Sitting of 3 July 1931

Preamble
The House met at Eleven of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.
London County Council (General Powers) Bill,
West Ham Corporation Bill,
Lords Amendments considered, and agreed to.
Public Works Facilities Scheme (Newport (Mon.) Corporation) Bill,
"to confirm a Scheme made by the Minister of Health under the Public Works Facilities Act, 1930, relating to the Newport (Mon.) Corporation," presented by Mr. Greenwood: and ordered (under Section 1 (9) of the Act) to be considered upon Monday next, and to be printed. [Bill 186.]
Public Works Facilities Scheme (Nottingham Corporation) Bill,
"to confirm a Scheme made by the Minister of Health under the Public Works Facilities Act, 1930, relating to the Nottingham Corporation," presented by Mr. Greenwood; and ordered (under Section 1 (9) of the Act) to be considered upon Monday next, and to be printed. [Bill 187.]

ORAL ANSWERS TO QUESTIONS.

  AGRICULTURE (FOOT-AND-MOUTH DISEASE).
  Major ELLIOTasked the Minister of Agriculture whether he is now in a position to make any further statement with regard to the Standstill Order o
  n foot-and-mouth disease, particularly as regards Scotland?
  The MINISTER of AGRICULTURE (Dr. Addison): If no outbreak of foot-and-mouth disease occurs in the meantime outside the existing infected areas, I propose to issue a further Order, the effect of which will be to remove the rest of Great Britain from the operation of
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  the Standstill Order as from midday tomorrow, the 4th instant. This, however, will in no way affect Orders which are in operation in respect of the infected areas.
  Information received from the Governments of Northern Ireland and the Irish Free State indicates that as a result of the fullest investigation, there is no evidence to show that infection has been conveyed outside the infected area of County Down, the whole of which has been subject to restrictions prohibiting the movement of animals therefrom since 19th June. Subject to this position remaining unaltered, I propose issuing an Order to operate from midnight tomorrow, the 4th instant, permitting the landing of fat stock from any part of Ireland outside the existing scheduled area for slaughter within 96 hours at certain landing places—Glasgow, Holy-head, Birkenhead and Cardiff.
  Major ELLIOT: With regard to the freeing of a large part of Great Britain after midday to-morrow, if no further outbreak occurs, would it be possible for the right hon. Gentleman to notify the local authorities of his intention to-day, because after midday on Saturday it will be difficult for the local authorities to get out the necessary orders?
  Dr. ADDISON: Yes, that is being done to-day.

MESSAGE FROM THE LORDS.
That they have agreed to,—
Small Landholders and Agricultural Holdings (Scotland) Bill, with Amendments.
Amendments to—
Doncaster Corporation Bill [Lords] without Amendment.
Small Landholders and Agricultural Holdings (Scotland) Bill,
Lords Amendments to be considered upon Monday next, and to be printed, [Bill 190.]

BILLS PRESENTED.

  PUBLIC WORKS LOANS BILL,
  "to grant money for the purpose of certain local loans out of the Local Loans Fund, and for other purposes relating to local loans," presented by Mr. Pethick-Lawrence; to be read a Second

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  time upon Monday next, and to be printed. [Bill 188.]

  ISLE OF MAN (CUSTOMS) BILL,
  "to amend the law with respect to customs in the Isle of Man," presented by Mr. Pethick-Lawrence; to be read a Second time upon Monday next, and to be printed. [Bill 189.]
  COAL MINES BILL,
  "to remove for a period not exceeding one year the limitation upon the number of days on which the hours of employment below ground in coal mines may be extended under section three of the Coal Mines Regulation Act, 1908; to restrict the duration of such extensions to half an hour on any one day; and to provide for the maintenance during the period aforesaid of the minimum percentage additions to basis rates of wages and of subsistence rates of wages," presented by the Prime Minister; supported by Mr. Arthur Henderson, Mr. William Graham, the Attorney-General, and Mr. Shinwell; to be read a Second time upon Monday next, and to be printed. [Bill 185.]

CONDUCT OF CERTAIN MEMBERS.
Mr. SPEAKER: I have received a report from the Serjeant-at-Arms which I think it is my duty to read to the House:
"2nd July 1931.
SIR,
I have the honour to report that, this afternoon, when carrying out your instructions to remove the hon. Member for Shettleston, the Messengers of the House, who were acting under my orders, were forcibly obstructed in the execution of their duty by certain Members of Parliament.
I have the honour to be, Sir,
Your obedient Servant,
(Sgd.) COLIN KEFPEL, Admiral,
Serjeant-at-Arms.
The Right Hon. the Speaker, M.P., House of Commons."
The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden): My right hon. Friend the Leader of the House regrets that, owing to a public engagement, he is not able to be here this morning, but he wishes me to say that he proposes on Monday afternoon to draw the attention of the House to the report which you have just read and
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to ask that appropriate action should be taken.

BRIGHTON CORPORATION BILL [Lords].
The CHAIRMAN of WAYS and MEANS, in pursuance of Standing Order 91 relating to Private Bills, informed the House that, in his opinion, the Brighton Corporation Bill [Lords], though unopposed, ought to be treated as an opposed Bill.
ORDERS OF THE DAY.

  FINANCE BILL.
  Order for Third Heading read [Allotted Day].
  The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden): I have the honour to signify to the House that His Majesty, having been informed of the purport of the Bill, gives his assent, so far as His Majesty's interest is concerned, that the House may do therein as they shall think fit.
  Motion made, and Question proposed, "That the Bill be now read the Third time."
  Mr. CHAMBERLAIN: I beg to move, to leave out the word "now," and, at the end of the Question, to add the words "upon this day three months."
  In rising to move this Amendment, I find myself in the presence of the same difficulties that have dogged and hampered all our discussions from the very earliest stages of this Bill, owing to the tyrannical methods of the Government in suppressing debate and making it absolutely impossible to give adequate consideration to its provisions. During the last three days we have been endeavouring to consider such bits and scraps of the Bill as we were permitted to do under the Guillotine procedure, and now to-day, a Friday, when we have only until half-past three at our disposal, we are called upon to discuss the Third Reading although we have had no time to consider or to digest the changes in the Bill which have taken place during the Report stage, changes which have materially altered its aspect and seriously prejudiced it as an instrument for producing revenue. The Bill in its final form, the production of which is a triumph on the part of the printers, has only been in our hands for the last hour and a half, at a time of day when it is absolutely impossible to look at it. Those are the circumstances in which we are asked to give a final verdict upon this most controversial measure.
  One cannot help contrasting the indecent haste with which the Government are forcing through this Measure, which cannot, in the most favourable circumstances, make any contribution to the
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  most pressing problem of the day, with the lethargy and the passivity they show in dealing with the problem to solve which they were put into their present position on the Treasury Bench. The impossibility, under which we have laboured, of giving proper consideration to the Bill in its various stages would in itself be sufficient justification for my Amendment; but we are not basing our opposition upon that fact, but upon the contents of the Bill itself. Although the greater part of the time spent upon it has been devoted to the proposals for taxing land values, yet we must remember that those proposals have nothing to do with the finance of the year, and it seems to me that there is a real danger lest we should forget that this Bill, which is supposed to provide the resources necessary to balance the Budget, does not, in fact, do so. Out of the prospective deficit of £37,500,000, only £7,500,000 is provided by this Bill out of revenue. Even when you have added to that the £10,000,000 which is to be obtained by squeezing the Income Tax payers of the smaller class, and when you have added to that the £20,000,000 which is to be obtained by raiding the dollar-exchange fund, even then the finances of the country are not balanced, and we find that the country is not paying its way.
  On a previous occasion I pointed out that, in preparing his Budget statement, the Chancellor of the Exchequer had omitted all reference to what was, after all, the most vital point about the financial situation, the relation between the Unemployment Insurance Fund and the national Exchequer. At that time the Royal Commission had not reported, and we could not know what action the Government proposed to take, although the Chancellor of the Exchequer had hinted that he was looking to that report to help him in his efforts to avoid imposing further taxation next year. Knowing the Government's record, even then we could make a pretty good guess at what they would do. They have done nothing so often that it is not difficult for us to assume that they will do nothing again. Now that the Commission has presented its report our worst fears have been realised.
  Not only have the Government refused to accept the course which has been indicated by the Commission for relieving the

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  strain upon the Exchequer, but they have produced no other plan of their own. The dilemma which I presented to the Chancellor of the Exchequer on the Second Reading of this Bill was that either he must continue to borrow on a scale which in the words approved by himself was bound to call in question the stability of the British financial system, or he must impose upon the Exchequer responsibility for finding fresh resources from current revenue, which are not provided for in this Bill or in the Budget. Since then the Chancellor of the Exchequer has succeeded in impaling himself and the country upon both horns of the dilemma, and borrowing is to be continued.
  When I spoke last the debt of the Unemployment Insurance Fund was in the neighbourhood of £83,000,000, but it must now be nearer £90,000,000, and it is quite evident that by the end of the financial year it will reach at least three times the whole annual income of the Fund. At the same time the Chancellor of the Exchequer has committed himself to an increase for this year of £5,000,000 in the amount which is to be assigned to transitional benefit. That £5,000,000 is not to be found in the Budget, and some further provision will have to be made for it. It would appear then that the Sinking Fund is going to be obliterated this year, and in all probability a deficit will be inevitable at the end of the financial period, even apart from the extraordinarily sanguine, and as I think, rather fantastic estimates to which the Chancellor of the Exchequer has committed himself as to the revenue for the current 12 months. Far from being a purist in finance, a character which is sometimes attributed to the Chancellor of the Exchequer, he has shown himself to be one of the most reckless and improvident of all the guardians to whom our national finances have ever been entrusted.
  Let me now turn to what the Chancellor of the Exchequer has himself described as the most important feature of his Budget. In the early stages of our discussion, we tried, but tried in vain, to obtain from the Chancellor of the Exchequer some estimate of the revenue which he expected to get from this proposed land tax. We are still
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  without any information upon that subject, but we can at any rate say that, while the changes which have taken place during the passage of the Bill have done nothing to diminish the cost of collection, on the other hand there can be no doubt that they will have considerably modified the possibility of obtaining a revenue which will justify the cost of collection. I doubt very much whether the tax can bring in anything but a trifling amount by 1933, or whenever it comes into operation, but, however futile it may be as a means of raising revenue for the Chancellor of the Exchequer, it is still going to be heavy enough to impose a serious handicap upon industry, and upon other great and beneficent activities of the country. A very small item in the national account may be a large item in the private budget of an individual or a firm.
  On the Second Reading of the Bill I enumerated a number of instances in which it seemed to me that this tax is going to do serious injury to the country as a whole, and it is rather significant that, in the course of that debate, the Government have been forced by the pressure of public opinion to give way on one after another of the cases which I brought to their attention. The first one was the case of industry, and, although the Government have refused to exempt from the tax the sites of industry as such, nevertheless the relief which is to be given under Clause 19 of the Bill will be in some cases some considerable help, and in many cases it will be some consolation to those who will find themselves exposed to a new burden. I quoted the case of the educational establishments of the country, and now no trace remains of the tax which was to be imposed upon the landed property of those establishments. The charitable trusts are another case in which we have succeeded in obtaining complete exemption from the tax.
  The friendly societies form a third case, and, as for the playing fields, after a series of strategic movements to the rear the Chancellor of the Exchequer finally made such a determined rush to cover that, except for one little tribute to class prejudice, there remains nothing for us to fight for. In future, it will be sufficient for the owner to put up a

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  notice board in his field, "Games, excluding polo, are likely to be played here next year," and he will be completely exempt from the tax. That is the price which the Chancellor of the Exchequer has had to pay for the pleasure of telling his Liberal friends what he thought of them on a previous occasion, The pleasure was so keen at the time that I fancy he would still think it was worth the money. To us on this side, although we are glad that these playing fields have obtained exemption, it does seem to offer food for cynical comment that their escape should be due, not to the merits of the case, but merely to the fact that it helped to soothe exacerbated personal feelings.
  After all our efforts to improve the Bill, there still remains in it its injurious and destructive character. It is still going to be a burden upon industry, and a burden which is unfairly distributed between one kind of industry and another. It still remains a burden which has no relation whatever to the profits made by industry, but which is imposed upon it even though it may be making a loss. It is based upon no sort of fair or logical principle, for, under the present arrangement, an industry which requires a large site and simple buildings will have to pay a higher penalty than one which can carry on its business in a multi-storeyed building. In some cases, no doubt, these extra charges will be passed on to the public, and I would like to call the attention of the House to one aspect of that kind of case to which I do not think they have given sufficient attention. That is that there is going to be a cumulative effect from this tax. Suits of clothes are not always made with the rapidity which enabled the Dominions Secretary to change his garments the other day as quickly as he changes his office; but, if you follow through the normal processes, say, of the making of a shirt or of the production and marketing of any ordinary article of food, you see how the charges are going to accumulate. Take the case of the shirt. The raw cotton has to be warehoused, and there is going to be a tax on the site of the warehouse. It is to be——
  Mr. P. SNOWDEN: Is this to be the effect of the tariff?
  Mr. CHAMBERLAIN: It is an effect of the right hon. Gentleman's tax, for which there is no compensation to industry. There is the tax, again, when the cotton, is spun, there is a tax on the process of weaving, there is a tax on the merchanting—there is a tax at every stage—[Interruption]—and, when you come to the user, the public will no doubt have its opportunity of appreciating the advantages of the new tax which the Chancellor of the Exchequer, with the support of his right hon. Friends, has imposed upon it. The deduction under Schedule A may mitigate, but it certainly cannot destroy, the effect of this burden, and it always remains in the background that, whatever the rate of the tax may be to-day, there is a possibility, which is hailed by sanguine hon. Members opposite as a certainty, that in the future the rate of the tax will be increased, until finally Schedule A may prove to be wiped out altogether.
  I want once again to refer to the famous formula which is applied to the deduction under Schedule A. The Liberal party objected to the original proposals of the Chancellor, on a ground of principle. They said they were driven by conscientious scruples against double taxation. They said they would not levy a tax twice over. And when, a little later on, they accepted the formula of the Chancellor, we said, and a great many Liberals have said too, that they were running away from the principle which they said they were going to support with their eyes open, whatever the consequences might be. Let us see what was the answer of the Liberal party to that charge. They have given us two answers, which are quite different and contradictory.
  The first is the answer given by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George). He does not deny that he is surrendering the principle, but he says he has not surrendered the whole of it, but only gave up one-eighth, and in any case, he says, I have no right to make any charge against him, because I sold my principles en a previous occasion. I confess I was rather nettled at the time by a charge which, if taken seriously, I should regard as one of the gravest that could be made against any politician; but I have come to the conclusion on further reflection that there is no need for me to get excited about it, and for two reasons.

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  First of all, I make allowance for the circumstances in which the charge was made. The right hon. Gentleman was feeling rather sore, and no wonder; and the worst of it was that he was not in a position to hit back at the quarter from which the wound had come, and, therefore, he contented himself with saying "Et tu, Brute"to the Chancellor and hitting the first head that he saw in the way. There is also another reason. I have not been in the House nearly as long as the right hon. Gentleman, but I think I have been here long enough to establish a certain sort of reputation, which might, indeed, be injured by something that I might do, but which is not going to be smirched by anything that the right hon. Gentleman can say.
  I pass to the second answer, which, as I have said, is contradictory, namely, the reason adduced by the right hon. Gentleman the Member for Darwen (Sir H. Samuel) and the hon. Member for Mid-Bedford (Mr. Gray). Their contention is that they have not abandoned any principle, that it is all a misunderstanding about this double taxation, that they always were in favour of double taxation, but that what they wanted was to get a graduated tax, and that is what they have got now. That was not the old Liberal principle; it was not the principle of the legislation of 1910. But I do not propose to discuss the question of a graduated tax upon its merits; what I want to call attention to once again is that, under the formula, the measure of whether land is fully developed, and whether, therefore, the tax should disappear at that stage, is a purely arbitrary one, and is based on the mathematical equation that the value of a building must be four times the value of the site. I have pressed the Solicitor-General repeatedly to tell us why he takes four times the value of the site as the value of the building when the site is fully developed, and all I could get from him for a long time was that that was the opinion of the Government. He thought so because he thought so. But at last he explained that it Was the opinion of the Government, because it was the result of a compromise, a bargain, made with the Liberal party, of which he saw no reason to be ashamed.
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  If the bargain only concerned himself and his colleagues on that bench and right hon. Gentlemen below the Gangway, I should quite agree with him that he had nothing to be ashamed of. I have always said that he got much the best of the bargain. In fact, he got the whole thing. But, when we consider that on this formula depend the vital interests of hundreds of thousands of people throughout the country, I say it is a shameful thing that an issue of that kind should be treated, not with regard to the interests of those people, but merely as a sort of compromise between one figure given here and another figure given there.
  This is a short day, and I have no doubt there are many members who will desire to speak, and I am not, therefore, going to take up more than a minute or two more of the time of the House. I must, however, enter my protest against one of the blots on the Bill that still remain, namely, that money spent by an owner in improving and developing his own land, making it ready for development, is to be taxed under the Bill, and that he is to be given no credit for improvements made at his own expense which, in the case perhaps of his neigh-bour, have been made at the expense of a public authority. That seems to me to be an iniquitous arrangement. It is one which in the past has been repeatedly condemned by Members of all parties in the House, and undoubtedly that is one of the features of the Bill which will bring upon it the general condemnation of the country. Yesterday we had hoped to make a last effort on behalf of privately-owned allotments. We were shut out by the action of the Guillotine from even formally moving and dividing upon our proposal.
  I know very well that to-day any arguments that we use will fall on deaf ears opposite so long as hon. Members know that they can count upon the blind support of those to whom the fear of electoral consequences stands first and foremost, but we can, and will, make our protest in the Division Lobby against a Bill which, in times like these, leaves our national finances in disorder, which, instead of strengthening and stimulating the national spirit, is going to carry doubt and anxiety into every form of

