§ [SECOND READING.]
§ Order for Second Reading read.
§ THE PRESIDENT OF THE LOCAL GOVERNMENT BOARD (Mr. GERALD BALFOUR,) Leeds, Central
As the object of the Bill, the Second Reading of which I rise to move, is to continue an Act with the subject of which the House is already thoroughly familiar, and as it has been discussed at considerable length on more than one occasion in recent years, my observations this afternoon may be comparatively brief. The effect of the Bill will be to continue until March 31st, 1910, the Agricultural Rates Act, 1896, the Tithe Rent Charge Act, 1899, and certain Acts relating to Scotland, all of which otherwise expire on March 31st next year. It will be remembered that when the original Continuance Act was introduced in 1901, it was brought in a form which would have given permanence to the Acts to which it applies. That proposal was strenuously objected to by the Opposition, and my right hon. friend the Leader of the House explained that we did not consider the scheme in the form embodied in those Acts to be in any sense a final or permanent scheme, or that, in the opinion of the Government, it would not be necessary, within a comparatively brief period, to introduce a comprehensive measure of local taxation reform. He accordingly expressed his willingness to limit the Continuance Bill to a period of four years, on the understanding that only one night should be spent upon the discussion of the Second Reading. That proposal was accepted. The operation of the Bill was limited to four years. The Second Reading only took one night, and the main stages of the Bill were passed with little or no opposition.
Now, four years have since passed and we are practically in the same position 329 as in 1901. We do not now, any more than then, profess that the scheme contained in these Acts is final or a permanent scheme, or that it deals once and for all with the many difficult and complicated problems connected with the question of local taxation. On the other hand, we held then, and we hold still, that those Acts met a real grievance, and, however much the Acts may be objected to in principle by hon. Gentlemen opposite, I hardly think that they will venture to deny that proposition. At all events, hon. Members on the other side of the House representing agricultural constituencies and Liberal candidates in agricultural constituencies would hardly dispute that those Acts do meet Teal grievances, and, to some extent, remedy them. I do not suppose that, at the present stage, this Continuance Bill is likely to meet with serious opposition, but perhaps it may be asked—I gather from a cheer just now that we shall be asked—why it is that the Government have not utilised the interval to introduce that more comprehensive measure at which my my right hon. friend hinted during the course of the discussion in 1901. Well, I do not think the answer is a very difficult one. To deal with so complicated a question as local taxation, a question involving so many conflicting interests, necessarily requires a favourable combination of circumstances. I will mention two senses in which combination is required before any Government can undertake such an Act. First, there must be an overflowing Exchequer, for, as far as I am aware, no complete solution is likely to be found without making large grants from Imperial sources; and, in the second place, it is necessary that there should be a Government and a House of Commons with plenty of leisure before it, and able and willing to devote a whole session, perhaps even more than one session, to dealing with the question. Neither of these conditions exists in our case.
But, over and above that, I may remind the House that it is admitted on all sides that before any comprehensive reform of local taxation can be undertaken the first thing necessary would be to establish a uniform basis of valuation. With that 330 object in view, in 1903, and again in 1904, Valuation Bills were prepared by my right hon. friend who is now the Chief Secretary for Ireland, and one of these was introduced in Parliament last year; but it met with considerable opposition. A revised Bill is in an advanced stage of preparation, and I trust will be introduced before very long, in accordance with the promise given in the King's Speech; but, of course, what progress it may be possible to make with that Bill must depend to a large extent upon the opposition which it encounters, and I fear experience has shown that even in the preliminary stages there are many pitfalls. I may, perhaps, briefly state why, in the meantime, and pending the introduction of larger and more comprehensive measures of reform, we support the admittedly incomplete remedy provided by the Acts which this Bill proposes to continue. The root of the whole matter is the fact that almost the entire burden, I may say the entire burden, of the rates falls in this country upon realty, and that personalty escapes scot free. This would not signify very much if all the money levied, in rates were expended in a beneficial manner, and if that benefit were distributed in anything like proportion to the payments made by the different classes of ratepayers. Everybody knows, however, that that is very far from being the case. A great many of the services which are paid for out of local rates are not services in which the ratepayers, as such, have any special interest; they are in the nature of national services. And there are also other services to which certain classes of ratepayers undoubtedly pay more than in proportion to their ability and more than in proportion to the benefit which they receive for them. Hence arise two grievances. In the first place, there is the grievance which all ratepayers have in common, though not, I think, in an equal measure, against personalty, in personalty not contributing towards the rates; and, secondly, there is the special grievance of the agricultural ratepayers and payers of tithe rent-charge, in that they are called upon to contribute more in proportion to their abilities than others and receive less benefit.
These two grievances have already, to a certain extent, been met, quite apart 331 from the Acts to which this Bill refers. They have been met, the first grievance, in part, by grant already made by the Exchequer to the Local Taxation Fund; and the second grievance has also been, to a considerable extent, recognised, at all events in principle, with regard to those rates which are levied for sanitary or other purposes of a similar character, in respect of which agricultural land and tithe are only rated to the extent of one-fourth. The Acts included in this Continuance Bill carry these remedies one step further. They are based upon the unfairness of the position in which agricultural ratepayers and the clerical owners of tithe rent-charge are placed as regards the other rates besides the sanitary rates, and in particular in regard to those rates which are levied for expenditure upon onerous services of a national character; and, as regards such rates, they provide relief not to the full extent of the Public Health Acts, but to the extent of a half. But, as a reduction in the rates in respect of agricultural land necessarily means an increased burden upon other ratepayers, the case of those other ratepayers has been met, though we do not consider their grievance as great as the agricultural ratepayer; and the Act of 1896 provided chat the deficiency should be met from moneys voted by Parliament. The scheme of relief which the present Bill continues for another period of four years may be imperfect, it may be open to criticism from various points of views, and it is confessedly incomplete and provisional. But, on the other hand, what we say is that it does meet the grievance on lines which are broadly just and equitable, and it holds the field, and, in my opinion, will and must continue to hold the field, until a more systematic and comprehensive form of local taxation is devised and passed into law to take its place. I beg to move that the Bill be read a second time.
§ Motion made, and Question proposed, "That the Bill be now read a second time."
§ SIR H. CAMPBELL-BANNERMAN (Stirling Burghs)
I think it will be found in the course of this debate that the opinions so strongly held and expressed on this side of the House both in 1896 332 and in 1901 remain among us still and have not been in the least degree abated; and, indeed, many of our complaints are practically admitted by the Government themselves. If the object of this Bill is the equitable readjustment of rating we are as much in favour of it as anybody, but what we think is that this Bill has set about it the wrong way; that the Government have dealt with it, as is admitted, in a partial and imperfect manner; as we say, also, in an unfair and inequitable manner as between different classes and different interests. It is inequitable as between town and country, inequitable as between different occupations and the like; and also we think that what has been done is open to this very serious objection, that a great part of the benefit, if it was ever designed for the advantage of the farmer, will drift as levies are made in the course of years into the pocket of the landowner. There are our feelings on the subject, and we hold them as strongly as ever. But, of coure, when you have had nine years of these subventions to a certain class, I think it is rather unusual and abrupt, as a principle at any rate in our dealing with these questions, to take away that assistance at once. It is one of the evils of such a mode of dealing with these questions. If I were to seek a parallel case, supposing a protective duty were imposed on some article which was found to be injurious to the interests of the country, we know how exceedingly difficult it would be, vested interests having been acquired, to interfere with that protective duty. And so it is that those who are most opposed to certain legislation may find it exceedingly difficult, after a term of years, to vote simpliciter for its repeal.
The right hon. Gentleman now Chief Secretary for Ireland said in 1901—What we want to do is to deal effectually with the whole rating question.So do we. But if the Government are so anxious to deal with the whole rating question, and have imposed a limit upon this particular measure in order that they may have the opportunity of dealing with it, why have they not done it? The 1896 Bill was only temporary; the Bill of 1901 was only temporary; and now, again, this is only 333 temporary. The President of the Local Government Board says that one reason why it could not be dealt with is that it requires an overflowing Exchequer. "Who is it that has caused the Exchequer not to be overflowing? The whole policy of the Government and the administration of the finances of the country have led to the depletion of the Exchequer, and now they allege that as a reason why they cannot deal with this great subject. But, after all, I do not know that an extremely overflowing Exchequer need be required, because this is a question of the readjustment of taxation. It is not a question of subvention so much as a question of readjustment so as to establish a fair system between one class of ratepayers and others. Then the right hon. Gentleman says that it would require a Government with leisure. The Government have given themselves very little leisure, because they have been occupied with great schemes of the same class as their proceedings in this matter—namely, schemes for the benefit of one part of the interests of the country in which the interests of the rest of the country were too often disregarded. They have been busy saving the pockets of the subscribers to Church schools, busy establishing those schools on a firmer basis, and they have been busy, above all, in entrenching and fortifying the position of the brewers. Now they say that they have no leisure to deal with this question, which would have brought advantage and contentment to the whole community if it had been rightly dealt with, and which has been, by their own admission, urgent throughout all these years.
I think it is worth while to quote the account given of this matter by the Prime Minister in 1901. I quote the words of the right hon. Gentleman because it was so well put that it cannot be improved upon. The statement of the right hon. Gentleman arose out of a question as to the arrangements for the debate, and I asked whether a reasonable limit ought not to be placed on the operation of the Bill. The right hon. Gentleman said that he could not now discuss the merits of the Bill, but the view of the Government was that the amount of relief given 334 should be temporary. The right hon. Gentleman also said that the actual machinery was essentially imperfect and the Government never contemplated that the Bill as drafted could be a permanent settlement of the question, and that if passed in its present form steps would be taken for further legislation at no distant date. The right hon. Gentleman was also prepared to consider the question of a time limit, though it would be madness, he said, to make the time limit too short. Within the next four or five years the Government would be prepared to deal with the subject. On this I thought that "four or five years" was rather a vague term; I thought three years would be enough, and the right hon. Gentleman said, "Shall we, in order to m et the right hon. Gentleman, split the difference, and say four years?" But here we are again in the same position, the same concessions made, the same demands from this side of the House, and not an inch further forward than we were before. I ask in these circumstances what should be done by a well-disposed and straightforward Government? I have said already that it is absurd to suppose you can root up after nine years without any qualification whatever an arrangement of this kind. No one that I am aware of has proposed to do that: but I do think that pressure should be put on the Government, to use a colloquial phrase, "to hurry up" and not to allow so much water to flow under the bridge before they tackle this question, the urgency and importance of which they themselves admit. I trust that the right hon. Gentleman will again apply that saving principle of statesmanship which he adopted four years ago, and will split the difference and modify to that extent the limit of time for which this Bill is to prevail.
§ THE PRIME MINISTER AND FIRST LORD OF THE TREASURY (Mr. A. J. BALFOUR,) Manchester, E.
The right hon. Gentleman has asked what should be done by well-meaning and straightforward men in dealing with this measure. Every one will admit that the right hon. Gentleman comes under the definition of a well-meaning and straightforward man. The right hon. Gentleman's position however, is that the Bill should not be 335 opposed, but that an appeal should be made to the Government to cut down the four years and convert the period into two. I do not think that much would be gained by that, and I do not know whether the experience of the past shows that there is likely to be much gain. The right hon. Gentleman reproaches us with not having in the last four years carried out a large scheme of local taxation reform.
