mr. BALFOUR: I am glad that half the party, at all events, are now coming to a decision. If I may say so, I should divide with him with rather more consistency than I think he has shown. I do not think he has voted for the indirect expenditure made by the other blood-suckers whose unhappy lot was discussed last night. He then, I think, left them in the lurch. I supported this last night; I do not support

    691
    him to-day. I must say this, that the Government, have been consistent in this matter, as we have been consistent. They opposed a perfectly similar claim made last night on behalf of private individuals, and they are absolutely right to-day in resisting it on the part of a company.
    Mr. WILLS: If the word "directly" were cut out it would apply to Trafford Park as well as to anywhere else.
    Mr. BALFOUR: Quite so. I wish to say, on the other hand, that I did not happen to notice the hon. Gentleman in the Lobby last night when the Trafford Park case came on. I may have been deceived; I may not have seen him. I notice throughout these Debates that there is a very large amount of dissent from the various propositions in the Budget on the part of a good many hon. Gentlemen opposite, but they take care never all to pull in the same direction at the same time. Isolated action taken occasionally with great spirit by a single individual has very little effect, as the other individuals
    who agree absolutely with him in principle always wait until their special exemplification of the principle comes on, and, therefore, if they vote against the Government they vote alone, when they do vote. That is not the way to get concessions out of the Government, and still less is it the way of getting concessions out of the Chancellor of the Exchequer when the Chancellor of the Exchequer is clearly consistent in his policy in this matter. I do not see how he could give way. He is absolutely unswerving in his absolute determination to discourage any form of expenditure to develop the land in this country. That being the fundamental and vital principle of the Government policy, it really is vain for hon. Gentlemen opposite, whether they mean to vote for their own Amendment or do not, to attempt to proceed on the lines they have done, with their obdurate chief's conducting operations on principles wholly inconsistent with the appeal they are making.
    Question put, "That the word 'directly' stand part of the Bill."
    The House divided: Ayes, 141; Noes, 62.

    Division No. 836.]

    AYES.

    [4.8 p.m.

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

    Ginnell, L.

    Morton, Alpheus Cleophas

    Acland, Francis Dyke

    Gladstone, Rt. Hon. Herbert John

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

    Allen, Charles P. (Stroud)

    Glendinning, R. G.

    Myer, Horatio

    Astbury, John Meir

    Goddard, Sir Daniel Ford

    Nolan, Joseph

    Baring, Godfrey (Isle of Wight)

    Greenwood, G. (Peterborough)

    Nuttall, Harry

    Barker, Sir John

    Gulland, John W.

    O'Brien, Patrick (Kilkenny)

    Beale, W. P.

    Harcourt, Rt. Hon. L. (Rossendale)

    O'Connor, John (Kildare, N.)

    Beauchamp, E

    Harcourt, Robert V. (Montrose)

    Parker, James (Halifax)

    Bethell, T. R. (Essex, Maldon)

    Harmsworth, R. L. (Caithness-shire)

    Pearce, William (Limehouse)

    Birrell, Rt. Hon. Augustine

    Haworth, Arthur A.

    Philipps, Owen C. (Pembroke)

    Brace, William

    Hedges, A. Paget

    Ponsonby, Arthur A. W. H.

    Branch, James

    Helme, Norval Watson

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

    Brigg, John

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

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

    Brooke, Stopford

    Herbert, T. Arnold (Wycombe)

    Radford, G. H.

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

    Higham, John Sharp

    Rainy, A. Holland

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

    Hobart, Sir Robert

    Rees, J. D.

    Bryce, J. Annan

    Hodge, John

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

    Buckmaster, Stanley O.

    Horniman, Emslie John

    Roberts, G. H. (Norwich)

    Burns, Rt. Hon. John

    Howard, Hon. Geoffrey

    Robertson, Sir G. Scott (Bradford)

    Buxton, Rt. Hon. Sydney Charles

    Hutton, Alfred Eddison

    Robinson, S.

    Cameron, Robert

    Illingworth, Percy H.

    Robson, Sir William Snowdon

    Causton, Rt. Hon. Richard Knight

    Jones, Leif (Appleby)

    Rose, Sir Charles Day

    Cherry, Rt. Hon. R. R.

    King, Alfred John (Knutsford)

    Rowlands, J.

    Clough, William

    Lambert, George

    Russell, Rt. Hon. T. W.

    Cobbold, Felix Thornley

    Layland-Barratt, Sir Francis

    Rutherford, V. H. (Brentford)

    Collins, Stephen (Lambeth)

    Leese, Sir Joseph F. (Accrington)

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

    Corbett, A. Cameron (Glasgow)

    Lehmann, R. C.

    Schwann, C. Duncan (Hyde)

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

    Levy, Sir Maurice

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

    Cornwall, Sir Edwin A.

    Lloyd-George, Rt. Hon. David

    Seely, Colonel

    Cotton, Sir H. J. S.

    Lupton, Arnold

    Sherwell, Arthur James

    Craig, Herbert J. (Tynemouth)

    Lynch, A. (Clare, W.)

    Shipman, Dr. John G.

    Crossley, William J.

    Macdonald, J. M. (Falkirk Burghs)

    Soames, Arthur Wellesley

    Dobson, Thomas W.

    Mackarness, Frederic C.

    Steadman, W. C.

    Dunn, A. Edward (Camborne)

    Macnamara, Dr. Thomas J.

    Strachey, Sir Edward

    Edwards, Sir Francis (Radnor)

    MacVeagh, Jeremiah (Down, S.)