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  commercial activity and yet still further increase and aggravate the condition of the unemployed.
  The FINANCIAL SECRETARY to the TREASURY (Mr. Pethick-Lawrence): When the right hon. Gentleman was describing the tyranny of the Government against the handling of the Finance Bill of the current year, I could not help casting my mind back to our Debates of last year when the Finance Bill of 1930 was under discussion. In spite of the fact that the right hon. Gentleman has used some hard words about the conduct of the Government and the handling of this Bill, I am going to pay him this compliment of contrasting favourably his conduct of the Opposition case with what took place when the right hon. Gentleman the Member for Epping (Mr. Churchill) was attempting to do battle against the Government on that occasion. We are always accustomed to have from the right hon. Gentleman who has just spoken the courtesy of debate and a reasonable handling of the questions as they arise, but those who remember what took place last year will not forget the swashbuckling tactics which kept this House long into the hours of the night, and sometimes into the hours of the morning, over points which no business assembly could possibly have thought fit to devote more than a few minutes to discussing. When the right hon. Gentleman talks, therefore, of the tyranny of the Government, certainly my hon. Friends behind me, and I believe hon. Members who sit below the Gangway, will realise that all the methods that we have employed in order to get this Bill on to the Statute Book—a Bill which we believe is going to be of lasting benefit to the people of the country—were to a very great extent dictated by two factors, first of all by our recollection of what took place last year and, secondly, the recollection of the older Members of the House, and the knowledge of all of us, of what took place when other proposals dealing with land taxation were before the House of Commons in 1909 and 1910.
  The right hon. Gentleman dealt first of all with the Budget as a whole. He accused my right hon. Friend of not balancing the Budget, and he claimed that we had not done so because there was a fund relating to Unemployment
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  Insurance which was a menace to the finances of the country. He charged my right hon. Friend with being the most reckless and improvident of finance Ministers. I could not help feeling glad that the right hon. Gentleman the Member for Epping was absent from our Debates because, had he been here the blush must have mounted into his face which one has often noticed when his own conduct is called in question. The real facts are these, that in a year of exceptional severity and difficulty for the country my right hon. Friend, who has always insisted that the country should pay its way and should make proper provisions for debt, has seen fit not to impose large additional taxation in view of the special circumstances of the time and, although hon. Members opposite may attack that in speech, they know perfectly well in their hearts that that was a sound and reasonable course to pursue and, had my right hon. Friend taken any other course, they would have been the first to attack him and denounce him for what he had done. It is perfectly clear that had my right hon. Friend dealt with the Budget of this year in a different manner and had he decided to put on large additional taxation in order further to increase the Sinking Fund of this country, in this particularly difficult time, he would have done something which might have been greatly injurious to the industry and welfare of this country.
  I will put it in this way. We are always telling the wise householder not to spend up to the limit of his income, because he has to provide for a rainy day, but, when that rainy day comes and all the difficulties suddenly impinge upon him, the corollary of that careful provision which he has made in good times is that he should not attempt further to save during that year but that he should spend the provision which he has made on that occasion. My right hon. Friend has not gone anywhere near the limit of that idea. He has not merely fully covered the expenditure of the year under the Budget, but he has provided a substantial Sinking Fund. He has done that by the methods which are dealt with in this Bill and which were fully set out in his Budget Speech, and which Members of the Opposition at the time thoroughly

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  approved and for which the country as a whole has, over and over again, expressed its gratitude.
  Mr. CHAMBERLAIN: How much is left now of the amount provided in the Sinking Fund?
  Mr. PETHICK-LAWRENCE: Clearly it is impossible in the middle of the year to settle exactly what will take place afterwards, but my right hon. Friend is fully confident that a considerable amount will be paid into the Sinking Fund even in this year of grave financial strain and difficulty.
  I will pass from the general question to the principal matter which forms the largest part of the subject matter of the Finance Bill. The right hon. Gentleman who moved the Amendment criticised that part of the Finance Bill which deals with the Land Tax as a part which was making no contrbiution to the problems of today. That exactly explains the difference between the right hon. Gentleman and hon. Gentlemen who sit opposite and their method of handling finance and the method adopted by my right hon. Friend. When the right hon. Gentleman the Member for Epping was Chancellor of the Exchequer all his Budgets were hand-to-mouth Budgets which were designed solely to deal with the finances of the year, and it is the feature of the finance of my right hon. Friend that he looks further ahead and sees the necessity for legislating, not merely for the current year but for the future. The right hon. Gentleman laughs at that, but let us see what the position is. When he was sitting on these benches alongside the right hon. Gentleman the Member for Epping, between them they hatched out the de-rating scheme, and the right hon. Gentleman knows perfectly well that, so far from looking ahead, they deprived the revenue of the country—using that word in the sense of the rate revenue and the taxation revenue together—of a sum which at that time, I think, was over £30,000,000, and which is bound to increase and reduce the sources of revenue in years to come. The provision that the Chancellor of the Exchequer at that time made was wholly inadequate to meet that burden in the years to come. When we were sitting on that side of the House we knew perfectly
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  well that the reductions in the sources of local government taxation which were thereby brought about would have to be made good on some future occasion.
  The object of the land values taxation which my right hon. Friend has inaugurated is to find a new source of revenue, and it is because we refused to be confined to the finances of the current year and because we look forward to years to come, and, in particular, because of the action of the right hon. Gentleman the Member for Epping and the right hon. Gentleman the Member for Edgbaston (Mr. Chamberlain) in reducing the sources from which the needs of the country are met that we have found it necessary to find a new source of revenue to meet the growing needs of the country.
  I do not want to take up the time of the House very long because there are a large number of Members in all parts of the House who want to speak, but I should like to deal with one or two points made by the right hon. Gentleman. Let me remind the house that, as is so often the case in the course of his speeches, he proved too much. He attempted to argue that the revenue, always exiguous from this source, was further cut down by the Amendments which had been made during the Committee and Report stages and that it was practically negligible, and at the same time he argued that the burden which will be put upon, and spread, all over the country would be so heavy as to be almost unbearable. These two arguments destroy one another. That he attempted to deny, but in vain. Either this burden is going to be so great as to bring in an enormous revenue which will inure to the benefit of the State and the local authorities and enable large reductions to be made in taxation and rating, or, if that is not the case, and if the total amount realised is going to be very small, these burdens, spread as they are over nearly the whole country, cannot possibly, in individual cases, be the excessive kind which the right hon. Gentleman suggests.
  He made fun of the very concessions which the Chancellor of the Exchequer has made in order to meet the sense of the House. When my right hon. Friend introduced these proposals at the beginning, he anticipated that the House

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  might make its contribution to this question and said that he would be perfectly willing to make concessions where the sense of the House was proved and where they did not conflict with the integrity of the Bill. The right hon. Gentleman who attacked the Bill in its present form singled out the concession which was made yesterday with regard to playing fields, and he laughed and jeered at what had been done. He told us that the owner of a field which he wanted to exempt from tax had only to put up a notice,
  "Games, excluding polo, will be played here next year."
  to escape the burden of taxation. If the right hon. Gentleman has a field himself and he tries that, he is quite welcome to make the experiment, because I can assure him that if he will read the Bill carefully and not base his arguments on a superficial understanding of the Clause he will find that the attempt to avoid his liabilities will not meet with the success that he imagines. If he will turn to what is now Clause 32 of the Bill, in page 33, about a third of the way down the page, he will find these words:
  "Playing field means land used mainly or exclusively for the purposes of open air games or recreation other than"
  those specified in the Clause. The owner, therefore, who intends to keep a field for his own use and puts up such a notice as, the right hon. Gentleman puts up will have an unpleasant surprise when, the tax collector comes to him afterwards.
  I am bound to say that the speech of the right hon. Gentleman convinced me that he was a man suffering under disappointments. He seemed to have three grievances against the Bill; I might almost say three grievances against life. His first grievance was that all the larger points that he had made against the Bill in its earlier stages had been met. They were not very big points, in fact they were small points, but the right hon. Gentleman thought that they were large points. He singled out a number of small points that he called large ones and said that those were the things to which he objected. His first disappointment to-day is that we have met substantially all those minor criticisms against the Bill and as a result the splendid campaign which the right hon. Gentleman was envisaging for himself in the country, is unable to be carried out.
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  He hoped to be able to enlist all sorts and conditions of people in his attack upon the Bill, and he is bitterly disappointed that, by the good sense of the Government, all the difficulties that there were, and must necessarily be, in regard to this kind of taxation, have been dealt with. Therefore, the Bill is, in that sense, a better Bill than when it was introduced.
  His second disappointment was that he had hoped, and his party had hoped, that they were going to have a glorious time, such as they had in the years 1909–10, in riddling the Bill with so many difficulties, so many exceptions, so many exemptions, that it would take weeks of Parliamentary time, and that it would make the Bill quite unworkable. That was their object. They did it quite frankly and with a perfectly specified object. The object was specified by the hon. Member for Shipley (Mr. Lockwood), when he explained that the only thing they were trying to do was to protect vested interests. If hon. Members on this side of the House had said that in regard to the policy of the Conservative party during the great many years of its existence in this House, we should have been told that we were unfair, and that they, as well as ourselves, were out for the benefit of the country. Yet here is the hon. Member for Shipley, much, as I saw at the time, to the discomfiture of his party, putting into words the very accusation which many of us have thought to be justified.
  I am glad to say that by the Government's methods of handling the Bill, with the support of another party in the House, the tactics of unduly delaying the progress of the Measure, have been prevented, and we have also refused to have the Bill riddled in the way that the Act of 1909–10 was riddled, with the result that we have preserved a practical Measure is workable form. The other disappointment of the right hon. Gentleman is in some ways more amusing. He had hoped that a wedge would be driven between those who support the principle of land values taxation on this side of the House and the hon. and right hon. Members below the Gangway opposite, who also support the taxation of land values. He and his party have never in any of the debates on the Bill been able to disguise their chagrin that that dissention amounted to nothing more than difference of opinion. Their chagrin is

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  quite natural. They have attempted to paint in glowing colours something in the nature of an illicit combination between two parties in the House to carry through the Bill.
  12 n.
  What is there improper or illicit in two parties who have a great desire to carry through a broad general principle, combining—[Interruption.] Yes, certainly, except one or two hon. Members, like the right hon. and learned Member for Spen Valley (Sir J. Simon), who brought in a Bill not very long ago for the rating of site values and who seems to have modified his views unless he can explain the difference in principle between the taxation of land values on the lines of this Bill and on the lines of the Bill which he introduced. The voting of hon. Members is the strongest test, and hon. and right hon. Members below the Gangway opposite have shown by their votes and their speeches that they have supported throughout the principle of the taxation of land values. It is perfectly natural that, on broad general principles, the two sections of the House should have come together in order to find ways which command substantial support among both parties. It is natural that the party opposite, whose views have been expressed by the right hon. Member for Edgbaston (Mr. Chamberlain), should be chagrined at that fact, but their chagrin cannot be a disappointment to us; it is a source, first, of amusement and, secondly, of gratification, because we realise that in the cause of their chagrin has been our success.
  The right hon. Gentleman, has made a number of small points against the Bill. I do not propose, however, on the Third Reading to take up the time of the House in meeting his criticisms on those small matters. What I do say is, that we have carried through in this Bill, and I am sure the House will ratify it by their approving of the Third Reading and rejecting the Amendment, what is absolutely essential in this country—a Measure which provides for the valuation of the great bulk of land on a much broader basis for taxation in the future; a basis which is free from many of the injurious effects of the basis used for rating purposes. In that way we are contributing, as the right hon. Gentleman
  1628
  said, nothing to the financial support of the current year, but we are laying down a general principle. We are erecting machinery which will be of great value in the future finance of this country, in order that the needs of the country may be met on a broader and fairer basis than has been the case in years gone by.
  Sir JOHN SIMON: On the Third Reading of this Bill, the Government rest from the work of creation and call upon us to declare that the work is very good. The Financial Secretary thinks that the right hon. Member for Edgbaston (Mr. Chamberlain) has suffered three disappointments. The Government, in carrying this Measure through the House of Commons, have enjoyed three advantages. The first advantage, which I hope it will not be unseemly to note, is that apart from the Financial Secretary they have had the great assistance of a most notable parliamentary performance in the work of the Solicitor-General. It is one of the best features of the House of Commons that when that occurs it is the whole House which takes a pride in such a success and certainly nobody could have handled the Committee and Report stages of this Bill with a more obviously velvet glove. But inside the velvet glove was the iron hand of the Chancellor of the Exchequer, and the combination was very formidable. It was a combination of reasonableness and determination, of what might be described as sweet reasonableness and sour determination. That is the first advantage which the Government have undoubtedly enjoyed.
  The second advantage has been the Guillotine. This is the first time in the history of Parliament that the whole of the Committee stage and Report stage of a Bill providing for the finances of the year have been from first to last carried through under the Guillotine. That is a very grave circumstance indeed, and one which on more than one occasion has saved the Government a great deal of trouble. The third advantage is one of which the Financial Secretary has made full use. They have had the advantage of a phrase which is sufficiently vague to bring into association bodies of persons who do not I think really hold the same doctrine, the phrase being "taxation of

  1629
  land values." I do not in the least recant from what I believe to be the Liberal doctrine on that subject, but what I think is that the principle to which the Financial Secretary refers—the principle of the taxation of land values—as the broad general principle embodied in this Bill is entirely different from the Liberal principle which I was brought up to revere. The Financial Secretary did not define the principle. He said that the only way to test it was by votes. I am not so sure about that. It is a new doctrine to say that people must hold the same principles if they vote in the same lobby, and I believe it can be shown, and I will try to show, that the Liberal principle of the taxation of land values is wholly and absolutely different from the principle which the Chancellor of the Exchequer has embodied in this Bill.
  Let me begin by saying what is the the principle of the Chancellor of the Exchequer, because the right hon. Gentleman has never disguised it. The Chancellor of the Exchequer's principle is this; that it is the right of the community to own the land, that private individuals are to have only a nominal claim, and that having only a nominal claim they must pay rent to the community for the ownership of the land. [Interruption.] I am not complaining that hon. Members opposite cheer; I am merely establishing what is the principle of the Chancellor of the Exchequer. I am sure that the right hon. Gentleman agrees because he said so when he introduced the Budget on Second Beading, and after the double shuffle on double taxation he produced an Amendment and was careful to say:
  "I submit that all the principles upon which the Bill is based remain unimpaired."
  So they do, the right hon. Gentleman is perfectly right. The thing which is of some interest to me and which I ask my hon. Friends on these benches to consider without prejudice or restraint is this, is the avowed principle of this Bill a Liberal principle? It is clear that it is in fact nothing more than a step to State ownership, and a step by way of confiscation and not by way of compensation. Again the Chancellor of the Exchequer will not dispute this because he pointed out, when he gave away a little money on the compromise, that he kept his principles and he said that the
  1630
  money did not matter so much because future Parliaments and future Budgets would decide it. That is exactly what has been said by the Financial Secretary this morning. He claimed as one of the merits of these proposals that they were framed by people who were looking further ahead. I want to ask my friends who hold the Liberal doctrine of the taxation of land values, is it really the case that the principles which are avowedly and plainly the basis and foundation of this Bill are the Liberal principles of the taxation of land values? Let me point out the contrast. I am going to be so bold as to lay down what I believe are the Liberal principles, and I am relying upon the declarations made by Mr. Asquith, Sir Henry Campbell-Bannerman and the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George).
  The Liberal principles can be summed up in these three propositions. First, I believe that you should endeavour to redistribute local burdens with a view to putting less on buildings and more on the land. The hon. Member for Burslem (Mr. MacLaren) would put it all on the land and none on the buildings—that is the pure milk of the gospel. I have always guarded myself from saying that that is practical, and I think it would be found very difficult to take the whole of the burden off buildings and put it on to land, but I am entirely at one with the proposition that you should endeavour to redistribute the burdens and take off what rests upon improvements and put more upon land. The proposition was admirably expounded by the hon. Member for Mid-Bedford (Mr. Gray) in his interesting speech. In the second place, and this is a principle which I do not retract and which has always been maintained by Liberal Members, that you should secure for the community a contribution from the future added unearned increment on land. The third proposition is this, that land which is unbuilt upon, which ought to be developed by buildings and which thus escapes contribution by that means, should with proper exceptions, such as are given in the Bill, bear its fair share of public burdens. I am not withdrawing any one of these propositions, but they are manifestly a wholly different set of principles from the

  1631
  principles which the Chancellor of the Exchequer proclaimed are the basis of this Bill.
  I have said that I am basing myself on the declarations of Mr. Asquith, Sir Henry Campbell-Bannerman and the right hon. Member for Carnarvon Boroughs. Nothing can be clearer than that the Liberal Budget of 1909–10 was not and did not profess to be a Budget upon the laws and doctrines of Mr. Henry George. I have been interested during the last two days in re-reading those Debates. I find that my right hon. Friend the Member for Carnarvon Boroughs, who was then Chancellor of the Exchequer, said:
  "There is no tax in our Budget which we propose that Henry George would have approved of."
  What I am establishing is that the principle which is behind this Budget is quite a different principle from the principle behind the Budget of 20 years ago. The hon. Member for Burslem, who is one of the devotees of the theory now propounded, would agree with me with his usual candour, I am sure. What I am pointing out is that there cannot be the slightest doubt that those principles are wholly different from the principles of this Budget. Let me quote Mr. Asquith. He said, in reference to these Liberal principles, that:
  "Our plans are not taxes on land but they propose to deal with future added value not due to the enterprise or expenditure of the owner."
  So complete is the divorce between that which is the principle of the present Chancellor of the Exchequer's Budget and the Liberal doctrines, that the Chancellor of the Exchequer told us in terms, at the very beginning of these Debates, that all attempts to compare them were, "foolish and irrelevant ". I am not comparing; I am contrasting them. I am pointing out that there was never a greater absurdity than to suggest that Liberals who take my view are thereby departing from some Liberal principle. The Liberal principle I have endeavoured to explain, and it has no relation whatever to the principle and doctrine that lies behind the present Budget.
  So much for principle. But, after all, you have to some extent to judge how
  1632
  a principle is applied in practical affairs by seeing what are the methods which are to be adopted. This is a short day, and I do not wish to occupy more than a few minutes, as there are others who wish to speak. But if the House will allow me I would like to take quite briefly two or three instances of methods. Let us see who has the burden upon him if he asserts the Liberal doctrine in relation to land values—the man who supports or the man who opposes the present Finance Bill. I start with this: Is it disputed that the present Finance Bill taxes improvements? [AN HON. MEMBER: "Yes."] I am afraid that there is some hon. Gentleman who has not been in the House in the last day or two. Only two days ago the Solicitor-General, with his usual frankness, admitted in terms that if you had a plot of land which owed a substantial part of its value to the expenditure of its owner on roads or sewers or embankments or the like, none the less he proposed to exact exactly the same taxes from that man as if he were the owner of a similar plot the value of which was due to the expenditure of the ratepayer or the taxpayer. What on earth is that except taxing improvements? When I hear an hon. Friend of mine beside me challenge the statement, I begin to understand how it comes about that some of my Liberal friends, very strangely, I think, wander into the wrong Lobby.
  Let me contrast it with someone who at least can expound the Liberal doctrine. The right hon. Gentleman the Member for Carnarvon Boroughs will forgive me if I do not quote him. I will quote Mr. Asquith. I do not know whether there is any Liberal who will not accept him. He said, in terms, about the Liberal land taxes:
  "Our taxes have no application to any added value in any kind of land which is traceable directly or indirectly to the efforts or the expenditure of the proprietor or of the persons interested in the land."
  That was the basis of the Liberal Measure, and I will defend it any day of the week. I cannot understand why that should be supposed to be the principle contained in the Clauses of the present Bill. Indeed, it is not even that some of my Liberal friends have forgotten, but even the Prime Minister has been carried along in the stream. When

