§ Mr. HAYES FISHER
I beg to move as an Amendment to add at the end of the Address,
"But humbly represent to Your Majesty that this House regrets that, having regard to the rapidly growing cost of education and other services of a predominantly national character which has been accentuated by the additional duties cast upon local authorities by the legislation and departmental administration of the last five years, involving heavy and increasing burdens on local rates which press with especial severity on the ratepayers of London, Your Majesty's Gracious Speech contains no announcement of measures to give effect to the recommendations of the Royal Commission on Local Taxation made in the year 1901 in favour of a large increase in the subventions from Imperial funds in aid of local expenditure upon national services, or to compensate local authorities for the loss of rates owing to the reductions of assessable value of licensed premises as the result of The Finance (1909–10) Act, 1910."
The absence of any reference in the King's Speech to the urgent necessity of measures being brought forward by His Majesty's Government for the readjustment of the whole relationship between the Imperial and local exchequers has occasioned surprise and regret not only to Members of this House but also to thousands of those who are engaged in our local government throughout England and Wales. The urgency of this matter has been admitted over and over again. Hopes have been held out to every deputation that approached the Government that something was about to be done to afford some relief to the local exchequers, but 701 up to this time there has been nothing but hopes. Nothing has been done. But the hopes raised gradually ripened into something very like pledges on the part of His Majesty's Government. Only last year the Chancellor of the Exchequer, standing at that box, used these words: "I do not believe it will be possible to postpone that question beyond this year. Whoever stands at this box next year will have to deal with that problem, and deal with it thoroughly." The same Chancellor of the Exchequer will stand at that box, and I only wish he were here to-day in the very best of health, and that he was able to answer this question categorically—whether he holds to the pledge to deal with this question this year, and to deal with it thoroughly. But the matter does not rest there. On the 13th July in another place my Friend Lord Dunmore asked for a further assurance by His Majesty's Government and received it. Lord Crewe, in answering him, said: "My only reason for rising at this moment was to give the Noble Earl the categorical assurance for which he asked. I can say quite definitely that if we find ourselves next year in the position of advising the Crown we shall make an attempt to deal with the whole of the subject. The Noble Earl can take it from me that that is so. Of course, whether it might be possible to conclude the whole subject during the compass of a single session I cannot say, but we shall certainly make the attempt, and we are now proposing to gain information and to consider the methods by which the whole subject—one of enormous difficulty, I once more repeat—may be brought before the country in what I hope may prove to be a satisfactory form." After these distinct pledges, one made in this House by the leading Member of the Government in connection with this matter, the Chancellor of the Exchequer, and the other made by the Leader of the Government in the other House, it is strange indeed that the King's Speech should contain no reference whatever to any measures to be brought before the House by the Government, or of any measure of relief whatever for these local exchequers. I can only suppose it is because His Majesty's Government did not think it necessary to mention legislation on the matter, and that they fully intend in the next Budget to provide a very considerable sum of money in relief of the ratepayers. Six months have elapsed since those promises have been made, and the object of 702 my Amendment is to give the Government the opportunity of renewing the assurance which they gave at that time, and that they will immediately set up, if they have not done so already, some plan by which they will attempt to solve this very difficult problem, and that they will go further than that and will promise to give an absolute pledge to this House that in this financial year, and in the Budget of this year they will find money for the interim relief, at all events, of the ratepayers from some of their most pressing grievances and most pressing claims. And I would ask them to bear in mind that this is the time of the year that these local authorities are all framing their estimates, and what they want to know is on what revenues they cart rely in the coming finanacial year 1910–11.
Whether we divide or not on this Amendment must very largely depend on what reply is given by His Majesty's Government. We shall not be content with the kind of general assurances which we have received for many years, that this matter is engaging the earnest attention of His Majesty's Government. No doubt it is. But we shall want something more as the result of this Debate. We shall want to know what precise machinery is going to be set up. Possibly the Government will tell us what the machinery is. Personally, I would suggest to the right hon. Gentleman that a small committee of representative experts might be at once appointed to examine the recommendations of the Royal Commission, which reported ten years ago, in the light of modern facts and circumstances, and the increased obligations and duties cast upon the local exchequers. An endeavour should be made by them to give form to some of those practical proposals which were the result of the Commission's deliberations, so that they could be put before His Majesty's Government, and afterwards before the House. If the Government are prepared to say that they have set up machinery, or that they will shortly set up machinery, for the solution of the whole question—which we all admit to be an extremely difficult one—and if they will, in addition, recognise that, out of the large surplus of which they are constantly boasting, they should find some money for the immediate relief, this very year, of those charges which press so heavily upon the ratepayers, then I cannot see why we should go to a Division. Of mere general promises we have had abundance; we are 703 rather tired of them, and we want something a little more specific than those. It may be supposed that in my position as chairman of the Finance Committee of the London County Council—a position which I have held for three years—I intend only to present the case of London. I propose to do nothing of the kind. I intend to present to this House the case of the local authorities—throughout England and Wales at all events. I may tell the Government that I am one of those who are perfectly capable of looking at both sides of the account. I do not desire to press the claims of local exchequers too far. I remember the time when I had the honour to be Secretary to the Treasury, and in that position I had a mind for Imperial Finance, and was the natural and proper defender of the National Exchequer. That was my first love, and I think my first love has the strongest hold on me even now. Having looked at both sides of the account—the account presented to the taxpayers for payment and the account presented to the ratepayers for payment—I am absolutely convinced that, in view of the growing demands upon local authorities and the many duties they have to render, and in view of the cost which has been cast on the rates, there is real and serious need of an adjustment, in the interests of the ratepayers, as to who shall pay.
Let me remind the House of the history of this case. The last great settlement of this question took place under the Local Government Act, 1888. When that Act was discussed, old grants were given for specific purposes. Those grants were discontinued, and certain revenues were assigned to meet certain services; the local authorities were allowed to enjoy any balance that might be over after the discharge of those local services. Parliament meant to be generous towards the local exchequers and ratepayers. The assigned revenues were supposed to produce £3,000,000—no more than the grants they were to replace. Take the figures in England and Wales for the year 1866–7, presented to the House. The Licence Duties were calculated to produce £3,000,000; the new Wheel and Horse Tax produced £800,000; and the Probate (now the Estate Duty), £1,800,000—that is, £5,600,000 less the discontinued grants. It was to be given in relief to the ratepayers for certain services which they were to carry out. The net sum—without discontinued grants—was, of course, £2,600,000. That left a 704 balance of £3,000,000 additional money that was to be voted to the local exchequers out of Exchequer contributions and Exchequer grants. It is quite true that the Wheel and Horse Tax—£800,000, was taken off, but still there was the additional balance of £2,200,000. Afterwards, in 1891, the residue of the Beer and Spirit Tax was handed over to the local authority. Of course, that was handed over rather with a view to meeting the expenditure on technical education, but it was not compulsory on the local authorities to meet that expenditure on technical education out of this money, and if they did not choose to do it in that way, they were to meet it out of the rates. For some years the local authorities used this money for that purpose, so that they were left with some balance in addition. What was the result of the action of 1888? There has been a very considerable growth of assigned revenues, but it has been nothing like equal to the growth in the charges placed upon the local authorities. The consequence is that the surplus balance has entirely disappeared in London and in other places, and there is a very little balance indeed in other localities. There never was a free balance really available. There used to be, before 1888, a sum of money voted every year for criminal prosecutions, and half the expenditure on main roads. That money was not voted after 1888, and the expenditure on criminal prosecutions and on main roads had to come, of course, out of the rates. So there was not a free balance even then. In London there was also a special charge for the pauper grant of £327,000. That settlement of 1888 was not satisfactory, and so short a time afterwards as 1891—so unsatisfactory was it—in obedience to general public opinion, a very strong Royal Commission was appointed to inquire into the whole of this subject of Imperial and local taxation. It was a very powerful Commission, and after five years it issued Majority and Minority Reports.
Both those reports recognise certain principles. Both recognise the principle that where local services are preponderatingly national, and are onerous to the ratepayers, there ought to be a very large increase in the annual grants from the Imperial Exchequer. Where another class of service was preponderatingly local, giving peculiar and special benefits to the ratepayers in the immediate localities, very naturally it is only right that the locality should bear the main if not the entire con- 705 tribution. That principle was recognised by both the Majority and Minority Reports. They agreed that there should be an increase of subventions given in aid of local finance. The only difficulty is as to the form which this grant should take and as to allocations. They are agreed in saying what were those preponderatingly national services. They say that the Police Service was preponderatingly national: criminal prosecutions, asylums for pauper lunatics, sanitary officers, main roads, and, more especially, indeed most of all—education. If the Majority recommendations had been carried out, there would have been an increase of the grants from the Imperial Exchequer of £2,500,000, and if the Minority recommendations had been carried out there would have been an increase of subventions from the Imperial Exchequer of £1,500,000. It is ten years since that Royal Commission reported, and nothing whatever has been done to carry out the recommendation of either the Majority or Minority Report. I have never heard the main contentions of both the Majority and Minority Reports really seriously disputed. Ten years have passed, and in that time all Governments have laid upon the local authorities more and more charges, more and more duties, more and more services, and the only point in which the present Government differs from other Governments is this: That it is, I believe, the only sinner that I can find in two particular respects—first, that it is the only Government which has laid a very large expenditure upon the local authorities without giving any grants whatever to those authorities. Other Governments, and the Government of which I was a member, laid a very considerable expenditure on local authorities, but they made grants. True, those grants were inadequate; but, at all events, they were a recognition of the principles for which I contend to-day, that this House of Commons, when it lays heavy and new duties upon the local authority, involving heavy and new expenditure to the ratepayers, ought to take care that it shares to some extent that expenditure. The present Government is a sinner in another direction. As far as I can see, looking back, it is the only Government which has ever, by its extravagant action, profitable to itself, profitable to its own Exchequer, diminished the rateable value from which local authorities draw their revenue. In fact, to put it shortly, this Government has feathered its own nest by plucking the ratepayers' bird. I have no quarrel with most of this expen- 706 diture, I am largely in favour of most of it; but I want to see the House of Commons acquire the habit of sharing this expenditure with the local authorities. I believe it will be a valuable habit from this point of view—that if the Chancellor of the Exchequer, whenever a new charge was imposed upon the local authority, knew that in framing his Budget he would have to find a substantial proportion of that new charge, then he would be a great deal more vigilant than he is in allowing such measures to pass through. Personally, I should like to see every Bill introduced into this House, that puts large and heavy charges on the rates, marked in the same way as Imperial Bills, with a danger signal of some kind, so that the House would really see what it was doing in the way of laying these increased charges upon the rates.
We come to some of those charges which are admitted to be preponderatingly national. The Poor Law Relief Grant for the year 1907–8 was £2,225,000 from the Imperial Exchequer. If the Majority Report of the Royal Commission had been carried out the grant would have been £3,824,000. If the Minority Report had been carried out the grant would have been £5,000,000. The Imperial subvention was thus only 17 per cent. of this great national charge. I am aware that there are a great many schemes for Poor Law reform, but I do say emphatically that the taxpayers do not bear a fair and adequate share of the expenditure of our Poor Law system. There is one little matter which I hope may be cleared up soon, because it affects the local exchequers at the present time, and especially boards of guardians. Boards of Guardians are all wanting to know whether they will have to refund the profits which they are supposed to have made by the removal of the pauper disqualification for Old Age Pensions. I hope that that claim will be surrendered by His Majesty's Government. I doubt whether the boards of guardians have made any profit, or whether they will in the long run, but for many reasons I think it will be wise on the part of the Government to surrender that charge on the boards of guardians. I come to the question of the police. There, again, we have what is largely a national service. There are two new factors making for increased cost in connection with the police. There is the growing and serious deficiency in the Police Pensions Funds established under the Police Act of 1890. Although 707 the Imperial Exchequer gave £155,000 in the metropolitan area and £150,000 outside that area towards those police funds, there is likely to be a very heavy deficiency. There is then the cost of the Police Weekly Rest Day Act, which was passed last year. It is not compulsory until four years have elapsed, but after four years it will be compulsory, and it will lead to a very heavy deficiency, which the ratepayers will have to find unless they can get some relief from the Imperial Exchequer.
I pass from the question of the Poor Law and that of the police to the largest question in local Budgets, and the one that most affects every local authority—namely, education. In education the gross expenditure from rates and taxes has been added to enormously. In 1889–1900 the general expenditure from rates and taxes and education was £6,000,000. In 1907–8 that figure had jumped up to £15,500,000. The principal contributory cause was due to the number of Education Acts. There was the Education Act of 1891, with the policy of which I cannot quarrel, because I both voted and spoke in favour of it. The cost of it amounted to £2,750,000. I mention that as one of the causes of the upward tendency in educational expenditure. We come then to the great Education Acts of 1902–3, which placed the voluntary schools on the rates. That cost a very great deal of money to the ratepayers; but the Government of the day did give a very large grant. There was a new added grant of £2,485,000, and, taking account of the old Grant of £620,000, there was still a net increase in the subsidy to the ratepayers for carrying out those Acts of £1,865,000. Naturally, when those schools all came under one authority, efficiency had to be studied and increased efficiency, which was undoubtedly most proper and most necessary in most cases, provided you did not push it too far and too quickly, occasioned a large expenditure beyond the actual net amount of the Grant-in-Aid which was given. The Board of Education has very largely helped, and I am not saying this either to its praise or blame, by its code of regulations to increase the expenditure for efficiency in all those schools, whether provided or non-provided. Then came the Education Provision of Meals Act of 1906. That was optional, but when I see the hon. Member for Bow and Bromley present, whom I have to face in the London 708 County Council, I would like to know how far a matter of that kind is optional when elections take place. Very soon in those cases "may" becomes "must," and certainly in London, at all events, we are now feeding every week close upon 50,000 children out of the rates. I may inform the House that the limit of the halfpenny rate has been reached in the case of London.
We had also the Educational (Administrative Provisions) Act of 1907, also passed by this Government. That provides for medical inspection and medical treatment. Medical inspection is compulsory but medical treatment, as a deputation was told by the Prime Minister, was optional. The Prime Minister, when told that the ratepayers rather groaned under the thought of the tremendous expenditure these provisions were going to involve, said that they are purely optional charges, and why should the ratepayers trouble about them? He said:—It is a matter in regard to which the local educational authorities have a complete free hand.I wish he could impress his views on the right hon. Gentleman the President of the Board of Education, and I wish the right hon. Gentleman the President of the Board of Education would impress his views upon those who write his letters for him, none too civil letters, none too courteous letters towards those who are carrying out the work of administering educational government. If this be optional why did we receive letters from the Board of Education censuring us and upbraiding us because of our present system of sending those children to hospitals for treatment. That is not what the Board of Education wants, but what they want, apparently, from their last letter, is that we should have school clinics. [HON. MEMBERS: "Hear, hear."] Let hon. Gentlemen who cheer if they agree with that policy join with me in asking for grants from the Government to carry that out. For my part I have at all events the courage of my convictions. I said to the Prime Minister when I went on a deputation to him that medical inspection is a waste of money unless you follow it up with medical treatment. I say boldly to this House that I believe if you carry out that medical treatment wisely and judiciously you are going to improve the health of the people. I am an advocate of that expenditure, and I am not complaining against it, but I do say that it ought not to be charged and put on the educational rates, but that it is a matter of national concern and one which ought to be a national charge. If the right hon. Gentleman is 709 going to press us to carry that out I do not object to it, but I do say that the Government should find substantial grants for those who do efficiently carry out that which the Prime Minister has again and again declared to be optional. There is also the question of the superannuation of teachers as the result of the inadequate pensions given under the Government scheme of 1898. There, again, you might say it is optional. So it is, no doubt, but how can you look on and see the best of your teachers going out from the service with totally inadequate pensions. The pensions are too miserable even to think about, and the consequence is pressure is put on the local ratepayer. The London County Council has brought forward a supplementary scheme to which I devoted a considerable amount of work. That scheme is going to cost the ratepayers the sum of £50,000 per year. I am certain that that is a charge which sooner or later other ratepayers outside London will have to meet. If the London teacher gets a good pension it will be a very odd thing if the teacher outside the London area could not get it. That expenditure is an expenditure towards which I am quite certain there ought to be substantial grants by the Government which is the successor of another Government which provided the inadequate scheme.