    Tennant, H. J. (Berwickshire)

    Essex, R. W.

    M'Callum, John M.

    Thomas, Abel (Carmarthen, E.)

    Evans, Sir S. T.

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

    Toulmin, George

    Falconer, James

    Mallet, Charles E.

    Verney, F. W.

    Ferguson, R. C. Munro

    Marnham, F. J.

    Villiers, Ernest Amherst

    Fiennes, Hon. Eustace

    Massie, J.

    Walker, H. De R. (Leicester)

    Fullerton, Hugh

    Masterman, C. F. G.

    Walsh, Stephen

    Gibb, James (Harrow)

    Menzies, Sir Walter

    Ward, W. Dudley (Southampton)

    Gibson, J. P.

    Morgan, G. Hay (Cornwall)

    Wardle, George J.

    Warner, Thomas Courtenay T.

    Whitley, John Henry (Halifax)

    Wilson, W. T. (Westhoughton)

    Wason, John Cathcart (Orkney)

    Williams, J. (Glamorgan)

    Wood, T. M'Kinnon

    Waterlow, D. S.

    Williams, Sir Osmond (Merioneth)

    White, J. Dundas (Dumbartonshire)

    Williamson, Sir A.

    TELLERS FOR THE AYES.—Mr. Joseph Pease and Captain Norton.

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

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

    NOES.

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

    Fell, Arthur

    Morrison-Bell, Captain

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

    Fletcher, J. S.

    Parkes, Ebenezer

    Anstruther-Gray, Major

    Forster, Henry William

    Pease, Herbert Pike (Darlington)

    Balcarres, Lord

    Foster, P. S.

    Powell, Sir Francis Sharp

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

    Gardner, Ernest

    Pretyman, E. G.

    Banbury, Sir Frederick George

    Gordon, J.

    Randles, Sir John Scurrah

    Black, A. Cecil

    Guinness, Hon. R. (Haggerston)

    Renwick, George

    Bignold, Sir Arthur

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

    Ridsdale, E. A.

    Bowerman, C. W.

    Hamilton, Marquess of

    Ronaldshay, Earl of

    Bowles, G. Stewart

    Harrison-Broadley, H. B.

    Scott, Sir S. (Marylebone, W.)

    Burdett-Coutts, W.

    Heaton, John Henniker

    Talbot, Lord E. (Chichester)

    Carlile, E. Hildred

    Hope, James Fitzalan (Sheffield)

    Tuke, Sir John Batty

    Castlereagh, Viscount

    Hunt, Rowland

    Valentia, Viscount

    Cecil, Evelyn (Aston Manor)

    Kerry, Earl of

    Walker, Col. W. H. (Lancashire)

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

    Kimber, Sir Henry

    Walrond, Hon. Lionel

    Chance, Frederick William

    Lonsdale, John Brownlee

    Willoughby de Eresby, Lord

    Channing, Sir Francis Allston

    Lowe, Sir Francis William

    Wolff, Gustav Wilhelm

    Cochrane, Hon. Thomas H. A. E.

    M'Arthur, Charles

    Younger, George

    Cowan, W. H.

    Magnus, Sir Philip

    Craig, Charles Curtis (Antrim, S.)

    Mason, A. E. W. (Coventry)

    TELLERS FOR THE NOES.—Mr. Wills and Mr. Bertram.

    Craik, Sir Henry

    Morpeth, Viscount

    Faber, George Denison (York)