  1633
  I read the debates which took place on the Budget 20 years ago I found that an hon. Gentleman, who was then the Member for Leicester (Mr. MacDonald), said this:
  "If there is this unearned increment created by the community, there is also earned increment created by the individual, and that must be held sacred."
  Here is the completed work, this Finance Bill which has now been revised and amended in Committee and Reported and presented here, and admittedly the Government's own Law Officer in terms has conceded that the Bill, as finally framed, is a Bill that puts this heavy burden upon people in many cases according as and in proportion as they have spent their own money for the purpose of improving that property. Here is the second test: This Bill taxes owners in respect of value already created and already existing for which they have already paid the full price. Is that a Liberal principle? I have read a good deal during the last week or two suggesting that I was unwilling to defend Liberal principles in this matter. I am defending them, and I call upon some other people to do the same.
  Again, let me quote Mr. Asquith; supposing that his views are not out of date. The late Lord Oxford, at the time when the Budget of 20 years ago was being carried through this House in face of great opposition, made a speech which was one of the principal speeches in the course of that campaign, and he pointed out, in terms, that we were not attempting to tax increment that had already arisen, on the express ground that "if you did so you interfered with existing contracts."
  That was the principle proposed by the Liberal party for years before. I have here another quotation by Mr. Asquith:
  "Nobody had ever welcomed a Measure of this kind except on that assumption. In Ms opinion that was an elementary condition of any reform."
  After all, I suppose the name of Sir Henry Campbell-Bannerman is still held in some honour in this part of the House. Sir Henry Campbell-Bannerman was challenged on this subject some few years before the end of his life by the people who are interested in feu duties in Scotland. What they wanted to know
  1634
  was this: They said: "We understand that the Liberal party is in favour of the principle of taxing land values, but how do you deal with this matter of feu duties, a fixed sum, the owner of which gains no further advantage from, it may be, the increasing value of the hereditament; a sum which has passed from hand to hand and been bought as a security and investment. Do your proposals touch that?" Sir Henry Campbell-Bannerman then declared on behalf of the Liberal party—and he quoted many passages to affirm it—that the whole Liberal view on this matter was that the tax had to be carried through with no violence to existing contracts and no invasion of rights sanctioned by the State.
  I am surely justified in pointing out that, whoever is right or wrong, this Bill is starting a new principle. If the reference is to be to principles hitherto accepted by the Liberal party, it is not I who am departing from the principles. I have not the smallest quarrel with the Socialist who desires to put Socialism into practice. My only regret is that there are some people who do not seem to see that the phrase, "Taxation of land values" is not like charity; it does not cover a multitude of confusions and sins, and you have to find out what is the thing you are supporting.
  Lastly there is this talk about "double taxation." Frankly, I have never put my objection to this Bill in the terms of that phrase, and when I had the opportunity of addressing the House on the Second Reading I never used it. What I did point out was that it seemed to me that the taxes which were proposed were taxes which would be imposed on people as land-owners merely because they owned land. But some of my friends became very considerably concerned at what they thought was an error in the Bill and they attempted to correct it by an Amendment about double taxation. As far as I am concerned I leave the single taxers and the double taxation people to agree among themselves. My position is quite simple. It is that if you are considering the principles which really lie at the base of this Bill, whatever else they are, they are not principles which have hitherto been known as Liberal principles in connection with taxation. At one time, I understood that this point about double

  1635
  taxation was held as a point of principle and of conscience and all the rest of it. There has been in that matter a, little change. I quite agree that, in the practical business of the House of Commons, there has to be, of course, adjustment and compromise, and I have never joined in rebuking people on that account. Still, either it is a question of principle or it is not.
  I am reminded of a story which I heard many years ago, and which at the time made me very indignant, of Bishop Stubbs. In examining some diocesan accounts he found an item which ran: "Occasional monitor, 5s." On reading this item Bishop Stubbs, wickedly, and I think unfairly, said, "Occasional monitor? Is that the Nonconformist conscience?" As I say, I think that was extremely unfair to the Nonconformists, but I must say that I am a little mystified at the intermittent activity of the attachment to principle and justice which seems to have been exhibited in some of these recent negotiations. My position, and I think the position of all those who agree with me, inside or outside this House, is this. We believe that if you examine this Bill, you will find that it offends against every principle which Liberals, in this connection, have hitherto declared to be essential. It is not a redistribution of burdens; it is the imposition of a brand-new burden. It is not, as a matter of fact, a plan which exempts improvements. It is a plan which puts a burden on some very important improvements. It is not a plan based on any scientific scheme at all. It operates by reference to an arbitrary formula of four to one—which sounds much more like the racecourse than the House of Commons. It does not, in fact, do justice; it does not ascertain the facts, and, so far from regarding myself and my friends in this matter as departing from any Liberal principle, I claim that it is we who have proclaimed and maintained that principle and I ask others to do the same.
  Mr. BARR: We have now reached an important stage in the prolonged controversies on this Measure. As to its far-reaching influence on landed ownership in this country. I am reminded of the words of Henry George when he said:
  "Rent is a toll levied upon labour constantly and continuously. Every blow of
  1636
  the hammer, every stroke of the pick, every thrust of the shuttle, every throb of the steam engine pays its tribute."
  If that be so, this Bill is lifting a burden from industry and putting it upon the common inheritance of the land. This Measure, I believe, will be of very great value in connection with housing activities in this country. A great deal has been made of the suggestion that the previous land tax, in the Finance Act of 1909–1910, particularly after the Lumsden judgment, injuriously affected housing, but I should like to give a tribute from my own country—from the Royal Commission on the Housing of the Industrial Population of Scotland—to the effect that even that Finance Act had not those injurious effects which have been stated. The Royal Commission said:
  "We are unable to agree with the suggestion that there is any evidence to show that the difficulty of finding capital for house-building has boon to an appreciable extent brought about by the Finance Act."
  It has been admitted by the Opposition that this Measure will throw land into the market, and that it will cheapen land. Indeed they have made an argument on this ground that it will interfere with rural amenities. Professor Macaulay Trevelyan in two articles on 31st May and 28th June respectively in the "Nation" on the bearing of this taxation on rural amenities, declared that the effect would be disastrous unless it were combined with a scheme of rural planning, and he said that owners would be forced to sell, and ribboning and rural destruction would be speeded up. In a rather bitter article in the "Nineteenth Century and After," Mr. Harold Cox maintained the same Ground. He wrote:
  "That the threat of the new tax will induce many private owners to part with their land is certain."
  I take that statement as a confession that this tax is going to be effective in driving land into the market for housing purposes; and the Government themselves have resolved to deal with this question in relation with town and country plan-nine, so that the suggested interference with rural amenities will not take place. It has been the holding-up of land in the past, under the existing system, which has crowded our cities and built up our tenements. As far as I am concerned, the main rural amenity which I wish to

  1637
  see in my own county of Lanarkshire is the development of new housing schemes and garden cities. In that respect I hold that, so far from injuring rural amenities, we shall have assisted the best form of rural amenities.
  The right hon. Gentleman the Member for Edgbaston (Mr. Chamberlain) said that some part of this tax would be passed on to the public. I was interested and grateful to note that he did not dare to say that all the tax would or could be passed on to the public. He only said that it would be passed on in some cases, and I desire to give one or two reasons to show why this tax cannot be passed on to the public. It would never have elicited the opposition which it has elicited from the landowning classes if they could easily have passed it on to the public. But instead of enabling them to enhance the price of land and recoup themselves, the result of this tax, as admitted by hon. Members opposite, will be to cheapen land and force land into the public market. Instead of making the land dearer, it will make it cheaper by the simple process of increasing the supply in the market. The fundamental position when a tax is placed on the value of land is that the owner can neither stop making land nor annihilate the existing supply in order to enforce his price. I would trouble the House with some quotations to show that this tax cannot be passed on. Lord Justice Fletcher Moulton, in his very excellent pamphlet on this question—I do not know whether it belongs to the old Liberalism or to the new—says quite clearly that the onus is on the State to see that it shall not be passed on. I might quote from Adam Smith:
  "A tax upon ground rents would not raise the rents of houses. It would fall altogether upon the owner of the ground rent, who acts always as a monopolist, and exacts the greatest rent which can be got for the use of his ground."
  John Stuart Mill said:
  "A tax on rent falls wholly on the landlord. There are no means by which he can shift the burden upon anyone else."
  So Ricardo:
  "A tax on rent would fall wholly on the landlord, and could not be shifted to any class of consumers."
  I might have pointed to the experience of other countries in this regard. I take the case of Denmark, one of the most
  1638
  prosperous countries in Europe, and one of the most stable. In 1922 they put a uniform tax, a national tax, on land, as apart from improvements, to the extent of one-third of a penny in the £ on the capital value. In 1926 and in 1929 they went much further. I should like to read two quotations from Danish statesmen as to the effect of this tax, and as to the popularity of it once it has been imposed. The first is from Mr. Henningsen, chairman of the committee of 15 members which dealt with the Bill, and who, speaking in 1925, after experience of it, said:
  "The demand for the taxation of land values is now so strong in Denmark that it will be very difficult to hold back such a reform."
  On 11th February, 1926, another statesman, a Social Democrat, used words which are exceedingly applicable to the official Opposition here:
  "Certainly far too much money has been expended by the Conservatives to make success of their agitation against this Bill. It has been said that 50,000 crowns have been used in the circulation of pamphlets. I think it is a pity for these gentlemen that all the energy, the money, etc., employed to persuade people that this was a mischievous Bill has been wasted, for when the law begins to work it will be seen that, to use a mild expression, the stories were fables. This will all react upon the Conservatives, and I venture to say that the people concerned will deplore the money that has been thrown away in this campaign."
  Now I come to say a word about the right hon. and learned Member for Spen Valley (Sir J. Simon). I will not enter into the controversy as to what Liberal principles are. He spoke of that occasional monitor known as conscience, and indeed he has spoken a good deal about conscience in the course of these debates. In his letter to the Chief Whip announcing his severance from the official Liberal party, he said:
  "It is manifest to everybody that the voice of conscience has been stifled, and double taxation has been swallowed for fear of consequences."
  As recently as last Tuesday he spoke of double taxation as
  "a matter of conscientious scruple,"
  and he said:
  "I hope that due regard will be paid to the conscientious scruples of everybody."—[OFFICTAL REPORT, 30th June. 1931; col. 1157; Vol. 254.]

  1639
  In all parts of the House we think about conscience. We remember the words of Bishop Butler on the subject:
  "Had it strength as it has right, had it power as it has manifest authority, it would absolutely govern the world."
  Conscience is like land; some of it is developed, and some of it is only very imperfectly developed; and if a tax were put upon conscience, I am very certain that the right hon. and learned Member for Spen Valley would not escape with one-eighth of a penny. Indeed the hon. and gallant Member for Devonport (Mr. Hore-Belisha), speaking of some Members of his party, said:
  "Conscience does make cowards of us all."
  He showed more familiarity, may I say, with Shakespeare than with the land tax position in that particular speech. I can fancy the right hon. and learned Member for Spen Valley, with a little bevy around him, saying to them "Conscience does make Tories of us all." If I may, for the benefit of the right hon. and learned Gentleman, give only one more quotation, there is a famous sermon of Bishop South's entitled:
  "No man ever went to heaven whose heart was not there before him."
  The right hon. and learned Gentleman has not told us where his spiritual home is to be, but if he should cross that narrow but very important Gangway opposite, I think we can say that he will not have gone over there without his heart having been there before him.
  Finally I wish to say this: The right hon. and learned Member for Hillhead (Sir R. Home), at the beginning of these debates, quoted the Scottish League for the Taxation of Land Values as being opposed to these measures, but he forgot to tell us that they were opposed because they did not go nearly far enough, because they exempted agriculture and minerals, and because the tax was not to-be put on this year but was to wait for two years. I think that should be known. The right hon. and learned Member said last night:
  "I leave this Bill with the conviction that you will have a revolt of Scottish opinion against it."—[OFFICIAL REPOBT, 2nd July, 1931; Col. 1592; Vol. 254.]
  I have long been associated, not only with political opinion in Scotland, but
  1640
  very specially with the subject of land values, and I can tell the House that there is no question that will be more popular in Scotland than this question. While tribute has been paid, and justly so, to the Solicitor - General, the Chancellor of the Exchequer, and others in this connection, I think it is fortunate for us that the Lord Advocate has taken a consistent stand in this matter, and I am exceedingly grateful to him for the position in which he has put the question of feu duties and other questions. Like other Scottish Members on this side, we return to our constituencies with a great joy that this Measure has been carried through in the form in which it has been carried through, and I say to the Government, "Go on and give us many more such Measures as this."
  Mr. SMITHERS: The hon. Member for Motherwell (Mr. Barr) must have thought when he was speaking that he was addressing a congregation from his pulpit, because we have had from him a lecture on conscience. I would like to ask him if he has read the Bill in its new form. Does he realise that under Clauses 20, 21 and 26, I think they are, of the re-printed Bill the Government break previous contracts, that under Clause 21 they put this tax in priority over existing mortgages, and that in Clause 26 they break all previous leases and covenants and put this tax in front of them? Investors and people who made agreements in the past did so in perfectly good faith that the existing laws would hold, but we now get an hon. Member talking about conscience and supporting a Measure which breaks existing agreements made in perfectly good faith. But he also attacked or, I would say, criticised the right hon. and learned Member for Spen Valley (Sir J. Simon), and talked about his conscience. All I would say about the right hon. and learned Member for Spen Valley—and I say it with respect—is that he has followed the dictates of his conscience, his political principles and his intelligence, and has not followed the dictates of political expediency.
  The outstanding feature of this Finance Bill has been the difficulty of discussing adequately the points, because of the Guillotine. I have received, not only on my own behalf, but on behalf of Members

  1641
  of our party, scores of letters from representative bodies, including chambers of commerce, associations of manufacturers and representative bodies of that kind up and down the land. We have tried to put their views before this House by placing Amendments on the Paper, but because of the dictatorial and bullying methods of the Government, the opinions and the points of view of those representative bodies could not be put before the House. The imposition of the Guillotine, as I see it, was caused by fear. The Government knew perfectly well that their case was so weak that they could not meet reasoned arguments upon the Clauses. Also, they were forced to guillotine the discussions arising from a situation of their own making. The Government so ineptly arranged the business of this House, that they found themselves pushed for time, and because they tried—their efforts are always in this direction—to force theories on to the Statute Book, quite ignoring the facts of the situation. The only reason for putting Part III into the Bill was that it might become part of the most important Measure of the year, and be forced through Parliament under the Guillotine.
  I want to ask the Financial Secretary, or whoever is going to reply, a question, and here I would remind the Financial Secretary of some words he used just now. He compared the way this Bill was conducted with the way the Finance Bill was conducted by my right hon. Friend the Member for Epping (Mr. Churchill) when Chancellor of the Exchequer, and criticised his methods to balance the Budget. The financial Secretary may agree or disagree with the methods of the right hon. Member for Epping, but, at any rate, the right hon. Gentleman did try to balance his Budget. This Land Tax has nothing to do with the business of the year. It is designed to come into operation in two years, and, in my humble opinion, it will not come into operation for at least double that time. This is the question I would ask the hon. Gentleman. I know that the valuation has not yet been made, but he must have some data upon which he can go. Will he tell the House what revenue the Chancellor expected to get from the operation of the Land Tax when he introduced the Bill, and what revenue
  1642
  he now expects to get, having given away all these exemptions? We ought to have some information upon that point.
  There is a further question I want to raise, and I am very sorry that neither the Attorney-General nor the Solicitor-General is in his place. I refer to the Hamilton Clause. I had the honour of raising this point in the first instance. I will not go through all the details of the Hamilton case again. I am not going to try to explain to the House all the details that arose when the Attorney-General won his case and Mr. Hamilton lost. The point I want to make is that the Clause is an outrage on the liberties of the subject and for this reason. The Government introduced legislation to overcome, or to confirm, a decision of the Court in a case which was still sub judice, at a time when Mr. Hamilton had a right of appeal to the High Court, and, when the later stage came, he still had a right of appeal to the House of Lords. I do not want to discuss now the merits of the Clause itself. It may or may not be right to have made this administrative change, but I say that Members of all parties should remember that on this occasion the Government of the day have introduced legislation, and made it apply retrospectively, and to a case which is now before the courts.
  Mr. HOLFORD KNIGHT: Does the hon. Gentleman suggest that it is not competent for Parliament to change the law?
  Mr. SMITHERS: That interjection simply shows—I say it with respect—the Socialist mentality. There is no restriction on the sovereignty of Parliament, but where would be the confidence of the citizens of the country when Parliament puts a provision in the Budget applying to a case where a private citizen has still the right of appeal? I am not arguing the merits or demerits of this case, but I do say most emphatically that this Clause should not have been made to apply to the case of Mr. Hamilton which was then before the courts.
  Then I want to refer to the pledge made by the Lord Advocate when he said that appeals in law and in fact should be given both in England and in Scotland. I belong to another House than this—the