§ MR. A. J. BALFOUR
I will not go into the way in which we have used the time of the House. But each session we were told that we were overcrowding the Speech from the Throne with legislation; and we have not been more fortunate than our predecessors in carrying through all the programme we have suggested horn time to time, though I think we have come nearer to the goal than any of those who have held office before. The right hon. Gentleman speaks in an airy, irresponsible manner of the facility of dealing with local taxation, though my right hon. friend, in introducing the Bill, pointed out that in the first place you must have as a preliminary measure a Valuation Bill. I do not know what view the right hon. Gentleman takes of the facility of passing such a Bill. I think that it would be a much less easy task than he at present realises. But even then you only come to the threshold of the question as to how you are to deal with the problem of local taxation itself; and here the right hon. Gentleman indicated why he thinks it is so very easy a matter. He speaks of the question as a readjustment of local burdens. The right hon. Gentleman will find that hard enough by itself, but it is much more than that. I do not believe that either he or any hon. Member will ever deal with the subject as one of the readjustment of local burdens pure and simple. It cannot be so treated. The right hon. Gentleman also spoke with very statesmanlike moderation of the extreme difficulty of attacking vested interests, interests once set up, and the bitterness of feeling and friction which attends any such measure. What is his own idea of the reforms of local taxation? It is to 336 attack every vested interest in the country. All those who at present pay too little will have to pay more, and those who pay too much will be relieved, no doubt.
§ MR. A. J. BALFOUR
It is what the right hon. Gentleman described as attacking vested interests. I take the right hon. Gentleman's vocabulary and it ought to be sufficient for the hon. Member. No Government can venture on any readjustment of local taxation among the different ratepayers unless they can smooth the progress by some contribution from Imperial funds. Nor is this theoretically unjust. On the contrary, it is unquestionably and intrinsically just. There are objections legitimately made to the present mode of grants in aid of local rates, and financial purists may object to the method. But if we take our eye off the mere question of technical method and look at the broad equities of the case, it is preposterous, in a country in which the needs of civilization throw more and more burdens on the local taxpayer, that that local taxpayer should be the owner and occupier of real property. It cannot be justified on any ground of broad equity. That gross natural injustice of the present state of things will meet inevitably any Government which tries to deal with this question in the broad, comprehensive spirit so easy to talk about and so difficult to carry out; and if the right hon. Gentleman and his friends deal with the subject in that spirit they will have even a more unpleasant time of it than I think, for other reasons, may be in store for them. But the truth is, that the right hon. Gentleman, quite rightly from his own point of view, only desires to get out legitimately of the rather delicate situation in which the extreme and almost factious violence of ten years ago put him and his friends. I think that he has got out of that position with grace and dignity. He has curbed, temporarily at least, his haste.
§ MR. A. J. BALFOUR
I was talking of his policy, not of his feelings. I congratulate the right hon. Gentleman on the statesmanlike wisdom and moderation of his speech. If I have some criticisms to make on the rough sketch he has made of the kind of Bill, comprehensive, universal, to give advantage and content to every class in the community, and if I have commented adversely on his general views of this great subject, that does not diminish the admiration which I express for the facility with which he has extricated himself and his friends from a position which at one moment looked as if it might be difficult.
§ MR. WHITLEY (Halifax)
said hon. Members on his side of the House held more strongly than ever their opinion on the measure, and he had ventured to place an Amendment to the Second Reading on the Paper, which attacked the crudeness and unfairness of the method contained in the proposals now introduced for the second time, and which set forth an alternative method of giving the needed assistance. In submitting the Amendment he trusted that at any rate, although they might not be able to defeat this policy of "drift and dole," they would be able to show that there was a method which would be more satisfactory, more equitable, and by which the admitted difficulty might be dealt with. This Bill had been introduced without even the condescension of a ten minutes address from the Minister of the Crown in charge of it. Let the House remember that the first Bill on this subject was introduced in 1896, and was brought in avowedly as a temporary measure pending the Report of the Royal Commission which was then sitting. That Commission had long since made its Report, and yet the Government a second time asked for a renewal of this Act without showing the faintest sign of acting on the Report. There appeared to be less signs now of bringing in any comprehensive or satisfactory measure than there was in 1901, yet surely in the period that had intervened the crudity and unfairness of this proposal had been established beyond question.
First as to the unfairness between agriculturists themselves in different localities and on different kinds of 338 land. This Bill dealt with many varieties of land. They had land rented as low as 5s. per acre—land which was barely able to, even if it could, bear the tithes charged upon it. Then they had the average land rented at about 25s. an acre, and they had land rented at 50s. an acre, such as was to be found in prosperous dairy-farming districts of Cheshire. Lastly, they had suburban land rented at £5 per acre. Those lands alike received relief under this Bill, but in what proportions? Did the poorest land receive the most and the richest land receive the least? It was the exact opposite. The greatest relief was given where it was the least needed, and the least relief was given where it was the most needed. The weak land in Essex and East Anglia, which had been the hardest hit by the importation of cheap food from foreign countries, and whose necessity gave rise to this Bill, should have received the greatest part of its benefits, but it had received the least, thus proving that relief was given out according to riches and not according to poverty. The unfairness could be established out of the mouth of the Government itself. The evidence given before the Royal Commission by the present Secretary to the Admiralty (Mr. Pretyman) some time after the Act had been in operation showed it. The hon. Member in reply to questions said—It is a bad method … I cannot say that I think it is entirely satisfactory because the relief is given to the land which is best able to bear the burden—that gets the most relief; and the land which is least able to bear the burden gets the least relief. That is inseparable from this form of relief, and that is one of the reasons, I suppose, why it was made only temporary.In spite of that evidence the Government came a second time to ask for that form of relief. Another member of the Government giving evidence before the Commission was the Deputy-Chairman of Committees (Mr. Jeffreys) who stated—No, what I say is that, unfortunately, on the poor land where the assessment is low—I know land, for instance where the assessment is only 5s. an acre, and the rates per acre therefore are very low indeed—the relief that we get is very small.An eminent agriculturist gave similar evidence and said—I cannot say that I think the principle upon which the Agricultural Rating Act was 339 passed last year was altogether wise. It gives the minimum of help where most is wanted. It chiefly goes to help the rates where the help is least needed.Secondly, as between the different classes of ratepayers in the rural districts there was equal crudity and equal unfairness. The relief given under this Act was limited to the amount required to pay one-half of the agricultural rates on the land when the Act was first passed. The results had been very disastrous in rural districts because it made in the case of all future increase of rates a double burden on that class of property. It had established a heavier burden on houses. They had been hearing recently of better accommodation for the agricultural labourer, and of measures to keep them from being driven out of rural districts into the towns, and yet they had an Act which would press more heavily than before on houses in rural districts. Even farmers through their own buildings and improvements found their burdens doubled by this Act. In the parish of Brockworth 117 persons had their rates raised, whilst only sixteen persons received any benefit under the Act. The rates in the parish of Langport, in Somersetshire, had been increased by fourpence in the pound on other classes of property owing to the operation of this Act. Then in the county of Buckinghamshire a table had been prepared showing that the total increased charge due to the operation of this Act on other classes of property had been £8,408 during the last five years. One of the things which agriculturists were attempting to do at the present time was to bring about co-operation and the increase of dairy farming in order to compete with the imports coming from Denmark, and yet the very operation of this Act was to throw heavier burdens on every farmer and landowner.
Then as between the owner and occupier they had a similar state of injustice. The right hon. Member for West Bristol (Sir Michael Hicks Beach), when Chancellor of the Exchequer, gave his opinion on that point very clearly. He said—In my belief—and I have always said so—it will be a benefit to the English farmer certainly at first, probably for the whole time of its operation; but when fresh tenancies are created, when there is a change in tenancies, especially in the present state of the market as 340 between landlord and tenant, if the change should be more in favour of the landlord than at present, then no doubt—I think it is admitted—the owner of the land will have an advantage.All the time these renewals went on new tenancies were created, and with each renewal more went to the owner and less went to the occupier. Yet it had been the occupiers who had borne the burden of the depression in agriculture in recent times. There could be no manner of question that nine-tenths of the burden had been borne by the tenants. The evidence of the Agricultural Commission had been overwhelming on that point. They had the evidence of Mr. Pringle, with regard to the county of Northamptonshire, dealing with a long series of farmers' budgets, and that gentle-man pointed out that all the profits over a certain number of farms in that series were £4,900, whilst the total rent paid to the landlords was £36,571. Mr. Pringle gave a series of cases in different counties in England showing how reduction on rents had been in no way comparable to the loss sustained by the tenants owing to the depression in agriculture, and showing in the whole series the profits to the farmers had been Is. 3d. per acre, whilst the rents paid by them amounted to 24s. 3d. At the present time there was a proposal for putting the farmer into the position of the owner of the soil. He could not say he was much in favour of such a proposal at the present time, but the right hon. Gentleman the Member for Bordesley had brought in a large scheme of land purchase in order to do away with the dual ownership of land in England, and he would point oat that one serious result of the continuance of this unsatisfactory policy was that all such proposals as that which was now under consideration made it more difficult to carry out a scheme of that kind, because, as was seen in Ireland, they were now purchasing from the land-lords their holdings at an increased value owing to a dole having been added to the capital value of the land. It was a most unsatisfactory policy. A few years ago they had to make a purchase on behalf of the War Office, and they found then how the price had been run up by the action which this House had taken. The hon. Member for King's Lynn gave some very useful figures upon that subject. He 341 found that the price paid by the War Office for the purchase of land required in the neighbourhood of Salisbury Plain was out of all proportion to its value for the purposes of taxation. In the case of the estate of the right hon. Gentleman the Member for West Bristol the value for estate duty amounted to £43,700, whereas the price paid by the War Office was £93,411, and no doubt there were many similar cases.
As between the town and country also this Bill was unjust. The policy of paying rates out of taxes meant that the poor were made to pay for the relief of the rich. In regard to the Exchequer grants it had been estimated that the result was that every man rated at less than £40 was condemned to pay out of his taxes money for the relief of those who were rated at a higher figure. In the case of the agricultural rates it was a positive hardship to those in the great cities. When they examined the case of accommodation land in the neighbourhood of the great towns, they found a very different state of things. Such land was only rated at one-fourth of its annual rental value, and its rental value was out of all proportion to its real or capital value. The rateable value of land in the neighbourhood of Bristol which came under this Act was £12,476. There was probably not an acre of that land which was not worth at least £400 or £500, much of it was ripe for building and worth £1,000 or £1,500 an acre. Yet in regard to that land the poorest wage-earners were being taxed in order to relieve the rich.
They could not get away from the fact that dealing with a question of this kind in this way was unjust. In all respects the method established by this Act was unfair and unequal with regard to every class which had to pay taxes. The real fact was that the farmer was taxed on his raw material and his improvements. Every effort of industry and intelligence which he put into his calling went to the owner of the land. It must be remembered that there were certain obligations placed upon the land of this country, certain duties to be carried out, obligations which. were, in fact, a first charge upon the 342 land long before they had any idea of rent. In early days, when grants were made by the Crown, there was the obligation to maintain the Army and the poor, and to uphold the Church, which at that time was the centre of education. Those services with regard to the ownership of land were not in their essence taxes at all, they were the reserved portion of the grant made by the State to the landowner, and if those burdens were moved off the shoulders of the owner on to those of the general taxpayer it was confiscation of that portion of the grant that the State specially reserved, and the community was doubly wronged. It had to pay rent for its own property and to pay taxes to increase its own rent. Those were the hereditary duties of owners for the discharge of which their privileges were granted. It was hard on the tenants who were rated and rented on their own exertions. What was required was that justice should be done to the tenant. It was necessary to remove from his shoulders the burdens which ought to be spread over the country as a whole in proportion to the benefit recceived from them. The occupier of land required to be put in a position where he would not any longer be rated for improvements which he himself made. This point was well illustrated by the case of some fruit growers in Perthshire who rented at £2 an acre some pasture land upon which they established a fruit-growing industry, and made it so successful that they required more land. But the owner asked £10 an acre for the land, and it was upon that £10 they would have been rated had the industry been capable of sustaining so heavy a burden. Thus the unfortunate tenant was both rented and rated on the improved methods he might introduce, and until this difficulty was dealt with in a thorough manner there could be no satisfactory solution of the question, and small holdings, co-operation, and so forth would only tend to defeat their own object. He had known cases of farms being cut up into small holdings, new buildings erected, and land made twice or three times as productive, and the only result had been to increase the. crushing burden of rates and taxes on the improvements.