On the question of higher education I will not dwell. Everybody knows there was practically no higher education provided for before 1892, certainly of not any exceptional character. Now we have a twopenny rate limit outside London, while there is no limit in London. We are carrying out in London higher education at very great expense, but for which I admit we do get very large grants. That large expenditure has been brought about by Acts of Parliament. But look at the expenditure looming in front of us as the result of codes and as the result of administration by the Board of Education. At present, for instance, the Board of Education is pressing the London County Council to reduce the numbers in the classes. Again I say I express my full and hearty concurrence with the policy of reducing the number in the classes below sixty. But I do want the House to know and to see the financial effect of this proposal. What I complain of to the right hon. Gentleman is that the Board of Education never does see the financial effect of the proposals which they are forcing on local communities. I do not believe that the right hon. Gentleman has the 710 slightest idea himself that if this policy is carried out, and if the London County Council is not to have more than forty in the class, except in the case of infants, where it is forty-eight, that that is going to cost within the net few years in London alone a capital expenditure of £2,000,000 and a maintenance expenditure of £400,000 per year. In addition to that there is a sum of £110,000 per year to meet the annual and recurring cost of the sinking fund and interest on the money. Thus we have £2,000,000 of capital expenditure and £510,000 per year, or close on a threepenny rate, for this one object alone. Hon. Gentlemen representing other Constituencies can apply those figures to their own Constituencies. I only give the London figures because I am familiar with them, and on the accuracy of them the House can rely.
So far as education in London is concerned, out of the total amount of money that has to be found the Exchequer grants amount to 31 per cent. and the ratepayer has to pay 69 per cent. In the county boroughs they are at least better off. There they get 51.7 per cent., as against our 31 per cent.; and in the counties they get 60.4 per cent., as against our 31 per cent. The total charges on the local rates for the year 1889–90 amounted to £27,713,000, while in 1907–8 the local rates total £59,628,000. That is an increase of £32,000,000 within the last two years, or over 100 per cent. To put it in another way, the rates had risen from 19s. 6d. per head of population in 1889–90 to £1 14s. 2d. in 1907–8. During that period the assessable value had not risen at the same rate, or anything like it. If the average assessable value had risen proportionately it would not have mattered so much. In the year 1889–90 the average rate per pound of assessable value amounted to 3s. 8¼d., and in 1907–8 to 6s. 0¼d. What prospect is there of arresting this rapid growth of rates? Is there any prospect whatever of a possible reduction of expenditure? I do not believe that anybody will say there is. I see none. In fact, I see a great possibility of increased expenditure. I have tried as hard as any man living to economise, to save where possible. My Committee, and those who support me in London, have succeeded in keeping the General County Rate at 1s. 5d.; but new services are ever demanded, and large expenditure is in sight. Then again, in London we are face to face with a reduction in assessable value—a fact of great 711 significance. For the first time, instead of looking for a substantial increase of the quinquennial value, as in former years, we are face to face with a slight reduction. I am afraid that that must be put down mainly to the prejudicial effect of the increased licence duties on public-houses and beer-houses. £370,000 has been knocked off our rateable value, at a low computation, which means £157,000 less to the ratepayers annually, or nearly a penny rate. That is in London; but other parts are similarly affected as a result of the Finance Act of 1910.
A Deputation from Scotch Burghs waited upon the Chancellor of the Exchequer, who said to them, "You want more money? Why do you come to me for it? Why do you not get it yourselves? Why do you not broaden the basis of taxation?" He did not suggest any means; he left it to them. It is a peculiar position that an administrative body is to be the body to invent and impose new taxation. I thought that that was for the Government to do. But what has become of the only proposal put forward for obtaining new sources of revenue for local bodies? There was a proposal, endorsed by many hon. Members opposite, for obtaining for local authorities some share of certain increment duties on urban land values. What has become of that? The first proposal of this ingenious Chancellor of the Exchequer was to collar the lot for the Imperial Exchequer. Owing to some agitation, not confined to one side of the House, he said, "Very well; I will give the local authorities one-half." We did not enjoy the prospect of even one-half for very long. We complained that there was a shortage from the Beer and Spirit Duties, largely in consequence of the legislation of the Government, and that we were suffering because all that money had to be applied to higher education. "Oh," said the Chancellor of the Exchequer, "I will make up that shortage for you; but in return I impound half of the value of these land taxes. I wish the right hon. Gentleman had been able to be present, as I should have liked to put to him some practical and pertinent questions. Where are these new sources of revenue? Again, the Chancellor of the Exchequer has not tackled the difficult question of allocating this moiety. It will require one, if not two, Acts of Parliament before we can get anything from this source of revenue, which was held out to us as being likely to afford 712 some relief. I expect no relief from that direction, certainly for some years to come, if at all.
Now take municipal undertakings. The whole of the municipal trading undertakings throughout England and Wales yield for the relief of the ratepayers only £721,000, or less than 1d. rate in the aggregate. I see no prospect of these trading undertakings affording any relief to the ratepayer. There are so many people who want to eat up the profits directly any are shown. If there is a profit on a tramway undertaking we are told to reduce the fares from 1d. to ½d., or to give better conditions to the employés, or to take the tramways down all kinds of narrow passages where the money to be expended on improvements would be so enormous as to be prohibitory of any profit. I see nothing for it but to look to the Imperial Exchequer for larger Grants-in-Aid. I submit that the grants ought to be increased on certain main grounds: First, that the Imperial subventions towards national services no longer keep pace with the growing expenditure on those services; secondly, that the revenues assigned in 1888–9 no longer afford that relief to the local rates which they were intended to do; thirdly, that new services have been forced upon local governing bodies without any commensurate grant from the Exchequer; and, fourthly, that this Government has unloaded some of its own duties and charges upon the local exchequers. I think it was a little mean to ask us to undertake the difficult and delicate duty of collecting the Dog and Establishment Licence fees without giving us adequate money for the work. It is a specially disagreeable duty, particularly when you are liable at hot moments, at election times for example, to have the intervention of the Home Secretary, who, without in any way consulting us who impose the fines, and without knowing the circumstances, chooses to remit the fines which we impose. I think that another time he might at least consult the great County Council on whom he has put the duty before he admonishes and rebukes them for the way in which they discharge that duty. In all, the total expenditure was £13,000, and the money handed over to us to meet this charge was less than £4,000. It may not seem much to gentlemen who are accustomed to deal with millions, but when we are adding up the bill it has some appreciable effect on the local budget which we have to introduce. The Finance Act of 713 1910 has had certain financial results, first, in reducing the assessable value on which we levy our taxation; secondly, in diminishing the yield of the revenues, which have been assigned to us for certain purposes; and, thirdly, in adversely affecting the value of properties in possession of the municipalities.
I hope I may be allowed to say a few words as to the special grievance of London, without its being thought that, because I am Chairman of the Finance Committee of the London County Council, I wish to make too much of it. London has a special grievance, though it is quite willing to wait for the remedy until the general grievance of local authorities has been met. It will be admitted that in 1888 the proportion of the assigned revenues allocated to London on the basis of the discontinued grants was inequitable, because the allocation included no allowance corresponding to that given to the rest of the country in reference to medical officers of health and sanitary inspectors, and only a very small allowance for main roads. We ought to have had 28.30 per cent. instead of 22 per cent. of the total assigned revenues. The basis was admitted at the time to be inequitable to London. It was only on the report stage of the Bill that the basis of discontinued grants was substituted for the basis of indoor paupers. Mr. Ritchie, who could not be accused of wishing to do anything unfair to the London County Council which he had done so much to create, said that:—On the whole, he believed the result would be found to be satisfactory with the exception of the Metropolis. As the Government had been driven from their proposals as to indoor pauperism, it was inevitable that the Metropolis must suffer.We have heard from one Government that minorities must suffer, and from another that the Metropolis must suffer. For my own part I do not see why either of them should suffer. I believe that if a committee of experts could be got together on this question we might remove the greater grievance from which the whole country suffers as well as the lesser grievance from which London specially suffers. In connection with the duty on licensed premises London has a special grievance. The duty was originally based on a very low minimum rate. The proportion of duty to annual value has been lower in London, where the proportion of premises of high value is large, than it has been in the rest of the country. Now the rates have been very largely increased. I think in some 714 cases unjustly and oppresively increased. We do not profit by it; the Government take all the increase right away. This Government has a kind of Oriental habit. Wherever it sees a fine growing crop which local authorities might expect to enjoy, the Chancellor of Exchequer at once swoops down upon it, takes the whole of it, and says, "Why can you not find some new source of revenue?" The right hon. Gentleman has established his own finance by disestablishing and disendowing those who like myself are responsible for the finance of other bodies. I will not pursue further the subject of London's special grievance. I will simply put in the further figure that since 1st April, 1904, the net additional expenditure cast upon the ratepayers of London is £680,000, and the net annual deficiency in revenue £370,000; so that adding the two together, the London ratepayer has to find an extra sum of £1,050,000, or the equivalent of a 5d. rate.
I do not say that the Imperial Exchequer ought to find all that money; but I do say that they ought to find a substantial proportion of it in the way of grants to meet the expenditure. Immediate action is needed. We think that the Government ought at once to appoint, if they have not already appointed, some machinery by which at last some of the recommendations made ten years ago by the Royal Commission on Local Taxation may be carried into effect in the light of modern requirements; and that meanwhile they ought to give some relief to the very much overburdened local ratepayers. It may be said to me, "You, having occupied the position you once did, and claiming to be concerned about the great growth in national as well as local expenditure, ought at least to tell us why the ratepayers should bear a less proportion and the taxpayer a larger proportion than they do now." It has been put better than I could put it by the Royal Commission on Local Taxation. Everybody, I believe, must admit that the incidence of taxation is fairer than the incidence of rates. That was very well put in the Minority Report of the Royal Commission, which, after expressing the view that education is national in a high degree, stated:—The difficulty, stated generally, is that rates fall very much less exactly than taxes in accordance with ability to pay. Taxation according to the taxpayer's ability has long been recognised as a primary aim of national finance. Ability is indeed a rather vague expression, but in any sense of the word taxes do approach this ideal more nearly than rates.The Report goes on to say:—It may be assumed that imperial taxation is, on the whole, in fair conformity with the principle of ability 715 to pay. The net is spread much wider, the Exchequer being fed by taxes in respect of all classes of property, by taxes which are not incidental to property, and by receipts which are not in the nature of taxes at all. By thus bringing under contribution all classes of persons, imperial taxation operates more evenly than local taxation throughout the country, and must be assumed to operate more equitably as between individual taxpayers, owing to the compensatory effects produced by drawing revenue from very different sources, and to the graduations which have been introduced during the last 50 years in our system of direct taxation.If that was true in 1901, it is much more true now, since many steps have been taken—by this Government especially—to graduate the taxes, and to fit them, to a certain extent at all events, with the ability to pay. I say again to this House that in the fitting of the incidence of the rates and taxes we have gradually drifted from the point of view of our industries, into a highly dangerous position, unless we take care that some arresting movement takes place in the amount of money found by the ratepayers. It is oppressive, both on the homes in which the men live, and the industries in which they are employed. If we are to maintain our Free Import system, it more behoves a Free Trade Government to see that no great handicap is placed upon the factories and workshops in which our men compete against those who send their free imports into this country. If the Government do not do something to relieve these industries of these weights, it stands to reason that those industries will be highly handicapped in competition with the produce that comes from foreign markets. For my part, I say boldly—and I will not pursue the subject, except in one sentence—that in this matter I must believe that it would be far less prejudicial to industries if we were to put a light revenue duty on imported goods coming into this country. [HON. MEMBERS: "Oh, Oh."] I know; I only say that in a sentence. I know it is controversial, but I may fairly be asked: "You approve of this expenditure; where will you find the money?" and my reply is that it would be far less prejudicial to the factories and workshops in which British goods are made to put a light revenue duty on imports coming into this country, than handicap those factories and workshops by the very heavy rates. I admit this question of the rating problem is in a most chaotic condition. If anyone reads the history of assigned revenues, and the way in which they were substituted for specific grants; if he looks at the whole course of operative action since the early days, he will see that he is face to face with a complex problem which it will take the very 716 best financial ability to unravel. For my part, although the policy of assigned revenue has behind it the very high authority of both Mr. Gladstone and Mr. Goschen, I say from such study as I have been able to give to it that I do not believe that assigned revenue is a proper and adequate basis for the reconstruction of our present system of Imperial and local taxation. On the contrary, I believe that the general principles laid down by both the Majority and the Minority in the Report referred to should be adopted, so that you can, looking to the services rendered, see whether they are proportionally national in their character and therefore onerous to particular ratepayers, or whether proportionally they are local in their character, and bring in a special and peculiar benefit to ratepayers in their locality that the expenditure is being made in. I also note how extremely important it is that the consequent grants should not be lightly and lavishly given from the Imperial Exchequer. I admit that there must be some very considerable central control when these grants are given. I admit that whenever they are given to any local authority, and particularly where there is any chance of any portion going to the relief of the general rate, there should be tight central control and efficient supervision of the local expenditure of the grant which is being given. In all these things I say that the time is coming, not alone for setting up some committee of experts by which we may solve the whole question, but for some interim grants to be made, particularly when it is a great educational service. And I for one shall be greatly disappointed if, as a result of this Debate, that some grants such as were put into the Education Bills of 1906 and 1907 are not offered by His Majesty's Government in connection with the Budget which the Chancellor of the Exchequer will bring forward.