  1643
  Stock Exchange. Our motto is "Dictum meum pactum"—my word is my bond. If that were not carried out absolutely sincerely, the Stock Exchange and the business between members of the Stock Exchange and banks could not be carried on. We do all our business by word of mouth. There is not even an initial slip. It is difficult to use moderate language on this occasion. I never remember an occasion in this House when I felt so sick at heart that such a regret-fable incident should have taken place. I can only give to the House my opinion of the situation as it appeared to me. I was here, off and on, through all the Debates. To my mind, the Lord Advocate clearly and definitely made a pledge on behalf of the Government. When he is challenged at a later stage, he and the Solicitor-General come down and use specious arguments to try to twist and turn their previous pledge. I do not want to use any unparliamentary language, but may I be allowed to say that they misled the House.
  The House of Commons is the most generous body in the world. If the Lord Advocate had come down here and said, "Mr. Speaker, I want to tell the House that when I made that speech I was not properly primed—[Laughter]—that I was not properly seized of the opinion of the Government"; if he had made an appeal to the House that he had overstepped the policy of the Government, and that he could not go on with what he had promised; if the Chancellor of the Exchequer had come forward and said, "I am sorry, but he went beyond our policy, and I must go back to the point as put forward by the Solicitor-General"; if that had been done, the House would have agreed. Such an instance of a word having been given and not kept is one of those things which does the House of Commons no good.
  In the difficult tunes in which we are living, there is no one in business who does not know that the financial situation of Europe and this country and America is in a critical state. There is no reasonable person who does not know also that the Government have done nothing to cope with that situation. They only keep on saying that they are under the heel of
  1644
  world causes. Is it possible that behind a cloak of respectability and a mask of moderation, the Government are not sorry to see things as bad as they are, because they wish to prove their theory that the capitalist system has failed, and that Socialism must come? I believe that all their actions tend in that direction, and that the sooner this Government are got out of Office, and another Government takes its place, there will be new hope and new confidence, and the country will at least feel that it has a fighting chance.
  Mr. WISE: I am not sure what particular new hope or confidence will be effected by the sort of speeches we have heard during the discussion from the other benches, but I am sure of this, that if hon. Members opposite or the country expect to get new hope or confidence from the experience of some of the tariff countries, whose financial methods I suppose are the alternative to the methods in the present Budget, they will be very woefully mistaken.
  Mr. SMITHERS: We shall get no hope from Russia, anyway.
  1.0 p.m.
  Mr. WISE: The hon. Member is very badly informed on that subject. The most remarkable thing about this particular Debate on the Third Reading of the Finance Bill is the fact that it would seem to an observer and to some observers outside the House that, despite the fact that the financial position in the world generally and in some countries—and some people say in this country—is worse than it has been for generations, we are dealing mainly with a Budget that will come into operation in two or three years' time. The most extraordinary thing about the financial position of this country is that, despite the circumstances that we are the country most hit by the world slump, that we have been the largest trading country, the largest creditor country and the largest exporting country, we seem to come, so far as our national finances are concerned, better out of it than anybody. It is true, as the Financial Secretary claimed, that we are balancing our Budget this year, but that is not true, I think, of any of the great protectionist or other countries with hardly any exception. The United States have a deficit of £180,000,000; Germany, Italy, Australia

  1645
  and Canada have deficits, and these are due to circumstances that might be expected in times of bad trade when their revenue is dependent on imports and trade. Having said that of the situation, we are entitled on the Third Beading of the Budget to look at the general principles of taxation involved, and the general possibilities of the situation; and it is perfectly plain that, whatever the facts are—and I think that they are as I have stated—at the time of this Budget, there is no conceivable doubt that we shall be faced with a deficit at the end of this present year.
  The anticipations on which the proposals of this Bill are based as to yield of revenue this year do not seem at all likely to be justified. The yield of the Estate Duties is bound to be down because of the drop in prices and the lower level of duties that must be levied, and that is apart altogether from the additional expenses that will fall on the Treasury on account of the loss of reparations and debt payments, and on account of the unemployment insurance situation. Fundamentally, the cause of the troubles of an already very serious situation in a great many countries, and of the troubles with which we shall be faced later in the financial year, is the enormous burden of fixed interest charges on Debt that not only the State Treasury, but industry has to face. We are familiar in this House with the effect of the drop in prices. No doubt very soon, when the report of the Macmillan Committee is published, we shall have an opportunity of discussing the reasons.
  We are familiar with the effect of that drop on the burden of interest and other charges that we have to pay on our National Debt. Between 1924 and this year, leaving out of account the immense change in price levels which took place between 1917 to 1920, when most of the Debt was incurred, the additional burden in real value amounts to something like £100,000,000 per annum, or between £50,000,000 and £100,000,000 according to whether you attach more importance to the retail index or the wholesale index, neither being exactly accurate. But even in the last six months, utilising the retail index, which is rather more against my case, the additional burden on the Treasury of the interest on War Bonds alone is, as far as I can calculate, between four and five times the accepted gross
  1646
  yield from the Land Tax in its present form in its first year of operation; that is, in two years' time. That is the real, fundamental problem in national finance, and it is equally the fundamental problem in industrial finance and in our general industrial situation. It is not merely the burden of war debts; it is the burden of debenture interest and of other fixed charges on industry. With a lower price level that means, in figures, a lower turnover, and, in figures, a lower profit, whilst the debenture interest, the fixed charges, remain constant, and all the time are a greater and a greater burden on the yield of industry, cutting at profits and cutting at the return which the revenue gets from the profits of industry. That is the real problem with which we are faced, and until we fact that problem effectively we cannot expect to get any sort of real prosperity either into industry or into the transactions of the Treasury.
  In the last week or two the burden of inter-Allied debts and reparation charges has come to a head, and more or less panic measures are being taken to deal with it. It is not, perhaps, so well known that the circumstances of most of the Continental countries are such that the burden of their internal debts and fixed charges on their industrial position would have landed three or four of them in a collapse had not the difficulty been staved off for a time by the very welcome action of the American Government. The reason is precisely the same as that which embarrasses our national finances—the undue, unreasonable, enormously exaggerated pressure of debt payments of fixed charges, of usury, extended and exaggerated by the drop in prices.
  Mr. ARTHUR MICHAEL SAMUEL: Do I understand the hon. Member to say that the national debt holder is receiving now pounds of greater value than those he lent? If so, is the hon. Member aware that most of the national Debt was raised before 1918—with the exception of two loans—when the average pounds were of better value than they are to-day, and that for a long time bondholders were receiving so much the less return?
  Mr. WISE: The actual index figure in 191V was approximately the same as in 1924. I took the value in 1924, and if the hon. Member will compare the burden between 1924

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  and 1931 he will find that in retail figures there is a drop of about 16 or 20 per cent. and in wholesale figures a drop of nearly 50 per cent., and I counsel him to examine them with more than his usual care. But let me proceed with my argument. The Financial Secretary to the Treasury says the object of the Land Values Tax is to find new sources of revenue. So far as we are concerned we entirely approve of the method. The main justification of it, as I see it, is the justification which so disturbs and annoys the right hon. Member for Spen Valley (Sir J. Simon), in that it does provide an additional means of taxing a particular form of wealth. In that very limited sense—and I would not accept is as such—it does represent the application of a Socialist principle to taxation. But why stay at land? Every argument which justifies the taxation of land as a new source of revenue would justify the special taxation of the interest on war bonds and fixed interest-bearing securities of every kind. All of these have been subject to an immense increment, not on account of any efforts of the holders, but on account of the change in the circumstances in the community as a whole. The ownership of land, from that point of view, is rather less reprehensible than the ownership of the other classes of property to which I have referred, because the land owner generally does have some sort of responsibility and does perform some functions in return for the rent he receives, whereas the rentier who lives on the interest from war bonds or debenture interest from South American railways or breweries takes no part in and has no responsibility for in the management of the industry which is the source of his wealth. It seems to me that he is a much more desirable person to tax.
  The so-called social purposes of this Land Tax seems to me to be very wide apart from the conception of Socialist policy that we used to have on these benches. The idea that you can secure indirect results of a real social value by forcing land into the market may, I think, have had a good deal of validity 30, 40 or 50 years ago, but we have long passed that stage. We all agree with that what is necessary now is not the higgledy-piggledy forcing of land along the main roads into the markets, but the
  1648
  organised planning of our resources in land and otherwise. We all agree—we, at least, on these benches—that the essence of Socialist doctrine is planning, is the deliberate, considered and carefully worked out utilisation of national resources in land, in wealth, in minerals for national purposes; and the old single tax conception, as it was put by some of my hon. Friends in the earlier stages of this discussion, seems to me to be the utter negation of Socialist doctrine, at any rate as I understand it. The proper way to secure the ordered, planned development of land and other resources is through national ownership.
  The policy of this party in regard to land has been, for a very considerable time now, that land ought to be nationally owned, not merely in order that we may by that means obtain for national purposes in the most convenient and complete way possible the increment that comes from national and public expenditure, but so that we may secure directly that the land is used in a manner which suits the convenience and the interests of public development rather than be at the mercy of private interests, private whims or private necessities. During the discussions which have gone on for weeks, with their manifold exemptions and complications, over straightening out the varying rights of particular classes of owners and interests in land, I could not help thinking that if we had taken on the whole task of transferring the land from private to public ownership the actual, intrinsic difficulties, administrative and legal, far from being greater, would have been much less. We have spent many hours in essaying the more or less impossible task of judging beforehand the problematical and uncertain social effect of this or that small tax as an inducement on a particular landowner or particular interest to do something or the other. The best we could do was to put through, after lots of trouble and many prises, a whole page of exceptions, so as to cut certain interests out of the operation of the Bill. If the land were in public ownership and were really owned and controlled by the people no one doubts that we should give all possible facilities for sport, for educatdon and for all the other purposes where exemption presents so much difficulty when the profits of the exemption go into private pockets.

  1649
  I would add a further consideration if it is not too late. It is an extraordinary anomaly that in response to pressure the Government have allowed an exemption in the case of golf courses and the Lords cricket ground, and other people who are well off, but they have not seen their way to exempt allotments which, apart from their social value, are largely the poor man's recreation. I hope the Government will reconsider that question. So far as revenue is concerned, a far more profitable course would have been a scheme, which will come sooner or later, for the nationalisation and the public ownership of land. The only way in which this revenue from land can be secured for social purposes is by public ownership. So far as the Land Tax brings a form of property under valuation so that it can be used, if not for national purposes, at any rate for rating purposes, we welcome it. We wish the Government had gone very much further and not singled out land alone as the form of property in regard to which the unearned increment should be taxed.
  Sir ROBERT HORNE: I am largely in agreement with what the hon. Member for East Leicester (Mr. Wise) has said in expressing the difficulty in finding any ground upon which the taxation of land proposed can be justified. It would, as he said, be just as right and proper to apply to the rentier class the rules which are being applied under this Bill to holders of land. It would, in my view, be unjustifiable to do either one or the other, but I have difficulty in understanding exactly where we are in relation to this Bill. The speech of the Chancellor of the Exchequer in introducing this Measure was largely given up to illustrations of the impropriety of allowing unearned increment to be taken by people who were deriving advantages from the work of the community rather than from their Own activities. The Solicitor-General suggested that the principle upon which the taxation of land is based is that the people who own land should be dealt with in a different way from the rest of the community
  The Chancellor of the Exchequer gave his explanation of that principle when he said that the fundamental reason was that God gave the land to the people. The Chancellor of the Exchequer does
  1650
  not seem to have taken into account the conditions under which God gave the land to the people. Indeed, the people for the most part seem unwilling to take the land under the conditions which God gave it. There are millions of acres of land available to-day in the form in which God gave it, but hon. Members opposite wish to take the land after someone else has spent considerable toil and money upon bringing it into such a state as makes it useful to the community. If hon. Members wish to take the land as God gave it there are people who will pay their passages to go and do the necessary work. If you take the whole revenues derived from the land of this country you will find that it does not pay more than three per cent. upon the capital which has been put into the land apart altogether from any site value.
  I have not risen in order to discuss the general principles of this matter but I want to refer to an aspect of this question which is special to Scotland. A great injustice is being done to Scotland in connection with this legislation. The Lord Advocate told us last night that why he had altered the law of Scotland in one particular was to make it conform to the law of England. Why is that principle not being applied where an injustice is being done to Scotland? There are at least two distinct systems of land holding in England. There is a form of long lease of more than 50 years which has the effect under the proposals of this Bill of making the lessee for the purpose of taxation the owner but it gives him the power of coming back upon the lessor for a certain portion—it may be the whole of it in certain instances—of the taxation which he has to bear under the Bill. That may not be unfair once you agree to the principle of this Bill because the lessor is the person who is entitled to resume the land at the end of the lease and gets all the benefit that the land has acquired in the interval through the activity of the community or otherwise. He not only gets back the land but also the buildings upon it. There is in England another form of granting land known as the conveyance in fee in consideration of a perpetual fee farm rent. That is known as a perpetual rent charge in England. In England under this Bill the man in ownership of a perpetual rent

  1651
  charge does not have the new taxation imposed upon him, either directly or by way of relief to the holder. My point is that Scotland is dealt with differently in this matter and quite unjustly. Conveyance in fee is really a grant of land for which payment is made by a perpetual annual payment.
  In Scotland, instead of having the long lease, we have a feuing system by which nearly all the building land of Scotland has been conveyed upon the basis of a perpetual payment, just as under the system of the perpetual rent charge in England; and yet the superior, or the owner of the feu duties in Scotland, has imposed upon him the taxation from which the man who owns a perpetual rent charge in England is free under this Bill. If the Lord Advocate's desire is to make the position in Scotland the same as that of people in England, as last night he said he wanted to do, undoubtedly this is a case in which a supreme injustice is done to Scotland. It was excused by the Lord Advocate on the ground that the owner of the feu duties is the owner of the land in some respects. He only cited one important person to support that point of view, because the citations which he made from one of our great constitutional writers did not at all bear out what he represented. The person whom he did quote was no doubt a distinguished lawyer in Scotland, who became Lord Advocate—Lord Advocate Ure. The quotation which he made from him was at a time when Mr. Ure was Solicitor-General for Scotland, but he omitted to tell the Committee, when we were dealing with this matter—and of course our debate was guillotined, and nothing more could be said—that Mr. Ure was entirely thrown over in this matter by the Lord Advocate of that time, to wit, Mr. Thomas Shaw, who became, as everyone knows, a distinguished judge in the House of Lords, and has only recently retired.
  In consonance with the opinions of all the other great lawyers in Scotland, he took entirely the opposite view to that taken by the Solicitor-General at the time, and the Solicitor-General, in the course of the debate on the Taxation of Land Values (Scotland) Bill, which was introduced in 1907, not only admitted that
  1652
  his view was contrary to that of his chief, the Lord Advocate, but he admitted that the law of Scotland at that time, so far as valuation was concerned, was entirely different from the view which he wished to have impressed upon the House. These are the words which he used as to the difference between the Lord Advocate and himself in regard to the true scope of the Bill if it became law:—
  "My right hon. Friend held, for good reasons no doubt, that the definition of 'owner' under the new Bating and Assessment Act should remain as it was under the present Valuation Act. I agree that under the present Act those who draw feu duties are not included in the definition."
  Accordingly, Mr. Ure himself, who was cited by the present Lord Advocate, gave expression to the opinion that his view was neither that of his chief nor was it expressed in the law of Scotland at that time so far as valuation was concerned.
  I do not elaborate this matter further. A very pointed pamphlet has been circulated by all the legal societies in Scotland which says that if this legislation is put into operation the fundamental principles of the law of Scotland so far as land tenure is concerned will be upset, and they point out that the greatest possible detriment will be done to what has been the immemorial system of land-holding in Scotland, which has undoubtedly produced benefits which, as Lord Shaw has said, are the envy of the legal people of the world. I desire to emphasise the fact that in this respect the Lord Advocate has allowed those people in Scotland who are analagous to the rentchargers in England to be put in an unfavourable position, and one which is detrimental, not only to their interests, but to the interests of the whole system of feuing in Scotland.
  But that is not all. There was another Clause which the Guillotine never allowed us to reach, and which deserves some notice on the Third Reading of the Bill before we grant it. It is a Clause which annuls existing contracts in so far as this legislation is concerned. May I explain to the House what that means? The proprietor of land, in granting a feu charter, makes stipulations with the feuar as to what the conditions of the contract are, and, in practically all cases, he stipulates that any future burdens upon the land shall be borne by the feuar, who obtains the land. The reason of that is

  1653
  easy to see. The grantor of the land has no more control of it. He never can enter upon possession again unless the other man fails to perform his obligations. The land is completely out of his control or possession, and, therefore, he says to the feuar, "Whatever future burdens may be put upon the land, you shall bear them," and that is accepted by the feuar. Let it be remembered that in all this business the superior of the land in Scotland can never get any further benefit from it. If the land increases in value, it is the feuar who gets the advantage of any increment that there may be in the value of the land, and it can never come by any possible chance to the owner of the feu duty, so long as the feuar pays the annual sum that he has contracted to pay.
  This Bill proposes to break those contracts, and, where the feuar has undertaken to bear all future burdens, it says that (hat condition shall not apply—that, in spite of the undertaking, and in spite of the fact that the land was granted out upon the basis that the feuar should bear any future burdens, nevertheless, the man who granted the land shall bear them, or Dart of them. Consider the injustice of such a system. The man who has granted the land obviously has taken a payment which has been fixed upon the footing that these burdens were going to be borne by the man who contracted with him. The State by this Bill says that that shall not be, but that the man who is to obtain the advantage of any increase in the value of the land shall not only have such value put into his own pocket, but shall also be relieved of any stipulation that he entered into with the man who granted the land, and who never by any chance can obtain any advantage from this increment.
  Really, can the House of Commons give assent to a principle of that kind? I wish that some of my Liberal friends were here, because this matter came up before Liberal Ministers when, in 1907, a Taxation of Land Values Bill for Scotland was introduced and passed in this House. The question arose whether it was likely that existing contracts would be dealt with or not, and a deputation representing the towns of Glasgow, Edinburgh, and Aberdeen, and all the legal societies of Scotland, waited upon Sir Henry Campbell-Bannerman, who was
  1654
  then Prime Minister. In reply to them he said in the most explicit way that no legislation that was going to be passed with regard to this matter would by any chance interfere with existing contracts. He quoted the Lord Advocate of that time, who afterwards became Lord Shaw, to the effect that he would not in any circumstances do violence to existing contracts. Let me give his precise words. He said:
  "He desired to associate this great and salutory reform with no violence whatever to existing contracts, and with no invasion of rights sanctioned by the State."
  Not only so, but, when the whole question was being debated afterwards in the House of Commons, in response to questions out by the then Leader of the Opposition, Mr. Balfour, Lord Shaw, who was then Lord Advocate, gave the most solemn pledge that no existing contract would be interfered with. Thereafter, on the question being put to Mr. Asquith, he got up in his place and said that in no circumstances would existing contracts be interfered with. He said he supported all the Bills which had this reform in view, but in not a single one of them was any existing contract going to be violated.
  But even that did not end the matter. Mr. Ure, the distinguished lawyer who was quoted by the Lord Advocate the other day, in response to further questions by Mr. Balfour, got up in his place and said that never since the general election—what effect that had upon his mind one cannot divine, had he advocated any such thing. Accordingly, I urge upon the House that, with regard to a Clause like this, which completely upsets every tradition of the law of this country and every principle of government, a Clause which we were not allowed to debate and which was guillotined in Committee, we really ought to take some notice of such a violation as this of all our sacred principles, and we should make our protest against any such legislation being carried into effect. I hope the Government will, in the intervening time that may elapse between now and the coming into operation of the Bill, take steps to see that such provisions as these should be eliminated from the Statute Book before effect is given to them.
  I think I have demonstrated, upon the matters of which I have spoken, that this