    Drafting Amendments made.
    Sir W. ROBSON Sir W. ROBSON moved, in paragraph (a), after the word "of" ["on behalf of any person interested"], to insert the words "or solely in the interests of."
    This is a small Amendment, but I think it is a somewhat considerable concession. It will relieve from taxation a good many of what are called Trafford Park cases.
    Amendment made.
    Further Amendment made: In paragraph (a), to leave out the word "or" ["or to the expenditure of money"], and to insert instead thereof the words "and (c) any part of the total value which is proved to the Commissioners to be directly attributable to the appropriation of any land or to the gift of any land by any person interested in the land for the purpose of streets, roads, paths, squares, gardens, or other open spaces for the use of the public; and (d) and part of the total value which is proved to the Commissioners to be directly attributable."—[Sir W. Robson.]
    Sir W. ROBSON Sir W. ROBSON moved, in paragraph (b), after the word "the" ["the site value"] to insert the word "full."
    Mr. MUNRO FERGUSON: In divesting the land, why, if of buildings, timber, and trees, not roads, hedges, and so on. I understand that we are endeavouring to arrive at a prairie value of the land without its agricultural equipment. Why should not the agricultural equipment of timber be divested. In order to have the matter discussed I will move as an Amend-
    694
    ment in paragraph (b) to leave out the words "buildings, timber, trees" ["divest the land of buildings, timber, trees, or other things"] in order to insert instead thereof "agricultural equipment and timber." If you are divesting land of its agricultural equipment why do you merely mention "timber trees and other things."
    Mr. SPEAKER: I think the hon. Member is too late. This divesting took place under Sub-section (2), and this Sub-section simply refers to the sum which, in the opinion of the Commissioners, would be necessary to expend in divesting. The divesting has already been provided for under Sub-section (2). I do not think the hon. Member is entitled to add further subjects of divesting——
    Mr. MUNRO FERGUSON: May I ask whether under the words "other things" I would not have a right to raise that point?
    Mr. SPEAKER: This relates only to the imaginary cost of carrying out this divesting. The actual divesting in respect of the things of which the lands are to be divested occurred under Sub-section 2.
    Mr. MUNRO FERGUSON: My point was that under Sub-section 2 there are certain matters of detail, but in paragraph (b) there are the words "other things" which do not appear in Sub-section 2.
    Mr. LLOYD-GEORGE: Will the hon. Member read the further words—"of which it is to be taken to be divested."
    Mr. SPEAKER: "The other things" referred to are the things mentioned in Sub-section (2).
    The word "full" inserted in the Bill.
    Further Amendments made: In paragraph (b), after the word "value" ["arriving at the site value of"], to insert the words "from the gross value of the land."
    In same paragraph, to leave out the words "and the site value as reduced by those deductions shall be taken to be the site value as ascertained for the purpose of this Part of this Act," and to insert instead thereof the words:
    "Where any works executed or expenditure incurred for the purpose of improving the value of the land for agriculture have actually improved the value of the land as building land, or for the purpose of any business, trade, or industry other than agriculture, the works or expenditure shall, for the purpose of this provision, be treated as having been executed or incurred also for the latter purposes.
    "Any reference in this Act to site value (other than the reference to the site value of land on an occasion on which Increment Duty is to be collected) shall be deemed to be a reference to the assessable site value of the land as ascertained in accordance with this Section."
    Question proposed, "That those words be there inserted in the Bill."
    Mr. YOUNGER: I desire to raise the question of the deduction of the cost of drains from the value of agricultural land. I raised the same point in Committee, and I understood the Chancellor of the Exchequer to reply that he had entirely met the point. Drains are most valuable and costly, and they should be allowed for in the valuation. I agree that there is no rating of agricultural land under these conditions, but that does not matter. You are valuing the land, and you ought to value your agricultural land on the same principle, which is the same principle as that which appears in the Land Values (Scotland) Bill. I wish to ask whether it is not possible for the Government to put in words to make it clear that in this valuation drains will be allowed for.
    Mr. LLOYD-GEORGE: I am afraid we cannot go into this matter beyond the words which are down on the Paper. I cannot imagine the Commissioners not taking into account land which is thoroughly drained when they come to
    696
    value it even for business purposes. I think we have really covered this point.
    Mr. AUSTEN CHAMBERLAIN: On the last occasion when this matter was discussed, the Chancellor of the Exchequer offered us words which, on examination, we thought met the point raised by my hon. Friend behind me (Mr. Younger), and we accepted them. Having done so, my hon. Friend, in deference to what we had done was good enough not to press his Amendment although he was dissatisfied with the offer of the Government. Since then I have had more time to look into the matter, and I think the point he raised is really much wider and of greater importance than I thought it was at first. I think now that I was much too hasty in giving any kind of approval to the words suggested by the right hon. Gentleman. I agree that they were better than the original words. The issue raised is whether when land has been improved for agricultural purposes and afterwards becomes building land you are to give the owner of the land credit for the agricultural improvements he has created, even though they do not directly subservea the purposes of building; or whether, although he has created that improved agricultural value—because the effect of putting houses upon it destroys the agricultural value—you are going to tax him on the value he has created, as if it were not the work of his own hands or the result of his own energy. It is, in effect, the same question, and the very big question, which suddenly dawned upon the hon. Member for the Buckrose Division of Yorkshire (Sir Luke White) the other day and caused him to state that, if the Bill was in fact what the Bill is, then he had entirely misunderstood it, and the description he had given could not be applied to it. Wherever there has been a value created by the work, the energy, or the expenditure of the owner, he should be given credit for it, even though that particular value becomes merged in another value he has not created. So long as you do not do that you are taxing improved agricultural value. That is grossly unjust and absolutely inconsistent with the claims the Government make for the Bill. We divided upon the matter under another form two days ago, and I am not going to move an Amendment or put the House to the trouble of another Division on exactly the same point.
    Mr. MUNRO FERGUSON: If the intention is to get at the prairie value and to

    697
    remove all taxation from any improvements upon it, then the simplest thing to do is to remove the agricultural equipment and timber. If you are only going to remove what conduces to its value as building land, such as drains, then I do not see the use of putting in buildings. The agricultural equipment has to be cleared away at additional cost if you are going to turn it into building land. Agricultural buildings do not add to its value as building land. I admit drainage would in some cases add to the value of the land for building purposes, but the agricultural buildings certainly would not, and we ought to know on which horse we are riding.
    Amendment made.