§ Mr. GRIFFITH-BOSCAWEN
I rise as representative of a very large borough, where the rating question is exceedingly onerous, and also as a member of the London County Council and chairman of one of its most important committees, to second the Amendment which has been so ably moved by my hon. Friend. The question of rating, the question of local taxation, is no doubt one of very great importance. I admit it is not one of those party questions like Home Rule, the Parliament Bill, or Tariff Reform, which separate us so acutely on party lines. After all, how- 717 ever, it is a matter of the very greatest importance, and one which affects the well-being of people of every town. Unless this question of the incidence of taxation is just, there can be no good government in the country. What I want to submit to the House is this: I say that on the broadest lines the rating system of this country is not just; its incidence is unfair, and drastic alteration is necessary in order that justice may be done. What is the position? As everybody knows, the whole rates of the country fall upon one class of property—that is land and houses. That was not the original intention when rating was first imposed. By the law of Elizabeth no inhabitant was to be taxed locally according to his property. But all degrees of personal property dropped out when the matter was finally settled by the Act of 1840, which exempted stock-in-trade from rating. The result is now that land and houses—real property, as it has been called—bears the whole burden of the rates—with an important difference. It is this: The late Lord Salisbury estimated that land and houses represent only about one-fifth of the total property of this country, and it is obviously unfair that one-fifth of the property of the country should bear the whole burden of the rates. The matter was put very clearly by the Royal Commission on Local Taxation, which the hon. Gentleman has alluded to. That Commission sat ten years ago, and made a number of recommendations. Not one of these has since been carried into effect. The Commission pointed out in the statistical table that no less than 82 per cent. of the entire local taxation revenue, excluding elementary education, is raised by a single tax on one form of property. They point out, as regards Imperial finances, that the same class of property only bears 17 per cent. How can it be fair that property, if it only bears 17 per cent. for Imperial purposes, should pay no less than 82 per cent. for local purposes? What, therefore, has been necessary has been this: For successive Governments to try and find means whereby personal property can be brought into the net in some way or another. We have had the grants-in-aid. We have had the assigned revenue. We have had special measures of relief—especially in the case of agriculture—as in the Agriculture Rates Act. All these things have been good so far as they have gone, but they have not yet nearly succeeded in bringing into the net personal property up to the point at which it ought to be brought 718 in. When we consider measures like the Agricultural Rates Act, which is a perfectly proper measure to relieve the ratepayers in the rural districts, it must be borne in mind that nothing has been done to relieve the ratepayers in the urban districts. It is perfectly terrible to consider the condition of the ratepayers in the urban districts. The rates are constantly rising, and urban and municipal enterprise of every sort and kind is at a standstill, largely on account of inability to raise fresh funds to carry out work which is absolutely necessary.
Let us look at the people in the towns. My hon. Friend has referred largely to London. The average rating in London is 7s. 6d. in the pound. In some parts of London it is a great deal more—it is 12s. 1d. In Dudley, which I have the honour to represent here, it is 8s. In Tottenham, a large urban district close to London, which I specially mention for the particular reason, it is 9s. 9d. I could give exactly the same sort of tale from Liverpool, Manchester, Glasgow, Birmingham, and other great cities. These rates continue to go up, and we find the most serious results following. Municipal work is stopped at every turn. I know there are some members on the London County Council who seem to think that high rates are a good thing. They say that high rates only mean that rich people are paying more from their riches towards the necessities of poor people. High rates are the worst possible thing for any district. Take, for example, London. Look at the industries which have been removed out of London in consequence of high rates. I remember when I was member for Tonbridge that a large printing works was sent there from London. The employers found the rates so high in London, they therefore took their works to where the rates were lower. This meant the driving of capital out of London, and employment, too, leaving London. This is going on in the case of every large town at the present moment on account of high rates. Let me put it from another point of view. It is my privilege to be chairman of the Housing Committee of the London County Council. Our duty is, so far as we can—and we are merely doing what smaller bodies are doing in every large town—is to try to find sufficient accommodation for the working classes at such a reasonable rent as a working man can pay. What is one of our very greatest difficulties? It is that the rates are so high that the rents are raised to a point that the working man cannot 719 possibly afford. If you take the operations of the London County Council with regard to housing, you will see that we find it impossible to provide accommodation in central London for less than 3s. per room per week. In other parts of London it amounts to about 2s. 7d. per room per week. In districts outside the metropolis it is about 2s. 1d. It must be admitted that 3s. a room is an enormous rent for a working man to pay, and a very large proportion of this is due to the rates. I will give another example. I will take a case in which the right hon. Gentleman the President of the Local Government Board will be interested—a case from Battersea. I take the case of a tenement of two rooms in a block of dwellings in Battersea; the rent is 6s., of which 1s. 5½d. or 22 per cent. represents the rates. Let me take a case in Tottenham, outside London, where we have been endeavouring to set up a large number of cottage dwellings on the principle of drawing people to districts outside London where the rents are cheap. I take a three-roomed house in Tottenham; the rent is 7s. 6d. and no less than 1s. 8¼d. represents the rates; and so, whether you look to the housing of the working classes or the employment of the people, or municipal enterprise generally, you are faced, at every turning by these high rates, which are constantly rising. It is absolutely necessary that the Government should assist us to keep them down.
The worst part of the case is this, that the increase in these rates is directly due to the action of the Government. My hon. Friend (Mr. Hayes Fisher) has given some examples. He has mentioned the Education Department. I do not hesitate to say that as regards the Education Department, local government has been reduced absolutely to a farce. The Education Department swoops down upon the authorities, orders this, that, and the other, and the local authorities have simply got to pay. That is not local government; it is government by a central bureaucracy at the expense of the local authority. Mr. Hayes Fisher mentioned the case of the feeding of children. That is costing London £68,000 a year. The Government passed that measure—and I do not deny it is a good measure—but then they made no provision whatever for its cost, and the right hon. Gentleman the President of the Board of Education makes it absolutely binding upon London and other local authorities 720 to adopt it. Take again, medical inspection. That is ordered by the Government, and the local authorities have no voice in the matter whatever, but it costs the local authorities £20,000 a year and the Government does not contribute a single penny. Take again the very serious expenditure caused by the reduction in the number of classes in the schools. I am not for a moment going to say that sixty—or, at all events, a class of about sixty—is not far too large for a teacher to undertake. I entirely approve of the policy of reducing the numbers, but what does the right hon. Gentleman do? Sixty, or above sixty, was the standard authorised by the Board of Education, and, acting upon that standard, schools were erected all over London and other places, accommodating classes of sixty. The class-rooms were built upon that model. The right hon. Gentleman now swoops down upon the local authority and demands that they shall at once make arrangements to reduce their classes below sixty; and if they do not do so, he makes a deduction from their grant. Where is the discretion of the local authorities? That, as I have said, is reducing local government to a farce: it is really government by a central bureaucracy at the expense of the local authorities.
I could give a good many other examples where the Government have directly interfered and imposed new expenditure upon the local authority without making any provision, and thereby directly put up the rates both in London and in the great boroughs and in the counties. But even worse than that has happened. Not only have the Government ordered this expenditure, but they have at the same time tapped the sources of supply from which the local authorities derived their incomes in the past. We heard about assigned revenues. The theory of assigned revenue was very good and sensible. It was thought that, as local expenditure grew, the assigned revenue would also grow, and, therefore, there would be a larger income coming in to meet the larger expenditure. But the present Government have destroyed in many particulars the growth of these assigned revenues. Take, for example, the cases of motor-car licences.
The Government last year entirely altered the system of motor-car licences and greatly increased them but they did not give the increase to the local authorities. On the contrary they stereotyped the amount the local authorities ought to get 721 —at the amount collected in 1908 and 1909—thereby preventing any further growth in that source of revenue so far as the local authorities are concerned. They dealt in the same way with the liquor licences. The Government have enormously increased the liquor licences. Are they giving that increase to the local authorities? Not at all; they are taking the whole of the increase themselves, and are thereby stereotyping what the local authorities get by the amount which they got in 1908–9. While, therefore, they have destroyed the value of assigned revenue in proportion as expenditure grew, they have also by their legislation in regard, to wine and spirit licences so reduced the assessable value of public-house property and so on, that undoubtedly there will be a very large falling off in the rates derived from this class of property in future. As we know quite well, the falling off in what is called "Whiskey Money" has been most serious. I do not know what it has been in London, but in the Borough of Dudley, which I represent, it amounts to £287 less this year compared to what was received by the borough last year. Dudley is a place of very low assessable value. A penny rate only brings in £600 a year. What the Government have done is practically to impose what is equal to the product of an extra halfpenny in the rating of the town in order that they may carry on their education policy. I know we are promised by the Chancellor of the Exchequer—and that promise was restated in reply to a question of mine last week—that a measure of temporary relief will be found in the new Budget proposals, to make good the loss, which has accrued from the decrease of the whiskey money to the local authorities in the present year, but if the plan is to be the one outlined by the Chancellor of the Exchequer I think his proposal is a very unfair one.
What did the Chancellor of the Exchequer say? He said, we were to have for the purpose of making good this deficiency, a part of the half share of the product of the Land Taxes, which was promised to the local authorities when the Budget of 1907 was going through. I say this is a most unfair proposal. That half-share was promised to the local authorities because it absolutely belonged to them, as an additional source of revenue to their local funds, and to use it in order to make up a deficiency caused by the Government in another part of the Budget, is in my opinion, not to keep 722 faith with the local authorities. I certainly think, if there is to be this taxation upon land values, the whole of it, and not merely half of it, ought to have gone to the local authorities A part of this increased value is, as I understand it, due to the presence of the community in the locality and expenditure of the rates.
§ Mr. GRIFFITH-BOSCAWEN
Very well, we will say the whole increased value is caused by the presence of the community, and the expenditure of the rates. If that is so, I want to know what right the Chancellor of the Exchequer has to any part of it. I said the "increased value," the hon. Member opposite says, "the whole value," which makes the point stronger still. In my opinion, the whole of the product of these land taxes are local and ought to go to the local authorities. At any rate, I cannot understand how it can be put forward as a fair proposition that part of the one-half which was the share of the local authority should now be utilised to make up a deficiency caused by the whiskey money owing to other parts of the Government's legislation.
The condition of the ratepayer at the present time in London and the country, and particularly in some of those large boroughs and Urban districts, is most serious, and calls for immediate relief. We do not want any more small tinkering measures; we want the matter finally set at rest upon a fair basis, and there is no reason why it should not be so. It is ten years since the Royal Commission reported and not one of its recommendations has yet been carried into effect. It is not for me to say what exact methods should be followed in dealing with this matter, but I say the only fair principle would be to recognise that certain services are essentially national in their character, and to provide that these national services should be almost entirely financed out of national funds. Education, for example, is essentially a national service. How many children are there in any particular school who remain in the locality where they were educated? Take a village school! In a village school we educate hundreds of children, but a very small percentage only remain on living in that village! others go to the towns and others go to the colonies. Again, the Poor Law is a national service, and has been so recognised over and over again, and it is most unjust that 723 the whole cost of it should be paid by the local authorities with their very narrow basis of taxation. Take again, main roads; I think they are undoubtedly national. No doubt there was a time, before the introduction of motor-cars and mechanical traction for goods, when the use of the main roads was almost entirely local, but that time is entirely past now. Take the case of a county, or county borough, which happens to have one of the great main roads of England, like the Great North Road, the Holyhead Road, or the Portsmouth Road running through it. That county has to maintain that particular main road at a high standard of efficiency, and at great cost in order to take motor-car, traction engine, and other traffic. There is no doubt that such a charge ought not to be purely local, and all charges like the Poor Law, the maintenance of pauper lunatics, and main roads undoubtedly ought to be considered national services, and should be paid for out of the National Exchequer. I thank hon. Members for their attention, and I beg to second the Motion.
§ Mr. WEDGWOOD
I apologise to the hon. Member who preceded me for interrupting his extremely interesting speech. The object of my interruption was simply and solely to point out that when he alludes to the views of those who believe in the taxation of land values, he must not be under the impression that we believe that only the increase is due to the community, because we hold the opinion that the whole value is the result and the creation of the community as a whole. We by no means say that it is the result of the expenditure of the ratepayers' money or of national money, but it is due to the presence and activity of the whole of the community.
The Debate to-day has so far ranged almost entirely around the increase in the rates levied by local authorities. Speaking on behalf of 143 Members who signed the Memorial which was presented to the Prime Minister at the end of last Session, I should like to point out that this question of the heavy growth of the rates, and the other increasing burdens upon local ratepayers is exercising as much attention and interest on this side of the House as amongst hon. Members opposite. We believe that these constantly growing burdens are something that the Government must consider at the earliest possible occasion, in order to secure an adjust- 724 ment of local and Imperial taxation. I think I can fairly say that we on this side of the House agree with nearly everything the Mover and Seconder of this Motion have urged upon the Government. The national character of such services as lunatics, main roads, the police, and to a large extent the necessity for a largely increased grant both for education and the poor law, are as lively subjects of interests on this side of the House and with Liberal electors in the country as they are with electors who have returned hon. Members opposite. At first it seems rather absurd that electors and hon. Members of this House should take so much interest in this question when it means merely transferring money from one pocket to the other by taking funds out of the Imperial chest and putting it into the local chest. The local rates, far more than Imperial taxes, press upon industry very heavily. The hon. Member opposite spoke of the difficulties in Dudley in providing decent houses for the people. I will allude to a case in London where Sir Sidney Waterlow presented to the London County Council a very valuable site for the erection of working men's dwellings. The London County Council inquired into the practicability of building on that site, and they found, owing to the crushing burden of the rates, that it would not be a paying proposition to erect those houses. Exactly similar arguments apply to the construction of working-class dwellings in the part of the country from which I come, where the rates are higher than in London, for they are over 10s. in the pound. The result is that if anyone contemplates increasing manufactories or making municipal improvements they have to face the fact that such improvements will be subject to a 50 per cent. tax, and that has to be taken into consideration when the return upon the money invested is being considered. That is a tremendous disadvantage to the industries of this country. The difficulty of getting suitable houses for the working classes and the difficulty of establishing local industries has led to protests against the ever-increasing burden of the rates. Not only this Government, but the last Conservative Government put fresh burdens upon the ratepayers' backs and gave promises of larger help from the Imperial Exchequer. I heartily sympathise with the hon. Member who moved this Amendment in urging the Government to take some steps in this matter. Of course, I recognise that the Government are doing 725 something now. They are finding old age pensions, which are relieving the local rates. I understand that in Dover the relief to the local rates on account of old age pensions amounts to 2d. in the pound. If it is anything like that all over the country I am sure all electors and ratepayers will feel very grateful for that remission.
But we want something more. We want a real definite change in the system whereby these Grants are allocated in relief of the local rates. We have to remember this very important difficulty in regard to the rate in question: The whole thing was gone into by the Royal Commission to which the hon. Member for Fulham alluded in such eulogistic terms this afternoon. The Royal Commission on Local Taxation reported in 1901, and the Minority Report of that Commission was signed by Sir George Murray, the permanent Secretary to the Treasury, Lord Balfour of Burleigh, Lord Kinross, and Sir Edward Hamilton. Such experts in finance as those made one definite statement about this relief to the local rates, which I should like to read to the House, because it is one of those fundamental considerations which have to be taken into account in considering the real adjustment of local and Imperial finance. After dealing with the incidence of rates, they sum up as follows:—Accordingly, unless the owners of Ground Values are to be relieved at the expense of the taxpayers, a course which probably no one would advocate, it seems most necessary to accompany the increase of subventions by the imposition of a Site Value Rate.That seems to be the whole kernel of the matter. Unless you are going simply to put money into the landlords' pockets by subventions in aid of the rates, this course must be taken. Many leading Conservative statesmen recognise the position in this matter as fully and as absolutely as those who signed that Minority Report, and as fully as we do ourselves. The right hon. Gentleman the Member for Wimbledon (Mr. Chaplin), who is a great authority on local taxation, stated publicly in this House that:—if rates increased, rents decreased. If rates decreased rents increased.There you have the whole question summed up. If you are going to relieve local rates so that rates decrease, then we ought not to be satisfied as a result with finding rents increase. I am quite aware that the right hon. Gentleman the Member for Wimbledon takes an extreme view on this question, but Professor Marshall and 726 Professor Sedgwick do not go so far. They would say that in so far as rates fall upon improvements, they are borne, not by the landlord, but by the occupier. The view I am expressing was put even more forcibly by that great financier Lord Goschen, who was chairman of the Committee which dealt with this question, and which sat in 1871. Upon this subject we have had a series of Royal Commissions, and although they have all reported, nothing has been done. Lord Goschen, writing to Sir Julian Goldsmid, who was making almost exactly the same suggestion that comes so often from the Conservative Benches that we should relieve local rates without a tax on land values, replied as follows:—It has been correctly held as an axiom that rates on lands constitutes a kind of rent-charge upon those lands for the benefit of the public. You, however, ignore these hereditary burdens altogether. Your plea includes the relief of the owners of the lands from burdens they have borne for centuries, which have entered into the selling value of those lands, and have been taken into account in every transaction connected with them.