  1655
  form of taxation is entirely inappropriate to the feuing system. I am not blaming the Lord Advocate for difficulties that have arisen. I may seem to have passed severe criticisms upon him from time to time. I do not blame him personally or the Scottish Office in any way, but it is obvious that what happened was that the Bill was designed by English draftsmen, and put together in a hurry and Scottish expert opinion never had an opportunity of dealing with it. It was brought into the House in a shape in which many paragraphs, as far as Scotland is concerned, were entirely meaningless, and even now we have not got a Bill which can be properly and intelligently read in relation to the well-known rules and traditions of Scottish law. This is the Third Reading, and it is the last opportunity that I have. I make this protest on behalf of Scotland and Scotsmen in general against the proceedings and the way in which they have been conducted in the House.
  It is an entire mistake to imagine that these feu duties are entirely in the hands of rich people. Feu duties have been an investment of some of the most thrifty of our industrial population. They are an investment which has been selected by bodies of trustees everywhere, and not only selected by them, but pointed out by Parliament in the Trustee Acts of Scotland as an appropriate and safe form of investment. Once Parliament has encouraged people to invest in feu duties, which have been sold in the open market and have passed into innumerably different hands, to come along and say, "We are going to take away a twelfth of the whole capital value of your investment," is to commit an act which is not only unworthy of Parliament, but which is more consonant with the fraudulent attitude of some who endeavour felonously to extract money from the pockets of the people. It is a course of legislation of which any Government ought to be ashamed. Confiscation openly avowed is one thing, but a mean attempt to take away the savings of the people, and some of the poorest, in the fashion in which it is done by the Bill deserves the condign condemnation of the representatives of the people of this country.
  The LORD ADVOCATE (Mr. Craigie Aitchison): I should like to intervene for two minutes to say a word in reply to the right hon. Gentleman. He has suggested, in fact I think he has repeated more than once in the course of these discussions, that this Bill has not been adequately considered from the point of view of Scotland. It was most fully and anxiously considered by myself and my colleagues from the point of view of Scotland, and, following precedent when conveyancing matters affecting Scotland are under discussion, we took expert conveyancing advice regarding the whole position, and I can now say to the House that the Bill is right as regards Scotland, not only in so far as its substance is concerned, but in so far as its form is concerned. I cannot allow it to go out without contradiction that this matter has not been considered from the Scottish point of view.
  The right hon. Gentleman said we were putting a feu duty in a different position from a rent charge. Of course, he will agree that that raises a very large question of controversy, into which I cannot enter now, but there is this very obvious distinction. A rent charge in England has no necessary relation to land value at all. In Scotland a feu duty is land value, and, if you exempt the feu duty from taxation, you are exempting from taxation the land value which is going into the pocket of the superior, who is merely a rent receiver, who has not contributed one penny or one ounce of energy or care to the creation of the land value. This Bill has been opposed with very great bitterness. I am not in the least surprised at that.
  Sir R. HORNE: Will you answer one question which has never been answered?
  The LORD ADVOCATE: The moment you legislate on anything that affects the land interests of Scotland, you touch a very sensitive nerve, and the result has been that, in the course of the Bill, hon. Members opposite, worsted in argument, have had to change their ground and to indulge in attacks of a personal kind for which I am glad the right hon. Gentleman has had the grace to make some apology to-day.
  It is said that, in what we are doing as regards Scotland, we are proceeding to break existing contracts. That is not so.

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  It is well settled in the law that clauses in contracts which give relief from burdens in feu contracts or in feu dispositions must be construed with reference to burdens that were in existence when the contract was entered into, and clauses of that kind have no relation whatever to burdens that are imposed by supervenient legislation. If time permitted, I could quote authority which would make that matter abundantly plain. It is said this Bill is going to wreck the feu system. Everyone who knows anything about it knows that that system has had a stranglehold not only on our towns, but on the country. It has throttled the whole development of Scotland, and, if the Bill is the first step towards bringing that system to an end—[An HON. MEMBER: "Now we know where we are!"] We know where we are, and it has taken the hon. Member a long time to find it out. We know where we are, and we say that this Measure is the first of a series of Measures which are going to restore the rights of the people to the land of Scotland.
  Mr. LLOYD GEORGE: I am afraid that I am not competent to enter into a discussion upon this Scottish question, and therefore I shall not pursue it. I will refer to other matters which have cropped up during the course of the Debate upon which I feel better informed. I should like to begin by saying something, with which, I think, the whole House will agree, and that is to join with those who have paid tribute to the extraordinary skill with which the learned Solicitor-General has undertaken what I know from experience is an extraordinarily difficult and complicated subject to handle, whether a Bill is right or wrong. I do not know what the law of real property in Scotland may be, but, as an old conveyancing solicitor, I know something about the complications of land tenure in this country, and anybody who attempts to handle that matter knows what a morass he is bound to get into. The learned Solicitor-General has extricated himself with a skill which has undoubtedly lifted him to the rank of one of the most distinguished parliamentarians of this generation.
  I should like also to say a word about what fell from the right hon. Gentleman the Member for Edgbaston
  1658
  (Mr. Chamberlain). Although he made it quite clear that it does not matter to him, it does matter to me. I did not charge him with selling his principles. I said, when he accused the Liberal party of having sold their principles, "if compromise means selling principles, well, then, the right hon. Gentleman has undoubtedly sold his." I want to make it perfectly clear that I did not make a charge of that character against any right hon. Gentleman whose career is as honourable as that of the right hon. Gentleman the Member for Edgbaston. His speech was an extraordinary example of attempting to ride two horses at the same time, each going in a totally different direction. It is an equestrian feat which is not always attempted even in the most remarkable circus performances. He said that this Bill would produce very little revenue and that from the revenue point of view it had been completely destroyed, and, at the same time, that it was an intolerable burden to the taxpayer. It ruined the individual taxpayer but brought nothing to the Treasury. That is an illustration of the method by which this Bill has been crticised from beginning to end.
  I am very glad that now, on the Third Reading, we are able to come back from the discussion of details, which always rather obscure the principle and purpose of a Bill, to the general purpose of the Bill as it stands. What is the purpose? That land, the value of which has been created by communal enterprise and expenditure, should make its contribution to taxation on the basis of its real value. That is the principle. [HON. MEMBERS: "Oh."] On the basis of its real value. [AN HON. MEMBER: "Who said that?"] The Bill, and if the hon. Gentleman had taken the trouble to read the Bill instead of reading snippety bits about it, he would have known that the first thing that is done is to ascertain the real value of the land. Then a tax is imposed upon the basis of the ascertained real value. At the present moment land is not taxed upon its real value. Henceforth, if this Bill comes into operation, it will be taxed upon the real value.
  That principle has been accepted. There have been three very special champions of it in the past in this House, and I am very glad to see that they are still here. There is the hon. Gentleman

  1659
  the Member for Burslem (Mr. MacLaren), there is the right hon. and gallant Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood)—both of them have been great champions of that principle—and the third, and perhaps the most distinguished of all, is the right hon. and learned Gentleman the Member for Spen Valley (Sir J. Simon). He is a real lineal descendant of Henry George and came from the same county, and, apart altogether from his attachment to the principle, there is a patriotic feeling which has inspired him to follow this great principle and make it very much his own. It is true that the three of them, and myself, when we have come to putting that principle into operation, have approached it from a different angle. [Interruption.] Yes, but if the hon. Gentleman there think that the right hon. Gentleman made greater concessions on improvements or anything else than either I or the Government they cannot have read that Bill of 1924. I made an attempt in 1909. As the right hon. Gentleman has pointed out, in some respects the methods of that Bill were different, although he very skilfully mixed up the Increment Duty with the Undeveloped Land Duty in order to confuse Members of the House as to the principle.
  I have been amazed at the way my Bill of 1909 has been quoted. Evidently it is the model. It is an example. It has taken the right hon. Gentleman and hon. Gentlemen there 21 years to discover what a meticulously just man I was then. It is true that in the bouquets which have been presented the rose petals have been stripped, and there is much more of the thorn than of the rose; even as they are they have not been presented to me. They have simply been jabbed in the faces of the Chancellor of the Exchequer and the Solicitor-General; used as a weapon and not as a tribute. However, there is the great Bill of 1924—I commend that Bill to hon. Gentlemen here who have been cheering to-day—and now comes the Bill of 1931, all aimed at achieving one and the same purpose, the taxation of land upon its real value, and the levying of a contribution upon that basis for the taxation of the country. The right hon. Gentleman to-day has been referring to the question of deductions. I ventured to tell the Chancellor of the
  1660
  Exchequer that when we came to make the valuation in 1910 we made far too many deductions. We undoubtedly did. If you begin these deductions in valuation there is hardly any limit. For instance, we deducted advertisements which helped to create the value of the land, and, if you go on from step to step as we were drawn to do in that Measure, it will have the effect of more or less neutralising the whole advantage of the tax. The right hon. and learned Gentleman the Member for Spen Valley very wisely dropped all those deductions in the Bill of 1924. May I point out that double taxation could have ensued from that Bill, and a double tax not confined to one penny in the pound. Under that Bill, you might have put on sixpence in the pound, and even more in the form of rates, without deducting anything for the roads or any of those improvements the omission of which it has been suggested to-day are an outrage upon justice. Yet the right hon. Gentleman never felt that when he was doing that he was trampling upon his conscience. Conscience did not in the least tangle his bold steps in those days.
  In undeveloped land there is, undoubtedly, a very considerable source of revenue, and it is an increasing source of revenue. I should have liked to have heard the right hon. and learned Gentleman repeat some of those eloquent speeches of his about the principle of the taxation of land of that kind, because especially in recent years, that value has increased enormously and, what is still more, it has spread enormously. The increase in wealth, fortunately, has not been arrested even by the great slump in trade. It is going on at a reduced rate of progress but it is still going on, and during these years it has raised the standard of life, of comfort and of health. The increased improvements in traffic, the irruption of the motors, affecting wide areas, have increased the value of land enormously. During the last 50 years there has hardly been any increase in the population of the centre of London but there has been an increase of very nearly 3,000,000 in the population of the outskirts of London. If you go beyond the outskirts the increase in population is still more considerable. Anyone who drives out to the country area surrounding London at intervals of a few weeks will

  1661
  find that almost villages have sprung up between his visits. Great values are heaping out, and at great cost to the public.
  The Government have a programme of national development. I am one of those who criticise them on the ground that the programme is not bold enough, but even as it is it is a programme that involves the expenditure of scores of millions of public money in roads and in development. There is not one of those enterprises that does not double the value of land in particular districts, not merely double it but quadruple it, and even far more. In the aggregate they raise the value of land by scores of millions of pounds. Who pays? The motorist pays. He contributes in his licence, in his Petrol Duty and in other ways. The general public contribute in rates and taxes. The one man who does not contribute is the man who gets the most direct financial benefit, the man whose land is increased in value five-fold by that expenditure. The Chancellor of the Exchequer by this Bill will bring all that land into contribution. [HON. MEMBERS: "Not by this Bill!"] By this Bill he will bring the whole of that land into contribution to the extent of one penny in the pound. I hope that in future he will take his courage in both hands and follow the bold example set him by my right hon. and learned Friend. He was not satisfied with a penny. He brought in a Bill in 1924 under which he might have charged 6d., 7d. and even more upon the real capital value of particular sites.
  2.0 p.m.
  That is what I call a just principle, and that just principle is embodied in this Bill. It is idle to say that there will be no double taxation if as in the Bill of 1924 you rate on the capital value of land. You will be paying taxes on Schedule A and you will be paying in your rates on the same value, and some people who are paying nothing to-day will be paying for the first time both rates and taxes. The burden, in my judgment, has been very largely exaggerated. A friend of mine had very grave misgivings in regard to this tax. He had been reading the speeches of the right hon. and learned Gentleman, and he was under the impression that he was going to be ruined. What concerned him
  1662
  far more was the fact that he was a trustee, and he was very alarmed at the possible disastrous effect upon the revenue of one or two of his trust properties. I said: "Would you mind giving me a case? He gave a case of a site which was worth £500. I said: "Under the Bill as originally drawn the tax would have been £2 1s. 8d. Under the Amendment which the Chancellor of the Exchequer has accepted it will be five shillings." Let me be quite accurate. It will be 5s. 2½d. I am told that when we agreed to that 5s. 2½d. instead of demanding a surrender of the whole tax we were departing from Liberal principles.
  We have heard to-day a denunciation of hon. Friends of mine here for that departure from Liberal principles, and it was delivered amid loud cheers from those genuine and independent Liberals above the Gangway. The right hon. and learned Gentleman said, "You are departing from the principles of Sir Henry Campbell-Bannerman." Loud indignation from the Conservative benches! "More than that, you are trampling upon the principles enunciated by Mr. Asquith." Still greater indignation! It is the old method of those who are transferring their allegiance always to say that those who are behind are departing from principle and that they alone are sound. Quite frankly, the one concern which those hon. and right hon. Gentlemen have about Liberal principles is this—I am not blaming them—that they want to use Liberal principles as a crowbar to overthrow the Government at a time when they think that trade has not turned and that they will be able to secure Protection. That is all they are concerned about. [Interruption.] I am concerned about it. I have never pretended that I am not, and I have said so. The Noble Lord who interrupts me has only discovered it for the first time now. He is not very quick in the uptake.
  Does anyone imagine that this 5s. 2½d. tax is what has induced the right hon. and learned Gentleman to sever from his party and to turn his back on the principles that he has devoted his lifetime to advocating? [Interruption.] The right hon. and learned Gentleman has been criticising and attacking and sneering for a fortnight, and hon. Members must allow

  1663
  me to reply. If the right hon. and learned Member imagines that anybody believes that, he under-rates the perspicacity of his countrymen. He says, "Ah, it is not the amount; it is a question of conscience." [Interruption.] Suppose instead of 5s. 2½d. it had been 2½d., still it would have been a question of conscience—a 2½d. conscience. I have been taught on pretty high authority to distrust that kind of conscience which strains at a gnat and swallows—[Interruption.]—cannot you stand your friend being answered?—the whole camel of Protection.
  It is no use pretending that the right hon. and learned Gentleman is merely criticising this Bill on details. The principle of the Bill has been repudiated by him. [Interruption.] At any rate, there is no doubt that the Opposition are opposed to the Bill on principle, and they have attacked it on principle. They have never made any pretence about it, but while we have in the principle of the Bill the taxation of land upon its real value—[An HON. MEMBEK: "That is not the Bill"]—I must be allowed to proceed. [Interruption.] An answer is to be given to me from the Front Opposition Bench. Are hon. Members above the Gangway never going to have any confidence in their leaders? [Interruption.] I have promised to sit down at a particular hour and enable the right hon. Gentleman to get up, but with these interruptions it does take a little longer, and the House must not blame me. Let me develop what I was going to say. The right hon. and learned Gentleman has been in favour of the principle which has been assailed, but has he delivered one speech in support of it? Not one; it has all been niggling about details. Never once has he made such a speech as he used to deliver on this principle which he has been advocating with such zeal and eloquence in the past.
  The right hon. and learned Gentleman forgets that he has a record on land values. It is not merely his Bill of 1924, but I remember when we had a land conference in the Kingsway Hall, in which we put forward proposals regarding reform of the land system. The right hon. and learned Member was not satisfied. Why? We had omitted the
  1664
  taxation of land values, and he moved an amendment in favour of the taxation of land values in an eloquent speech and carried it. There the right hon. and learned Member nailed the flag of land values to the mast, and you could hear the hammering blows resounding through the hall as the nails were driven in. And it still remains where the right hon. and learned Member planted it. We have had to pass through many contrary winds, but through it all this flag which the right hon. and learned Member nailed to the mast has been waving in the breeze. Now he has been trying to shoot it down, and since he cannot do that he is leaving the ship.
  It is very difficult for hon. and right hon. Members on either side of the House to realise the peculiar position which the right hon. and learned Member has always held in our party, and what a shock it is to see the line taken by him now. There used to be in the Calvanistic Churches in Scotland and in Wales one man who made it his business to see that there was no departure by the preacher or anyone else from the strict lines and dogmas of the doctrine. He was called in our parts the "Guardian of the Doctrine." The right hon. and learned Member in our party was the guardian of the doctrine, land value, the rights of nationalities, free trade, and anybody departing from them had to reckon with the right hon. and learned Member. I was never thought to be a joy to the orthodox, and the right hon. and learned Member was always held up to me as an example. In the Paris Resolutions Mr. Asquith was said to be departing from the doctrine of Free Trade and the right hon. Gentleman loftily rebuked him for his lapse from principle. Later on came my turn. They said "on doctrine you cannot always trust Lloyd George; but" the elect said, "there is always Simon ". In the very sanctuary of Cobdenism where I was not always allowed to enter, there in the stained glass was the figure of the great admonisher of heretics.
  To all those who have been strictly orthodox there is a satisfaction in seeing the mighty fallen, a sort of naughty satisfaction. It is like the case of the teetotaler who all his life has been so stern that he looked with lofty and awful disdain