343 The essentials of a just system of local taxation were a national distribution of national services; a fair allocation to owners of land of services which were in their essence a just charge on the land—which would mean a distribution according to the value of the land in the various districts concerned; a reduction of the burdens on tenant farmers, and the prevention of the burdens falling on their own improvements. Both in Scotland and in Ireland the plan had long since been adopted of sharing these burdens between owner and occupier, and there was surely nothing very revolutionary in suggesting that some such system might be introduced in England and Wales. The arbitrary division in halves between the owner and the occupier was a crudity in some respects corresponding to the present system, but he believed a scheme could be devised whereby a division could be made on scientific and equitable lines, so that the owner should bear his proper burdens, and the tenant those burdens of which he himself obtained the benefit. An Amendment in this direction, moved by the hon. Member for East Northampton when the Act was first before the House, was defeated by the Unionist Party; he hoped they had now learnt to look more favourably on the proposal. He could conceive of no satisfactory way of dealing with these national services without to some extent pooling the great land values of our cities. For instance, agriculture ought not to be called upon to bear the chief share of the burden of main roads, the use of which belonged more to the inhabitants of cities than to the dwellers in the country. He believed a scheme ought to be, and could be, devised, whereby all such national services should be placed on one fund to which town and country contributed, not in proportion to area, but according to benefit received, and he knew of no better test of the benefit received than the value of the land in the respective districts. That in itself would bring great relief of burdens to the agricultural districts, but the relief would be founded on justice and not on charity.
He had ventured to put his Amendment before the House in the hope that when the time came round for this matter to be 344 reconsidered there might be put forward a comprehensive and thorough proposal which would not have the unfair result of the present Act. A dying Government could not be expected to deal with the matter; they had had their opportunity twice over and had neglected it. The Act would have to be renewed, but he hoped it would be for a very short period, and that then the question would be faced and dealt with in a satisfactory manner. Nothing at present prevented the advance of agriculture and the development of agricultural districts so much as the question of local taxation, and he hoped the House would join in condemning the continuation of the policy of doles. It was not inconsistent for any Member who believed in the allocation of the burdens between owners and occupiers as a proper solution of the question to vote for his Amendment, although a temporary supporter of the measure itself. He begged to move the Amendment of which he had given notice, and he hoped the debate would be devoted more to the threshing out of a solution of the question than to the mere temporary renewal of the Act.
§ MR. TREVELYAN (Yorkshire, W.R., Elland)
seconded the Amendment because it contained a direct challenge to the general policy of the Act and gave the House an opportunity of discussing one alternative to the proposal which the Government for the third time were bringing forward. From the haste with which the Government had brought in a mere continuation Bill, it was pretty clear it was a prelude to an election. But whether or not this was an election Bill, the Act which it proposed to renew I was the only thing done by the Government during its ten years of office which; had even the appearance of a measure for the relief of either rural or urban ratepayers. It was not a very magnificent I record. It meant that there had been handed over to a particular industry rather more than £1,500,000 per annum, which would otherwise have gone to the I relief of the general taxpayer. It was only a shilling an acre, though it was true the Government began by holding out to the farmer the hope that it was only the beginning of greater things. In 1896 they would not do more because a 345 Royal Commission was inquiring into the question of local taxation; in 1901 they asked for a renewal pending the consideration of the Report of that Royal Commission; and now they asked for a further renewal—he supposed pending the forgetting of that Report. At any rate there was no promise, hint, or pretence on the part of the Government that there was any larger policy to which this Act was leading which would embrace the whole question of the burden of rates and help all ratepayers instead of only one particular class. This was the end, as it was the beginning, of the Conservative policy; its friends would be able to say of the Government, "Rest in peace. They gave the farmer a shilling an acre."
But that was not all. Other measures had been passed since this Act was first introduced. The President of the Local Government Board had said that the Government had not had leisure to deal with the whole question of rating. But they had not done very much during the last three years. All the measures of importance they had passed were those dealing with licensing, the Sugar Convention, the imposing and the taking off of the corn duty, and education. What had been the effect of the Education Act on the farmer? Ail the advantage which it was claimed he could have reaped from the Agricultural Rates Act had been more than abolished by the large increase of rates which had taken place from one end of their county districts to the other. He had the honour of being a member of the Northumberland County Council and he knew what the outcry of the farmers was there. He could assure the House that they were quite as noisy against the rates as they were before the Act was passed. The farmers were the only class the Government had catered for and yet they were still asking for larger consideration and more subventions from the Government. That was the way in which they hoped to meet the increase in the rates. He thought it would be somewhat of a miscalculation if the farmers thought that, in the next decade, it would be as easy to get relief out of the taxpayer, because they would not always have a Government in power dominated by the landlord interest, and they could 346 not always expect the urban taxpayer to go on paying increased taxation for the sake of benefiting agriculturists. It was less likely that the town ratepayer would sanction an extension of this process when half the Party opposite were trying to impress upon him that he was being ruined through the decadence of industries in the towns. The outcry against the rates in towns was every day becoming more and more marked, and more subventions was a thing that could not possibly be thought of. But although agriculturists were unwilling to relinquish the advantage they got under this Bill they despaired just as much at the burden of the rates. If more relief was going to be given it should be given all round to all ratepayers upon some scientific and more reasonable plan which would attract the support of the towns. He did not think that many hon. Members regarded the method by which these subventions were given as either reasonable or logical, and he did not gather from the President of the Local Government Board that he thought that this was a satisfactory system.
A system of, distribution was wanted, in the first place, which would enable those districts which wanted it most to get the relief. Quotations had been given in which a member of the Government and the hon. Member for Basingstoke had declared that the districts relieved most were those which least required it, and that those districts where agricultural depression was greatest were relieved the least. He thought they ought to turn for advice on this question to the Hamilton-Murray Report of the Local Taxation Committee. That was a Report with which Lord Balfour of Burleigh entirely agreed, and what was more, it was a scheme for distributing the national subventions which the Government themselves practically adopted when they gave the increased education grant under the Act of 1902. They made a proposal to give a fixed and increased contribution for national services to all unions, urban and rural alike. It was a proposal to give two kinds of grants—(1) a primary grant in order to bring the rate under a certain figure and administered so as to give most relief to the most needy districts; 347 and (2) a grant towards excess expenditure. The result would be that the largest proportional grant would be given to the poor and economically administered districts and the smallest to the wealthy and extravagant. If they went on giving larger grants to local authorities because the ratepayers were becoming more and more discontented with the burden of the rates, where were they going to get the money from? The Government were getting it from the ordinary taxpayer. That was just where this Amendment differed from the proposal of the Government and from the Amendment of the hon. Baronet the Member for Somerset. He thought that the ordinary taxpayer paid enough already and national economy was required. He was proposing a national readjustment of the burdens on land by taxing the permanent value of land in order that the taxation on improvements and buildings was to some extent relieved. A great many of them who supported a policy of this kind disliked a great part of the rates upon real property quite as much as hon. Gentlemen opposite. In his view the rates which at the present time, under the ordinary system of assessment, fell upon the improvements put into the land or on the land seemed to him the most vicious and destructive kind of tax they had got. It was impossible to devise a worse tax than that part of the rates which fell upon the improvements put into the land or on the houses built upon the land. The same principle applied in the case of towns in the present taxes on improvements. In towns industries were hampered and houses were fewer because of the high taxes put upon mills and houses. It was just the same in the country where the enterprising farmer or the landlord put capital into the land, for he was mulcted in rates upon his improvements, and this was the reason why the burden of the rates was felt so much.
What they wore now asking the House to consider was the placing more and more of the taxation upon the permanent and unimproved value of the land which would not rise in exact proportion to the amount of capital put into the land or to the extent to which it was improved. There was an impression abroad that in 348 proposing this kind of taxation they wished to put a new and larger tax upon the cultivators of the land. He was constantly hearing of what he would call "the finishing touch" argument, which urged that if they put any more taxation upon land they would put the finishing touch to that class of property which was suffering from agricultural depression. He had received a letter from a country gentleman in which he said—I have had this estate thrown on my hands twice over in a ruinous condition, and not being rich enough to incur such heavy losses a third time, I am farming five farms out of six, at a loss, but not so great a loss as the former tenants caused me, owing to the agricultural depression. On the sixth farm, formerly let at £620 a year, I have received less than £200 a year for the last twelve years on the average, besides having had to spend an average of some £60 a year on upkeep. The tithes and rent-charges run away with another £150 a year. If you succeed in imposing another land tax on it, I will get my trustees to make you a present of it if you do not take care. In any case I promise you that my sense of justice will not permit of my paying another land tax, if I have to form a rebellion of only one, nor shall I be-altogether passive.He was sure hon. Members would have respect for that man's sufferings. He did not know all the circumstances, and he did not know what the condition of his estate was, but he might very easily be a man who would very considerably gain by the proposals contained in this Amendment. Supposing his land was really of very much less intrinsic value than a few years ago, and supposing it was the unimproved value that was going down, and he had been putting a good deal of capital into it in order to keep his head above water, he would be a gainer by this proposal, because its object was to try and get taxation taken off such capital which had been put into the land, and if they based the taxation upon the unimproved value, if that land went down in value of course the taxation would be reduced. It seemed preposterous, taking land in Essex, which. notoriously was hardly of any value, that rates should be raised on such land to any extent. If land was of no value it ought to have no rates, and if a man. came along to spend capital upon it, if he took this useless and valueless land and put money into it, it was very foolish that the nation should put local burdens, on him and tax him on the capital values 349 which, he chose to put into that land. His object was to exempt that kind of man from taxation.
The other side of the question was where ought the taxation to fall, and whose taxes ought to be increased in order to make up for the remission of taxation in this direction? In no case ought the tax on land which was being put to a good or better use to be increased. If they based taxation more on the unimproved value of land, there were certain classes whose taxes would tend to be increased. There was first of all the landlord who was neglecting bin estate—the landlord who was putting no capital into it, allowing bad farming to continue, and letting the value of the land fall, not because the general value was falling, but because he was not working the estate properly. At the present time if an estate fell in value because it was not put to proper use and was not well farmed, the result was that the rates on that estate fell. Who had to make it up? The neighbouring landlords who were working their land well and putting plenty of capital into it. The best criterion for rating was the intrinsic value of the land and not the way in which the land was used. What they wanted to do was to let off as far as possible the landowner whose land was being well used, and, if they liked, to penalise the man who was not using his land well.
Then there was land round towns or villages which was fit for building. He addressed an argument to the House on Friday on the subject of the rating of land values and carried hon. Members with him. At any rate, the Second Reading of the Bill he introduced was carried by a majority of ninety. His argument then went to show that they ought to tax more than they did land on the outskirts of towns which was fit for building on and which was wanted for buildings by the people. There was no magic in the particular boundary line of an urban district or town. Exactly the same was true of villages from one end of the country or the other. There was land round villages which very often would be used for building if it were taxed on its selling value and so brought into the market for building. They were always talking 350 about the condition of housing in the villages. One of the reasons of that condition was the difficulty of getting land, whether by the local authorities or individuals. Then there was land which was wanted for public improvements. Everyone in the House could probably call to mind cases where enormous prices had been paid by corporations in order to get land for, say, waterworks. What ought corporations to pay if they went into some wild district which had been a sheep run? What ought they to pay in reason for land which, until there was a water-supply scheme in prospect, had never had any particular value? Obviously they only ought to pay very little above the agricultural value of the land. But the landlord, owing to his monopoly, was often able to ask eighty or ninety years purchase. That land ought to be taxed on its selling value. That would mean, if public authorities could not get land at reasonable prices, the landlords would have to pay rates on the basis of the selling value. The other day in Northumberland the local authority had to buy land in the neighbourhood of pit villages for schools under the Education Act. The land round about these villages was often going for Is. 6d. or 2s. a square yard, but the local authority had to pay 5s. a square yard in order to get land to put up schools. If land were, taxed on its selling value two things would be done. It would be made easy for local authorities or individuals to get land at reasonable prices, and also to get in the neighbourhood of towns and villages a larger revenue for local purposes. There was land near railway stations which was fit for the purposes of industrial development, but which did not now come into market.