§ Mr. WEDGWOOD
I do not know the date, but it was quoted by the hon. Member for Ipswich (Mr. Goddard) in this House on the 20th April, 1896, and appears in Hansard, vol. 39, column 1302.
§ Mr. WEDGWOOD
The hon. Member who quoted the extract in the House did not give the date, but I think it must have been in 1871. That brings up the other question we have to consider. In the past, when land has been bought and sold, the transaction has taken place subject to certain charges in connection with it, such as the Land Tax, the charge for the support of the poor, or a charge for educating the people. All those charges are inherent to the possession of land, and purchasers take them into account. It is of no avail for a purchaser to complain of the heavy charges upon his land, because when he succeeded to or bought the land he knew such charges were upon it. If might not be a definite rate, but there was a charge for the upkeep of the poor, for the education of the people and other matters, and all those things were inherent to the possession of land, and it is not for the purchasers or their successors 727 to come forward and tell this House afterwards that these charges are heavy and overwhelming. They cannot tell us that unless they are prepared to refund to the parties from whom they bought the land. Their ancestors and predecessors in title assumed the liability of these charges and originally held the land subject to them, and we are not now going to let them shift these charges and put them on to the shoulders of other people. Perhaps I had better mention that the right hon. Gentleman the Secretary of State for War (Mr. Haldane), who is generally regarded as a bit of a Whig in these matters, stated in this House fourteen or fifteen years ago:Undoubtedly the relief which the dole—the Agricultural Rating Acts of 1896——would give would go to the benefit of the landlord class almost exclusively.I think that will show there was a general consensus of opinion upon all sides of the House, Conservatives of old standing as well as Members on this side of the House, that this relief to the local rates must be raised by a rate or a tax upon land values if there is to be a fair exchange. What is the proposition we are specially urging upon the Government at the present time? We say we want £10,000,000 in relief of local rates, and that that £10,000,000 should be raised by a universal tax upon land values. In making that tax, we should be doing no injustice to landlords as a whole; we should be changing the already existing burden upon the landlords by putting it upon a standard which would lead to the best possible use of the land. For instance, the landlord who is developing his land, who is a good landlord, making two blades of grass grow where one grew before, who is making improvements, and who finds himself rated still higher, will get a benefit in the relief of rates; and the landlord on the other hand who does not allow his coal seams to be used, holds up his land round towns, and refuses to allow his land to be used for small holdings, preferring to keep it uneconomically in large farms, will find himself called upon to pay more, but will be able to put himself right and have no extra burden upon his shoulders if he allows his mines to be worked and his fields to be used as small holdings. We are not taking any extra sum from landlords as a whole, but are merely calling upon them to contribute on a more equitable basis between themselves and on a basis or standard which shall lead to the best possible 728 use of the land and to an increase of employment in the country.
Hon. Members opposite and on this side of the House will remember very well that last year the Chancellor of the Exchequer gave a fresh rebate to those who paid Income Tax on Schedule A. It was an alteration intended to facilitate the improvement of properties and to give some assistance to those landlords who put their money, their capital, their brains, and their energy into producing more from the land of England. It was in the right direction, but what we ask the Government to do is to cease altogether to collect Schedule A of the Income Tax upon the annual value of the property. We ask that, instead of the 1s. 2d. in the £ on the annual value, the tax should be levied as 6d.—which is the equivalent of 1s. 2d. in the £—upon the capital value of the property, and that then all improvements should have a rebate of 50 per cent. upon that capital value. We calculate that by that means a sum of money slightly but sufficiently in excess of the present return of Schedule A of the Income Tax would be raised. It would bring in, exactly as Sir William Harcourt's Death Duties did, an increased revenue from all those lands which are not being fully used or which are not being economically used at the present time, and the remission of 50 per cent. upon the improvements would act as a far more substantial inducement to landlords to improve their properties than the small extra rebate they got from the Budget of 1909–10.
Our object has too often been misconstrued. We are not primarily anxious to put a tax upon land values. What we are more anxious for even than that is to take off all taxation on improvements so as to induce people to improve their property. Here we have a chance of embodying our taxation of land values and yet bringing it forward in a guise which I hope will be popular and will be well received by landlords all over the country. It will raise no more money from them than at present, but give them a distinct bonus, and it will be a very solid inducement to all good landlords who will develop their property if they get a chance to make those developments—not entirely free, it is true, though I hope we shall come to universal free improvement shortly—without all the heavy penalties which are at present laid upon the improving landlord.
§ Mr. HARRIS
I hope the hon. Member who has just addressed the House, as he 729 apparently agrees with hon. Members on this side, will go with us into the Lobby and thus give point to his agreement. I shall not attempt to follow the ancient quotations he adduced, nor to deal with the somewhat complicated economic theories as to taxation which he brought forward. I want to come to close quarters with the practical question before the House. I want to urge the Government to grant some immediate relief to the ratepayers from what has now become the intolerable burden of the rates. The appeal ought to be irresistible to the Government, seeing the intolerable character of the present rate-burden has been seriously aggravated by their action, and seeing that they and their friends have fed up the ratepayers, if I may use the expression, with lavish promises of relief. In London certainly, and I believe elsewhere, the Radical party have posed as the special friends of the ratepayers. I well remember a manifesto being issued a few years back, in which they stated that their policy was a ratepayers' policy, for it was entirely directed to relieve the ratepayer of his unjust burdens and to check the increase of his burdens in the meantime. Alas for Radical aspirations; their policy has been entirely directed in practice to increasing the burden of the rates, and in 1911 we have to state that the burden of the rates has increased, is increasing, and will increase unless effective measures are taken by the only people who can take them at the present time, His Majesty's Government.
The pertinent question to be asked at the present time—a Radical Government being in power—is, what are the proposals which the Radical party have made for relieving the ratepayer? They have suggested, in the first place, obtaining increased and more equitably distributed subventions from the National Exchequer, and in the next place they have proposed direct taxation of ground values. How have they carried out those promises? The Government have not increased the subventions from the National Exchequer. The tendency of their policy has been the reverse, but they have imposed new and expensive burdens upon the rates, and Radical Ministers urge the local authorities to carry out those duties regardless of cost to the ratepayers. Radical Ministers nowadays seem to be anxious to emulate Pharaoh of old. They say to the municipalities:—Ye shall have no straw, but ye shall deliver your tale of bricks.730 You shall have no Government revenue, but you shall carry out national services. I know it may be said the Unionist Government, when they transferred educational services to the local authorities, did not give adequate grants, but, at any rate, they did give what were thought at the time to be adequate grants, and I think I may venture to say that, if the Unionist Government, as a result of their policy, did chastise the ratepayers with whips, the Radical Government are chastising them with scorpions. Not satisfied with adding increased burdens to the rates, they have added to the rate burden by a policy of Imperial finance, which may be defended on political though scarcely on economic grounds, but which has undoubtedly had a serious effect upon ratable values, especially in London. Then the Government have annexed the very source of revenue which they and their friends have long designated as peculiarly appropriate to local purposes, and which they have held out to the local ratepayers as likely to afford them very large relief from the burden of the rates. It is an extraordinary change of policy, and I cannot help thinking that the ratepayers will consider it a breach of faith.
I know it may be said that though the Government have laid their hands on this source of revenue they propose to hand over half of it to the municipalities. The Chancellor of the Exchequer, as I understand it, proposes to do nothing of the kind; he proposes to retain the Land Value Duties as an Imperial source of revenue, and, though in the Finance Act he has provided that a grant shall be made to the localities equal to one-half of the Land Value Duties, that grant, as I understand, is to be treated as a subvention from the Government in payment of the Government debts to the municipalities, and the Government do not admit the claim put in by the municipalities to have those Land Duties regarded in any sense as local revenue. That has created a situation of very grave moment to the municipalities, and the question is whether they are going to acquiesce in a policy which is so fatal to the municipal taxation of site values from whatever point of view that question is regarded. I know there is a great difference of opinion upon the question of the taxation of site values, but the difference has turned not upon the question of whether site values ought to be taxed for local purposes, but upon the question whether they do or do not contribute to local 731 taxation under the present system. Schemes of taxation based on the assumption that site values do not contribute at the present time to local taxation and which propose to set aside existing contracts are obviously inequitable if the view taken by the Royal Commission is correct, that the incidence of the rates is to a large measure at any rate upon the owners of site values at the present time. But, whatever view may be taken, as to how site values should be taxed, and I am afraid the controversy is not settled yet, no one disputes the appropriateness and even the necessity of site values as a source of local taxation. I should like to clear away a misapprehension which exists upon this question of the municipal idea of taxing site values. I observe that the Prime Minister some time back twitted Lord Rosebery with having approved this idea, and appeared to think that he was thereby precluded from objecting to the policy of what was then the Budget, but is now the Finance Act, 1909. But the policy of that Finance Act and the municipal idea of taxing ground values are quite different things. The policy of the Finance Act was to tax one kind of property, land values, more heavily than other kinds of property for Imperial purposes—purposes to which I think all kinds of property ought to contribute equally. The municipal idea of taxing site values was quite different. The proposal was that owners of site values should contribute directly what everyone agrees that they should contribute, and most economic authorities hold that they do contribute at present, though indirectly. That was a perfectly legitimate object to desire, and it does not involve any undue discrimination between different kinds of property, because, admittedly, a great deal of local expenditure tends to bring special advantages to the owners of site values, and there is this further consideration, that direct contributions by owners towards local expenditure would go in relief of the burdens they now bear, though indirectly. The question then, I think, we are entitled to put to the Government, when the whole question of their relations with the municipal authorities is at stake is,—Are they prepared to give the go-by entirely to the municipal idea of taxing ground values? Are they going to persist in making this inroad upon what is one of the principal sources of local revenue? The Government have, in a certain sense, admitted the force of 732 the contention put forward by the municipalities. They have admitted the force, but are they going to give it practical effect. A clause in the Finance Act provided that there shall be paid out of the Consolidated Fund a sum of money which is to be equal to one-half of the net proceeds of the Land Value Duties. What is the meaning of that reference to the Land Value Duties. Why is the grant out of the Consolidated Fund to be measured in that way? Is it not a recognition of the fact that these Land Value Duties are, in their origin and nature, distinctly local in character? The Government have recognised that fact, but do not act on it. Instead of providing in the Finance Act that the duties shall be handed over to the municipal authorities as local revenues, and allocated according to the districts in which they arise, they have simply ordered that a certain amount of money shall be paid out of the Consolidated Fund which happens to be measured by the amount of the duty. They have not provided how the money is to be allocated: they simply say that such money is to be appropriated as Parliament may hereafter determine. It will be interesting to know how and when Parliament is going to determine how the money shall be allocated to the municipalities. I submit that this question is still open, whether the money is to be considered as local revenue or as Imperial Revenue, and I venture to think that the municipalities are entitled to maintain that it ought to be treated as local revenue, and handed over to them accordingly. In the first place, then, we ask the Government to act up to their promise, and I would remind them of the words placed before the Royal Commission by the London County Council, to the effect that it is desirable that taxation arising from local sources should be devoted to local purposes. The late Mr. Costelloe, one of the most able advocates of the taxation of site values, drew a very broad distinction between revenue which is local in principle and that which is not, and I venture to think that the doctrine laid down by the London; County Council is one which the Government should carry out. What about I the promises made by the Government and by the Radical party to the ratepayers for many years in this matter. The Government are coming forward with proposals for taxing site values, and yet the whole proceeds are to be swept into the Government's own pocket. I think we are entitled to ask the Government 733 to do something immediately to make good the deficiency in the Imperial Grants. We cannot expect them to deal thoroughly and completely with the whole question of the relationship between the national and the local exchequers, but some temporary mode might be devised if the Government are prepared to find the money, and I would venture to lay down, in the strongest possible manner, that the ratepayers cannot afford to wait. The Government will find it will be an exceedingly bitter cry which the ratepayers will raise when they realise the new burden which is to be put on already over-burdened shoulders. Justice requires that the Government should act promptly, and we only ask them to carry out their promises.
§ The PRESIDENT of the BOARD of EDUCATION (Mr. Runciman)
I should not have thought it my duty, as President of the Board of Education, to intervene in this Debate had not direct reference been made to the administration of the Board, especially in connection with the work undertaken by the London County Council. The charge which is made against the Board of Education is that we have, by administration, increased the expenditure of the local authorities for education in various ways. That is the charge that is made against us this afternoon. There is the statement made by the hon. Member for Fulham (Mr. Hayes Fisher) that a great addition to the expenditure of the London County Council on education has been the direct result of the Act of 1902. I am not going to pass in review that controversial subject, but I state the fact because it explains to a very large extent the enormous burden now borne by the London ratepayers with respect to education. But one curious fact emerges from a comparison of the figures for the year immediately preceding the Act of 1901 and the year immediately after that Act was in full operation in London. The fact is this: that the total amount expended by the School Board in London in the first year was about £3,316,000. Of that amount £2,421,000 was found by the rates, only £819,000 being paid out of the Parliamentary Grant, so that at that time less than 25 per cent. of the total expenditure in London came from the Parliamentary Grant. Now mark a change. I will take the year ending 31st March, 1906, as being the time when the Act of 1902 was in full operation. In that year the total expenditure in London, as far as we 734 can ascertain, was £3,980,000, and the amount of the Parliamentary Grant was £1,273,000, so that while as in the year ending 29th September, 1903, the percentage of London's expenditure on education which came from the Exchequer was 24 per cent., in 1906 it had risen to 32 per cent. It might have been supposed from the way in which hon. Gentlemen have spoken, and from the terms of their resolution, that since 1906 the amount of the Exchequer contribution has declined. In the year ending 31st March, 1909, the last year for which we have the complete figures, the contribution was 31 percent., but, curiously enough, during that period the amount paid by the rates had also diminished from 69.2 in 1906 to 68½ per cent. in 1909. The London case is by no means one of the strongest cases. I could point to many in other parts of the country where the burden borne for education is far greater than that borne by the London ratepayers. I therefore deprecate London being put in the forefront of this question. We all realise that the ratepayers' burden is increasing every year. Many of us feel that the basis of the rating is bad, and that we can endorse the charges brought against it by the hon. Member as throwing too great a burden on those interested. We feel there are other ways of dealing with the matter.
I come at once to the purely administrative case—the case in which we are charged as having been unjust to the Local Government ratepayers As to the Act passed for the feeding of school children, I think it will be agreed, except by a very small minority, that it has not imposed a very heavy burden The Act providing for the medical inspection of school children has no doubt involved London in a very large expenditure. We have been overhauling the methods by which the London County Council has provided for the medical inspection of school children, and we could not pronounce it efficient. When my hon. Friend refers to this medical treatment, and suggests that we have tried to convert what is an optional into a compulsory measure I reply that we have done nothing of the kind. We have made it perfectly clear that the Act is optional, and that we are only carrying out our statutory duty to see that the arrangements made are sanctioned by the Board of Education. We cannot sanction schemes of medical treatment which are not efficient and do not cover the ground, but in many cases leave the whole question of the medical inspection of school 735 children m a worse position for the future than it has been in the past.