  1665
  on anyone who took a drop of alcohol—however diluted—to his lips, and suddenly, when he is approaching the seventh decade of his life, he takes to drink: you see him reeling from one side to the other, and he ends his career by entering an inebriates' home. However, there is one comfort. Although the right hon. and learned Gentleman has left us we have always his great utterances in the past to cheer us on and to keep us straight—on land values most enthusiastic and encouraging; on Protection there never was such an exposure of the fallacies to which his new friends are committing themselves. We, his late lamented friends as he called us shall always think of them with a great sense of satisfaction and encouragement. Just a few days after he quitted us, departed this life to enter a higher sphere, there was a meeting of a Conservative Committee upstairs, and the right hon. Gentleman most appropriately was invited to address it. It-was on India, on his Indian report, and he made such an impression that it was decided unanimously that each member of the Committee should buy that report and read it for the first time.
  May I very respectfully suggest that they might extend their studies, now that they begin to realise how important and valuable his utterances are, and read his speeches and writings on land values and Protection? After all, the right hon. Gentleman is their new prophet, and the Koran is made up of the utterances of the prophet both before and after the Hegira. I hope these utterances and writings will all be read faithfully; they contain some very useful things. I am going to quote a sample by way of encouragement to hon. Gentlemen of the Conservative party to pursue their course of studies in this way. The quotations are so very topical. This is from a speech which the right hon. and learned Gentleman delivered when I was having some difficulties with Independent Liberals in trying to get my land value taxation through.
  Mr. HANNON: On a point of Order. Is the right hon. Gentleman in order in proceeding with this kind of discussion in relation to the Third Reading of this Bill? For several minutes now the right hon. Gentleman has been talking of the relations between the right hon. Gentleman
  1666
  the Member for Spen Valley (Sir J. Simon) and the Liberal Party, without a single reference to the Finance Bill?
  Mr. SPEAKER: Of course, it is a well-known rule that during the Third Reading debate only the subjects contained in the Bill can be discussed. These are little asides which we need not take too seriously.
  Mr. LLOYD GEORGE: I was going to quote from the speeches of the new Leader, and I am sorry that one of his followers rather resents it. The quotation is on land Values, and this Bill is a Bill for the taxation of land values. When the hon. Gentleman interrupted I was about to quote from a speech delivered by the right hon. Gentleman when I was carrying through this House a Bill for the taxation of site values. As I stated, I was having trouble with Independent Liberals who were trying their best to destroy the Bill by the same kind of criticism, and the right hon. Gentleman the Member for Spen Valley then made a most admirable statement which seems to me to be very applicable to-day.
  "There is no politician who seems to be more truly Conservative than the person who is a Liberal on every subject except the matter in hand."
  I will quote from another speech which the right hon. Gentleman delivered on the subject of that Bill. It was quite in order in those days, and I think it would be in order now. At that time we had exactly the same situation. There were two proposals for taxation. One was the Liberal plan for the taxation of site values and the Conservative party as an alternative were putting up their proposal for the taxation of food. That is exactly the situation of to-day. Listen to the denunciations of the prophet:
  "There are two ways in which you can select suitable or unsuitable subjects of taxation. You can tax people according to the size of their stomachs or according to the size of their pockets. That is the real issue involved in this Bill."
  Just a little crude, but very much to the point! I could give one or two more quotations which are very much to the point. But I do not want to travel one iota beyond the region of order. The right hon. Gentleman has been engaged with right hon. and hon. Gentlemen of the Conservative party in—I hesitate to use the word, because he dislikes it so much—a manœuvre, to put the

  1667
  Government out with a view to introducing a Protectionist regime. There is no doubt at all about that. There is no greater proof of the confidence which Members have in you than that they should reveal to you the fact that there is to be a snap Division. The right hon. and learned Gentleman knew about the snap Division and we were very struck with the delight with which he hailed the result. I have never seen such an exhibition of acrobatic delight. This is what the right hon. and learned Gentleman said on a former occasion:
  "No wonder these Protectionist plotters want a free hand and a rushed Election. They want to secure in a fortnight, authority to do what they like for five years."
  When that was said, the right hon. and learned Gentleman was denouncing his present friends. But a few days ago he was one of the Protectionist plotters himself. I do not object in the least to the right hon. and learned Gentleman changing his opinions. Every man, in. the course of his lifetime, is entitled to do that whether on land values, on India or on Protection. Greater men than the right hon. and learned Gentleman have done it in the past—some of the most honourable men in the political life of this country. But I do object to his treating it as if he were the only man who was obeying conscience and principle. I do object to this intolerant self-righteousness. Whenever he does it:
  "He tak's the high road,
  And we tak' the low road."
  Greater men, as I say, have done it in the past, but in doing so they have not taunted those who have not agreed with them, and who have still adhered to the underlying principles, which they have pursued through their lives. They never taunted them with lack of principle, with being mere manoeuvrers and tacticians. They, I at any rate, did not leave behind the slime of hypocrisy in passing from one! side to another. It is a thing that I pro-I test against most strongly. If the right hon. and learned Gentleman says, "Well, I propose to change my view on this fundamental question," he has a perfect right to say so. [HON. MEMBERS: "He has not said so."] The right hon. and learned Gentleman is here.
  Sir J. SIMON: Yes, and I am going to answer. Mr. Speaker, on the Third Reading of the Finance Bill, what I say is this—that I am opposed to the principle that landowning in private hands is wrong. What I want to know is whether my right hon. Friend has changed his views on that subject?
  Mr. LLOYD GEORGE: The right hon. and learned Gentleman knows that that is not what I was alluding to. He has most carefully evaded it. He has been challenged before and he has given no answer. He has referred to us as his lamented friends. May I just give him, as a lamented friend, a word of warning. The Conservative party will hail with rapturous delight his criticisms upon his friends and his attacks upon the causes to which they adhere. They will applaud him. They will use him to the utmost—all his powers and all his gifts—and when he ceases to be useful to them, they will fling him aside——[Interruption].
  Mr. SPEAKER: I would remind hon. Members that we have not much more time left for this Debate.
  Mr. LLOYD GEORGE: Or they will treat him as they treated an infinitely greater man, if he will allow me to say so, Mr. Joseph Chamberlain. They will fob him off with a second or third-rate office, and cheat him of the prize which they dangled before him. That is what they will do. But, as for us, without his help, a small party—and smaller by such defections as there are—we stand by those causes, and, inasmuch as this Bill embodies one of the principles for which he once fought along with us, and for which we continue to fight, I am prepared to vote for its Third Reading.
  Sir WILLIAM MITCHELL-THOMSON: The extremely amusing and diverting speech to which we have just listened from the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) has, so far, diverted the House from the fact that at a moment when there are 2,500,000 unemployed, we are now considering—[Interruption.]
  Mr. SPEAKER: I must ask hon. Members to remember that the Opposition are entitled to a chance to reply.
  Sir W. MITCHELL-THOMSON: I am anxious not to take up too much time,

  1669
  but as you say, Mr. Speaker, the Opposition has the right to reply and I shall use that right to the full, and if I have to take a longer time than I intended, it will be the fault of hon. Gentlemen opposite. Before I say anything further about the right hon. Gentleman's speech, let me observe that 99 per cent. of it was addressed to an examination into the convictions of his right hon. and learned Friend the Member for Spen Valley (Sir J. Simon), and it was only in the concluding sentence that he gave a perfunctory valedictory blessing to the proposals of the Bill. We have had to consider this Bill under great difficulties. Allusion has already been made to the operation of the Guillotine, and I say nothing more about that, except that it is worth noting that the practical result of the operation of the Guillotine has been to reduce the time for this Finance Bill below that which would normally be available for an ordinary Bill. In consequence, many of the most important questions involved in the Bill, including all the very important Schedules, have been passed practically without discussion, and we are being asked, in an hour's time, to pass into law a mass of half-baked proposals, trusting that, whatever Government comes after, will do something subsequently to render them fit for the digestion of the subjects to whom they are to be applied. That is bad for the Exchequer, bad for the subject and very bad for the prestige of Parliament.
  There is no time to say anything about the general question of the Budget. It was never pretended that it was a balanced Budget, but it is now quite manifest that it is a wholly unbalanced Budget and the prospect which confronts us next April is truly appalling. In those circumstances, it might have been expected that the Government would have brought forward some proposals for the encouragement of industry and more particularly for the encouragement of inter-Imperial trade and industry in which alone, as I believe, lies hope for the economic salvation of this country. Nothing of the kind. They have occupied three quarters of this Bill and weeks of the time of Parliament with these proposals for land taxation, which can bring in no revenue for two years, which involve a large and immediate cost to the Exchequer and to the subject, and which
  1670
  constitute a fresh burden upon industry, at a moment, when, on the Chancellor's own statement, any fresh burden on industry "would be the last straw," and it is a fresh burden on British industry from which the foreign competing industry is free.
  Let me try for a moment to restate one or two of the chief objections which we feel to the principles underlying these proposals, and our objections are not, as the Financial Secretary to the Treasury seemed to think they were, small matters, but are vital matters of principle. Our first objection to these proposals is that they involve selective taxation, imposed twice annually in respect of the same investment, and imposed not in accordance with ability to pay, not in accordance with the income derived from it, but because it is an investment in a particular kind of property. That is a fundamental principle, and not all the rhetorical dialectics of the right hon. Member for Carnarvon Boroughs can obscure that fact. The right hon. Gentleman, has dealt faithfully with the right hon. and learned Gentleman behind him, and I have no doubt the right hon. and learned Member is quite able to take care of himself.
  Let me put this to the right hon. Gentleman: He talks about the fundamental principle of this Bill, and he gives His own definition of that principle, but that is not the definition which the Chancellor of the Exchequer gives. The Chancellor's definition is this:
  "The fundamental principle of the Bill is to assert the right of the community to the ownership of land;"
  and, I would add, to recover land ownership by the process of confiscation. [Interruption.] It is denied that the object of this taxation is to initiate the process of gradually recovering the right of the community to the ownership of land? The Chancellor of the Exchequer acquiesces. That is the fundamental principle of the Bill. [An HON. MEMBER: "Appropriation by the State."] Well, we will not quarrel over the words: appropriation by the State, if you like. Is that fundamental principle accepted by the right hon. Member for Carnarvon Boroughs? That is the question which the right hon. and learned Member for Spen Valley asked,

  1671
  and to that question we have never yet had an answer. When is a principle not a principle? The right hon. Gentleman says "When it is one-eighth of a penny instead of a penny in the £." A penny is a great principle to be fought against and to be resisted, and so apparently is a halfpenny, or it was in 1909. But somewhere between a halfpenny and one-eighth of a penny you get to the vanishing point at which there ceases to be a principle and it becomes a matter of accommodation between parties. How does the right hon. Gentleman know that, having admitted the principle, it will stop at one-eighth of a penny? What guarantee has he got of that? Absolutely none. On the contrary, he has had the plainest warnings from the Chancellor of the Exchequer. He talks about future Governments having power to vary and increase the rate of the tax, and the Chancellor of the Exchequer's hon. Friend the Member for Burslem (Mr. MacLaren) looks forward with hope, and joy, and conviction to the day when the tax will be increased from 1d. to 2d., to 3d., to 6d., and up to 1s., at which point the whole economic rent of land is taken away. That is the proceeding which opens before the right hon. Member for Carnarvon Boroughs.
  Then there is the right hon. Member for Darwen (Sir H. Samuel). He goes down into the country, to the Banbury division, over the week-end and delivers, with almost oleaginous unction, a speech in which he acclaims the triumph and the valour of his associates, who have succeeded, at the point of the bayonet, in extorting concessions from a reluctant Chancellor of the Exchequer. Valour is hardly a word that I should have applied to that section of the party with which the right hon. Gentleman is associated. The Caudine Forks is the badge of all their tribe; Canossa is their home town. The right hon. Gentleman goes on to wax a little bolder and talks about the Chancellor as being a reckless chauffeur and as driving to the country's danger in his conduct of the Bill. If we are to have motor-car analogies, that is not exactly the picture which the events of recent weeks suggests to my mind. I have a picture of the right hon. Member for Darwen and the right hon. Member for Carnarvon Boroughs speeding in a somewhat
  1672
  dilapidated vehicle, skidding round awkward corners, with some of the rest of their associates trying vainly to induce them to moderate their speed, while the rest of their friends stand in the heat and dust of the constituencies and watch the right hon. Gentleman, as he hurtles past to keep a date with the Government, and, like the gentleman whose pictures we see in the papers from day to day, exclaim "Crikey! That's a Liberal principle, that was!"
  Our second objection to these proposals is that they are in themselves unjust, because they impose a tax not solely on the increment in value which has resulted from expenditure by other taxpayers and ratepayers—and I much prefer to say the expenditure of other taxpayers and ratepayers than the expenditure of the State or the local authorities—but they impose it not solely upon that increment value, but upon the increment in value which has resulted from a man's own expenditure, or from the expenditure of his predecessors in title, which has already been fully discounted in the price which he has paid. While that injustice has always been inherent in these proposals, it is rendered far more glaring by the events which have taken place since the Bill was introduced in regard to town planning. There you have agreed to the principle of a betterment levy and fixed it definitely at 75 per cent., but you have rejected the suggestion that the levy should only be imposed when the value is realised and a sale takes place, and you have insisted that it is to be imposed at a date selected, at a given time, by the local authority. Having done that, one would have thought that common justice at least would have made you recognise that the fact that such a levy had been charged and paid ought to be taken into account when the valuation was made, but not a bit of it. You tax the man on the annual amount of the levy. You extract from him once under Schedule A, once under the betterment levy, once under the proposals of this Bill, and, finally, once and for all by way of Death Duties: and you call yourselves single taxers!
  Our third objection is to the valuation itself. We object to the valuation itself because, in our view, the basis of the valuation is grotesque, farcical, and unjust. I could give many instances, but

  1673
  let me give just one by way of final illustration. We object to the basis as being unjust because, after you have arrived at your ridiculous and absurd stripped value, you then proceed to enact that the one site which you are considering is the only site in the country in that condition, and that all other sites are in their existing condition. Is it not clear that if you take a street like Oxford Street, a site there would have one value if it were the only available site, but a widely different value if the whole of Oxford Street consisted of vacant sites? In other words, the total value of Oxford Street, made up of a total sum of individual values taken separately, would produce a result far in excess of the true figure, and any Domesday Book written on that basis would be wholly erroneous and fallacious.
  I still think that the Government have grossly under-estimated both the cost and the time which will be incurred in order to carry through this valuation, and the fact that, for reasons of their own, they have postponed the valuation date, makes me more than believe that it will be impossible to carry this through by March, 1933. Let me say, in passing, that the Government have always refrained from pointing out that not only is there going to be a cost to the State, but that there is going to be, through the operations of this valuation, a very large additional cost thrown upon the subject. In almost every case where values are at all large or complicated, the subject who is assessed will have to employ professional assistance. The truth is this is not only a Finance Bill, but a lawyers' and surveyors' endowment Bill.
  Let me say one word about the new Domesday Book. The right hon. Member for Darwen attached so much importance to the existence of the new Domesday Book and the complete valuation, that he is prepared to swallow the principle of double taxation. But is the right hon. Gentleman going to get complete valuation under the Bill? Nothing of the sort. In their anxiety and hurry to get land valuation, the Government have provided that the valuer need not value land which is going to be exempt from taxation, or on which no tax is chargeable, and, as our discussions have proceeded, so electoral repercussions have
  1674
  gradually forced the Government to widen the area of their exemptions, until it has become manifest that the width of the exemptions is the measure of the injustice of the proposals of the Chancellor of the Exchequer. How, in the present economic situation of the country, can you justify exempting playing-fields while at the same time you are imposing a tax on factories, warehouses, offices and shops. As regards the extent of the valuation, it is clear that the Government have not the smallest notion how much land they have exempted. They have not the slightest idea how far the exemptions they have given are going to render this complete valuation incomplete. The truth of the matter is that the right hon. Gentleman the Member for Carnarvon Boroughs has sold, what he asseverated, almost with oaths, at Edinburgh was the birthright of his party, for a mess of pottage skilfully concocted by the Solicitor-General, and I should like to take this opportunity to pay my tribute to the hon. and learned Member for the way be has conducted the proceedings on this Bill.
  There is the curious provision in the Bill which gives discretion to the valuer in the case of agricultural land to refrain from valuing land where the land value and cultivation value are equal. I am a little doubtful whether the provisions of the Bill do confer that discretion, but, assuming that the discretion is given to the valuer, is it not a rather remarkable commentary on our proceedings that we should perforce have had to do without discussion at all on this remarkable proposal? I said in the early stage of the debates that you had to go back to the Stuart Kings to find a precedent. I was unjust to the Stuart Kings. It is to the Tudors that you have to go back—to the days of Empson and Dudley, who, I regret to say, were both predecessors of yours in the Chair. It is to them that you have to go back to find a parallel for a case like this which has been brought forward by a Socialist Government supported by Liberals.
  Nor are we even to be allowed to invoke the aid of the courts to determine facts on appeal—a right which the right hon. Member for Carnarvon Boroughs willingly conceded to the subject in 1910. For a few short hours we were under

  1675
  the impression that this right was going to be conceded in this case too. Moved by the arguments which the Scottish Members were able to find time to address to him, the Lord Advocate was understood to intimate that he agreed that such an appeal was just, and that he proposed to use his influence to secure a corresponding provision for England. But, having thus gallantly nailed his colours to the Solicitor-General's mast, the Lord Advocate retired to his cabin, and only came on deck in time to assist his hon. and learned Friend to haul down the flag. In a few moments the Lord Advocate is going into the Lobby to support with his vote and influence proposals which, on the confession of all who heard him, and the pages of the OFFICIAL REPORT can testify, do less than essential justice.
  Is it to be treated as nothing that the whole land system of Scotland is to be thrown into inextricable confusion by the operation of this Bill? Is it nothing that a system of tenure, whether right or wrong—and strong evidence was given before the Committee on Land Values to show that it was an exceedingly proper and advantageous system—a system which has existed for centuries, is to be practically abolished here on Friday afternoon? Is it nothing that industry is to have this fresh burden, whatever its magnitude, imposed upon it, which will fall especially on those heavy industries and industries dealing with raw materials, especially those which are depressed, because they are precisely the industries which, from the nature of their business have to operate largely on land sites—is it nothing that those who have invested their money in mortgages and ground rents, because that is a well-tried and recognised form of security, built up almost to a trustee character—is it nothing that these people are to suffer great loss and damage inflicted upon them by the operation of this tax? I do not doubt that when the Chancellor of the Exchequer introduced these proposals he thought he was really introducing a certain electoral weapon. That was obvious from his demeanour when he moved the original Resolution.
  I have noticed that the right hon. Gentleman never looks so exalted as when he is casting somebody else's bread upon the waters. I wonder if hon.
  1676
  Gentlemen behind him are going to find themselves equally happy when they go, in a few weeks' time, on their autumn visits to their constituencies, and have to explain to the angry shopkeeper or the angry householder a tax which was intended to fall on a duke but is going to fall on them because the Government are determined that they will not in any circumstances impose any taxation on the foreigner for the use of British markets. I believe they they will find that there is an innate sense of fairness in the British people which will not allow them to tolerate proposals so pregnant with injustice as these. Hon. Gentlemen will find, as other tin-pot tyrants have found before, that organised oppression never pays a political dividend. At all events, so far as we are concerned, our position is perfectly clear. The Order Paper of the House of Commons shows to-day that we have no responsibility whatever for these preposterous, unjust and damaging proposals; and we look forward to the day when the electorate will have an opportunity of pronouncing upon them, upon the Government which has conceived them, and upon the right hon. Gentleman the Member for Carnarvon Boroughs and his associates who have so sedulously and successfully nurtured and fostered them.
  3.0 p.m.
  Mr. P. SNOWDEN: The right hon. Gentleman who has just sat down has rightly earned in the course of the Debates on the land Clauses of the Bill a reputation for a knowledge of this subject, and for cogency and vigour in explaining his views upon this matter. This afternoon he has not gained in his reputation, and the explanation, I think, is that he was depressed by the electric atmosphere that had been created by his predecessor. The right hon. Gentleman in his concluding remarks called the attention of the House to the fact that upon the Order Paper to-day something like 200 names are attached to a Motion for the rejection of this Bill, and that, he said, was an indication of the views of the Opposition upon these proposals. It came as no surprise to see that. I should have had grave suspicions about the efficacy and justice and purpose of these proposals if they had received the support of that party, whose purpose was described by