At the present time there was a healthy panic in the country at the fact that we were becoming a town-brednation, and one of the forms which that panic was taking was the outcry for garden cities, and for having industries in the country instead of the towns. There was only one way in which any large part of the industries could be taken into the country. There was an advantage for almost all our industries in being in towns because of the nearness of communication to the centres of business. There must be some 351 economic compensation to the industries if they were to be taken out of the towns and placed in the country. The only real compensation there could be was that land ought to be cheaper in the country. But what was the case now? Land constantly could not be got in the country by those who wanted to take industries there. If a man wanted a piece of land close by a railway station he was asked a prohibitive price for it; it was a mere chance if he could get cheap land there. If land were rated at its selling price the landlord would not be able to hold it, and when it was wanted for industrial purposes it would be obtainable at a reasonable price. He asked the House to consider whether they ought not rather to do justice than to give charity, whether their chief object ought not to be to remove the real burden upon land, that was to say, the taxation on improvements and everything put into the land, and to tax instead, as could be done with perfect safety, the unimproved value of the land, because that was a permanent factor which could not be altered by anything except the general activity of the population.
Amendment proposed—To leave out from the word 'That' to the end of the Question, in order to add the words 'No Bill dealing with the severe burden of the local rates on the agricultural industry will be satisfactory or afford permanent relief which does not provide for a contribution payable by the owners of land based on its selling value, and utilise the fund so provided to relieve the ratepayers of a substantial portion of the burdens which result from the local payment of national services and from the incidence of existing rates on buildings and improvements, instead of adopting the crude and unfair method of paying half the rates on agricultural land out of the Imperial Exchequer' (Mr. Whitley.)—instead thereof.Question proposed, "That the words proposed to be left out stand part of the Question."
§ MR. CHAPLIN (Lincolnshire, Sleaford)
said that, as the author of the Bill of 1896, he might be allowed to intervene for a few moments in the debate. The hon. Member for the Elland Division was good enough to say that this Bill was the only thing the Conservative Party had done in ten years for the rural ratepayers of England. Even if the statement were true—and he should be inclined to doubt it—it was not a bad record even after 352 ten years of office. By this one measure alone they had reduced the burden of the rates paid by that particular class 50 per cent. What had the Party opposite ever done to compare with that with regard to this particular class, although they had been in power quite as long as the Conservative Party during the time he had been in the House of Commons? The hon. Member for the Elland Division went on to say that when this Bill was passed it would be the end of Conservative policy in this direction for the present. If he was right in that statement, there was all the more reason for passing this Bill as quickly as they could, for if there was one thing in the world that farmers might be certain of, it was that they would never get anything of this sort from hon. Gentlemen opposite.
He rejoiced to hear the announcement of the right hon. Gentleman the Leader of the Opposition that he was not going to offer opposition to this Bill. He congratulated the right hon. Gentleman on that decision whatever he might think of his consistency, and, indeed, he could hardly believe his ears when he remembered the weary hours through which they were kept night after night, and on two different occasions all night, by the most obstructive Opposition that he had ever known during the time he had been a Member of the House of Commons. The right hon. Gentleman had told them that all his objections to the Bill remained as strong as ever they were in the past, which under the circumstances was somewhat surprising. What were these objections? That it was grossly unjust, that it was inequitable, that it could not be otherwise than most ineffective, and that it would be most unfair in its operation, and, lastly, that it was nothing but a dole to the landlords from which the farmers would not benefit by a single iota. If the condemnation of the Bill was true—he denied it at the time and he denied it again to-day—and if those iniquities had been allowed to proceed during a period of nine years, what was it that naturally followed? Why! that the sooner, of course, that these iniquities were repealed the better! To-night the Opposition sang a very different song. What he had understood from the speech of the right hon. Gentleman was, that the 353 doles to the landlords and all the iniquities they had complained of in regard to this Act, had only to be allowed to continue sufficiently long to become virtues instead of the vices which they denounced.
He remembered, as if it were yesterday, the rapturous cheers with which one attack in particular on that side of the House was received by Gentlemen opposite. It was made by an hon. Member who was now a prominent and rising Member of the Liberal Party; he meant the hon. Member for Carnarvon Boroughs. He was not going to detain the House by any long quotations, but would merely give a concrete instance to the House of the iniquities which that hon. Gentleman said would follow from the Bill. That hon. Gentleman stated that taking the rentals of the Ministers, as the authors of the Bill, they would benefit to the extent of £67,000 a year, and he was good enough to tell him that his share would be £700. His own experience was this, that after a permanent reduction in the rental, which had been nearer 70 than 60 per cent., at the very next rent day after the passing of the Bill he had to make a further remission of 10 per cent. in his rents, and on the last rent day he had to make another remission. So much, as a matter of fact, for what had happened to landlords as compared with the amazing fictions of the hon. Member for Carnarvon Boroughs. And all this was being done, said the hon. Gentleman, to relieve the distress of the farmer, the real fact being that the landlord had "bled him to the last drop of his blood." He had had quite recently some opportunities of learning a good deal about the truth of this matter. He happened to be chairman of the Agricultural Committee of the Tariff Commission, and a number of gentlemen had come before them as witnesses from a great number of counties, in England, Scotland, and Wales, selected not by the Commissioners but by the great agricultural societies in the country, and there had been the most remarkable and almost unanimous testimony of opinion he had ever heard before any Committee or Commission, and he had served on many, as to who had been the real recipients of the benefits of the Act. Out of all these witnesses it would be found that, with one or two single 354 exceptions, no one had ever heard of a landlord attempting to intercept the advantages of the Act, and that they had no doubt the farmers had enjoyed them all to the full.
Whether it were the possible approach of the election which had contributed to what he could only describe as this eleventh hour recantation on the part of the Leader of the Opposition; whatever the motive was he thought the right hon. Gentleman was wise, for opposition to the renewal of the Bill just now with an election before them, might, he thought, be a little awkward for a good many hon. Members on that side of the House. Many of those Gentlemen were always professing their desire to do something, to arrest the rural exodus to the towns. "Back to the land" was a leading item in their policy. It was one of their favourite catch cries; what had they ever done to promote it? Nothing that he was aware of, except to bitterly oppose a measure, which at least reduced the rates upon agricultural land by one half; and to denounce it without ceasing ever since. Their Leader moreover declares that they maintain all their old objections to the Bill as strongly as ever. If they do—if they believe in them—if they are sincere—then of course their duty is clear. To do their utmost to defeat it now; which would mean, of course, doubling the rates upon agricultural land, immediately after the Act expires next year. The Member for the Elland Division and the Member for Halifax had Amendments down which, if carried, meant the destruction of the Bill and nothing else. Yet they professed to feel great interest in the welfare of the rural population. Personally, he hoped they would vote for them. The more they voted for them the better; it would teach the people of this country what they would have to expect from some Gentlemen who professed great interest in the welfare of the rural ratepayers of England. It would be a nice cry for them to go to the country with—" Double the rates on agricultural property after March 1st next year."
§ MR. GEORGE WHITELEY (Yorkshire, W.R., Pudsey)
said he very much regretted that the hon. Member for Elland had chosen to meet this Bill with 355 a very elaborate and complicated Amendment, rather than simply moving that it should be read a second time that day six months hence. He, himself, held as strongly as ever he did some nine years ago, when the Agricultural Rating Act was first introduced, the cruel wrong and grievous injustice which this Bill did to to a very large section of His Majesty's subjects, viz., all the urban ratepayers and those who lived in populous districts. It seemed to him that that injustice and greivance had been aggravated all the more because this Bill had been originally passed as a merely temporary measure, and it had now become, by its repeated continuance, almost incorporated into the Statute - book of the country. He did not observe any real evidence of any intention, or inclination even, on the part of the Government of dealing further in the future with this great and pressing matter of the reform of local taxation.
The House would pardon him if he referred to the question of rates in towns. Hon. Gentlemen who represented urban districts well knew how heavy and burdensome those rates were. He had ventured to cull the rates imposed on ten or a dozen of the large towns and cities in the country. In Newcastle they amounted to 5s. 2d. in the £; Portsmouth, 6s. 2d.; Bristol and Hull, 7s. 2d.; Cardiff, 7s. 3d.; Liverpool, 7s. 4¼d.; Brighton, Birmingham, and Nottingham, 7s. 6d.; Plymouth, 7s. 7½d.; Manchester, 7s. 8½d.; Leeds, 8s.; Bradford, 8s. 4d.; Southampton, 9s. 5d.; and Norwich, 9s. 7d. He knew full well that hon. Members opposite would urge that regard should be paid to the facilities and advantages which those who lived in largo towns obtained from the expenditure of those large sums of money derived from the rates. They pointed out that the ratepayers in towns enjoyed fine main roads, excellent sanitary arrangements, sewage farms, watching and lighting. All these were paid for out of the rates. But he argued that there was no luxury in fine main roads and smooth pavements, no great advantage in complete sanitary arrangements. A sewage farm was not "a thing of beauty and a joy for ever"—although all these things were necessary for the aggregation of population in the towns. He could assure the House that 356 the towns were not very extravagant in spending money on these objects. The expenditure under these heads was not incurred by the municipalities unless it was absolutely unavoidable. They waited until they were absolutely driven and forced by the Local Government Board to make it. He argued again, that towns were called upon, under this Bill, to contribute to make good in rural districts the rates that were formerly levied on the land. It was all very well for the right hon. Member for Sleaford to say that the Agricultural Rating Act had reduced the rates in counties by one-half. Well, were he a rural ratepayer he should think that a most excellent thing; but it had been done out of the pockets of the ratepayers in the towns, who had to pay even higher rates than those in the rural districts. An hon. Member who sat on that side of the House told him the other day that if the people in the towns were idiots enough to pay one-half of the rates in the rural districts, should they not be much greater idiots in rural parts if they did not accept it.
This Bill was founded on a wrong principle. The rates were purely local in their nature and character, and were not national in any shape or form. They were levied in any particular parish, district, or county in order to meet the expenditure of that parish, district, or county, such as for the poor, or for roads or other expenses. They were entirely restricted to that locality and to the district. It followed that the land in itself was rated at too great a figure and that some other property had escaped the fair share of the burden which it ought to bear. That argument, if true, might, be no justification or bringing national resources to the rescue of land, but it might be for some rectification of the burdens of rating in the special areas in which those rates were levied. That was the course which ought to be followed. Why should the ratepayers of Leeds, Manchester, or Liverpool be called upon to pay taxably sums of money in order to reduce rates in Andover or rural districts in Devonshire or Cornwall, with which they had no connection or sympathy.
With regard to the allegation that the farmers and occupiers received this 357 benefit, he was inclined to hazard a doubt of it, and if hon. Members would carry their minds back to the state of affairs that existed previous to the passing of the Act of 1896 they would remember that for some weeks before rent day one read in the newspapers, and more especially in those dealing with agricultural subjects, lists of landowners and landlords in various parts of the country who announced their decision to give some abatement or remission on the rents to be paid in the next rental. Those abatements and remissions went up to 25 per cent. But did anyone read now of such abatements? He had consistently read the newspapers, and had not seen for some years past any announcements of that nature. What did it mean but that the tenant was in almost the same position as before? Instead of his relief coming from the landlord, the State stepped in and took on its shoulders those remissions and abatements which previously the landlord had been bound to afford to the tenants in order to keep his land let. Would the tenants be worse off if the House refused to re-enact this measure? He ventured to argue that the landlords and landowners would have to return to their former course and again allow the abatements and remissions as before the passing of the Act. He did not believe that the tenant would suffer in the long run.