Then the hon. Gentleman mentioned the subject of the superannuation of school teachers. There, again, that is quite optional and has not been forced upon the local authorities by the Board of Education. The Board of Education has done nothing to force that on any local authority. It was done at the freewill of the London County Council, and they should not blame the central Department for their own act. Now I come to a question where we are to blame, if blame there be. We are to blame for having reduced the limit of elementary school classes to sixty. But the hon. Gentleman himself said that the ideal of the London County Council itself was forty, and I gather from the public prints that forty is the ideal that they themselves set up. How, then, can he complain of us when we say that no class should be more than sixty in number. When we are accused of being unjust, or unfair, or oppressive in imposing upon the London County Council regulations in regard to the size of classes, I shall be glad if he will allow me to point out that the London County Council has always been acknowledged as being the one authority of all the authorities in England and Wales that on that subject has lagged behind the lot. We had discovered no less than 1,982 classes giving education to 125,000 children, each class having more than sixty children on the roll. An effort was made by the London County Council to reduce the number of these classes, and then we had communications with them and we discovered that, so far from 1,982 being the full number, it was well over 2,000, and we had really under-estimated, through lack of information supplied to us by the London County Council, the number of these classes in which there were over sixty children. Last autumn the London County Council seemed to be ashamed of the fact that they were the last of the authorities to undertake this reform. The hon. Gentleman agrees that classes of over sixty cannot be effectively conducted, and their existence means that to some extent you are wasting your educational money if you have classes over that number.
But he says by making these changes we have thrown a burden on the London ratepayers. Let us see. I believe that at the present time a very large number of these classes have been wiped out. Does 736 the hon. Gentleman say with regard to the London County Council that it has been put to a penny of expenditure with regard to buildings to carry that out. I do not believe that he could say so, and, as a matter of fact, they have got rid of a large number of these excessive classes, and to a large extent they have found a way of doing it for which I do not blame them at all, but the change has cost London nothing in the matter of building. Therefore, that cannot be raised as an argument in favour of this Amendment to the Address. I now come to the question of teachers. So pressing was this matter that in November the London County Council suddenly appointed no less than 255 additional teachers to deal with the problem. That was just about the time when there was a good deal of agitation among the teachers, who complained of the London County Council because they were not employed after that body had passed them through the training colleges. The London County Council immediately mopped up 255 of them in order to comply with the regulations of the code and put themselves in the same position as every other local authority, at that time, except themselves. The London County Council have no ground for criticism, and when the hon. Gentleman complained about the gentlemen who write my letters for me, and said that they are none too civil and none too courteous, I wonder whether he regards that as being very courteous towards them. I believe that the officials of my Department are among the most courteous of public servants, and I have never heard before anybody charging the officials of the Education Department with discourtesy. If the hon. Gentleman thinks that for a single moment I disclaim responsibility for any communication made by the Education Board he is mistaken. Not only do I not disclaim responsibility for them, but I can tell him that they were issued with my instructions, and if the same conditions were to arise again, I should say the same communications should be sent.
We are not only alive to the heavy cost of education, but we are also doing something towards reducing it. One of the troubles we have is to prevent local authorities spending too much on building. Every hon. Gentleman on both sides of the House knows that all over the country there is a tendency fostered by both contractors and architects, and to some extent by members of local authorities, who are 737 naturally proud of the public buildings of their own town—a very proper pride—to put up schools which are far too costly. Take London; the standard in London is £20 a place. Is that too much or too little? I have no doubt that the representatives of some of the local authorities will say that it is not too much, but I do not think the chairman of the Finance Committee will say that it is not too much, and I will give him, as chairman of the Finance Committee, a good argument to use. It is this, that buildings for the same purpose, under similar conditions as to cost of materials and land, are put up at Croydon at £13 a head. We should not be blamed for the difference, but we have been blamed for it. We are, however, alive to the fact that the regulations have added largely to the school expenditure. Last year I appointed a committee consisting of a representative of the Board of Education, a representative of the Local Government Board, who looks very frequently after finance and representatives of architects, and others. They sat continuously throughout last year, and their recommendations will be laid upon the Table to-night and will shortly be circulated as a Parliamentary Paper. In that they go into the whole question of novel materials and methods which will reduce the expenditure. By these means, if we cannot add to the percentage which comes from the State, we can at all events reduce the money which they spend on bricks and mortar. The last remark I have to make is this, that where the areas have been really necessitous, we have last year set free a larger amount of national money. In the last Session the Chancellor of the Exchequer promised to remove the limit on the grants to necessitous areas, so that all areas over a rate of a certain amount towards which London is rapidly approaching should receive assistance from the Exchequer. I do not know whether that is the best way of helping local authorities, and I may think of some better, but it is a stop-gap arrangement, and the authorities of those areas, a large number of which are in London, will receive the benefit of this grant. Indeed, in a day or two I shall have to ask the House to pass a Supplementary Estimate to provide for this increased supplementary grant in ncessitous areas. In conclusion, I am glad to think that, although the hon. Gentleman used some strong language about the Board of Education, he abstained altogether from one charge which is 738 frequently put forward and maintained in the House, and which we heard last year—namely, that under administrative regulations we have made no discrimination between Council and voluntary schools.
§ Sir WILLIAM ANSON
The President of the Board of Education has taken up the case of the Government in this matter in regard to their action with respect to education, and the charge we make on that Department is that the Government have not kept pace in the matter of Exchequer grants with the burdens that are being laid upon the ratepayers. The right hon. Gentleman has contended that we could not say that the Government had not gone forward, and he instanced the difference contributed by the Exchequer to the London School Board account between the years 1903 and 1906. The percentage of the Exchequer Grant rose, I think he said, from something like 20 per cent. to 32 per cent. I entirely agree, but he forgot that it was due to the action of the Government to which I had the honour to belong, and that it was the aid grant which accompanied the increased burden laid upon the local authorities in 1902, which raised the percentage of Government grants to that larger figure in 1906. Moreover, he forgot that since that time the Board of Education and this House has thrown upon the local authorities a further burden by the Provision of Meals Act, the Administrative Provisions Act, which carries with it medical inspection, and the Board of Education has no doubt quite properly required that classes should be reduced in number, involving an expenditure not merely in building but in the salaries of teachers. I do not suppose that we regret on either side of the House that the children should have the advantages that they obtain by this increased expenditure, nor is it any business of mine to hold a brief for the London County Council, but I rather think that my hon. Friend the Member for Fulham (Mr. Hayes Fisher), who moved this Amendment, had this for his point of view, that the Board of Education was requiring that all that it wanted should be done immediately, and that the burden thereby thrown upon the local authorities was a greater one than it could bear. I can quite understand the attitude of mind of the right hon. Gentleman that what the Board of Education thinks to-day the local authorities should do to-morrow, and it is difficult, no doubt, for those who work out 739 the schemes for the improvement of teaching by a reduction of classes to recognise the position of the local authorities with hundreds of schools to deal with in this way, in some of which buildings must be altered, in all of which the staff must be increased, and very large expenditure be put upon them. I do not believe that there is any objection to the working out of these improvements if the time given to the local authority to make them in is considered, together with the burden which must ultimately fall upon the ratepayers, and what my hon. Friend complains of is that there are difficulties arising from the fact that the local authorities cannot carry out immediately the suggestions or orders of the Board of Education, and if they are all to be done at once it would mean a financial calamity to the local authorities. I do not think this House always realises, when it passes a measure for the improvement of the conditions of the children, what is the ultimate expenditure involved. We all agreed that medical inspection was a desirable thing, but medical inspection is very difficult to dissociate from medical treatment. When children are examined on entering a school and it is found that their eyesight is defective or their teeth, or that some removable cause is present which hinders the progress of their education and the development of their proper physique, it is almost impossible to avoid applying treatment which removes those causes. Then we find that various local authorities have in different ways, partly using voluntary agencies and partly calling upon the ratepayers to assist, applied not merely inspection but treatment, and one difficulty which I understand has arisen between the Board of Education and the London County Council is the relation which inspection and treatment should bear to one another, and that the London County Council is arranging with the hospitals, partly for inspection and partly for treatment. But I notice that their own medical officer wishes to suspend judgment until the whole scheme of the London County Council is in operation and says that there were many circumstances to overcome and that the task was one of exceptional magnitude, and that the machinery has been imperfect, either in conception or in working or both. These, he says, are matters which call for the consideration of the authority. What applies to the school treatment in London applies to every 740 school topic in London—that it is a matter of exceptional magnitude, and, therefore, it demands the fullest consideration on the part of the executive which either controls or suggests the action of a local authority.
This education of our children is really a national service, and it was regarded as such by the Committee which sat and reported on the rating questions, and while it is a national service it is also a service in which it is desirable to associate local interest. You cannot always excite local interest unless you, at the same time, impose local burdens, but the fact that our education is a national service ought to be a prominent feature in the discussion upon it, and unless it is so treated, and if the burdens go on being laid on the ratepayer without due consideration as to the order in which they are to be dealt with, or the necessary delay which must accompany the wishes of the Board and the local authority in carrying them into effect, I am seriously afraid that the right hon. Gentleman may create a distaste for the whole subject of education in the minds of local authorities, or of ratepayers, at any rate, which may have an injurious effect on our educational system. What we are doing here is to lay continuous burdens, financial and personal, upon local authorities. We are considering, or shall be called upon to consider, the payment of our honourable selves in return for such services as we render to the country in this House, if I understood rightly the speech of the Prime Minister at the last Parliament, but we forget that we go on cheerfully laying burden after burden upon the local authorities, and that we are demanding unpaid services which are almost reaching breaking point, and that this personal attention, accompanied by the very distasteful task of laying burdens upon the ratepayer, may become heavier than our local authorities will be able to bear.
§ Mr. THOMAS LOUGH
I think we ought to be indebted to the hon. Member (Mr. Hayes Fisher) for bringing forward this most important subject, which he introduced in a very able and fair speech. I hope, having made that fair acknowledgement, in view of the great importance of the subject, hon. Gentlemen opposite, and the hon. Member especially, will not blame me if I criticise a little the standpoint from which this important matter was treated. Suppose we had been hearing of 741 this subject for the first time this afternoon, the impression which we should get is that the worthy local authorities of the country were struggling, unhelped, under the burden which a penurious and miserly Government had flung upon them, that the Government had abundance of money which it would not part with to the local authority, and that they, poor fellows, were struggling with these extraordinary difficulties. That is not the true way to present this picture at all. I admit that the difficulty of the local authority is one of the greatest magnitude, but the difficulty of the Government is one of equal magnitude. Let us look for a moment at the question of national expenditure, in comparison with the figures which have been given us of the expenditure of the local authority. I accept the figures of the hon. Member. He told us that between 1897 and 1907 the expenditure of the local authorities in rates had increased by £22,000,000. The Government's expenditure has increased, in Civil Service Estimates alone, and that has mainly been swollen by increased grants to the localities by £23,000,000, the Army Estimates by £10,000,000, and the Navy Estimates by £20,000,000. So that if the local authorities have to struggle under an increased burden of £22,000,000, the Imperial Government has to struggle under an increased burden of £53,000,000. We shall not be treating this subject with the importance which it requires, or the fairness or dignity which the occasion is worthy of, if while we overlook the difficulties of the local authorities we do not recognise also the difficulty in which the Government itself is placed.
There was another fault, I think, in the way the case was presented by hon. Gentlemen opposite. They say the Government is constantly throwing fresh burdens upon us and is not giving us the means to perform the duty. These new burdens to which they alluded were not thrown on the country by the Government. I will take one case which was mentioned, the Feedings of School Children Bill, of which I had some experience when it was passed in the House. It was a private Member's Bill, taken up by the Government. It was unanimously demanded by all sections of the House. Indeed, it was a most difficult thing for the Government to deal with that matter. Take, again, this medical inspection of school children and all this better care of our children in the schools, these were demands which 742 were emphatically expressed by Labour Members and other Members of the House, and no Government would have been strong enough to resist the claims which were made on their behalf. Let us not treat this subject from a narrow party point of view. Let us not try to make points against this or that Government, but let us look at it as a great national question of exceeding difficulty and exceeding importance. I admit the gravity of the question. Our local authorities are so over-powered beneath the burden of expenditure that they hardly know in what direction to turn to meet it, but the Government is in the same position, and we must try to look at the matter fairly.
There has been one word not mentioned in the Debate so far, and I am glad to bring it forward for the benefit of local authorities. The word "economy" has not been mentioned, and no one has suggested that this House might not take up the question of economy and look at the whole question of State expenditure and local expenditure together as one whole and see whether great economy might not be realised by the servants of the nation. This point has not been raised at all, yet I think it ought to be put in the very foreground of our consideration of the question When I opened my paper this morning, I saw an account of a paper to be presented to this distinguished local authority, the London County Council, tomorrow, and it is very relevant to take note of what our local authorities are doing. According to this notice in the "Times" this morning, the local authority is increasing the pay of its servants, I was in sympathy with it, and I looked at it, but when I saw that the pay of one of these gentlemen was £2,000 a year, and the local authority proposed to increase it next year to £2,250, and the year after to £2,500 a year, I said the time has come when a line ought to be drawn. Here is a salary of £2,000 to be made up to £2,500, and a salary of £1,500 to be made up to £2,000, and the economic recommendations made with regard to the Clerk of the Council are to be reconsidered and all these splendid revenues, sufficient for right hon. Gentlemen who sit on the Treasury Bench, are to be paid by the local authorities. When the taxpayers are groaning under the burdens of what they have to meet, it would be well to consider the question of economy, and to see whether some reductions could not be effected. It is said that expenses must constantly 743 expand, and that you cannot have the thing done cheaply. I do not believe this at all. I believe we shall be driven back on economy. I have the great advantage over the majority of the Members of the House of having been born in Ireland, and that is a country where the people are naturally economic. If the Irish had control of their own affairs they would set an example to the British in the matter of economy: I mention that matter because of the growth of expenditure of these local authorities. In the first ten years of the county councils in Great Britain they increased their rates by 1s. in the pound. In the first twenty years they increased them by something on an average like nearly 2s. in the pound. There was no need for them to do it. In the first ten years of the Irish County Councils they did not increase the rates at all. I believe they were diminished by about 10d. in the pound. Hon. Gentlemen might say that the work is not so well done, but everyone admits that the work is a great deal better done than it was before the councils came into existence. The question of economy is not at all an impossible ideal for us to hold up.
We have to consider the remedies which were presented to us by the hon. Member (Mr. Hayes Fisher). He gave us three remedies. In the first place, he said, we ought to have a committee of experts. Heaven save us from experts. I believe we have been led into all our trouble by experts. The London County Council now, instead of being a local authority in the old sense, is a body in the hands of experts. This House is run by experts. So I say that we must guard against this suggestion of a committee of experts. If we are to have a committee, let it be a committee of this House to consider this whole question of national expenditure, both local and Imperial, and to see what can be done to reduce it. Another cure that the hon. Member suggested was Grants from the Treasury. It is always grants. Nothing is so popular as asking for grants. We all applauded the hon. Gentleman when he asked us to imagine ourselves going to the unhappy Minister and his saying that there was no fund out of which grants could be given. A broader view will have to be taken. The charge against this Government that they have no fund out of which they give grants is the most ridiculous I have ever heard brought against any Government.