  REVISED FINANCIAL STATEMENT.
  Motion made, and Question proposed, "That the further proceedings on the Bill be now adjourned."
  Mr. LLOYD-GEORGE: On the Motion that the proceedings be adjourned, I should like to make the statement I promised in regard to the revision of the estimates. We have made very excellent progress this afternoon. It is rather a novel proceeding, I admit, for a Chancellor of the Exchequer to give a revised estimate of his revenue before the Budget leaves the House of Commons. It is not, however, a new thing for a Chancellor of the Exchequer to give a revised estimate of his new taxes. But I propose to go a little beyond that, and to give a revised estimate which will cover pretty well the whole ground. My reason for doing so is this: it is later in the year than I suppose it has ever been with a Budget. Therefore we have a unique opportunity of checking, by the experience of at least half a year, the estimate, which depends, after all, very much upon conjecture when it is made at the beginning of the year Some branches of the revenue have produced more on this occasion already, some less. This is nothing new, as the right hon. Gentleman the Member for East Worcester (Mr. Austen Chamberlain) knows. As a matter of fact, it is what happens every year. I do not believe there has ever been a case where the estimate has been justified. Some parts of the revenue fall far short of the anticipated yield; other parts produce a good deal more. And that has happened in this case, especially in regard to some of the old taxes. But that would not be a Sufficient justification for giving to the House of Commons a revised estimate had
  698
  it not been for the fact that there have been very considerable modifications made in the Bill I submitted to the House some months ago, and which will involve a loss, to a certain extent, in one part of the Bill.
  I do not believe any Finance Bill has ever been submitted to the House of Commons, involving proposals for raising taxation by a new and novel method, when concessions have not been made in the course of the Debates. I take the case of the Corn Tax, which had considerable modifications, and the Finance Bill of 1894. So far as the Corn Taxes are concerned, the modifications required a revised estimate. But here I confess there is a larger number of new and novel methods of raising taxation than have been incorporated in any single Bill within the last 48 or 50 years. Therefore there is a larger number of modifications and alterations. The only thing that I can say is that we have been more fortunate in that respect than some of our foreign friends who are placed in similar circumstances, and of the German Budget, I believe, barely one-fifth survived. The modifications in my proposals I shall give a summary of. First of all, as far as the yield is concerned, the first modification of the new taxes I will take is land. The modifications in the Land Tax will bear fruit not so much this year as next year and the next ensuing year, because they are in respect of Increment Duty, which I budgetted to yield £50,000 this year, and therefore a very considerable modification in these Clauses would have had a very small effect upon this year Taking these modifications into account, and also making some allowance for the delay in the carrying of the Budget, I think I shall be safe in estimating that these concessions only make a difference this year so far as increment is concerned of £25,000. Next year there will be a very considerable alteration, I think, in the estimates. As far as the Undeveloped Land Tax is concerned, another £25,000 will cover the whole of the modifications there, but I have got to add a sum of £175,000 in respect of our alterations in the Mineral Eights Duty, so that the net effect of our alteration in the Land Tax is that although we have taken off £50,000 and added £175,000, the net result is an addition of £125,000 in my estimate for this year.
  We estimate that the concessions given on licences since the introduction of the Bill amount to £500,000. Then there is another alteration in the proposals of

  699
  the Bill, which will account for a further substantial sum, and that is stamps. The alterations with regard to small conveyances will involve this year a matter of something like £50,000—the total will be £50,000. If hon. Members will take the £125,000 in respect to land, they will find that under the heading of new taxes the reduced yield this year under all modifications amounts to £425,000, but that does not account for all the concessions made in the passing of the Bill. We have proposed that half the yield of the Land Tax should pass over to a Local Taxation Fund, which will account for some £300,000. Then there is the incerased cost of valuation. The Government have proposed that the State shall undertake the whole cost of valuation instead of casting it upon the individual land-owner. That will make a considerable difference in our estimate of the expenditure for valuation, and for this year it will come to £200,000. The Prime Minister estimated it at something more than that, but at that time it was assumed that the Bill would go through sooner than it will go through to all appearances. Therefore, something will have to be taken off in respect of the tax. There will be at least a month's expenditure, which will not count this year. That means another £500,000. That will account for all the concessions in connection with the new taxes. But we made one very considerable concession in respect of a very old tax, and that is Schedule A. We estimated that that concession would cost the Exchequer half a million a year, but it will be obvious to those who have experience in these matters that the whole of that sum will not be paid out of the Treasury before the end of the financial year, because the land-owners will have to send in their claims and sometimes they will have to be investigated. There will be some delay, and I am informed that the probability is that by 31st March £300,000 will count for the proportion of that £500,000 which will be paid during the current financial year. There will be a slight loss in land. The yield from the Land Taxes this year will not be a very large sum, and the delay will not affect it very seriously, and it will not affect the new Mineral Rights Duty in the same way as it would have affected the old Mineral Rights Duty. We do not anticipate much loss there. But, at the same time, undoubtedly the delay will affect to a slight extent the yield which we anticipate from
  700
  the Land Taxes. It may affect the Super-tax, and it will certainly affect stamps. It will take off something like a couple of months probably from the yield of the new Stamp Taxes.
  I come to the old revenue. The House will be very glad to hear that the old revenue is doing very well. All the taxes are doing well, old and new, except one, and that is whisky. The Whisky Tax is discouraging—or shall I say encouraging?—but beer is doing very well. There are five new taxes. Four out of the five are quite up to our anticipations, but the fifth, the Spirit Tax, is not doing well. I will take the taxes in respect of which I shall have to alter and revise my estimate. The first is the Death Duties. They are the most difficult of all taxes to estimate with anything like approximate accuracy. I do not know a tax which has so often falsified anticipations as the Death Duties. Sometimes they exceed the estimate by hundreds of thousands of pounds. In the last few years they exceeded the estimate by £1,200,000. Sometimes it falsifies the estimate the wrong way, and I think that happened last year. We received less by some hundreds of thousands of pounds than we anticipated. This year I announced that already the anticipations with regard to the yield of the tax have been considerably exceeded. It is very difficult to know whether in the course of another six months we may find that there will be such a shortage in the yield as to lose the full benefit of the advantage of the considerable harvest which we have had during the last six months, but the anticipation of the Inland Revenue is that, looking at the yield of the last six months, when two or three very exceptional estates have come in, which, of course, made a very great difference, the estimate in respect of the Death Duties will be exceeded by £1,300,000. Then the Post Office has also done better. That is due to the improvement in trade. Stamps have done very much better since the introduction of the Budget. That is because there has been such a boom on the Stock Exchange. [An HON. MEMBER: "Selling."] Well, there must be somebody buying when there is selling, and that is where the revenue comes in. They are doing so well and there has been such considerable briskness in business there that we shall improve our stamp revenue. Even making allowance for two months which were lost to the Inland Revenue, and even making allowance for the concessions we have given, we hope to derive £250,000 more