They had heard from the right hon. Gentleman an elaboration of the two arguments previously placed before the House by the Chief Secretary for Ireland, who said that in all these rating matters the House should have consideration for two points, viz., ability to pay and service rendered. Those were two new doctrines or gospels of very recent birth; they were formulated to give an air of verisimilitude to an otherwise bald and unconvincing narrative. He agreed that they ought to bring personal property into contribution towards expenditure. His objection was to any piecemeal and partial dealing with the subject. Why should an income of £100 a year obtained from land be treated differently to an income of £100 a year derived from cottages, or a public-house, a corn-mill, or any other 358 business. The right hon. Gentleman could not say that the ability of the land to pay was less, because if it were not able to pay £100 a year, it would pay only £60 or £80. They must take it that the income derived from land was evidence that this land or property was able to pay the amount placed upon it. He suggested, therefore, that the argument of "ability to pay" went by the board. If that part of the argument were not true, the other part of "services rendered" was more ridiculous. Were they going to discriminate among the ratepayers according to the benefits they received? Were they going to have a new classification of property on some sliding scale? If so, they must go further, and not only graduate and classify properties, but graduate and classify the people to whom they belonged. To state either argument was to show immediately the colossal absurdity of both of them. There was no doubt that the effect of the operations of the Act was bad. It was generally allowed that the relief under this Bill went where it was not wanted—to the rich land, instead of to the poor land that ought to enjoy the larger share. It was a re-enactment of the old state of affairs which provided that "to him that hath shall be given, but from him that hath not shall be taken away even that which he hath." He ventured to think that, so long as 1hey had the present Party in office, this would be not only the first but the last stage of reform. There was no indication or intention on the part of the Government really and honestly to take into consideration the whole question of the reform of local taxation. If the Government would promise to attempt to deal with this matter in a manner fair and equitable to all classes of property he would support them, but unless they had some such assurance he would not only vote against the Second Reading, but he would oppose the Bill to his utmost ability.
§ SIR EDWARD STRACHEY (Somersetshire, S.)
said he differed from the hon. Member for Halifax in the way in which the hon. Gentleman proposed to remedy the present unfair system of rating. The hon. Gentleman, in the first instance, talked about the unfairness of 359 the present system between farmers and farmers, and in the same breath he talked about a "dole." He had never heard farmers complain that the relief was greater in districts, where the rent was £2 or more an acre, than in districts where it was 5s. or 10s. per acre. Farmers never looked upon this question as a "dole." If they looked upon it as a charity, it would have been right to have given greater relief where the land was the poorest. As regards fresh tenancies his experience had been that not the slightest alteration in rent had been made in consequence of the Act, and he believed all land owners would agree with him in saying that their agents when letting a farm did not for a moment take into consideration the incidence of the Agricultural Rating Act. It was a fallacy to say that the rate had gone into the pockets of the owners, because if that were the fact they would not have the farmers with one voice asking for a renewal of the Act. The farmers declared that the relief went direct to them and not to the owners. If the argument was true that reduced rates meant increased rent, it would be true also as regarded urban rates. The cry in the great cities, as well as in the country districts, was of the excessive burden of local taxation. The occupier was the person who suffered, and not the owner, and it was well known that in towns the higher the rates the higher the rent where rates were compounded. The argument might just as well be employed that it was no use to reduce the taxation on fond or on clothing, if it was taxed, because the workmen would just get less wages. Farmers and working men would repudiate any suggestion of that kind.
They were told by the hon. Member for Halifax that his Amendment was based on the principle of relieving agricultural land by taxing land at its unimproved value and without the buildings. The hon. Member for Halifax proposed that they should tax land upon its unimproved value. That was a very startling proposal, for it would mean taxing urban land value for the benefit of rural land. It might be very well from a farmer's or a land owner's point of view, but the hon. Member's proposal would be most 360 unfair to the towns. There was a great difference between the taxation of land values in the town and in the country. As regards the town they would be taxing land which was continually increasing in value, and which it was only right should be taxed to assist in paying for the rates which were spent in the town itself which not only increased the annual value, but the capital value. On the other hand, the capital value of agricultural land was decreasing year by year. He agreed with the hon. Member for Halifax that it would be advantageous if they could have a fair distribution as between owner and occupier in this matter. He was always ready to support any suggestion which would throw on the owner of the land any fair burden which was for the permanent improvement of the land.
As regards the question of what ought to be charged to the Imperial Exchequer which was now placed on local rates, he admitted that the question was one of considerable difficulty. He considered that subsidies were not ideal, and the right hon. Gentleman the Member for Stirling Burghs expressed the opinion that there ought to be an adjustment and not an increase in them. The Royal Commission on Local Taxation, who had inquired very carefully into the question, had reported, however, that it was not practicable to suggest any other remedy at the present time. If some scheme could be devised to do away with them altogether and so readjust taxation as to have all taxes which were Imperial in their incidence placed on Imperial resources, and all those which were local in their character placed on the localities concerned, it would receive the support of those who thought with him that burdens which were national should not fall on the local rates. Take such matters as the education rate, the poor rate, and the main road rate. In the case of the main roads those who lived in country-districts were aware of the enormous expense falling on the rates owing to these roads being used for heavy locomotive and motor traffic—traffic which could not in any way be regarded as local. Then the education rate had increased enormously and had placed an unfair burden on the local ratepayer. It 361 had been said that the idea of placing these taxes on the national Exchequer was impracticable. He thought most of them would favour the granting of relief to the local taxpayer by taking off the unfair burden he was called upon to bear in having to pay out of local rates for national services. There ought to be no distinction between one form of property and another. From whatever source the income was derived every person ought to pay a fair share towards local taxation. He did not see why all these charges should fall entirely on real property and none on personal property. It was, he supposed, because at one time there was very little property except real property to be rated, but if that were so in the past the reverse was now the case. Now there was £160,000,000 a year arising out of real property to bear this burden, whilst there was £340,000,000 a year out of personal property which almost entirely escaped local taxation in regard to those services which were as national in their character as the Army and Navy.
If it were asked how he would tax property derived from, say Consols, he would suggest the possibility of a local income-tax. Such a system had been adopted in several countries. In France, Germany, Austria-Hungary, Belgium, Holland, and America personal property was liable to assessment for local taxation, and they had the principle of a single assessment for both local and Imperial purposes, thus getting rid of many inequalities and difficulties. Upon that assessment local taxes were raised on personal property. In France, Belgium, and Holland it was done by a surtax to the rate levied by the State; in some cases the local authorities had power to rate independently personal income for local purposes, while in Austria they went so far as to have a local death duty for educational purposes. The difficulty of localising the incidence in cases when men were domiciled in more than one place was met in some cases by the man who had two residences having to pay on the whole of his income in both places, probably on the principle that if a man was rich enough to have two houses he could afford to pay his local contribution 362 in both places, while in other cases the whole contribution was divided proportionately to the time spent in each place. There were doubtless difficulties in the system, but he believed they could be surmounted. If a system of local income-tax were introduced it would be only fair that the tax should be graduated, and as in Imperial taxation, so that the small ratepayer should pay a smaller amount of rates than the larger one.
As one of those who had always considered that this Act did the right thing in the wrong way, he was glad to hear that the right hon. Gentleman the Leader of the Opposition did not intend to oppose the Second Reading of the present Continuation Bill. From the agriculturists' point of view he entirely agreed with the right hon. Gentleman's complaint against the delay of the Government in dealing with the matter, but he was not altogether sorry for that delay, because from the sympathetic way in which the right hon Gentleman had spoken, it was evident that the Leader of the Opposition, when he had the opportunity, would attempt to deal with the question in a much more satisfactory way than the present Government had done. He should divide against the Amendment, as he did not believe it was practicable, nor did he for one moment think that the great towns should assent to the suggestion for the pooling of land values for the benefit of agricultural land, as by so doing they would be depriving their own inhabitants of valuable resources for lightening their own heavy rates. The remedy for reducing local rates in town and country was to bring into local taxation property which now escaped such taxation so that the incidence of local taxation might be readjusted on a fair and just basis, and that all forms of property should contribute its fair share.
§ MR. SPEAR (Devonshire, Tavistock),
speaking as a farmer, expressed his gratitude to the Government for bringing forward this Bill, and congratulated them on having to meet a different kind of opposition from that which they had hitherto had to encounter. On the present occasion the objection was not so 363 much to the assistance given to agriculture as to the absence of a larger scheme dealing with the whole question of local taxation. Hon Members on that side of the House felt as strongly as Members of the Opposition the importance, in the interests of the trading community and of the agricultural classes, of a complete rearrangement of the basis of local taxation. The Government had at least shown some appreciation of the necessity for such a le-arrangement by proposing to take the first step towards the formation of a new valuation authority. But the argument of the Leader of the Opposition would not be misunderstood by the agricultural community. They would not readily forget that when the Bill was first introduced, and there was no question of the expediency of dealing with the question on a larger scale, the opposition of the Party opposite was directed against the principle which the right hon. Gentleman now admitted was just and equitable.
The hon. Member for the Elland Division had spoken deridingly of the amount of the relief. It might very well have been larger, but if the hon. Member and his friends had had their way the farmer would have been deprived of even the £1,500,000 granted by this Act. As an agriculturist he knew how manfully the farmers had borne up against the depression with which they had had to fight, and it was mockery for the hon. Member to taunt the Government with no having done more. Without this Act British agriculturists would have had to pay during the last nine years from £13,000,000 to £15,000,000 more in rates than they had done. They based their claim for the passage of the Bill not on charity, but on justice. While there had been a slight improvement during the last few years, he believed it was true, as certain statisticians calculated, that agriculturists in this country were receiving for their produce from £60,000,000 to £80,000,000 per annum less to-day than thirty years ago. He also believed that the average agriculturist had not received a penny interest on his capital during the last twenty-five years; he had simply had bread and cheese for his labour, and frequently the labour of his wife and 364 family in addition. Under these circumstances it was not unreasonable to suggest that an industry whose paying powers were so seriously diminished should not be called upon to contribute to local rates so heavily as was justifiable in more prosperous days. He submitted, further, that it was more important to-day that the Act should be renewed than it was in the first instance that it should be passed, because, mainly owing to increased outlay on main roads, there had been a large increase in the rates that had to be paid, with the result that agriculturists were paying as much in rates to-day as before the Act was passed. [OPPOSITION cheers.] Hon. Members opposite cheered, but it had to be remembered that had they succeeded in their opposition agriculturists would have been paying nearly £2,000,000 more to-day than they actually were.
Many objections had been urged against the Act, some in their old form, others in a new dress. Once again it had been said that the landlords would grab all the advantage of the measure. British agriculturists had been grossly insulted by the way in which this matter had been dealt with; they had been treated as though they were paupers instead of Englishmen asking for justice at the hands of Parliament. From his own experience he could say that the prediction that this was a landlords' dole had not been borne out by the facts. If a landlord said to them, "We intend to increase your rent because of the reduction in rates," they would at once point out that notwithstanding the advantage of the Agricultural Rates Act the farmer was earning less to-day than years ago, and, therefore, the landlord would have no ground on the principle of the reduction of rates to increase the rent. When farms were rented for a term of years the landlords readily gave 10 or 15 per cent. remission of rent during agricultural depression, and they readily came forward. Therefore, he did not think landlords were men who were likely to come forward in order to grab that which Parliament meant for the benefit of the tenant farmer.
It was said that this Bill helped the richer farmer as against the poorer 365 farmer, but in his opinion it did quite the reverse, because actually the small farmer got the advantage as against the large farmer. He would show the House how this occurred. The abatement under the Bill was extended to big farmers and to small farmers, and to the occupier of rich land and poor land in like proportion. The abatement was made upon the rateable value of the land, representing the actual value of the land; therefore the advantage, in the first place, was equally enjoyed by the occupier both of good and bad land. The losses incurred by the holders of good land within the last few years had been greater than those sustained by the occupiers of poor land, but he wished to say that while the advantage of the remission was enjoyed equally according to the rateable value of the land, the larger farmer as a contributor to taxation contributed to a fund from which the money was taken to give this remission, and so paid back in taxes part of the advantage he got by the remission of the rates on the land. The smaller farmer was not a taxpayer, and so he put in his pocket the whole of the advantage of this Act, whereas the larger farmer got the advantage, but made a contribution by an increased payment to the taxes.