It seems to me that the Government is always giving grants of vast sums for the 744 benefit of localities. I have made a note of seven. Look at the Development Grant, given last year, to be applied for a dozen different purposes, the cost of which the local authorities should discharge themselves. Look at the large Grant for roads in the country. I see that £100,000 of that money was scattered about this morning. We have been told that no assistance was given for making roads. I say there never was a Government that gave as much as the present Government for making roads. It has provided a fund of something like £1,000,000 a year. Then there is the Grant for schools, and the President of the Board of Education said it would be increased this year. What is the charge for old age pensions but one huge Grant of £10,000,000 a year, which up to the time the present Government came into office rested entirely upon the shoulders of the localities. There are Labour Exchanges set up to discharge useful local work, and the whole cost is borne by the Central Administration and not a penny by the local authorities. There is the large Grant which the President of the Local Government Board is always giving out. I do not know how many hundreds of thousands of pounds are given for the benefit of the unemployed. We are going to have in the present year's Budget a charge for a large fund to assist in providing insurance for the sick, for invalidity, and for the unemployed. All these, although not in the narrow sense, are Grants. They are all Grants to help the localities in increasing the happiness of the people, and to assist them in the burdens they have to bear. The remedy will not be found in making charges against the Government. If the Government has a fault in this matter, it is that they are too liberal, and that they give out large sums without sufficiently considering the question of economy. I have mentioned that old age pensions have added £10,000,000 a year to our expenditure. How many millions will be added for insurance? We do not know the relation between this new grant for old age pensions and the expenditure of the present Boards of Guardians under the Poor Law system. I think the Boards of Guardians should be relieved of much of their expenditure. I have endeavoured hastily to lay these large aspects of the question before the House. I believe the local authorities are suffering under just the same evil as the central authority is suffering under in respect of vast and unregulated expenditure, and that a much larger method of dealing with the 745 question must be found than anything suggested this afternoon.
I will make another suggestion. A great deal was said about the Royal Commission which reported in 1901. The reference to that Commission was too limited. The reference only allowed them to consider the burden of rates. We must consider the relation of the local authorities to the Central Government in a broader way than it has yet been considered by the Royal Commission or any Committee in this country. We forget that these local authorities which are now laying on these heavy burdens are only twenty years old. They are only beginning to feel their strength, and only coming to the full growth. The relation between the central authority, which we have to deal with in this House, and the local authorities should be broadly considered in all its aspects. I think there is great extravagance in connection with some services. Take education and poor relief, which are paid for partly by the local authority and partly by the Central Government. Just look at the cost of education from the standpoint I have mentioned. The President of the Board of Education had an easy task in rebutting the charge made against the Government in this matter. My view is that the Government have done not too little but too much. I shall put the figures before the House. From a statement which was made, and which was repeated by the hon. Gentleman who has just sat down—and he should have known better—you would think that the whole increased burden for education had fallen on the local authorities. In 1897 the amount which this House granted for education altogether was 11.6 millions, and now we are asked to grant 18.7 millions—7 millions extra. The grant for public elementary schools increased the burden by over £5,000,000. The Central Government cannot be charged with having been niggardly. I am heartily glad that the local authorities and the people generally are beginning to feel the burden of all this expenditure, and I believe that the remedy for the difficulties in which we are struggling can only be found by bringing business principles into operation in connection with this matter. It is the fashion in this House to say that it does not matter what we spend on education. It does matter. There may be as much waste in regard to education as in any other branch of the national services. We may get a far better result by a small expenditure than we get from the large sum, which I think we to some extent waste. I think 746 there is in this matter a great deal of overlapping between the central authority and the local authority. The London County Council has appointed twenty inspectors, and the Board of Education has appointed twenty inspectors, but this House has never considered the relation between these two bodies' expenditure. Huge expenditure goes on on both sides, and the nation is groaning under the heavy charges which have been imposed. I think that instead of making charges against the administration, which are easily rebutted, we ought to take up the question of national expenditure in a broad and comprehensive sense and show ourselves, if possible, worthy of dealing with it.
§ Mr. SPEAR
I have an Amendment on the Paper bearing on the question now under Debate, and being a member of most of the local administrative bodies in my county, and knowing that my Constituents feel that they have a grievance in the ever-increasing rates, I desire to give the reasons why I intend to support this Amendment. I agree with the Mover of the Amendment that this is a question which affects the urban areas as well as the rural, and I feel there is no need for jealousy in dealing with the claims of either the one or the other. We who administer these bodies know that we are spending a lot of money, but if the hon. Member opposite (Mr. Lough) was a member of a county council, or a district council, or an education authority in a county, he would find there is so much pressure by the people for improvements of every kind—better main roads, more police, and so forth—that it is very difficult to practice that economy which he so wisely brings before the House. Be that as it may, it has been proved up to the hilt that our expenditure is constantly increasing, and we do say that the cost of main roads, education, the administration of the police and for sanitary matters has increased so largely that the time has come when there ought to be from the Imperial taxes a larger contribution towards the cost of these national services than is at present the case. We feel that the Grant should be based rather on the present expenditure of these public bodies than on the expenditure some years ago, as is the case at present. We agree, and we desire, that there should always be a considerable margin which should fall on the local ratepayers so as to prevent extravagance. But surely if these services are national in their character—and practically every speaker in the 747 Debate has admitted that is the case—it is unfair that so heavy a proportion of the cost as is at present the case should fall on the local ratepayers. As to the amount of the increased burden on the rates, figures have been produced, and as the increase has been clearly proved, I will not do more than point out that in the county of Devon twenty-two years ago the cost of main roads was £37,000 per annum, while now it is £80,000 per annum. There is still a great demand for increased outlay in the upkeep of the main roads. If the upkeep of main roads is a national responsibility, surely it is hard that so much of that increase caused largely by the introduction of motor traffic should fall on the local ratepayers of the county. As has been pointed out, the cost of education has greatly increased. The hon. gentleman opposite says that we are extravagant. That may be, but I submit to the House that if the Education Committee deem it essential to have better buildings, better-paid teachers, and better sanitary conditions, they are themselves large ratepayers. And if they have made a large outlay, we must believe they have done so because they consider it necessary. We appeal to the Government to do something to increase the grants towards the cost of education. We do not claim for a moment that subventions in aid are a satisfactory method of dealing with this question.
We hope that the Government will, at the earliest opportunity, bring in a measure rearranging the basis of local taxation, but meantime we plead that a case has been made for increased Grants until the whole question can be dealt with. The burden is becoming intolerable for ratepayers. The hon. Member for Newcastle-under-Lyme (Mr. Wedgwood) said that he was in favour of a remedy, but he contended that if we relieved the rates by subventions-in-aid it would simply mean more rates, and he took the case of the Agricultural Eating Act. I happened to be in the House when that measure was passed, and I heard many hon. Members opposite say, again and again, "It is a landlord's dole." It has been proved beyond a denial that it is not a landlord's dole, but that it is simply a measure of justice to those engaged in an industry that for twenty years after 1879 passed through a period of great depression. It was recommended by Royal Commission in aid of an industry that for twenty years after 1879 only held its head above 748 water by the generous and hearty cooperation of landlord, tenant and labourer. I think that such criticism is a little bit ungenerous of hon. Members, who must, if they look at the question in a fair and impartial way, be convinced, after all these years that have elapsed since that measure was passed, that it was a measure which has benefited agriculture, and has not been taken advantage of by the owner of land. But is the hon. Member for New-castle-under-Lyme prepared to follow out the arguments The hon. Member does not represent a county constituency, and therefore it may be that his lack of knowledge of agricultural matters leaves him under a wrong impression. But if the principle prevailed that you cannot do anything for agriculture without benefiting all classes concerned we should have an embargo at once against doing anything to promote the welfare of the rural classes. Of course, if you take an unjust burden off any section of the rural classes you benefit not only that class but the community as a whole. The hon. Member for Newcastle went on to say he was in favour of taking the rates off all improvements on land I hope he will continue of that opinion after I have pointed out that agricultural land to-day has no value whatever except what has been created by the expenditure of labour and money by those who have brought the land from its prairie state into a state suitable for food production.
I submit the hon. Member on his own showing goes further than I do since I can prove that the present agricultural value of land only represents the interest on capital and labour, laid out in bringing the land from its prairie state into a state suitable for food production. Hon Members will bear with me as a practical farmer when I say I understand the business, and I do not stand up here to screen landlord or farmer or anyone else, but to argue for a reduction of rating on our industry. We as farmers claim that the land which we deal with is our raw material, out of which we manufacture food for the people. We do not go as far as hon. Members do, and very properly, and say "you must not on any consideration tax our raw material." We might even take that stand, and say that our raw material, like the raw material of any other industry, must be made rate free. But while we do not go so far as that, we do say that the present burden of rates on agricultural industries tends to make it 749 so difficult for the people to live in country districts that it is driving people into the towns, and lessening the production of our native food supply, and we cannot say we are developing our land. What seems to me a most serious thing is that it prevents us from incurring expenditure on the provision of good and suitable dwellings for the working classes, which is one of the most pressing questions that can possibly come before the House. The hon. Member for Newcastle cannot deny that the present agricultural value of land only represents expenditure on draining and fencing and cultivating and on the erection of buildings. The present rent value of land only represents interest on the capital so expended. On this point I appeal to hon. Members below the Gangway who so ably represent the claims of labour in this House. I remember last Friday they made very able appeals in the interests of labour, but more than one of them had a dig at those who happen to own land. I hope I have made it plain that the present value of agricultural land is as much the fruits of labour as are the wages of the artisan or any other worker, and I trust that hon. Members representing the Labour party will take a broader view of this question and not support the penalising of labour as applied to agriculture, and thereby injure and shackle the development of their own country because of lack of employment in the rural districts and the reduction of the native food supply.
It has been said that the Government have met us in some things, and the hon. Gentlemen opposite mentioned the grant under the Roads Board. But I would point out that that is a grant for the improvements of roads, but not for their maintenance, and, therefore, instead of relieving rates, it will considerably increase rates; because the Grant from the Roads Board towards a given improvement will not be sufficient to carry out the whole improvement, a margin will have to be met and the County Council will be called upon. Therefore, when hon. Members point to the Roads Board as evidence that the Government have relieved us, I think that that shows that they have failed to look at the question from a proper point of view. I support the Amendment not in the interests of landlord, farmer, or any other class, but because I want to see something done to delay, or at any rate nothing done to increase that deplorable movement of the rural population from the country districts into the towns, which is injuring the country greatly and menacing 750 the physique of the race. But we cannot keep the people there unless we make it better worth their while for them to stay there. [HON. MEMBERS: "Hear, hear."] I am very glad to hear hon. Members opposite support that view, and I will point out to them as practical men that one way of doing that will be to reduce the unjust, unfair burdens resting on land. The right hon. Gentleman the President of the Local Government Board (Mr. John Burns) told us on Friday of a deplorable incident he saw of an agricultural labourer being underpaid on Salisbury Plain. I regret, as everybody regrets, that men should have to work for 12s. a week in the country, though I know that that is not generally the ease. But we, as farmers, tillers of the soil, want to see the men who work for us, the agricultural labourers, who stuck to us honourably and well all through the depression—we have had no strikes to contend with, and they have supported us bravely—improved in their condition and better housed. But the profits of agriculture have been so small in recent years, that money has not been forthcoming wherewith to carry out these improvements.
I notice that my hon. Friend for Newcastle smiles, as if he questions the un-remunerative character of agriculture as a whole. I know there are exceptions. I am speaking of the country as a whole, and, as a practical man, I venture to say that from 1879, and for twenty years onwards, the average British agriculturist in this country had no interest whatever for his capital engaged in his business; he had simply a livelihood, bread and cheese for his labour. That was an unsatisfactory state of things, and if the position of the farmer is benefited, and an unfair burden is taken off the raw material of land, which we manipulate, we shall be able to pay the agricultural labourer better, and able to do something to provide better houses. I would point out how the present basis of taxation makes it difficult for us to provide better houses for the working classes. I am the owner of cottages, and I know a great many of my neighbours, landowners, who provide cottages; and we admit the moral responsibility of a landlord to provide good dwellings for his employees on the estate; but there is a moving population, many others who have no particular claim on the landowner, and they lack decent and necessary houses in the rural districts. What happens? If a man proceeds to provide a good cottage it 751 costs £200 for him to do it, and we claim that you are entitled to something like 6 per cent. on that money. That would be £12 per annum. There are hundreds of cottages built in my county: a good cottage will let at £4 per annum, and very few will let at more than that. Therefore it is a great financial loss for a man to build a cottage for the working classes. Yet it is absolutely necessary in the interests of the country; but our present rating system makes it still more difficult for a man to build the cottages, for after he has spent £200 in building a cottage which lets at £4 a year, on comes the overseer, and he is rated heavily for local charges, whereas if he had taken a narrow and non-philanthropic view and invested his £200 in foreign securities he would receive his £10 per year interest, and would not contribute a fraction towards the cost of upkeep of the roads, the police and sanitary matters.
Therefore, we advocate this lessening of the burden from a broader point of view than mere pounds, shillings and pence. I do hope the Government, in view of this valuable extension of the Old Age Pensions Act, and with their over-flowing Treasury, will at least put the whole demand on the Imperial Exchequer and not upon the local rates.
§ Mr. J. M. HENDERSON
It seems to me that there is a very great deal of loose thinking and loose speaking on the question of rating. No doubt, in regard to education, there is a great deal to be said as to its being a national duty. Many farmers have said to me that they pay for the education of the children in their district, and no sooner are those children educated than they go away to the towns, and the locality which has borne the expense of their instruction receives no benefit from that expenditure. So far as other rates are concerned, we have heard a great deal about the increased burden which they impose, but why do not those who complain go to their own local authorities and not come here? They cannot expect fine roads, fine parks, fine sanitary arrangements, and fine baths and so forth without paying for them. Why should they not study economy themselves? We have heard the proposition—I have often heard it before—of relieving what are called improvements from taxation. What are improvements? According to what has been 752 said buildings are improvements. I have read the Valuation and Assessment Acts, and there is not a word from beginning to end in them about rating buildings. Hon. Gentlemen on this side and the other side of the House seem to forget that a building is not rated per se. You have got to find out the ability of the man to contribute his fair quota to the rates. Be he rich or be he poor, you have to see that he is rated fairly and according to his ability to pay. If a man has got a house of £300 a year, he has got to pay ten times more than the man who has a house at £30 rent. That is right, and I agree with it. But how are you to attain that result unless you have local income tax, to which I have no objection? How are you to arrive at the proportion which a man should contribute to the local rates? Adam Smith said the best way was the rent that a man paid. Therefore, when you speak of buildings and improvements being rated you are simply using a misleading phrase. What you do tax is the rent which the building produces. It stands to reason. According to some of my hon. Friends if you had a building at £100 a year which had ten rooms, and another man had a similar building, both would be similarly rated. But the neighbour might build additions to his house, so that his rent would become £150 a year, yet still he would pay no more contribution to the rates. [An HON. MEMBER: "Why should he?"] Why should he? For the reason that the man with the larger house would be receiving more benefit from the rates than the man with the smaller house. Each man should pay in his proportion, and you must stand by the rent until you get another standard, a local income-tax or whatever it may be, but at present there is no other measure upon which you can go than rent. With regard to rating machinery, that is another thing altogether. It is a matter of construction of the law between landlord and tenant, and I am quite prepared to support any Bill which would make all the machinery which a man puts into premises so long as it does not injure the landlords' property free of rating.