  1677
  one of their own Members a few days ago as looking after vested interests. I can assure the right hon. Gentleman and his associates that when that day comes and we have to take the verdict of the country upon our proposals to deal with the land monopoly, we shall not shirk the issue. We have reached the end of the Debate upon the Finance Bill, and the only thing the House of Commons can do is to accept the Bill as it is, or to reject it. Before I go further, I should like—and I have a special obligation to do this—to associate myself with the just tribute that has been paid from many quarters of the House to the invaluable assistance that I have received in the conduct of this Bill. I am grateful to my hon. Friend the Financial Secretary and to the President of the Board of Trade; and I am sure that it will not be regarded as invidious if I say that I am grateful beyond measure for the assistance that I have received from the Solicitor-General. His legal knowledge, his ability, his powers of debate have justly earned for him a high place in Parliamentary history; and his courtesy, his tact and his toleration are so admirable that even I could hardly do better.
  The right hon. Member for Edgbaston (Mr. Chamberlain) said that we were in danger of losing sight of the fact that this was the Revenue Bill of the year, and in the course of the Debate, following speakers have supported that fear, because practically every speech has dealt with only the land Clauses of the Bill. The right hon. Gentleman did make some observations in regard to the Finance Clauses of the Bill, and it is incumbent on me to make some remarks on the criti-isms that he made. I Was charged once more with having produced an unbalanced Budget, a Budget which was described by the right hon. Gentleman the Member for Billhead (Sir R. Home) a week or two ago as a cooked balance-sheet. The right hon. Gentleman ought to have some knowledge of balance-sheets, and I should like to hope that all the companies with which he is associated present balance-sheets which are as honest as the balance-sheet which I submit to the House. [HON. MEMBERS:
  1678
  "Withdraw!"] I have nothing to withdraw.
  Mr. D. G. SOMERVILLE: The nasty imputation.
  Mr. SNOWDEN: The imputation is in your own suspicious minds. The criticisms of the financial proposals of the Budget have been made purely from the partisan point of view. If, instead of making the financial provision I have, I had raised taxation in order to meet the deficit what would have been the criticism of the Opposition? It would have required an Income Tax of something like 8d. in the £, and I Can imagine something of the criticism with which I should have been assailed if I had adopted that means of meeting the financial situation instead of the course which I have adopted.
  I have been charged, too, with emulating the example of my predecessor. The right hon. Gentleman said that I was the most improvident Chancellor who had held this office. In making that statement the right hon. Gentleman did an injustice to his right hon. Friend the Member for Epping (Mr. Churchill). In the matter of improvidence I could never hope to emulate that right hon. Gentleman. In order to avoid taxation at a time like this, I have used other means, all of which were available, without inflicting the slightest hardship upon industry. The right hon. Gentleman spoke about squeezing the Income Tax payers. The proposal to advance the collection of a quarter of the Income Tax by six months is a proposal defensible in itself, apart from what the financial position of the country may be. In that I was not following the example of the right hon. Member for Epping, but following the example of predecessors of ours far more illustrious than either he or I. It was a course that was adopted by Mr. Gladstone; it was adopted by Robert Lowe, and, as I said just now, it is wholly defensible in itself. The people that are going to be affected by that are people who have been having an advantage for the last 15 years at the expense of the other taxpayers of the country, and it is no hardship upon them. There was a great deal of correspondence in the newspapers, following the Budget, in which, I believe, the right hon. Member for Sevenoaks (Sir H. Young) said that we

  1679
  were imposing an additional Income Tax of 1s. in the £ upon this particular class of taxpayers. If that were the case, then they have been escaping an Income Tax of 1s. in the £ during the last 15 years. As a matter of fact, they are not paying a single penny more, and, if hon. Members will do a few sums in arithmetic, taking any calendar year they like, they will find that under this system they are paying not a single penny more. It is true that they will have to pay a somewhat larger sum in January, and Lord Decies, whose interest in Income Tax affairs is so well known, has written to the newspapers to say that in January the taxpayers have to pay a quarter's rent, perhaps to pay a motor licence, a quarter's gas and a quarter's electric light; but there are exactly the same things to pay in July, and in July, under this system, the taxpayer will pay only one-half the amount he now pays in January.
  Mr. CHAMBERLAIN: Then where does the sum of £10,000,000 come from?
  Mr. SNOWDEN: The £10,000,000 comes from the advance the Income Tax payer is paying. [Interruption.] It is perfectly simple. The £10,000,000 comes from the fact that he is paying three quarters in January, and then he gets the relief in the following July.
  In regard to other matters, very little has been said about the Debt proposals of the Budget. I have been charged with abandoning old principles and departing from the strict path of rectitude which I have hitherto professed to follow. I put in the Finance Bill of last year a Clause that a deficit must be made up in the Budget of the following year unless Parliament otherwise determined, and Parliament has this year determined that, in view of the industrial and economic condition of the country, that should be postponed. The right hon. Gentleman opposite said something in criticism of my estimates, and he repeated the statement that I had banked on a trade revival. I never said anything of the kind. I said that I hoped economy would be effected as the outcome of the recommendations of the Economy Committee, and when the report of that Committee is produced then, as it was a House of Commons Committee, it will be up to the House of Commons to face its recommendations.
  1680
  There is one other matter to which I would like to refer. Mr. Hoover's proposal for a moratorium, of course, created a somewhat serious Budgetary position for this country. I explained to the House the other day that it would cost the finances of this country something like £11,000,000. Of course, we welcomed President Hoover's proposal as an act of statesmanship, and the Government immediately stated that it would accept the proposal as it was made. It has, however, raised a very difficult position in regard to the fixed Debt charge. The House will remember that under that provision there is a fixed charge of £355,000,000, and that includes the payment of £33,000,000 to the United States of America. We have paid one instalment to the United States, and obviously, if the Debt charge remains at what it is now, including the provision with regard to the payment of the American debt, which we shall not have to make, there will be a much larger sum which must go to the reduction of other parts of our national Debt than was provided for in the Budget originally, and there will be a difference of something like £30,000,000. That would be accounted for by the £11,000,000 which we are losing by extending the moratorium to the Dominions, and to relieve debtors, and the balance of £19,000,000 would be the surplus sum which we should not have to pay. This £11,000,000 is a very serious burden on the taxpayers of the country, and I am hoping that a satisfactory settlement will be arrived at among the parties now negotiating in Paris. But I have to state to the House that the latest information is not very satisfactory. The Government, the House of Commons, and I believe the whole country, are quite willing to shoulder the sacrifices which we have already declared our willingness to bear, but the Government will not be prepared to make further sacrifices unless other parties are prepared to co-operate in these sacrifices.
  I come now to the matter which has occupied most of the discussion this afternoon, namely, the land Clauses in this Bill, which have emerged in a somewhat different form. I never expected that I should be able to carry them without making some concession, but I was determined to maintain intact and unimpaired the essential principles of the Bill—

  1681
  [Interruption]—and the Bill, as it will pass in the next quarter of an hour, does maintain those principles. It maintains the principle which was defined by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), of a tax upon all site values, and it maintains wholly intact the principle and practice of a valuation for arriving at the real value of all the sites which will be subject to taxation, excluding, of course, those which are exempted under the Bill. A first Measure dealing with a great and complicated subject like this is bound to show imperfections. I never expected that I should be able, as a first Measure, to produce a perfectly watertight Measure. Any Measure is bound to inflict what may appear to be injustices in certain individual cases. What we have to do is to try to confer the largest measure of good by what we do, and at the same time to try to reduce the injustices or hardships that it may entail. I venture to say that we have succeeded in doing that.
  There is another point in connection with this matter, which, in the course of this Debate, has not, apparently, been appreciated. We have heard a great deal about the alleged injustice of imposing a tax upon land value which the owner of land has already paid. But the House of Commons ought to realise that this Land Tax proposal is for the future, and that in the future those alleged injustices will not operate; because it has been repeatedly stated, and it was repeated by the right hon. Member for Hillhead (Sir R. Home) this afternoon, that the effect of these taxation proposals will be to reduce the capital value of land by at least one-twelfth. Indeed, it may be anticipated that the reduction will be morn, because, when the tax is imposed, it will be the object of the owner to sell the land, land will be thrown into the market, and competition in the sale of land will have the inevitable result of reducing its capital value.
  There is another fact which appears to have been lost sight of in this discussion. There has been a great deal of talk about double taxation. But, if this tax raises revenue—about which the right hon. Gentleman appeared to have some doubts—something can be done with that revenue. It will be used for the purpose of reducing taxation in other directions—[Interruption]—and, therefore,
  1682
  there will be a reduction of taxation exactly corresponding with any in crease of taxation that may have beer imposed by the operation of this Measure. The scheme of the right hon. Gentleman the Member for Carnarvon Boroughs was complicated, as I think he will agree, by trying to deal with too many aspects of the question at the same time. Ours is a much simpler way and, in that respect, it is the first real attack upon the land monopoly of the country. I hope more courageous Parliaments will in the future deal with this problem more drastically than we have done. The land monopoly is the greatest burden on industry. It imposes a tax of hundreds of millions a year upon the productive enterprise of the country, and, instead of this tax being an additional burden upon industry, it is designed for and will have the effect of lightening the burden upon industry. Taking the admission of hon. Members opposite that it will reduce the capital value of land in the future—and it is to the future that we must look for the effective benefits of the tax—every manufacturer who wants to buy a site for a factory will find that he can get it, on the admission of hon. Members opposite, at one-twelfth less. [HON. MEMBERS: "He will then pay the tax!"] The tax has already been included in the price. The right hon. Gentleman raised the question that this tax is going to be imposed whether a profit is being made by the business that is on the site of it or not. Is not rent paid? Is not the rent of agricultural land being paid in these limes of depression?
  Hon. Members opposite regard this as being an unjust imposition, but they never have a word to say about the enormous burden that the rent of land is upon the industry of the country. I hope that this is only the first attempt upon the land monopoly. The right hon. and learned Gentleman the Member for Spen Valley (Sir J. Simon) explained what he conceives to be my views upon this question, my purpose and my principles. I take no exception to what he said, but I may remind the House that they are views of which he himself was such an ardent supporter up to a few weeks ago. The right hon. and learned Gentleman

  1683
  said that the Liberal party had never been identified with the principles of Henry George. The English Land Taxation League exists for the purpose of propagating the principles of Henry George, and up to a month ago, when his name was removed from the list, the right hon. Gentleman was a Vice-President.
  The principle underlying this Bill is to assert the right of the community to the ownership of the land. I have never made any question about that, nor that that right should be expressed in the form of a rent paid by the occupier or rather the owner of the land to the community. As I said just now, this is only the first step in the reform of our land system. The effect of that system has been to place a burden on industry of hundreds of millions a year. It has crowded our people into pestilential slums, and it has driven hundreds of thousands of people from the land into the towns to compete with the town workers, with the result that wages have been depressed and unemployment has been increased. I hesitate to enter into the controversy between the right hon. and learned Gentleman the Member for Spen Valley and the right hon. Gentleman the Member for Carnarvon Boroughs. I did tread upon that very ground a short time ago and my experience does not encourage me to repeat the operation. Of course. I noticed with
  what enthusiasm the Tory party received his denunciation of Liberal principles upon the taxation of land values, and when the right hon. Gentleman stands no longer shivering on the brink and takes the short step across, I hope that he will be successful in imposing upon his new friends Liberal principles with regard to the taxation of land.
  I commend the Bill to the House of Commons, not only upon its financial proposals but also upon its land proposals. I think that when they come into operation their social and economic effect will be seen, but it is only the first step. The right hon. Gentleman himself said so. The party for whom I speak have always put the question of land reform in the forefront of their programme for the reasons I have already stated, because we believe it to be one of the greatest burdens upon industry and one of the greatest obstacles to social well-being. Although I may not live to see the step that we have taken this afternoon advance still further, at any rate I submit this Bill to the House of Commons with the satisfaction that I believe that we have begun a far-reaching reform which some day will liberate the land for the people and abolish once and for all the tyranny under which the people in this country have suffered.
  Question put, "That the word now' stand part of the Question."
  The House divided: Ayes, 274; Noes, 222.

  Division No. 377.]

  AYES.

  [3.30 p.m.

  Adamson, Rt. Hon. W. (Fife, West)

  Bromfield, William

  Davies, Rhys John (Westhoughton)

  Adamson, W. M. (Staff., Cannock)

  Bromley, J.

  Day, Harry

  Addison, Rt. Hon. Dr. Christopher

  Brooke, W.

  Denman, Hon. R. D.

  Altchison, Rt. Hon. Cralgie M.

  Brothers, M.

  Dudgeon, Major C. R.

  Alexander, Rt. Hon. A. V. (Hillsbro')

  Brown, C. W. E. (Notts, Mansfield)

  Duncan, Charles

  Alpass, J. H.

  Brown, Rt. Hon. J. (South Ayrshire)

  Ede, James Chuter

  Ammon, Charles George

  Buchanan, G.

  Edge, Sir William

  Angell, Sir Norman

  Burgess, F. G.

  Edmunds, J. E.

  Arnott, John

  Buxton, C. R. (Yorks. W. R. Elland)

  Edwards, E. (Morpeth)

  Attlee, Clement Richard

  Cameron, A. G.

  Egan, W. H.

  Ayles, Walter

  Cape, Thomas

  Evans, Capt. Ernest (Welsh Univer.)

  Baker, John (Wolverhampton, Bilston)

  Carter, W. (St. Pancras, S. W.)

  Foot, Isaac

  Baldwin, Oliver (Dudley)

  Charleton, H. C.

  Gardner, B. W. (West Ham, Upton)

  Barnes, Alfred John

  Chater, Daniel

  Gardner, J. P. (Hammersmith, N.)

  Barr, James

  Church, Major A. G.

  George, Rt. Hon. D. Lloyd (Car'vn)

  Batey, Joseph

  Cluse, W. S.

  George, Major G. Lloyd (Pembroke)

  Beckett, John (Camberwell, Peckham)

  Clynes, Rt. Hon. John R.

  George, Megan Lloyd (Anglesea)

  Benn, Rt. Hon. Wedgwood

  Cocks, Frederick Seymour.

  Gibbins, Joseph

  Bennett, Sir E. N. (Cardiff, Central)

  Compton, Joseph

  Gibson, H. M. (Lanes. Mossley)

  Bennett, William (Battersea, South)

  Cove, William G.

  Gillett, George M.

  Benson, G.

  Cripps, Sir Stafford

  Glassey, A. E.

  Bevan, Aneurin (Ebbw Vale)

  Daggar, George

  Gossling, A. G.

  Bondfield, Rt. Hon. Margaret

  Dallas, George

  Gould, F.

  Bowen, J. W.

  Dalton, Hugh

  Graham, D. M. (Lanark, Hamilton)

  Broad, Francis Alfred

  Davies, E. C. (Montgomery)

  Graham, Rt. Hon. Wm. (Edin., Cent

  Brockway, A. Fenner

  Davies, D. L. (Pontypridd)

  Gray, Milner

  Greenwood, Rt. Hon. A. (Colne)

  McElwee, A.

  Sherwood, G. H.

  Grenfell, D. R. (Glamorgan)

  McEntee, V. L.

  Shield, George William

  Griffiths, F. Kingsley (Middlesbro' W.)

  MacLaren, Andrsw

  Shiels, Dr. Drummond

  Griffiths, T. (Monmouth, Pontypool)

  Maclean, Sir Donald (Cornwall, N.)

  Shillaker, J. F.

  Groves, Thomas E

  MacNeill-Weir, L.

  Shinwell, E.

  Grundy, Thomas W.

  McShane, John James

  Short, Alfred (Wednesbury)

  Hall, G. H. (Merthyr Tydvil)

  Malone, C. L'Estrange (N'thampton)

  Simmons, C. J.

  Hall, J. H. (Whitechapel)

  Manning, E. L.

  Simon, E. D. (Manch'ter, Withington)

  Hall, Capt. W. G. (Portsmouth, C.)

  Mansfield, W.

  Sinclair, Sir A. (Caithness)

  Hamilton, Mary Agnes (Blackburn)

  March, S.

  Sitch, Charles H.

  Hamilton, Sir R. (Orkney & Zetland)

  Markham, S. F.

  Smith, Ben (Bermondsey, Rotherhithe)

  Hardie, David (Rutherglen)

  Marley, J.

  Smith, Frank (Nuneaton)

  Hardie, G. D. (Springburn)

  Marshall, Fred

  Smith, Lees, Rt. Hon. H. B.(Keighley)

  Harris, Percy A.

  Mathers, George

  Smith, Rennle (Penistone)

  Hastings, Dr. Somerville

  Matters, L. W.

  Smith, Tom (Pontefract)

  Haycock, A. W.