  701
  from stamps than I originally anticipated. From the Post Office we hope to get an additional £200,000, and from the Land Taxes we hope to get an additional £100,000. Instead of receiving £500,000, we hope to receive £600,000. That will mean on the credit side—

  £1,200,000 on Estate Duty,

  £250,000 on Stamps,

  £200,000 on the Post Office, and

  £100,000 on Land Taxes—

  a total of £1,850,000, most of that being accounted for by the Death Duties.
  I come now to the other side of the account. I am very pleased to say that there is only one tax I can place on the other side. All the other taxes are doing very well, including the Income Tax. I have seen some very wild statements about the Income Tax—about there being a falling revenue, and probably a serious deficit. On the contrary, the Income Tax is doing admirably, including the new tax—the additional 2d. Unless the Budget is very late, and there is a loss of money on the Super-tax, I expect that the Income Tax will come fully up to expectation in the same way as in regard to other taxes. That is not the case in regard to the Spirit Duty. The Spirit Duty has done either badly or well, according to the view any hon. Member may take of it.
  From the point of view of the Exchequer, I say frankly we are doing badly, owing to forestalments, owing to the shortening of the stocks, and also to an anticipated drop in the quantity of drink consumed. Forestalments were very accurately estimated. We did not estimate with equal accuracy the other two elements of the reduction of the yield of the tax. I believe that the trade, owing to the uncertainty with regard to the immediate prospects of the Finance Bill, have reduced their reserves to the very lowest figure, and they have not taken a keg of whisky more out of bond than they were obliged to do; and it is rather remarkable, I have been told, in some districts when some recent speeches were delivered they had the effect upon the trade of their still further reducing their stocks and reducing their clearings from bond, because they were under the impression that possibly something might happen this year to do away with the whole of the tax, and that, therefore, there would be no necessity for them to pay. Undoubtedly they are living on as narrow a margin as they can possibly conduct their business on, and that has had a very serious effect
  702
  on that view. That is bound to be temporary. They must make that up before the end of the financial year. That is not the case with regard to the drop in consumption. Undoubtedly there has been a very serious diminution in the quantity of drink which has been consumed. It may or may not be temporary; but even if it is temporary the effect upon the revenue this year is irreparable, because even if they do get back to their old habits of drinking the same quantity it will not quite make up for lost time. Therefore we must anticipate a very considerable diminution in the yield of the Whisky Duty. I am told that in some districts the quantity consumed has gone down by something like 30 per cent. In Glasgow I have heard that the amount of whisky which distillers sold in the month of September was 30 per cent. less than the amount sold in the September of last year, and that as far as bond is concerned the diminution is something like 36 per cent. But that I think is not altogether accounted for by the decrease in consumption. I estimated for an increased yield of £1,600,000. I do not think I will get it. And may I say that every criticism directed against that estimate at that time was in the direction of complaining that we had underestimated. No one ever suggested that we had overestimated. On the contrary, there were Members—and I am not sure that there were not some on my own side—who thought I had really deliberately underestimated. I had in view that there would be a serious reduction in the whisky consumption, but I thought that the percentage I allowed would cover that diminution. Taking the twelve months as a whole, I am going to estimate for a loss of £800,000 on spirits. [An HON. MEMBER: "A loss?"] Not a loss of £800,000, but a decrease; I give £800,000 instead of £1,600,000. All this must be purely an estimate, but there is one advantage in estimating now. I am estimating now with some six months' experience of what has happened during the year, whereas at the beginning of the year I had to estimate without knowing exactly what was the nature of the tax and what it would produce.
  Let me come to the actual figures. The Income Tax I estimated will cost £300,000 under Schedule A. The loss on licences will be £500,000, and the sum of money that will be paid over to the local authorities will be £300,000. The valuation will cost £200,000, in addition to the £50,000 that we already provide. That