He appealed to the House to pass this measure first in the interests of the British farmer, and secondly, in the interests, of the labourer. Any unjust burden upon the farmer must affect those labourers employed by him. He deplored most sincerely and deeply the movement of the rural population into the towns, but the only way to stop it was to make it better worth while for the rural classes to remain in the country districts, and the removal of unjust burdens from those classes tended in that direction. This was a matter of importance, because they all wanted to see home land developed, and producing the greatest possible amount of food supply which it was capable of producing. The removal of unjust burdens from the agriculturists also tended to the employment of more capital in the cultivation of the soil, and, consequently, it gave more employ- 366 ment to the labourer, and brought greater good to the people, thereby increasing the common wealth. They had heard a great deal said to the effect that this Bill was helping the agricultural community to the injury of the towns, and that house property suffered in consequence. If the Government could have secured a payment to the local bodies of a sum of money from the Imperial Exchequer equal to one-half the rates upon agricultural land the same object would have been achieved. He would like this Act applied to one-acre lots of agricultural labourers. He understood that as this was a continuation Bill that could not be done. Where the expenditure had increased to what it was when the Act was passed the balance did fall upon house property rather than on land, but it fell on the houses and premises of the farmer as well as upon those of anyone else, and, therefore, he did not see that there was much to complain of. He always regretted to hear the town placed against the country, because what was good for the country was also good for the town. He admitted that the ratepayers in towns had grievances, and Parliament every year passed the Poor Law Exemptions Bill which relieved tradesmen of an enormous burden that would otherwise have fallen upon them for the maintenance of the poor. The concession to the towns under that measure was much greater than the concession to the country districts under this Act.
He hoped the Government would introduce a Bill dealing with the rearrangement altogether of local taxation. He thought traders had just reason to complain of the present basis of taxation, and it was high time there was a re-arrangement in the interests of trade and agriculture in the direction of securing that all who had enjoyed local work and the advantages of the outlays made for the convenience and health of the district should contribute alike to the cost of those improvements whether their property was real or personal. This Bill would be received by the agricultural classes with gratitude and appreciation. He assured the House that the farmers had had a keen struggle to meet the liabilities of their position and they had done it manfully. They 367 had heard of very few bankruptcies. Had it not been for the sympathy of the landlords in allowing reductions of rent, and the Government in granting this remission, he ventured to say that a large number of farmers would have been bankrupt. From the point of view of justice and equity he thought the Government had done right in bringing forward this Bill, and he appealed to the House to pass it simply as a measure of justice to a class of people who were engaged in one of the most important industries of the land.
§ MR. LLOYD - GEORGE (Carnarvon Boroughs)
said the hon. Member who had just sat down had told them that a reduction of rates was a very good thing for agriculture. He thought that observation was equally true about any other industry; their complaint was not that the Government had reduced rates upon agriculture, hut that they had made this reduction at the expense of other industries which were very much more heavily rated than agriculture. [MINISTERIAL cries of "Oh, oh!"] Surely hon. Members opposite did not mean to say that other industries were not so heavily rated as agriculture? The hon. Member said that he hoped next session the Government would readjust taxation generally, but he noticed that with hon. Members opposite it was always "next session." In 1896 it was stated that this Bill was purely a temporary measure, but they had renewed it once since, and they were now being asked to renew it a second time, and they were simply renewing it as a promissory note to the tradesmen, whilst, at the same time, they were giving the cash to the agriculturists. So long as they confined the relief to one class they must necessarily increase the burden to other classes. Take, for example, the town tradesman and the farmer. He was not going to say that the rates were not very heavy, but they were heavy for all classes. Take, for example, a tradesman paying £100 rent and a farmer paying £100 rent. The farmer would have probably a rate at 2s. 3d. in the £. The tradesman paying £100 rent in a town would probably have to pay a rate of about 6s. 8d. in the £. He thought that was a very fair 368 average for a good many towns, and he knew in some of the towns he represented the rates were higher. The tradesman in this case would be paying £30 a year. What did this Bill mean?
§ MR. LLOYD-GEORGE
said if that was the case the hon. Member ought to be righting not to tax the tradesman but to reduce the rent of the farmer.
§ MR. LLOYD-GEORGE
said the hon. Member might know a good deal about farmers, but he did not appear to know much about tradesmen, or he would know the difference between turnover and profit. Did he not know that many tradesmen were struggling just as hard as the farmers? The hon. Member stated that few farmers had gone to the Bankruptcy Court. He wondered if the hon. Member had ever looked through the list of the tradesmen who had absolutely failed to struggle on in their business and had become bankrupt. If the Government had introduced a Bill to deal with everybody—farmer, miller, and manufacturer—nothing could have been said against it. On his side of the House they should probably have voted for it. He objected to one class being singled out of the lot—a class which was not the most heavily rated-and to all the other classes of the community bearing the burden of relieving a class of that character.
It had been said in the course of the debate that this relief had not gone into the pockets of the landlords, and that rates had not gone up. But from observation he knew that remissions of rent had been knocked off in a good many cases. The farmer, after all, was a good business man, and it was perfectly right that he should make the best of this, and claim as much remission as he could in respect of rates. If a landlord attempted to put the rent up because the tenant had had a remission of half his rates, the tenant would say, 369 "The remission we get is one that we are entitled to." Perfectly true, but the hon. Member opposite forgot the other part of the argument. During the last few years the rates had gone up very much, one of the new burdens being in connection with the education rate. Supposing the farmer went to the landlord and said, "My rates are gone up and you ought to make me a remission in rent," the answer was, "Don't you get half rates out of the Agricultural Rates Act?" The farmer did not get the remission he otherwise would have got if this Act had not been passed. The landlord said that the Government were giving £1,500,000 towards the rates of agricultural tenants. Therefore the money had gone already to the landlords in those cases.
He reminded the Government that every time this Bill had come before the House they had promised a general Act dealing with the whole question of local taxation. The Royal Commission had reported fairly unanimously on this subject of local taxation, and how was it the Government had not brought in a Bill to give effect to their recommendations. Local rates were becoming a serious matter. Did the Government really intend to deal with the subject?
§ MR. LLOYD - GEORGE
The President of the Local Government Board knows that valuation is a very different matter.
§ MR. GERALD BALFOUR
Before any large scheme of local taxation can be undertaken it is absolutely necessary to establish a new valuation system.
§ MR. LLOYD-GEORGE
said that answer was good enough for the tradesman, the manufacturer, and the artisan, but it was not good enough for the landlord. Why not deal with the matter all round instead of dealing with it piecemeal? The fact was that the Government did not intend to deal with it. This was only one of a series of matters on which they had broken their pledges, and, 370 on the other hand, they had dealt with subjects they were pledged not to couch. They were pledged up to the hilt not to deal with controversial matters. Local taxation was a question which, in 1896, they pledged themselves to deal with, and that pledge was renewed afterwards. They had not dealt with it yet except in a manner which was characteristic of the way in which they had dealt with every subject. Rates were up all round, and the only relief given was in respect of rates on agricultural land. So far from the predictions that were made concerning the effect of this Act when it was originally passed having been falsified, the fact was that they had been justified by experience. One prediction was that parks would come under the definition of agricultural land, and that they would be relieved of half their rates. That was the case throughout the country, although they were not in any sense agricultural land. The landlords had put a few cattle or sheep upon them and had received relief to the extent of half the rates in every county in England and Wales.
§ MR. LUKE WHITE (Yorkshire, E.R. Buckrose)
said that as the representative of a very large agricultural constituency in Yorkshire, he desired to say a few words in support of the Bill. Some years ago he not only voted but spoke in its favour. If circumstances at that time justified him in taking that course, the position of agriculture to-day was an additional reason why he should support the measure. In considering the Bill they were bound to take into consideration that when the Agricultural Rates Act was first passed its duration was limited in order that Parliament should in the meantime consider and deal with the whole question of local taxation. It was not the fault of agriculture that local taxation had not been dealt with. The onus really lay upon Parliament itself and on the Government for not taking action in the matter. It was absolutely necessary however, in the interests of agriculture itself, that this measure should be renewed until one Party or the other had the time, in the interests of agriculture, to deal with the whole question. In the meantime local rates had greatly 371 increased. Agricultural land in Yorkshire, although rated at one-half, was now paying nearly as much as was payable when rated at its full value. The Education Act had placed a very heavy burden upon the agricultural interest. It had been stated that the benefits of the Act went to the landlord. He had had considerable experience of the incidence of local taxation since the Act was passed, and he could unhesitatingly say that although here and there they might find the landlord deriving benefit from it, on the whole the benefit went to the farmer and not to the landlord. They might ask themselves who paid the education rate. The farmer paid it and got no recompense from the Government. The farmer would pay that rate for years to come; it was a burden placed upon him and not upon the landlord.
A Royal Commission had considered the practical working of the Agricultural Rates Act and they favoured its principle. But he considered there was great hardship to the farmer in some of its provisions. In some agricultural districts there were urban communities who suffered very much from local taxation. Although agriculture had received the benefit of the Act, there still remained a heavy burden of local taxation of which land should be relieved. The most important feature of the Report of the Royal Commission from the agricultural point of view was the full recognition of the claims put forward by those who represented the agricultural interest. It was clearly shown that a strong case had been made out for considerable relief in addition to the benefits under this Act. In dealing with the readjustment of local taxation there would have to be a clear distinction made between the cost of services which were national and those which were purely local. Those engaged in agriculture were agreed that the expenditure on Poor Law relief, the cost of police, the cost of the maintenance of main roads, education, and other services, ought not to be borne by agriculturists but by the taxpayers generally throughout the country. All who had had any practical experience as to the present basis of the incidence of local taxation were agreed that it urgently needed alteration. Hon. Mem- 372 bers had admitted that this measure ought to pass, certainly in the interest of agriculture itself. To his mind, all classes of the population, both in town and country, were interested in the success of agriculture; because, if agriculture was prosperous, then the entire population received considerable benefit. Agriculture stood more in need of this measure to-day than it did nine years ago. He trusted the Bill would pass, and that during the next four years Parliament would have the opportunity of dealing in a comprehensive manner with the whole question of local taxation.
§ SIR CARNE RASCH (Essex, Chelmsford)
said that, as a Member for an agricultural constituency, he thanked the Government for having brought in this Bill. It was what the agricultural Members expected of the Government; although they would have liked it better if the Government had gone further. But, he supposed, they must take what they could get. He confessed he could not understand the arguments of hon. Gentlemen opposite. The hon. Member for the Carnarvon Boroughs was always perfectly straight, and he understood what that hon. Gentleman was at; but when his hon. friend came down to Essex to spread the light, if he would only take advantage of the opportunity of going over the land in that county with him, he could show him that this was not a question of rent at all, but a question of getting the land cultivated. He, however, confessed that he could not understand the arguments of the hon. Gentlemen who had moved and seconded the Amendment. He had heard of those who were "willing to wound and yet afraid to strike." So far as he could understand the line these hon. Gentlemen had taken they desired to kill the Bill, and yet they did not. They could not do both. The hon. Member for Halifax told the House that certain members of the Government were themselves not in favour of the original Agricultural Rating Act. He did not move in such exalted circles himself, but he knew that people in that part of the world which he represented were in favour of it.