What is it that is asked in the way of taxation of site value? The land value taxation I entirely agree with and support, but I want to know what it is my hon. Friend means by land value. There is a taxation of land value in the Budget of 1909—a very proper 753 taxation too; it taxes the increment, it taxes reversion, and it puts a duty on undeveloped land—with which I do not particularly agree—and half the money goes to the community. There is a tax of 20 per cent. on increment value, there is being taken 10 per cent. when the lease falls in, and a ½d. in the pound is charged on all undeveloped land. Part of that money goes into relief of the rates. What other land or site value are you going to tax? What is the position? You cannot put a special tax upon the site value unless you are prepared to tax feu duties in Scotland and ground rents in England. Three-fourths of the land value of all houses built in the towns of Scotland is capitalised in feu duties. In all the towns in England, at all events in London, three-fourths of the land value is capitalised in ground rents. The late Prime Minister, Sir Henry Camp-bell-Bannerman, distinctly stated that he would be no party to rating or taxing feu duties. The present Prime Minister declared that the taxation of feu duties as propounded by the Glasgow Bill, was immoral. [An HON. MEMBER: "No."] He did say so, and I heard Sir Henry Campbell-Bannerman say so. Therefore, I say that hon. Members who are trying to prevail on the Government to tax this land value must remember that the Government themselves said it would be immoral to impose such a tax, and hon. Gentlemen who take that course are not doing any good to the party they are supposed to follow. As a matter of fact, so far as agricultural land is concerned, the Budget of 1909 does not touch it. The hon. Member opposite who has just sat down, talked of buildings, but if you take away buildings and improvements, agricultural land has little or no value. I agree with the tax in the form in which it is proposed by the Budget of 1909, but I disagree with it in the form proposed by some hon. Members on this side, partly because I think it is very much pressed on hon. Gentlemen by certain of their supporters in the municipalities. If you refer to the debate on the 1854 Valuation Act for Scotland you will see that an Amendment was introduced for rating feus. The then Lord Advocate repudiated the idea, and the Amendment was lost. For fifty-six years this effort has been made. It was made in 1906, on the Glasgow Bill, and the then Lord Advocate said that the Government would tax future feu duties, 754 but they could not accept the proposal to tax existing feu duties. That is precisely the position to-day. This local taxation is a very great subject. If you are going to put the national education on the national exchequer do not imagine that it is not a very difficult subject, and fraught with a very considerable amount of danger. If such a measure could be adopted it would involve the establishment of some department, with a great many inspectors and so forth, to see that the grants are properly spent by the local authorities. You cannot leave the local authorities to spend the money as they choose. To make education an Imperial matter, therefore, would involve the cost of another department altogether. The whole question of rating requires to be very carefully studied. It is a very difficult subject, which wants to be thought over at great length, and to be the subject of exhaustive discussion, but whatever you do, unless it be based on a just system, it cannot succeed.
§ Sir ALFRED CRIPPS
The hon. Member for Aberdeenshire (Mr. Henderson) made some observations in regard to feu duties with which I entirely agree. I do not think anyone can have really considered this difficult question of local taxation without coming to the same conclusion as the hon. Member has—that it is quite impossible, as regards ground-rents or feu duties, to impose any rate at all that is not in its incidence really grossly unfair. The reason why I want to address the House is that I think I am now about the only Member left who was also a Member of the Royal Commission on Local Taxation. I think I may claim that, having studied the subject for six or seven years, and hearing, no doubt, a number of witnesses, we, at any rate, ought to have gained some insight into this complex and difficult subject. It was no part of the functions of the Royal Commission to suggest recriminations between one side of this House and the other. In what I am going to say I want entirely to take the non-Party attitude in order that we may approach this question from the basis of principle, and in order to see if we may not get some better solution than we have at present of what is a very complex topic. The first standard the Royal Commission took was this: They said you cannot determine whether a particular subject matter ought to be paid for by the State or by the rates, without considering the nature of the service with which you are dealing. It is not a question of taking money out of 755 the Exchequer and giving it to the ratepayers, and it ought not to be a question of taking money from the ratepayer and giving it to the Exchequer. I should like to divorce this discussion from any consideration of that kind which I consider really irrelevant. There is the preceding discussion, and that is that the rates ought to have regard to the particular character of the service for which payment is required. Surely we can approach that in a non-Party aspect, and without thinking we are either defrauding the Exchequer or the rates, as the case may be.
Starting from that standpoint, what the Royal Commission said was this: There are certain matters which are now dealt with by rates, not wholly by rates, but which, in our opinion, are in the nature of national or onerous services. If we look back to the history of this matter we can see how this tradition arises. Fortunately it has been common ground on both sides to get where you can local administration, and surely there is a large number of services where it is almost obvious that, in order to have good results, you must have local administration by people who know the conditions and requirements of the particular localities. Unfortunately, when that was realised in this House, it was thought wherever you had local administration the great mass of the expenditure ought to be raised in the locality. I think it is fundamentally a mistake. If you want to use the local authority as the agent of the central authority, you ought not, in addition to making use of it, put an unfair charge on the ratepayers whom it represents. I do not want to extend the area of bureaucratic government. I am very much opposed to it in principle, but it is quite clear that where money is voted by this House out of the National Exchequer for any service, whatever it may be, it is the duty of the Department concerned, and this House must make that clear, by proper supervision, to see that the money is properly expended, and that there is no waste of our national resources. When I come to this question of national resources and onerous services, I want to make this quite clear. I need not here discuss what services, now partly paid for by localities, are national and what are not. As I understand, hon. Members on both sides are willing in substance to take the differentiation which we find both in the Majority and in the Minority Report of the Royal Commission. It does not matter which one takes, 756 there has been a great deal said about education and main roads and Poor Law expenditure, where both the majority and minority were perfectly justified in saying that those were services of a preponderatingly national and onerous character, and not of an ordinary local character at all.
That being the position, what is said more particularly by Sir Edward Hamilton and Sir George Murray? I happen to agree with the Majority Report, but I entirely agree with what was said by Sir Edward Hamilton and Sir George Murray on this question. They said primâ facie if you have an expenditure of this kind in respect of services, national and onerous, you ought to have an amount found in reference to that expenditure out of the National Exchequer. They said, further, if you can adopt a conclusion and a principle of that kind you would put an end to what I may call this rating and taxation difficulty, because you would settle once and for all a clean basis and in accord with principle. No doubt they recognised, as naturally all of us must recognise, that it is not possible, at any rate in the first instance, to go as far as that. It is not possible, in other words, to relieve the local ratepayer of all charges in respect of what are called national and onerous services. On the other hand, it is monstrous that for ten years no step whatever has been taken to carry out the recommendation which, if it had been carried out, and if the principle had been applied, would have relieved the ratepayers by this time to the extent of from four to five millions. Do not let it be thought that that is a sum that is going to be diverted from the National Exchequer. It is a sum properly chargeable against the National Exchequer, and the only reason why the whole of it is not borne by the National Exchequer is because for reasons of administration it is better to have these matters dealt with in the locality than by a central authority. Let me take my argument one step further, and I hope I shall carry the House with me in my view. Supposing you have an expenditure on a service of a national and onerous character, how ought you to distribute the burden? I think the answer must be that you ought in the main to distribute it in the same way as we endeavour to distribute the burden in our National Exchequer, that is in the proportion of the ability of the person called upon to pay to bear the charge.
I come to the next step in the argument. When we come to consider a charge of this kind placed on the rates it can be shown 757 at once that rates have no reference whatever to the ability of the ratepayer to bear the burden. When we come to that point you emphasise and bring to a crisis what is the real injustice, and absurdity I may almost call it, of the existing system. Let me point out what I mean. First of all, as between ratepayer and ratepayer, the amount paid in rates is no test either of poverty or of wealth. A comparatively poor man and a comparatively poor business have to bear a very heavy charge in rates now, while, on the other hand, a comparatively wealthy man and a comparatively wealthy business have to bear a very small charge indeed. The essence of the injustice of putting these charges on the rates is that as between ratepayers the charges do not depend on the ability to bear the burden. I am not now going to complain that if the principle of the Royal Commission were carried out it would rectify this. I am not going to complain that the rates are charged on what is real or immovable property alone. If you ask me to state my own opinion having considered this matter for a number of years, I believe a local Income Tax is impossible and impracticable. What you have to get is fair additional assistance from the Exchequer, and not to attempt what I believe to be an impossible system of that kind. Let me carry this injustice a little further. A penny on the Income Tax produces about the same income as threepence on the rates. That is a substantial difference between the two. It means that a very large class of property in this country, or two-thirds of the entire income of the country, escapes contribution altogether when a charge is placed on the rates alone. Without again emphasising what an hon. Member said about the position of agricultural land, that cannot be justified.
I take the case of education, which, as we know, is a national and onerous service. Why should not a man who is getting £500 per year from a foreign investment pay as much as the ratepayer who is getting his money from other sources, and who is asked to bear the whole of the burden. Surely hon. Members of this House will agree that one of the great vices of the present system is that people who ought to bear their share of the burden are exempt. Why in this matter of education should not everyone bear his share, and as regards every national service? This is constantly put as though it were a question between rates and taxation. That is a false analogy altogether. 758 The question is a different one. It is between the individual who bears more than his fair proportion and the individual who ought to bear his proportion and gets oft scot-free. Until you get this matter put right how can you expect people in a particular locality will not complain of the burden of rates as regards education? They have a sense of injustice that a charge is put on them alone which ought to be spread over a much wider area, and ought to include a large number of individuals who under our present system are not charged at all. I do not want to raise what always seems to promote a discussion in this House, and that is the question as between industries at home and abroad, but surely one may say this that where you have an onerous and national service, such as education, people who get an income from abroad ought not to go off scot-free. I feel that a charge ought not to be put on people obtaining their income from industries in this country.
In order to put before the House the whole position as it was stated in the Royal Commission, I must say a word or two upon the other side of this rating question. Certain services which are now placed on the rates were defined by the Royal Commission as local and beneficial. My view is that as regards those rates, when they are properly ascertained, there ought to be no subvention whatever from the National Exchequer. If you are to have economy, which, I admit, is very difficult in these matters, the first step must be to draw the distinction which the Royal Commission drew between national and onerous charges and beneficial and local charges, and that you do not mix them up. When we come to what I may call the local and beneficial services, what do I mean? I mean services that are specially of advantage to a particular defined area. When you come to that defined area, what the Royal Commission pointed out was this: that you ought to distribute the charges fairly between the persons benefited within that particular area. Of course, that raises the question, although not in the way the hon. Member for Aberdeenshire (Mr. J. M. Henderson) referred to it, of land value taxation. I entirely agree with the view of the Royal Commission on Local Taxation, that in order to fairly distribute the charges on a particular locality within a defined area you ought to see how far the land, or anything else subject to the tax, has been benefited by the charges which you seek to impose in that locality. From that point of view the Royal Com- 759 mission came to the conclusion with reference to site value that you ought to have a special site value rate, and as regards undeveloped and unoccupied land that you ought to have a particular rate in connection with land neither occupied nor developed for the moment. Why did they do that? They put it on the intelligible ground that, as between one ratepayer and another, in a definite and defined area, you ought to divide the charge in proportion to the benefit that they respectively receive as fairly and equitably as possible.
Just see how that is quite inconsistent with what I may call the financial proposals of the Government as regards land values. The essence of the proposals was that the man who got the benefit should bear his proportion of the charge. That is quite right; but if you follow that principle you must not take that fund for national purposes; you must leave it for the benefit of the locality. More than that—because I think there has been some misapprenhension on this point—you must leave it for the benefit of the particular locality. For instance, you must not take the fund from London by some system of one-half for the national Exchequer and one-half for the ratepayers, and give it some other locality or outside district. The proper principle is that where the benefit arises there the charge may be laid. That is in accordance with principle because there is a large number of these local charges which have increased the value of the neighbouring land or neighbouring irremovable property to the ratepayer, and in these circumstances he ought to bear his fair proportion of the burden. I do not think anyone on this side of the House will differ from that statement. It is in accordance with principle. But when accepting a principle such as I am laying down, you must not forget that there is all the difference between national and onerous charges and local and beneficial charges. Because if you take a fund of this kind and apply it to national and onerous charges, that is contrary to the whole argument and the whole basis on which the Report of the Royal Commission is founded. I have been astonished sometimes to hear people referring to the Report of the Royal Commission as though it had been in favour of what is called the taxation of land values. Every word of both Minority and Majority Reports is absolutely and entirely opposed to it. It is 760 opposed to it on this very proper ground—that this is a fund which, if taxed at all, ought to be used for local purposes and local purposes only. When considering a matter of this kind, it is extremely hard on the ratepayer that he should have a prospective fund of that kind taken out of his pocket and diverted to alien purposes.
In the same way, although much may be said on the matter of increased grants, licensing legislation, particularly in several large towns, has very much diminished the rateable value of the properties to be assessed. This House is not careful enough in matters of this kind. Unfortunately the ratepayer is not directly represented here. Who is represented is the taxpayer, and he is well looked after by the Chancellor of the Exchequer. The ratepayer is not really represented here at all; and this House, in my view, ought to take every care, whenever it puts a fresh charge on the ratepayer, to see that the burden is a fair and proper one. I support this Amendment because of the words contained in it asking the Government to give effect to the recommendation of the Royal Commission on Local Taxation made in the year 1901. I believe you will never get any true solution of the problem unless you approach it from the point of view of the principle laid down in both the Majority and Minority Reports. It is of no use giving a few tens or hundreds of thousands more one year than another. The result of that is extravagance both as regards the rates and as regards the National Exchequer. Any Government which is in earnest upon this point must grasp the difficulty as a matter of principle. They must draw distinction between services which are national and services which are local, and those services which are national should mean expenditure from the National Exchequer. On the other hand, as regards services which are local, I agree that they are properly paid for by local rates and properly contributed to by the local ratepayer, and that it is a mistake as regards those to make any contribution at all. I heartily support the Amendment.
§ Mr. RYLAND ADKINS
I am sure Members in all parts of the House will have listened with the greatest attention to the most valuable exposition of the Report of the Royal Commission made by the hon. and learned Member opposite (Sir Alfred Cripps). If we were in the 761 happy position, which the Commissioners found themselves not to be in, of being able to begin at the beginning, the logical division between national and onerous expenditure and local and beneficial expenditure would indicate the line on which all parties in this House would wish to work. But, like so many political problems, this problem is made far more complicated by the fact that we cannot cut ourselves adrift from the past. We cannot, nor would it be fair for us, to relieve certain classes of property which have changed hands over and over again, subject to certain burdens. At the same time, the ratepayer, in so far as his claim for relief is legitimate, can hardly be expected to wait until a really philosophic system of local taxation is established by this or any future Government.
I rise for two reasons: First of all, to point out that the case for Government intervention, which has been made so clear in the case of London by the hon. Member for Fulham (Mr. Hayes Fisher) and in the case of the great boroughs by the hon. Member for Dudley (Mr. Griffith-Boscawen), also exists, allowing for the varied circumstances, to the same extent in the English administrative counties. It is, of course, true that the rates in the English counties are, on the whole, far less than the rates in the English boroughs or in London; but, on the other hand, the intensity of the administration is of necessity less in a rural area than in a crowded area. When you come to deal with the question of proportion, it is astonishing how very greatly the burden of the ratepayer in the administrative counties has increased in the last twenty years. The last year for which complete information is available is 1906–7, and the increase in the amount raised locally as compared with 1889–90 is, including education, 124 per cent. If you exclude education, the increase is 115 per cent. Even more remarkable is the character of the proportion of the cost paid by the Exchequer and the cost paid by the locality. With regard to educational charges, as regards English counties it is true that the proportion paid by the Central Authority is now 18 per cent., as against 14 per cent. twenty years ago. What I think is even more significant—because when you are dealing with education yon are dealing with a subject of exceptional difficulty—as indicating the general claim of the county ratepayer to consideration, is that in regard to services now discharged by the county ratepayers other than those of education, 762 the proportion borne by the Exchequer has actually gone down from 12 per cent. to 8 per cent., and the rate at which it has decreased has increased from year to year. In other words, while the burden of local administration apart from education is increasing most rapidly, the proportion found by the Exchequer is decreasing at an ever-accelerating rate. Therefore, the case for the English counties is as strong, making allowance for the difference in circumstances, as the case for London or for the great boroughs.