  703
  amounts to £1,300,000. You add to that the loss on whisky, which is £800,000. That comes to £2,100,000. Place, on the other side, the increase in the Revenue of £1,850,000, that means that I shall be short of £250,000. I have already provided £488,000 to meet contingencies, but that sum, I fear, will be absorbed by Supplementary Estimates which I shall have to submit to the House; £200,000 for the unemployed, and a good many small sums. Therefore, in order to meet that deficiency, I propose that we shall take out of the Sinking Fund another half million. That is a really moderate proposal, because I think Lord Cromer suggested we should take a sum of £4,000,000, but we have only taken £3,000,000. We now propose to take an additional £500,000, and I shall be at any rate £500,000 under the proposal of so careful a financier as Lord Cromer, which he actually proposed and submitted to the country before my Budget. That is the position of affairs. I think it is a matter for congratulation that the revenue on which the prosperity of the country depends, and the revenue which indicates prosperity, the Income Tax and all the other taxes are doing well, and that the only tax that is doing badly is that tax the diminution of which proves that there is a considerable improvement in the habits of the people. I am very much obliged to the House for having afforded me this opportunity of making this statement. I propose to circulate a Paper, which will not contain any fresh information, but which will give the whole of these facts.
  Mr. AUSTEN CHAMBERLAIN: I do not propose now to make any lengthened statement, nor do I wish to make any lengthened comments to-day, as he will have to amend the Sinking Fund proposal, and we shall have the opportunity of referring to it at that stage, and, when we come to discuss the Motion to alter the Sinking Fund, to the circumstances which gave rise to the arguments which the Chancellor of the Exchequer adduces in favour of that proposal. I shall, therefore, be as brief as I can in what I say to-day. I am not going to criticise the Chancellor of the Exchequer under all the circumstances of the year in meeting the deficit which he ultimately devised by a further appeal to the Sinking Fund; neither do I criticise him for the divergence which now appears between his present estimate of revenue in certain respects, with the estimate he made six
  704
  months ago. That is, I fully admit, due to changes which the House, under the guidance of the right hon. Gentleman, have made in his Budget. Those are matters which cannot be foreseen until the Budget is actually discussed, but when I turn to the other parts, to that part which is not due to changes made by the House, but to the inaccuracy of forecast on the part of the Revenue authorities, I am bound to say that it is a kind of inaccuracy which no human foresight could guard us against. The Death Duties are, as the right hon. Gentleman said, the most uncertain of all forms of our revenue, and that is, from the purely fiscal point of view, one of the objections to trusting too much to death and to the raising of too large a proportion of our revenue from that source, because the accident of individual death may upset the Budget of the Chancellor of the Exchequer, and may turn an apparent or probable surplus into a deficit just as readily as, more happily on this occasion for the Chancellor of the Exchequer, that they turn what would have been a very serious deficit into a comparatively small and manageable deficit.
  Again, when I come to the error in whisky, that is a more serious one. I do not say that it was unavoidable. No doubt the Chancellor of the Exchequer is right in saying that when he first produced his estimate the criticism which was levelled against it from all quarters of the House was that he had estimated the Spirit Duties too low. That is so. That error was fostered by the declarations of the Government themselves, who, when the spirit distillers raised the price of whisky, made the most exaggerated statements that it is possible to conceive as to the enormous profits which the distillers were going to reap from that rise of price. We, not unnaturally, argued that if by raising the price of the glass of whisky a halfpenny, out of which halfpenny they took the smaller half, they were going to make a profit, as we were told by the Government, of something like three or four million pounds per year. Then clearly the Chancellor of the Exchequer had grossly underestimated the amount of revenue which he was going to get from that same halfpenny. The increase was not divided equally between them. The Chancellor of the Exchequer had taken to himself the larger half, so that when his colleagues said that what remained to the distiller was three or four millions we were naturally driven to the conclusion

  705
  that the Chancellor of the Exchequer had grossly underestimated the share which he himself was going to get. But though I do not blame him for having made an underestimate—so far as I am concerned, I blame him only for the very extravagant language which he used in order to prejudice the House and the country against the distillers——
  Mr. LLOYD-GEORGE Mr. LLOYD-GEORGE dissented.
  Mr. AUSTEN CHAMBERLAIN: I think that, if he looks back on the Debates to the statement he made as to the profits the distillers were going to make, he will admit that my language is not unjustified.
  Mr. LLOYD-GEORGE: On the contrary, I have always considered that the extra halfpenny might be a perfectly legitimate charge, and that whatever profit they made upon that was quite legitimate. I have always said so. I am not sure that I did not say so in my Budget statement. Beer, I agree, I consider is on a totally different footing.
  Mr. AUSTEN CHAMBERLAIN: I am told it was the Chancellor of the Exchequer who invited the distillers to raise the price of whisky by a halfpenny a glass. I hasten to give him full credit. What is really serious is the effect which this increased duty has had on consumption. The Chancellor of the Exchequer and some other Members too easily comfort themselves by laying to their souls the flattering unction that if there is a reduction in the consumption of whisky there is also an improvement in the habits of the people. That does not follow at all. I do not believe that a slight additional charge checks the habitual drunkard, the man with a craving for drink which he cannot resist. He will have the drink, whatever happens, as long as he can afford to pay for it, and if he cannot get it at the old price he will stint himself of something else rather than go without that which has become to him a drug with which he cannot dispense, or that from which he has not the moral or physical strength to abstain. I do not believe that this kind of drop in the consumption, produced by a rise in price owing to increased taxation, is at all an evidence of improvement in the moral habits or social conditions of the people. I think it is a diminution of consumption not among those who have hitherto consumed too much, but among the moderate drinkers. People who think that all consumption of alcohol is bad or wrong, would, of course, be
  706
  pleased at a reduction in consumption wherever it took place. But that is not my view; it is not the view of the Chancellor of the Exchequer; it is not the view upon which this House has hitherto legislated; and I do not think the right hon. Gentleman can console himself for his loss of revenue by supposing that it is balanced by an improvement in the habits of the people. In my opinion it is a very serious injury which he has done to one of oar great sources of revenue by being greedy in what he asks for. By attempting to get too much he has made a serious inroad upon what he should have got if he had been more moderate. The lasting damage is that it may not recover; that that may be a permanent injury to this source of revenue. I will say no more about it now; we shall get to the subject in two or three days' time. The Chancellor of the Exchequer said nothing about tobacco. I have seen some figures which—of course, they are very difficult to follow or test from outside—led me to suppose that tobacco was not doing well. I should be glad if the right hon. Gentleman would tell us more in detail how tobacco is doing. There is only one or a couple further observations that I desire to make at this stage. The Chancellor of the Exchequer, whilst congratulating himself on the unexpected recovery in stamps, spoke humorously of the boom on the Stock Exchange. I suggest to the Chancellor that when he is performing a very difficult and invidious task, as every Chancellor does when he has to face a deficit, and having to impose new taxation—and that taxation will never be popular with the people who have to bear it—that he does not improve his position or lighten his task by remarks characterised by a rather unhappy levity with regard to the position of the people who are notoriously not doing well. It is absurd to talk of a boom on the Stock Exchange at the present time. There has been a very bad time. The stamp revenue for several years has declined, and has hardly reached the estimate of the Chancellor of the Exchequer, who has estimated yearly rather less than the year before or about the same sum. There has been a slight recovery as the figures of the Chancellor of the Exchequer show. But really he had better not exaggerate the amount of prosperity or the ease and readiness with which people are meeting their liabilities. He talked in the same way of the revival in trade. It is a curious commentary on the revival in trade that he also had to