373 Of course the Bill was not protection; but in this sphere they had to take what they could get and make the most of it. As Shakespeare said, it was not as deep as a well, or as wide as a church door, but it was enough. He admitted that a Bill of this kind was not an ideal way of dealing with the agricultural industry; but it was the only plan which had been tried. Hon. Gentlemen opposite had not done them the honour to suggest another. The agricultural interest was not satisfied with the present condition of things. What they wanted was to take all the rates off the land; and there was no reason why that should not be done, and, simply, for this reason. When protection was abolished the rates and taxes, for the payment of which protection was given, ought to have been abolished also. Either agriculture was worth preserving or it was not. The only way that agriculture could be preserved was by either relieving the land from rates and taxes, or giving a bounty on coin. If agriculture was not worth preserving, let it go; but if they let it go, he failed to see how they could keep a population on the soil which was to provide men for manning the Army and the Navy; or how the population of the country was to be fed for nine months out of the twelve in the year. If hon. Gentlemen opposite doubted that, let them come to Essex and he would show them where agricultural labourers were doing nothing. Then, if agriculture went by the board and the towns attracted the labourers, the towns might increase in wealth, but they would have an anæmic, narrow-shouldered, stunted people who would not do any good. He was certain of the truth of the lines written more than a hundred years ago that—III fares the land, to hast'ning ills a prey, Where wealth accumulates and men decay.That was what they were coming to when the land went out of cultivation.
§ LORD EDMUND FITZMAURICE (Wiltshire, Cricklade)
said there had been a good deal of discussion as to what the immediate effect of the Agricultural Bating Act had been. Had the occupiers or the owners of the land 374 benefited most; or had the one not benefited entirely at the expense of the other? He submitted that it was quite impossible to lay down any general proposition on that question. He thought that this discussion, taken part in by hon. Members from every part of the country, had shown that the effect of this Act, in operation, had been, in some cases, to give a temporary benefit to the occupiers, and, in other cases, a benefit to the owners. He would point out that what his right hon. friend the Leader of the Opposition said, in opening the discussion, was that the main reason for opposing the Bill in a former year, when it was first introduced, was that whatever, might be the temporary effect of the measure on the tenants, the eventual benefit, owing to the higgling of the market, would fall to the owners. That was one of the most established propositions of political economy, even in these days when free trade had been expelled from this planet and had taken refuge in another sphere. In regard to land, whatever might be the case in towns, the tendency of the rates was to fall on the tenant, and therefore the landlords benefited. In addition to that, as had been pointed out by the hon. Member for Carnaron Boroughs, "in a great number of parts of England, during the bad times after 1874, it was a very common practice on the part of owners not to give a permanent reduction of rent but a temporary. The old rent was kept in existence, and remissions were given from year to year. That being the state of things, in many cases, it was not unnatural for the owner to say that after the burdens on the occupier had been diminished he was justified in going back to the old rent. Therefore, the immediate effect of this Act had been to benefit such owners and not the occupiers of land.
He did not wish to enter into a general discussion on the whole effects of the Agricultural Rating Act; but he wanted to press on the right hon. Gentleman the President of the Local Government Board to state rather more clearly to the House than he had done the policy of the Government in regard to this great question of rating and the burdens on the land. It appeared to him that in his speech the right hon. Gentleman had 375 adopted a certain Olympian tone and had admitted that this question went back a very long time. Everybody admitted that it was a very great question, and that it demanded to be dealt with by the Government. He hoped the Government would deal with it, and yet the right hon. Gentleman seemed to indicate that the only way the Government meant to deal with it was by renewing this unfortunate Act. The House had good reason to complain of that attitude, because the experience of the past and the necessities of the present showed that this was a most urgent question. When the Government first introduced this question, they said it was necessary to appoint a Roya Commission, and an exceedingly strong Commission was appointed, of the composition of which they, on that side of the House, had no reason to complain. The Government then said that they must wait for the Report of the Royal Commission. The Royal Commission had reported, but in what order? First of all, they made a Report on the very matter which the right hon. Gentleman told the House, correctly, lay at the foundation of this question. They produced a very able and convincing Report on the valuation and assessment of lands as the basis of taxation. The second question dealt with was the rating of tithes: and then came their final Report, not unanimous, but which, nevertheless, contained a very great deal of important and valuable information. There was also a Minority Report. Now, it might have been expected that the Government would have dealt with this question in the order of importance attached by the Commission to the questions raised. But exactly the opposite had been the case. There had been certainly the clamorous interest of the clergy in regard to tithes, and the interest of the owners of land in regard to rates.
The right hon. Gentleman and the Prime Minister told the House that valuation and assessment lay at the root of the whole matter; and so, judged out of their own mouth, they were doing exactly opposite to what they should have done. It was only last year that the Government brought forward a Valuation Bill, but where was it. They saw the Bill of last year, and they were now told by 376 the President of the Local Government Board that there was another Bill in an advanced state of preparation. The right hon. Gentleman also alluded to the Bill of last year. He (Lord Edmund Fitzmaurice) supposed that Bill was in an advanced stage of decomposition. That might be so or not, but they wanted to know where was the Bill of the present year. Was there any serious intention of dealing with this question at all, or was it only a shop-front Bill? He agreed that the question of valuation was at the root of the whole subject. Some of them were too much disposed to devote the whole of their time to the question of rating of site values, and did not attach sufficient importance to the organisation of the valuation authorities of this country. If they took the proposals of the hon. Member for Halifax and of other hon. Gentlemen, by their own showing, if their Bills became law to-morrow, it would be a considerable time before any large sums of money would accrue from those Acts and find its way into the pockets of the ratepayers. The Bill of the hon. Member for the Elland Division only dealt with houses and lands when the leases fell in, and therefore ex hypothesi it would be a considerable time before that Bill would bring any large amount of money into the pockets of the ratepayers.
In regard to the existing law of valuation he was astonished that the Government, having had the Commission's Report on valuation for some years, and having admitted that it lay at the very root of the question, had not only played with the subject last year, but were apparently going to play with it this year. He agreed that a Bill of this kind could not be carried by a wave of the hand. He recollected when some twenty years ago Mr. Sclater-Booth held the position now occupied by his right hon. friend there was a Government Valuation Bill every year, and every year it broke down by reason of the jealousy between the local rating authorities and the surveyors of taxes. Since then the county councils had come into existence. The figures in the last Report of the Local Government Board showed that a large proportion of the 377 rates were levied by the county councils as distinct from the boards of guardians. They now had to deal with three authorities. First there was the surveyor of taxes with regard to the Government taxes; next there was the existing local rating authority with regard to the rates which they still levied; and then there was the county council, which was becoming more and more the governing authority in county boroughs. What a humiliation it was to the Government that after so many years, after the Reports of the Royal Commission, and after having all these Bills they were now no nearer to a settlement of this question than they were in the days of Mr. Sclater-Booth. Was it not possible to make the appeal to the Government that they were losing authority and their reputation by appearing to play with this question, which was admittedly of such immense importance. Everyone who had anything to do with the subject knew the great difficulties that beset it, but he was most anxious that some effort should be made to deal with it, because he felt that whatever Government or Party might be in power that question must be dealt with first. The reputation of the House was involved in dealing with and settling this question which had been a failure ever since the days of Mr. Sclater-Booth.
§ MR. ERNEST GRAY (West Ham, N.)
cordially agreed with what the hon. Member who just sat down had said. It certainly was not creditable to this House that, though from the early sixties Governments from both Parties had declared that the reform of local taxation was an urgent question, yet both had persistently pushed it aside. He desired to approach this subject from the point of view of that class of district which would be called upon to pay heavily, and which would receive from this Bill no benefit whatever, or if it received any benefit it would be very small and very indirect. He denied that in this matter the country was in the same position as it was nine years ago when the original Bill was passed, or even four years ago when it was renewed. He remembered the promises that were made by the Government when the first Agricultural Rating Bill was passed; the declaration daily 378 and nightly made by the Government that this was a temporary expedient to meet a case of urgent necessity, and that the whole question of local taxation would, at an early date, be grappled with by the Government, Then came the Royal Commission and it was a reasonable thing at that time to vote for the Bill, and a great many urban Members did vote for it, largely in the hope that the promises made by the Government at that date would be fulfilled without any serious delay. In 1901 the Royal Commission had reported, and again he recollected the promises made by the Government when the Tithe Rent Charge Bill was taken up, when the House was again told that this also was an urgent matter, and should be dealt with without delay. Were they, he asked, in the same position as they were four years ago in regard to this matter? Had not the interest in this question of local taxation receded rather than advanced? Was the interest of the Government or the House as keen now upon the question of local taxation as it was when the Royal Commission reported? He very much doubted whether instead of having made progress the interest had not receded until it had almost reached a vanishing point.
Let the House consider for a moment the burdens of the urban districts and compare them with those of the rural districts. The burdens borne by the urban districts were much greater than they were ten years ago, and they had grown with much greater rapidity in the urban than in the rural districts. This was illustrated by the effect of the Education Act of 1902, which had placed far greater burdens on the ratepayer and the taxpayer. Where had that burden fallen most heavily? Where had the relief given by Parliament been the least felt? There were less than one dozen rural districts where the education rate came to Is. in the £., but there were a considerable number of urban districts where it exceeded 2s. How could he, representing an urban district where the education rate alone amounted to nearly 3s. in the £., support this Bill? He would be told, no doubt, that a different method of assessing the rate prevailed as between 379 urban property and agricultural land; but even admitting that that was the case, there was one instructive illustration of the difference, namely, that where-ever a man could move his residence from an urban district into an administrative county he went without the slightest hesitation. He would leave his factory, j his business, or occupation, whatever it might be, in the urban district, but would move his residence without the slightest hesitation into the administrative county, and the reason given nine times out of ten was the heavy burden of the local rate in the urban district compared with the much lighter burden which fell upon him in the administrative county.
What were the rates it was proposed to relieve by this Bill? They were all the rates levied on agricultural property. That was not following out the recommendation of the Commission; what the Commission recommended was that those charges which were national in their character should be paid out of the Imperial Exchequer, and that those which were local in their character should be paid out of local taxation. The whole of the charges on agricultural land were not national in their character, but when it came to a question of education and the poor rate, those were certainly national in their character, and the burden of them should not be so largely local as it was to-day. The debate of to-day, together with the debates of four and nine years ago, ought to teach the lesson not merely that the question of assessment and taxation had to be dealt with, but that it never would be satisfactorily settled until the basis of taxation had been considerably enlarged. Difficulty was found in imposing local rates, and schemes were put forward for bringing different kinds of property into the net of local taxation. There was H steadily growing desire that a large portion of the national charge now borne by local rates should be thrown upon national taxation, but every year the Chancellor of the Exchequer had to admit that if any such relief was to be given it would be necessary either to increase the burdens upon certain sections of the community or considerably to enlarge the area of national taxation, and no one who had followed the debates 380 of the last ten years could doubt that it was to the latter of those alternatives resort would have to be had to provide the central Exchequer with means sufficient to discharge national obligations without falling back on the local ratepayers. As the representative of a constituency where rates had enormously increased, he could not but admit that the position had materially changed during the last nine years. The prospect of relief appeared to be vanishing rather than approaching. Under the Education Act of 1902 necessitous districts which previously obtained relief had had that relief swept away, and in its stead there had been setup a system under which assistance was given to districts where it was hardly needed, while districts which more than ever required relief lost much of that which they formerly had and were now called upon to continue this subsidy to districts which were really better off in the matter of local rating than the urban districts themselves. Under these conditions he could not see his way to vote for the Second Reading of the Bill.
§ MK. PERKS (Lincolnshire, Louth)
said that he was one of the few Liberal Members who, in 1896, voted and spoke in favour of the Agricultural Rates Act, not because he was enamoured of the economic principle which underlay the Act, but as an expression of the gratitude of his constituency for the generosity of the authors of the measure to the depressed agriculturalists. He agreed that agriculture did not now present the altogether hopeless spectacle of fifteen or twenty years ago, but, at the same time, it could not afford, at any rate in his Division, to renounce the benefaction which Parliament offered to it. Remembering the strong language used to him in the House, and the still stronger language used in the lobby for the vote, he felt it his duty to give in in 1896 he could only congratulate the Leader of the Opposition that he had, for reasons he had explained, decided to support the measure on the present occasion—although the right hon. Gentleman had been careful to state that he did not approve of the principle of the Act. It might be remarked further that nearly every 381 Liberal who had been returned for a county constituency during the last few years had previously declared himself in favour of the Agricultural Rates Act.