  Maxton, James

  Smith, W. R. (Norwich)

  Hayday, Arthur

  Messer, Fred

  Snowden, Rt. Hon. Philip

  Henderson, Rt. Hon. A. (Burnley)

  Middleton, G.

  Snowden, Thomas (Accrington)

  Henderson, Arthur, Junr. (Cardiff, S.)

  Mills, J. E.

  Sorensen, R.

  Henderson, Joseph (Ardwick)

  Milner, Major J.

  Stamford, Thomas W.

  Henderson, Thomas (Glasgow)

  Montague, Frederick

  Stephen, Campbell

  Henderson, W. W. (Middx., Enfield)

  Morgan, Dr. H. B.

  Strauss, G. R.

  Herriotts, J.

  Morley, Ralph

  Sullivan, J.

  Hicks, Ernest George

  Morrison, Rt. Hon. H. (Hackney, S.)

  Sutton, J. E.

  Hirst, G. H. (York W. R. Wentworth)

  Morrison, Robert C. (Tottenham, N.)

  Taylor, R. A. (Lincoin)

  Hirst, W. (Bradford, South)

  Mort, D. L.

  Taylor, W. B. (Norfolk, S. W.)

  Hoffman, P. C.

  Muff, G.

  Thomas, Rt. Hon. J. H. (Derby)

  Hollins, A.

  Muggeridge, H. T.

  Thorne, W. (West Ham, Plalstow)

  Hopkin, Daniel

  Murnin, Hugh

  Thurtle, Ernest

  Hudson, James H. (Huddersfieid)

  Nathan, Major H. L.

  Tillett, Ben

  John, William (Rhondda, West)

  Naylor, T. E.

  Tinker, John Joseph

  Jones, Llewellyn-, F.

  Newman, Sir R. H. S. D. L. (Exeter)

  Toole, Joseph

  Jones, J. J. (West Ham, Silvertown)

  Noel Baker, P. J.

  Tout, W. J.

  Jones, Rt. Hon. Lelf (Camborne)

  Noel Buxton, Baroness (Norfolk, N.)

  Trevelyan, Rt. Hon. Sir Charles

  Jones, Morgan (Caerphilly)

  Oldfield, J. R.

  Vaughan, David

  Jowitt, Rt. Hon. F. W.

  Oliver, George Harold (Ilkeston)

  Viant, S. P.

  Jowitt, Rt. Hon. Sir W. A. (Preston)

  Owen, H. F. (Hereford)

  Walkden, A. G.

  Kelly, W. T.

  Palin, John Henry.

  Walker, J.

  Kennedy, Rt. Hon. Thomas

  Paling, Wilfrid

  Wallace, H. W.

  Kenworthy, Lt.-Com. Hon. Joseph M.

  Palmer, E. T.

  Walters, Rt. Hon. Sir J. Tudor

  Kinley, J.

  Parkinson, John Allen (Wigan)

  Watkins, F. C.

  Kirkwood, D

  Pethick-Lawrence, F. W.

  Watson, W. M. (Dunfermline)

  Knight, Holford

  Phillips, Dr. Marlon

  Wellock, Wilfred

  Lang, Gordon

  Pole, Major D. G

  Welsh, James (Paisley)

  Lansbury, Rt. Hon. George

  Potts, John S.

  Welsh, James C. (Coatbridge)

  Lathan, G. (Sheffield, Park)

  Pride, M. P.

  West, F. R.

  Law, Albert (Bolton)

  Quibell, D. J. K.

  Westwood, Joseph

  Law, A. (Rossendale)

  Ramsay, T. B. Wilson

  White, H. G.

  Lawrence, Susan

  Rathbone, Eleanor

  Whiteley, Wilfrid (Birm., Ladywood)

  Lawrie, Hugh Hartley (Stalybridge)

  Raynes, W. R.

  Whiteley, William (Blaydon)

  Lawson, John James

  Richards, R.

  Wilkinson, Ellen C.

  Lawther, W. (Barnard Castle)

  Richardson, R. (Houghton-le-Spring)

  Williams, David (Swansea, East)

  Leach, W.

  Riley, Ben (Dewsbury)

  Williams, E. J. (Ogmore)

  Lee, Frank (Derby, N. E.)

  Riley, F. F. (Stockton-on-Tees)

  Williams, Dr. J. H. (Lianelly)

  Lee, Jennie (Lanark, Northern)

  Ritson, J.

  Williams, T. (York, Don Valley)

  Lees, J.

  Roberts, Rt. Hon. F. O. (W. Bromwich)

  Wilson, C. H. (Sheffield, Attercliffe)

  Leonard, W.

  Romeril, H. G.

  Wilson, J. (Oldham)

  Lewis, T. (Southampton)

  Rosbotham, D. S. T.

  Wilson, R. J. (Jarrow)

  Lindley, Fred w.

  Rowson, Guy

  Winterion, G. E.(Leicester, Loughb'gh)

  Lloyd, C. Ellis

  Salter, Dr. Alfred

  Wise, E. F.

  Logan, David Gilbert

  Samuel, Rt. Hon. Sir H. (Darwen)

  Wood, Major McKenzie (Banff)

  Longbottom, A. W.

  Sanders, W. S.

  Young, R. S. (Islington, North)

  Longden, F.

  Sawyer, G. F.

  Lunn, William

  Scott, James

  TELLERS FOR THE AYES.—

  Macdonald, Gordon (Ince)

  Scurr, John

  Mr. Charles Edwards and Mr. Hayes.

  MacDonald. Rt. Hon. J. R. (Seaham)

  Shaw, Rt. Hon. Thomas (Preston)

  MacDonald, Malcolm (Bassetlaw)

  Shepherd, Arthur Lewis

  NOES.

  Acland-Troyte, Lieut.-Colonel

  Beamish, Rear-Admiral T. P. H.

  Broadbent, Colonel J.

  Ainsworth, Lieut.-Col. Charles

  Beaumont, M. W.

  Brown, Ernest (Leith)

  Albery, Irving James

  Beilalrs, Commander Carlyon

  Brown, Brig.-Gen. H. C.(Berks, Newb'y)

  Alexander, Sir Wm. (Glasgow, Cent'l)

  Betterton, Sir Henry B.

  Buchan, John

  Allen, Sir J. Sandeman (Liverp'l., W.)

  Birchall, Major Sir John Dearman

  Buchan-Hepburn, P. G. T.

  Amery, Rt. Hon. Leopold C. M. S.

  Bird, Ernest Roy

  Bullock, Captain Malcolm

  Ashley, Lt.-Col. Rt. Hon. Wilfrid W.

  Boothby, R. J. G.

  Burton, Colonel H. W.

  Astor, Maj. Hn. John J. (Kent, Dover)

  Bourne, Captain Robert Croft

  Butler, R. A.

  Atholl, Duchess of

  Bowater, Col. Sir T. Vansittart

  Cadogan, Major Hon. Edward

  Baillie-Hamilton, Hon. Charles W.

  Bowyer, Captain Sir George E. W.

  Campbell, E. T.

  Baldwin, Rt. Hon. Stanley (Bewdiey)

  Boyce, Leslie

  Carver, Major W. H.

  Balfour, George (Hampstead)

  Bracken, B.

  Castle Stewart, Earl of

  Balfour, Captain H. H. (I. of Thanet)

  Brass, Captain Sir William

  Cautley, Sir Henry S.

  Balniel, Lord

  Briscoe, Richard George

  Cayzer, Sir C. (Chester, City)

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  1687

  Cayzer, Maj. Sir Herbt. R.(Prtsmth, S.)

  Gunston, Captain D. W.

  Penny, Sir George

  Cazalet, Captain Victor A.

  Hall, Lieut.-Col. Sir F. (Dulwich)

  Peters, Dr. Sidney John

  Chadwick, Capt. Sir Robert Burton

  Hamilton, Sir George (Ilford)

  Peto, Sir Basil E. (Devon, Barnstaple)

  Chamberlain, Rt. Hn. Sir J. A.(Birm., W.)

  Hanbury, C.

  Pilditch, Sir Philip

  Chamberlain, Rt. Hon. N.(Edgbaston)

  Hannon, Patrick Joseph Henry

  Ramsbotham, H.

  Chapman, Sir S.

  Hartington, Marquess of

  Rawson, Sir Cooper

  Christie, J. A.

  Harvey, Major S. E. (Devon, Totnes)

  Reid, David D. (County Down)

  Clydesdale, Marquess of

  Haslam, Henry C.

  Remer, John R.

  Cobb, Sir Cyril

  Heneage, Lieut.-Colonel Arthur P.

  Rentoul, Sir Gervais S.

  Cockerill, Brig.-General Sir George

  Herbert, Sir Dennis (Hertford)

  Reynolds, Col. Sir James

  Cohen, Major J. Brunei

  Hills, Major Rt. Hon. John Waller

  Richardson, Sir P. W. (Sur'y, Ch'te'y;

  Colfox, Major William Philip

  Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.

  Roberts, Sir Samuel (Ecclesall)

  Collins, Sir Godfrey (Greenock)

  Hope, Sir Harry (Forfar)

  Rodd, Rt. Hon. Sir James Rennell

  Colman, N. C. D.

  Home, Rt. Hon. Sir Robert S.

  Ruggles-Brise, Colonel E.

  Colville, Major D. J.

  Howard-Bury, Colonel C. K.

  Russell, Alexander West (Tynemouth)

  Conway, Sir W. Martin

  Hudson, Capt. A. U. M. (Hackney, N.)

  Salmon, Major I.

  Cooper, A. Duff

  Hunter-Weston, Lt.-Gen. Sir Aylmer

  Samuel, A. M. (Surrey, Farnham)

  Courtauld, Major J. S.

  Hurd, Percy A.

  Samuel, Samuel (W'dsworth. Putney)

  Courthope, Colonel Sir G. L.

  Hurst, Sir Gerald B.

  Sandeman, Sir N. Stewart

  Cowan, D. M.

  Hutchison, Maj.-Gen. Sir R.

  Sassoon, Rt. Hon. Sir Philip A. G. D.

  Cranborne, Viscount

  Inskip, Sir Thomas

  Savery, S. S.

  Croft, Brigadier-General Sir H.

  Iveagh, Countess of

  Shepperson, Sir Ernest Whittome

  Crookshank, Capt. H. C.

  Kindersley, Major G. M.

  Simon, Rt. Hon. Sir John

  Culverwell, C. T. (Bristol, West)

  Knox, Sir Alfred

  Sinclair, Col. T. (Queen's U., Belfst)

  Cunliffe-Lister, Rt. Hon. Sir Philip

  Lamb, Sir J. Q.

  Smith, R. W. (Aberd'n & Kinc'dine. C)

  Dalkeith, Earl of

  Lambert, Rt. Hon. George (S Molton)

  Smith-Carlngton, Neville W.

  Dalrymple-White, Lt.-Col. Sir Godfrey

  Lane Fox, Col. Rt. Hon. George R.

  Smithers, Waldron

  Davidson, Rt. Hon. J. (Hertford)

  Latham, H. P. (Scarboro' & Whitby)

  Somerville, A. A. (Windsor)

  Davies, Dr. Vernon

  Leigh, Sir John (Clapham)

  Somerville, D. G. (Willesden, East)

  Davies, Maj. Geo. F. (Somerset, Yeovil)

  Leighton, Major B. E. P.

  Southby, Commander A. R. J.

  Davison, Sir W. H. (Kensington, S.)

  Lewis, Oswald (Colchester)

  Spender-Clay, Colonel H.

  Dawson, Sir Philip

  Little, Graham-, Sir Ernest

  Stanley, Lord (Fylde)

  Despencer-Robertson, Major J. A. F.

  Liewellin, Major J. J.

  Stanley, Hon. O. (Westmorland)

  Dixon, Captain Rt. Hon. Herbert

  Locker-Lampson, Rt. Hon. Godfrey

  Steel-Maitland, Rt. Hon. Sir Arthur

  Dugdale, Capt. T. L.

  Locker-Lampson, Com. O.(Handsw'th)

  Stewart, W. J. (Belfast South)

  Eden, Captain Anthony

  Long, Major Hon. Eric

  Stuart, Hon. J. (Moray and Nairn)

  Edmondson, Major A. J.

  Lymington, Viscount

  Sueter, Rear-Admiral M. F.

  Elliot, Major Walter E.

  Macdonald, Sir M. (Inverness)

  Thomas, Major L. B. (King's Norton)

  Erskine, Lord (Somerset, Weston-s. M.)

  Macdonald, Capt. P. D. (I. of W.)

  Thompson, Luke

  Everard, W. Lindsay

  Macguisten, F. A.

  Thomson, Mitchell-, Rt. Hon. Sir W

  Falle, Sir Bertram G.

  Maitland, A. (Kent, Faversham)

  Titchfield, Major the Marquess of

  Ferguson, Sir John

  Makins, Brigadier-General E.

  Todd, Capt. A. J.

  Fermoy, Lord

  Margesson, Captain H. D.

  Tryon, Rt. Hon George Clement

  Fielden, E. B.

  Marjoribanks, Edward

  Turton, Robert Hugh

  Forestler-Walker, Sir L.

  Mason, Colonel Glyn K.

  Vaughan-Morgan. Sir Kenyon

  Frece, Sir Walter de

  Merriman, Sir F. Boyd

  Wallace, Capt. D. E. (Hornsey)

  Fremantle, Lieut.-Colonel Francis E.

  Milne, Wardlaw-, J. S.

  Ward, Lieut.-Col. Sir A. Lambert

  Galbraith, J. F. W.

  Mitchell, Sir W. Lane (Streatham)

  Warrender, Sir Victor

  Ganzoni, Sir John

  Monsell, Eyres, Com. Rt. Hon. Sir B.

  Waterhouse, Captain Charles

  Gauit, Lieut.-Col. A. Hamilton

  Moore, Sir Newton J. (Richmond)

  Wells, Sydney R.

  Gilmour, Lt.-Col. Rt. Hon. Sir John

  Moore, Lieut.-Colonel T. C. R. (Ayr)

  Williams, Charles (Devon, Torquay)

  Glyn, Major R. G. C.

  Morrison, W. S. (Glos., Cirencester)

  Wilson, G. H. A. (Cambridge U.)

  Gower, Sir Robert

  Morrison-Bell, Sir Arthur Clive

  Windsor-Clive, Lieut.-Colonel Georg

  Graham, Fergus (Cumberland, N.)

  Muirhead, A. J.

  Winterton, Rt. Hon. Earl

  Grattan-Doyle, Sir N.

  Nail-Cain, A. R. N.

  Withers, Sir John James

  Greaves-Lord. Sir Walter

  Newton, Sir D. G. C. (Cambridge)

  Wolmer, Rt. Hon. Viscount

  Greene, W. P. Crawford

  Nicholson, O. (Westminster)

  Wood, Rt. Hon. Sir Kingsley

  Grenfell, Edward C. (City of London)

  Nicholson, Col. Rt. Hn. W. G.(Ptrsf'ld)

  Young, Rt. Hon. Sir Hilton

  Gretton, Colonel Rt. Hon. John

  Oman, Sir Charles William C.

  Gritten, W. G. Howard

  O'Neill, Sir H.

  TELLERS FOR THE NOES.—

  Guinness, Rt. Hon. Walter E.

  Ormsby-Gore, Rt. Hon. William

  Major Sir George Hennessy and Sir Frederick Thomson.

  Bill read the Third time, and passed.

NORTH KILLINGHOLME (ADMIRALTY PIER) (Re-committed) BILL.
Considered in Committee, and reported, without Amendment; read the Third time, and passed.

ELECTRICITY (SUPPLY) ACTS.
Resolved,
"That the Special Order made by the Electricity Commissioners under the Electricity (Supply) Acts, 1882 to 1928, and
1688
confirmed by the Minister of Transport under the Electricity (Supply) Act, 1919, in respect of the borough of Okehampton, the urban district of Tavistock, and the rural districts of Okehampton and Tavistock, all in the county of Devon, which was presented on the 4th day of June, 1931, be approved."
Resolved,
"That the Special Order made by the Electricity Commissioners under the Electricity (Supply) Acts, 1882 to 1928, and confirmed by the Minister of Transport under the Electricity (Supply) Act, 1919, and the Public Works Facilities Act, 1930, in respect of part of the rural district of Bucklow, in the county of Chester, and part of the rural district of Warrington,

1689
hi the county palatine of Lancaster, which was presented on the 4th day of June, 1931, be approved."
Resolved,
"That the Special Order made by the Electricity Commissioners under the Electricity (Supply) Acts, 1882 to 1928, and confirmed by the Minister of Transport under the Electricity (Supply) Act, 1919, and the Public Works Facilities Act, 1930, in respect of part of the borough of Ware-ham and parts of the rural districts of "Wareham and Purbeck, Poole, Wimborne, and Cranborne and Blandford, in the county of Dorset, which was presented on
1690
the 4th day of June, 1931, be approved."—[Mr. Parkinson.]
The remaining Orders were read, and postponed.
Whereupon Mr. SPEAKER adjourned the House, without Question put, pursuant to Standing Order No. 3.
Adjourned at Eighteen Minutes before Four o'clock.

  MAGISTRATES, BRISTOL.
  MAGISTRATES, BRISTOL.
  BEET-SUGAR FACTORY COMPANIES.
  BEET-SUGAR FACTORY COMPANIES.
  SAFETY OF LIFE AT SEA.
  SAFETY OF LIFE AT SEA.
  IMMIGRANTS, CANADA.
  IMMIGRANTS, CANADA.
  LONDON TRAFFIC REGULATIONS.
  LONDON TRAFFIC REGULATIONS.
  TOLLGATE SCHOOL.
  TOLLGATE SCHOOL.
  SHOP HOURS.
  SHOP HOURS.
  AVIATION (ACCIDENT).
  AVIATION (ACCIDENT).
Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.
FINANCE BILL.
Brought from the Commons (endorsed with the Certificate from the Speaker that the Bill is a Money Bill within the meaning of the Parliament Act, 1911); read 1a; and to be printed.
ROMFORD URBAN DISTRICT COUNCIL BILL. [H.L.]
Commons Amendments considered and agreed to.

DARLINGTON CORPORATION TROL LEY VEHICLES (ADDITIONAL ROUTES) PROVISIONAL ORDER BILL.
The CHAIRMAN OF COMMITTEES informed the House that the opposition to the Bill was withdrawn: The Order made yesterday discharged, and Bill committed.
House adjourned at seventeen minutes past four o'clock.