  707
  announce that amongst the demands he had to make was one for £200,000 for unemployment. A grant introduced, first of all, in a particular winter season as a wholly exceptional method is now becoming an annual service!
  The Chancellor of the Exchequer, in dealing with his Supplementary Estimates, did not say when we were to have them. Can he tell us when he proposes to lay them on the Table of the House? In connection with them he did not mention any money for "Dreadnoughts." We should like to know if he is going to provide for the "Dreadnoughts" of which he talks, as I understand the right hon. Gentleman the First Lord of the Admiralty claims that he is spending money.
  Sir F. BANBURY: One word to express my great regret at the statement of the right hon. Gentleman the Chancellor of the Exchequer that he is going further to deplete the Sinking Fund by half a million. The Sinking Fund was imposed by Sir Stafford North cote in 1874 or 1875, in order that there might be a permanent fund from which money for the reduction of the Debt could be taken, and that permanent fund was not to be liable to the temptation, which might occur to Chancellors of the Exchequer when short of revenue, to take the money which was to be devoted to this particular object. It is not so much the half million to which I object as it is to the evident intention of the Chancellor of the Exchequer to avail himself of the Sinking Fund whenever he happens to be in a tight place. Six months ago on the Estimates he stated that he intended to reduce the Sinking Fund by £3,000,000. I thought it was a mistake, even though it had been understood that for the future the amount of money devoted to the services of the Debt was £20,000,000 instead of £28,000,000. Still, everybody knew where that would put us. My own impression was that until better times came the sum would be £25,000,000 instead of £28,000,000. What do we see? Owing, it may be, to the perfectly natural circumstances which have arisen, the Chancellor is short of money. He immediately goes to the Sinking Fund to replenish his purse. My right hon. Friend asked about the money which was to be provided for "Dreadnoughts." What safeguard have we that next year the Chancellor of the Exchequer will not come forward and say, "We require £2,000,000 or £3,000,000 for
  708
  "Dreadnoughts"; we must take it from the Sinking Fund"? I admit there is a deficit to be made up, but all I can say is that the Sinking Fund is the last possible thing that should be touched, especially at the present moment. I was startled beyond words when the Chancellor said that things had gone up on the Stock Exchange. What does he mean by an increase in prices? Consols were 85 when he introduced his Budget——
  Mr. LLOYD-GEORGE: I did not say prices; I said business had gone up.
  Sir F. BANBURY: I beg pardon. I will not pursue that subject; I understood him to say that, and my hon. Friend below me says that he used the word "boom." "Boom" means a rise in prices. You only have a "boom" when things go up. Perhaps I ought to have known that the Chancellor was not conversant with these phrases. I am not quite certain if he knew the meaning when he used the word "boom." There has been no boom in English securities—[An HON. MEMBER: "There has been in South Africans"]—though there has been a small rise in foreign, but that is not a feature upon which we as Englishmen ought to congratulate ourselves upon.
  Mr. MOORE: I do not know whether the Paper which the Chancellor of the Exchequer has promised will contain very full information. We have asked on several occasions for certain information, and we have always been referred to this Paper. During the Committee stage of the Finance Bill concessions were made to the Irish publicans, while the publicans in Great Britain were being obliged to pay an increased scale, as provided in the Bill. We asked then, but we got no information, What is the money value of this concession to the Irish publicans? I subsequently put a question to the Secretary to the Treasury, but he said at the time it would not be respectful to answer it then, and that we should wait for the full statement. I hope that information will now be forthcoming.
  Mr. LLOYD-GEORGE: I can reply at once to the observations addressed to me by the hon. and learned Member who has just sat down. We estimate that the alteration made with regard to the Irish minimum will amount to £25,000 a year. These are the estimates, and that is the view we take of the loss to the revenue involved in these concessions. With regard to the observations of the hon.