He was not a believer in the doctrine of grants in aid from Imperial funds for local objects. The system had already been pressed far beyond reasonable limits, and it certainly conduced to waste and extravagance in the imposition and administration of local rates. Some of his hon. friends had given admirable, and, to some extent, lucid expositions of their views in reference to future rating legislation. It was possible that the time would come when a reconstruction of the whole system of local taxation would have to be considered, and he agreed that it would never be done by a mere shuffling of the cards as between agricultural and town property. There was reasonable ground of complaint, in Ms judgment, on the part of the large farmer class, as to the method in which they were assessed compared with the shopkeeper in the country town. The shopkeeper who paid perhaps £25 or £30 rent was probably making a larger income in that small shop than the neighbouring farmer who was cultivating 300 or 400 acres of land, and not only had to bear that burden, but probably had to invest £5,000 or £6,000 capital compared with the £200 or £300 invested in the stock of the country shopkeeper earning an equal income. That was a ground of complaint between these two classes of ratepayers. He was not concerned to inquire upon whom ultimately this burden rested, but he adopted the view of his right hon. friend that the benefit of the relief in the last resort unquestionably went to the freeholder. It must be so because every political economist asserted it. Assuming this doctrine to be true, although objectionable, that the freeholder was the man who benefited, he wished to point out that in his division there were 1,000 of this class who were the owners and occupiers and farmers of holdings varying in acreage from ten or fifteen acres up to 100 acres, and he was bound to have some regard to what they thought in regard to the working of this Act.
382 He did not know what form future legislation on this point would take, and he was not concerned to inquire about it; they might have to discover some method of ascertaining the selling value of freehold land, and base all future local taxation upon the selling value. He observed that by an extraordinary process of reasoning in the treatise sent out as a Parliamentary Paper by the opponents of this Bill, there were two branches of property which his hon. friends thought would never get any relief, and they were the public-house and the railway. He would pass away from that thorny point. The relief might come by bringing into the net for local taxation personalty as well as realty. He had a friend in a manufacturing district near Zurich, who told him he had to pay local taxation upon the whole of his stock, machinery, and manufactured articles in his great mills. He had another friend not far away from him who was a professional man. He was a doctor earning over £500 a year, and he had to pay away to the extent of one-third of his income over that sum in local and general taxation, and even his books and surgical instruments were valued for the purpose of ascertaining what he should pay. He did not know whether that would be the basis of taxation in the future, but he should support this Bill, not because he believed in its principle, because he did not believe in the principle of relief to local taxation upon which the Bill was based. He supported it, because it was a generous gift from the urban constituencies so largely represented on the other side of the House, to agricultural constituencies, and it was on that account that he supported it in 1896.
§ MR. EMMOTT (Oldham)
said hon. Members opposite, and even his hon. friend who had just sat down, twitted some of the Opposition with not opposing the Bill on this occasion, whereas they had opposed it in the past. The hon. Member for Louth had further twitted the Leader of the Opposition with not approving the principle of the Bill. What was the principle of the Bill? His hon. friend himself did not approve of the principle of the Bill. Was the principle of the Bill that one class only 383 should be helped, or was it not? Nobody who had studied the question or read the Report of the Local Taxation Commission could deny that the agricultural interest required, under certain conditions, relief in the matter of the rates. If that was the principle of the Bill the Opposition did not oppose the principle; but what they did oppose, what they continued to protest against, was that one interest should have been picked out and treated with every favour, whereas other interests, deserving a large relief, had not been dealt with. He was glad that they on the Opposition side were not opposing in any very whole-hearted way at any rate, the passing of this particular measure on this occasion. When a Bill like this had been in force for some years, when a class of men—farmers, landowners, or whoever it was—had had a benefit under the Bill for a number of years, when it was generally conceded that they ought to have some benefit, then it was very difficult to take such benefit away.
They were considering at the present moment the Amendment of his hon. friend the Member for Halifax. He did not know whether he was present in the House at that moment. If he were he would appeal to him to withdraw the Amendment, or at any rate not put the House to the trouble of a division upon it. He did not think the Amendment quite expressed his hon. friend's desires; at any rate it was certainly not in accord with the speech of the hon. Member for the Elland Division who seconded, because he spoke of "a contribution payable by the owners of land based upon its selling value." But the whole of his speech—as he understood it—was that it was to be the unimproved selling value of the land, whatever that might be. If that was the case it ought to be expressed in the Amendment. He wished to make it clear why it was that some of them, whilst not going to any great length in opposition to this Bill, nevertheless felt strongly the gross injustice of it. His constituency was in the same position as that of the hon. Member for West Ham, and he fully sympathised with the speech he had made. Rates were extremely high. The education rate was mounting up to 2s., and the 384 effect of the Education Act of 1902 was not to benefit his constituency but to do it harm. Their urban rates were higher. They were advancing much more quickly than rates in the rural districts, and the burden of those local rates on the great manufacturing industries was enormous. This case was made infinitely worse by the extreme injustice of the distribution of Imperial subventions at the present time. Some hon. Members opposite who supported this Bill seemed to think of only one kind of injustice, and that was the injustice to the agricultural class under the old conditions of rating. But there was a tremendous injustice at the present time to constituents like his in the present distribution of Imperial subventions. If the amount received from the Imperial Treasury were divided according to the principle favoured by Sir Edward Hamilton and Sir George Murray, and approved by Lord Balfour of Burleigh, then the extra amount his constituency would receive would be between £20,000 and £25,000 per annum, representing a rate of Is. to Is. 3d. in the £. That being the case, was it not a great injustice to his constituents that they should be asked, as they were, nine years ago, not only to go on suffering that injustice, but also to pay their share of the subvention to the agricultural class. If his constituency paid its proportionate share of the £1,750,000 or whatever it was, the share of his constituency amounted to from 2½d. to 3d. in the £. At page 119 of the Report of Sir Edward Hamilton and Sir George Murray he found a statement showing the disparities in regard to-local rating in certain agricultural corn-ties and county boroughs, one of the county boroughs being Oldham. Further down on the same page was the following—Accordingly in order not to overstate the case we take 'assessable value' as defined by the Agricultural Rates Act, i.e., rateable value after deducting half the value of agricultural land. Even on this test, Rutland still is more than twice as rich as Oldham—that is to say, if a local service costs Is. per inhabitant alike in Rutland and in Oldham, it will need a rate of almost 4d. in Oldham and only 1¾d. in Rutland, even when agricultural land is rated at a half. Notwithstanding this disparity in ability, Oldham only receives help to the extent of 2s. 7d. per inhabitant, while Rutland receives 6s. 8d. or more than twice as much.385 That statement showed how hardly treated his constituency was in this matter, and that would continue until there was a complete reform of the system on which subventions were given from Imperial sources. Could it be wondered in view of the facts that complaints were still made in regard to doles given to favoured classes? He regretted that as years went by no attempt was made to deal with this great question of the reform of local taxation. For ten years the Government had had an enormous majority. They certainly had had sufficient leisure to deal with this question. They had had some surpluses, and he thought that instead of giving the country the Acts which had been passed since 1900, to which the Opposition strongly objected, they might have devoted part of the time to making a great reform, in which hon. Members on his side would have been only too glad to help them, and which would have redounded to their credit in future years.
§ SIR JOHN KENNAWAY (Devonshire, Honiton)
associated himself with the expressions of regret which had fallen from hon. Members that this question had been allowed to drag on for a considerable time without any substantial reform being undertaken. He agreed that urban districts had a grievance in regard to the postponement of the reform of local taxation. The sins of omission and commission of the present Government had been very much dwelt upon by Members of the Opposition, and he could only hope that during the time still left to them the Government would do a great deal to repair their sins of omission so that they could go to the country with a good record. At the same time he congratulated the Government upon this act of simple justice in preserving to the agricultural interest the benefit which they had enjoyed with advantage to themselves and. the whole community for the past nine years. He also congratulated the Opposition on their tardy repentance, which enabled them, now an election was in view, not to subject the House to an all-night sitting while they opposed the passage of the measure. The inequality of rating between those who enjoyed 386 an income from personal property and those who derived their income from real property was so glaring that Parliament had admitted that the case called for special and preferential treatment. The tradesman and the professional man paid rates only on the premises they occupied, whereas the agriculturist was rated on his whole income. He would give two instances to show what the hardship was for which this relief had been asked. In the Report of the Commission on Agricultural Depression it was stated that Mr. Wilson Pox, a farmer, the rateable value of whose holding was £1,050, paid income-tax on £506, and was assessed for poor and highway rates £157 12s. Id. A tradesman adjoining the farm had premises the rateable value of which was £50, and he paid income-tax on £600, but only £13 for poor and highway rates. There was another case in Somersetshire where a manufacturer, employing 2,000 men, was rated for local purposes on £200, while a farmer in the same parish was assessed on £460 and paid more in local rates than the manufacturer.
§ SIR JOHN KENNAWAY
said it was a very serious injustice; and his desire was to see the inequality in the way in which rates were levied between town and country done away with. He thought it was fair to put forward a special claim for the agricultural interest for consideration in these times. When the Corn Laws were repealed the advantages which the agricultural interest had hitherto possessed were withdrawn, and he submitted that the damage done to the agricultural interest ought to have been met by a reduction in the rating at that period. Time had been allowed to slip by, the injustice had remained, and the unfair treatment of the agricultural interest had been patiently borne, and would have continued but for this Act. What the agricultural interest asked for was only equity and justice. They would be very glad if this Act were made permanent and not temporary, because they would be free 387 from the danger of its not being renewed when hon. Gentlemen opoosite came into power.
§ MR. SOARES (Devonshire, Barnstaple)
said that although he should vote for the Second Reading of the Bill he did not feel grateful to the Government for proposing it, because he looked upon it as, to a very considerable extent, a landlords Bill. He believed that the benefits of the Act went very largely to the landlord. He represented an agricultural constituency, and had talked with farmers, valuers, and land agents, and that was the position which fair-minded men took up in regard to this measure. They said that in the majority of cases in which there had been a reletting of a farm, or in which the farm had been revalued for rental purposes, it was the landlord and not the tenant who got the benefit of the Act. But, having regard to the fact that this Act had been in force since 1896, and that large numbers of contracts had been made on the faith of it, that reletting and revaluation for rental purposes had been made during that period, he considered it would be unfair not to continue the Act. One proof that the benefit of the Act went to the landlord was the Answer given by the President of the Local Government Board to a Question which he had put to the right hon. Gentleman. He asked the right hon. Gentleman if he would provide in the Bill that in every case the benefit should go to the tenant; but the right hon. Gentleman refused to do so. That was a very strong proof that the Government meant the benefit of the Act to go to the landlord and not to the tenant, and if the Government had not thought that the benefit would ultimately go to the landlord they would not have been so anxious to pass this Bill. If it had been a Bill giving tenants full compensation for improvements and security of tenure the Government and their supporters would have voted against it, hut when there was a Bill in which the benefits conferred went to the landlord, hon. Members opposite went tumbling over each other to support it. The right hon. Member for Sleaford had said that when rents were high rates were low, and that when rates were high rents were low. That showed that when 388 a rating benefit was given to the tenant the landlord was sure to get it ultimately for himself. The hon. Member for Tavistock spoke as if landlords were angels without wings, and yet he said in another sentence that no tenant during the last twenty years in his neighbourhood had made more than bare bread and cheese.
And, it being half-past Seven of the clock, the debate stood adjourned till this Evening's Sitting.