  709
  Baronet (Sir F. Banbury) I know his views with reference to the Sinking Fund, or, rather, the views he holds since the present Government came into power. I also know when he was this side of the House in the time of the late Government he was one of the most faithful supporters of the Government on that point, and on two occasions he supported a reduction of the Sinking Fund which was much more drastic than the one I am proposing at the present moment. I only hope he will extend to me the indulgence he was prepared to extend to my distinguished predecessor. May I point out that in the main our attitude towards the Sinking Fund is because of our concessions under Schedule A and our concessions upon the higher class of public-houses. Owing to these things it is necessary to go in for a further reduction of the Sinking Fund. I do not think anyone in this House would support the imposition of a new tax at this stage merely for the purpose of relieving Schedule A by £500,000 and the higher class of public-houses. I think we have taken a course which will commend itself to all sections of the House in going to the Sinking Fund. With regard to tobacco, I am very glad to say that it is going on nil right, and we are likely to realise our estimates. It is true that there were very considerable forestalments, and the figures which the right hon. Gentleman has seen show those forestalments, and we had to work them off before we could get into our stride. Now the Tobacco Duty is doing very well, and the Revenue officials anticipate that the estimate will be fully realised. The right hon. Gentleman the Member for East Worcestershire (Mr. Austen Chamberlain) asked me when I could lay these figures on the Table. I must get an order for the printing of the Paper, and then it will depend upon the expedition of the printer. I am not sure that I can put the matter into the hands of the printer to-night. There will be no fresh figures.
  As to what has been said about the Stock Exchange, I can assure hon. Members that I was not treating this serious question with levity; on the contrary, I thought I was referring to a matter of congratulation even amongst members of the Stock Exchange. Whether the word "boom" is too strong I do not know, but it has been pointed out to me that there has been a great revival of business on the Stock Exchange, and that revival represents really an increase of £450,000 in stamps. This has covered not only the
  710
  £250,000, but the £200,000 loss in respect of the delay and in respect of small conveyances. An increase in stamps of £400,000 entirely due to the Stock Exchange undoubtedly represents a very enormous revival in business. As a matter of fact, I know that, at any rate during some period of the time, they were working early and late, and almost all through the night in some of the most important offices. I was not sneering at the Stock Exchange, who have treated me uncommonly well over this Budget, and who have met me in a way which is beyond praise in the matter of the adjustment of the duty, and I should be the last man to sneer at them. On the contrary, I congratulate them upon the improvement in business which I do not say has resulted from the Budget, but which has inured to them since my financial statement was made to the House. The right hon. Gentleman also referred to the unemployed grant, and said that last year we spent £200,000. Let me remind him that we have granted £300,000 for this purpose, and we think that £200,000 will probably be more than sufficient this winter; and that represents an improvement of 33 per cent., at any rate in our view, as to what will happen with respect to unemployment. I think I have now dealt with all the points. As to "Dreadnoughts," I am afraid that I cannot give an answer to my right hon. Friend, and I would rather not say until I have made inquiries.
  Mr. AUSTEN CHAMBERLAIN: When do you propose to lay the Supplementary Estimates?
  Mr. LLOYD-GEORGE: The Financial Secretary to the Treasury always undertakes the Supplementary Estimates.
  Mr. AUSTEN CHAMBERLAIN: I imagine that the Chancellor of the Exchequer will be able to answer my question. Does he mean to lay Supplementary Estimates this Session or wait until Parliament meets again in the new year?
  Mr. LLOYD-GEORGE: I do not think it will be necessary to lay them this year. I think now I have dealt with all the questions put to me; and I suggest that the discussion should, as I would respectfully submit to the Chair it could, be debated on the Motion that £500,000 be taken out of the Sinking Fund, and, inasmuch as it does not involve an increased charge, but quite the reverse, I think it can be done merely upon an Amendment placed on the Paper.
  Mr. SPEAKER: There can be no doubt that an Amendment can be made, and doubtless the reasons for making it can be gone into.
  RESOLVED.—That the further proceedings on the Bill be now adjourned.

EXPIRING LAWS CONTINUANCE BILL.
Read a second time, and committed to a Committee of the whole House.
ADJOURNMENT.—Resolved, That this House do now adjourn.—[Captain Norton.]
Adjourned accordingly at Twenty-nine minutes before Six o'clock till Monday next, 25th October.

PETITIONS PRESENTED DURING THE WEEK.
The following Petitions were presented during the week and ordered to lie upon the Table:—
PETITIONS PRESENTED DURING THE WEEK.

  MONDAY.
  Finance Bill—Petition from Gloucester, against.
  Women's Enfranchisement—Petition from Bolton, for legislation.

  TUESDAY.
  Development and Road Improvement Funds Bill—Petition from Kirkcaldy, in favour.
  Finance Bill—Petitions against, from Bessels Green, Bloxham, Brighton, Ealing, Hitchin, Horeham Road (Sussex), Islip, Pirton, Stagenhoe Park, and Weston-super-Mare.
  Women's Enfranchisement—Petition from Norwood, for legislation.

  WEDNESDAY.
  Finance Bill—Petition from Tewkesbury, against.
  THURSDAY.
  Finance Bill—Petitions against, from Robertsbridge, Tunbridge Wells, and Winchester.

  FRIDAY.
  Deaths (Registration and Burials) Bill—Petition from the Royal Sanitary Institute, in favour.
  Finance Bill—Petition from Fifield, against.
  Khoda Yar Khan—Petition from Khoda Yar Khan, for redress of grievances.
  Milk Control (Scotland) Bill—Petition from the Royal Sanitary Institute, in favour.
  Public Health (Sewers and Drains) Bill—Petition from the Royal Sanitary Institute, in favour.
  Tuberculosis Prevention (Ireland)—Petition from the Royal Sanitary Institute, for legislation.

  Unlicensed Saw Sharpener (Conviction at Stockport).
  Unlicensed Saw Sharpener (Conviction at Stockport).
  City of London (Traffic Regulations).
  City of London (Traffic Regulations).
  Industrial Schools (Number of Committals).
  Industrial Schools (Number of Committals).
  Fordyce School (Proposed Transfer).
  Fordyce School (Proposed Transfer).
  Customs Statistical Office.
  Customs Statistical Office.
  Belfast Revision Court.
  Belfast Revision Court.
  Campbeltown Steam Packet Company (Mail Contract).
  Campbeltown Steam Packet Company (Mail Contract).
  Post Office (Electric Light Staff).
  Post Office (Electric Light Staff).
  Post Office (Engineering Department).
  Post Office (Engineering Department).
  Naval Discipline Bill.
  Naval Discipline Bill.
  Chatham Dockyard (Men Employed).
  Chatham Dockyard (Men Employed).