This Debate, although it has shown great variety of utterance, has very largely taken on the character of a chorus. With the solitary exception of my right hon. Friend (Mr. Lough), who looked at the matter, as he told us, from an Irish point of view, and gave us the somewhat unaccustomed privilege of hearing him whole heartedly support the Government, all the speakers have agreed that the present condition of local taxation is one of very great gravity, and that, however we may differ as to the remedy we should employ, the ratepayers are suffering under a genuine grievance. I agree entirely that we ought to approach this question with as much freedom as possible from party bias or party objects. We quite understand that the only opportunity of raising the question in the early days of this Parliament is by an Amendment to the Address, and that it is perfectly understood by those who have so moved it, that they cannot expect in the Division Lobby, on what in Parliamentary values is a vote of censure on the Government, the support of those who desire, for other reasons more important in their judgment, to retain the Government in power. No party division can measure the importance or the significance of this question. I think the value of the Debate will depend far more on the facts which are brought to the knowledge of the House and of the country, than on anything which may happen at its conclusion. There has been on the other side, and to some extent on this, a disposition to press the Government for immediate subventions. There has also been the argument of those who have pointed out how inadequate the policy of subventions is, and how necessary it is to draw with more precision the true line between national and local services. It appears to me that these two positions are not necessarily exclusive. It is perfectly right and fair to say that, on the one hand, we do press for greater subventions from the 763 Exchequer as immediate relief, while at the same time we should be exceedingly sorry if this problem was not advanced further than it can ever be merely by the machinery of subvention.
There is no need for detaining the House by enlarging on the grievance. As to that we are all agreed. As to remedies, in the first place, there must be immediate subventions, and I desire to associate myself with the hope that has been expressed that the full additional cost of old age pensions in respect of the removal of the pauper disqualification shall be made a national charge—not only because it relieves the ratepayers, but because it detaches old age pensions from the slightest connection with the Poor Law or the taint of pauperism. In the next place, we are all agreed, I think, that the promises made last year and embodied in that part of the Budget which has not yet become law, should be realised in legislation as soon as possible. These are immediate matters.
When you pass to the general problem, the remedies, speaking generally, are three. In the first place, there must be a transference from local to central administration of some of those national and onerous duties. It may well be that you cannot have a scientific distinction carried out in all particulars, but is not the time ripe for saying that the burden of the unemployed, so far as it falls on the locality, should be a national burden, that vagrancy at any rate should be a national concern rather than a local one; and that the cost of lunatics and the money which should be expended on the feeble-minded—the reforms for which we have waited too long—should be national instead of local services. It appears to me that in some of these matters a very great deal is within the power of this Parliament to deal with. I suggest, in speaking of this question, the line there indicated as the first line of remedy. In the next place—here it may particularly refer to education—we may have services predominantly national, yet which must be carried on locally; where you must have, in my judgment, some local rate or you will have local extravagance. Here, surely, it will be possible to divide the cost more equitably and with more precision than is done today! It may be difficult, it is difficult, but I do not think it will be impossible to fix some datum of local educational rate expenditure, above which additional expenditure ordered by the Department should be 764 borne in some fixed proportion between the taxes and the rates. It is a very great difficulty, as every one in this House who takes part in local government will realise, to get ratepayers to vote money, and meet the claims of a Department whose demands a very large majority of them are scarcely in a position to appreciate; whereas if the cost so necessitated were divided between the Department representing the Exchequer and the ratepayer, it would make it far easier for those of us who are concerned to have great expenditure—where necessary—with the consent and support of the locality itself. It is perfectly true that the proportion of Government expenditure on education has risen in the English counties from 14 per cent. in 1889 to 18 per cent. in 1907. So far the argument of my right hon. Friend the President of the Board of Education is a good one. But while the subvention from Whitehall has increased slightly, the control of Whitehall has increased enormously. There is far less power of local self-government to-day than there was say, twenty years ago. That may not be wholly bad. We may be grateful for the constant impetus supplied from the central authority, for education, unhappily, is not a popular subject of expenditure in many parts of the country. But surely the more Whitehall directs where the expenditure is to go, the larger the proportion of expenditure which Whitehall ought to meet? So far the claim of the ratepayers, for a larger proportion of grants in regard to education, is based not on the fact that the grants have not slightly increased in proportion, but on the fact that the grants have not increased in anything like the proportion as the power of Whitehall—the intervention of Whitehall in the details of local educational administration. Also, and here I agree with the hon. Gentleman who moved the Amendment—in regard to future Acts of Parliament which definitely call upon localities to carry out public duties, it would be a very great help, not only to the ratepayers' pockets—I think not so much of that—but to the local administrator in doing the work that Parliament puts on him, if the cost of these additional services were specifically divided between the Exchequer and the ratepayer in the very Act of Parliament by which was set out what was demanded. The first remedy, I repeat, is by detachment of certain national services. The second is the division of the cost. The third— 765 which may be the most difficult of all—but which, I am sure, this House should not put out of its mind—is the widening of the basis on which rates are levied, and the modifying of the incidence of local taxation. These, we know, are to many highly controversial subjects, but the path is one upon which the House sooner or later will, I am convinced, decide to go, because the feeling of injustice which is felt now in all parts of the country does not merely mean that the selfish instincts of the ratepayers are alarmed. It means that really good local government is hindered in all parts of the country. We live in times in which, within the memory of us all, the province of government has been largely extended. I for one am in sympathy with that extension of the domain of government. But if the enlarged functions of government, to which this House has repeatedly given its sanction, are to be carried out in the country with earnestness and enthusiasm, it is not enough to pass good measures here. You must enlist the sympathy of those upon whose action in the country it may be the very efficiency of the matter will depend. In the present worried, restless, and complaining mood of large numbers of the ratepayers, we, who are concerned in local administration, find our greatest difficulties. We therefore ask the Government to consider the course of this Debate, to mark the unanimity which has characterised it, in putting forward the contention that the ratepayer is worthy of greater consideration. I am sure if that be desired by those who think we have too much legislation it is equally desired by others, who, like myself, look forward to further legislation in the direction of social reform, because the real efficiency of what is directed by this House depends in the last resort on all classes of the community being prepared to work together and carry it out. That will only be done when the sympathy of the ratepayer is enlisted far more than it is to-day by a more equitable proportion of the cost, and the transference of the burden from the one to the other class of revenue.
§ Mr. HOARE
I am afraid the House has during this Debate heard a good deal of the case for London. I should not have cared to return to it had it not been for certain observations that fell from the President of the Board of Education. I am the only Member of this House who is a member of the London Education Committee, and I think, therefore, it devolves upon me to attempt an answer to certain attacks of 766 the president on the administration of education in London. I hope the House will not think that in drawing particular attention to London I shall imply that the case for London is stronger than the case for either the county boroughs or the counties. I believe myself that the points in our case are the points in the case of hon. Members, who represent county boroughs and counties. Therefore, those points to which I shall draw attention have a bearing which is not peculiar to London, but is of general application to the counties and the county towns. The hon. Gentleman the Member for Fulham, in his very comprehensive speech, alluded to the fact that it was since the Act of 1903 that the particular stimulus was given to educational expenditure. Hon. Members on the other side of the House cheered. The President of the Board also implied that the stimulus which was given to educational expenditure was mainly direct, from the fact that the voluntary schools came upon the rates. That is true to a certain extent, though it must be remembered that at that time a very considerable grant was given in aid by the Government of the day. It is also to be remembered that, at any rate in London, a very great number of voluntary contributions were raised by those who were determined to support non-provided schools. I went very carefully into the figures at the time, and I discovered that no less than £600,000 was found by voluntary subscriptions in order to meet the demand of the educational authority for non-provided schools. Apart from that, it seems to me that the importance of the Act of 1903 was not so much in its direct effect as in its indirect effects. I think the House will agree with me that' the co-ordination of education in all its various branches that was then brought about, gave a stimulus to an incredible extent. During this Debate we have had allusions to one or two phases in which education has developed since the passing of the Act of 1903. We had, for instance, the case quoted of the Provision of Meals Act, 1906. The remarks of the President of the Board implied that the enforcement of that Act, voluntary though it was in its origin, yet forced as it was in actual practice, did not involve the ratepayers of London in a very heavy expenditure. Those hon. Members who are not acquainted with the figures of London educational expenditure will probably be surprised to be told that at the present time the feeding of necessitous 767 children in London costs the ratepayers no less than £89,545. Last week we fed 53,000 children. Hon. Members with unbiased minds will agree that the enforcement of an Act that involves the ratepayers of London in an annual expenditure of £89,000 in order to feed 53,000 children per week does involve them in a very heavy burden. The Administrative Provisions Act in the following year, 1907, also involved the London ratepayer in a very heavy expenditure. The Administrative Provisions Act is involving the London ratepayers at the present time in an expenditure of no less than £39,960. There also, I think, hon. Members will agree that the President of the Board of Education was scarcely just when he said that these two Acts were not involving the ratepayers of London in a heavy expenditure. Apart from the actual Acts which have been placed on the Statute Book since the Act of 1903 there have been other kinds of pressure which have been placed upon local educational authorities. These other kinds of pressure have involved even larger items of expenditure possibly than these two actual Acts. The President in his speech alluded to the way we are paying teachers in the London service.
The right hon. Gentleman made a curious statement that it was unnecessary apparently for London to increase the teachers' salaries or to institute a superannuation fund, because these two charges of expenditure were not compulsory. I was astonished to hear the President of the Board of Education imply a fact of that kind. There is no statutory enactment by which the County of London is compelled to raise the salaries of its teachers or to give them a superannuation fund on which they can retire on pension. But we were compelled to undertake that work because the President of the Board of Education refused to undertake what many Members here feel certain is a national charge. We have been compelled to involve the ratepayers of London in a rise in the teachers' salaries in the last seven years of no less than £650,000, and to institute a superannuation scheme which will involve the ratepayers of London in an annual expenditure of £45,000, and in an ultimate expenditure of £50,000, because the Board of Education has shuffled out of its responsibility. What has the Board been doing to help us? They certainly have not been helping us with money 768 Grants, and I imagine hon. Members will agree that they have not been helping us with sympathetic assistance. We have had no money or expenditure by the Board of Education, but we have had a whole series of circulars and regulations and new articles in the code, involving us in very large items of public expenditure.
Three years ago they issued a circular which stated that after a time all teachers in certain positions must pass through the training colleges. We of the County Council in London proceeded to make our arrangements to bring these recommendations into force, but as soon as we began to make the arrangements the Board of Education promptly withdrew that particular article of the memorandum. Next year the Board of Education made a calculation by which it proclaimed of itself that a certain given number of teachers would be necessary in London and in the country for the year 1909. Subsequent events proved that they were no less than 5,000 teachers wrong, and in the course of the last few months we have had a considerable correspondence with the Board of Education on the enforcement of what is known as Article 14, in the 1909–10 code. The President of the Board of Education implied, and his observations seemed to go to show, that we in London were refusing to carry out our duties with reference to the number of children in the classes in the various departments of the public elementary schools. [An HON. MEMBER: "Hear, hear."] Let me answer the hon. Member and the President of the Board of Education at the same time. Possibly they are unaware that at the present moment the average size of class in London certainly is forty-five children. [An HON. MEMBER: "The average?"] The hon. Member opposite says "The average," and by that I suppose he implies that in certain classes we had in London a number of more than sixty. I agree, the hon. Member is perfectly right, and probably knows the reason. The reason is that, five or six years ago, the Board of Education passed regulations calling upon the local authorities to reduce their classes to seventy. We in London carried out this article to such an extent that we put up permanent buildings for seventy, with the result that we have these permanent buildings for seventy children which could not be very easily accomodated for classes of sixty or under, You could turn them into two classes for thirty-five, but it is extremely difficult to turn them into class-rooms for sixty and for 769 ten. The fact that five or six years ago we were more progressive than other local authorities put us into this position. We could have staffed our schools with untrained and uncertificated teachers; we could have put up iron buildings, and got round the Code in a variety of ways, but we preferred to go on in our own way, and we said we were ready to make permanent arrangements for classes of under sixty and even of forty or of forty-eight.
I think it is a little hard that when an educational authority is trying to do its duty, we should have this want of sympathy from the President of the Board of Education. It might appear that from the attitude he was taking up he had a strong claim upon London ratepayers. If the Board of Education and the Treasury were contributing large Grants towards London education, then I would say they had a right to call upon the London ratepayers; but what are the facts? At the present time, while the County Council is finding 79 per cent. of the cost of education, the Board of Education is only finding 21 per cent. I do urge upon the House that it is a little hard that the Board of Education should not only refuse to pay its proper share of what is really national service, but should at the same time start a policy of interference—I might almost say of obstruction and opposition—at the very time when our contributions from the Board of Education are much less than in the past.
I have not been able to go into the figures of each particular local authority or provincial borough, but I have had an opportunity of going into the figures of the great industrial centre of Dewsbury—the Constituency which is represented by the right hon. Gentleman the President of the Board of Education himself—and I find that, whilst London is spending no less than £7 per head upon its children in its elementary schools, Dewsbury is only spending £4; while in London we have 90 per cent. of certificated teachers in our schools, in Dewsbury they have only 58 per cent.; and I find further—and this is the most remarkable point of all—that, whilst the Exchequer Grant to London only amounts to 21 per cent. for its educational expenditure, the education Grant to Dewsbury amounts to no less than 45 per cent.
With these figures in view, I am not surprised that the President of the Board of Education should not feel sympathy with the London ratepayers in their difficult task of attempting to administer education there. Let me seriously point out 770 that at the present moment there are a number of men and women devoting most of their time to educational administration—a very fine work it is—and devoting their experience and their time and their money to it. This repeated interference and opposition from a central bureaucracy makes our work immeasurably harder. Bureaucratic Government may be an excellent thing, and local government may be excellent also, but it seems to me at the present moment, owing to the policy adopted by the Treasury and the Board of Education, we are having the disadvantages of both without the advantages of either. I do honestly believe that unless we receive a greater grant from the Exchequer in the first place, and more sympathetic treatment from the Board of Education in the second place, the local administration of the great public Service, the administration of education, will inevitably break down.
§ Mr. JAMES PARKER
I am sure every Member of the House will feel we are indebted in a large measure to the hon. Member for Fulham (Mr. Hayes Fisher) for bringing this matter forward, and for raising the question as to the responsibility of government and as to the responsibility of this particular Government for the large amount which the ratepayers are called upon to pay for services which we say are national in character. For myself, as one Member, I have some difficulty in deciding which are national and which are local services, for it seems to me that the question, whether you take education, police, or poor law, or any portion of this question, there is a sense in which it is local and a sense in which it is national. I cannot help feeling that the experience we are now passing through with regard to the Board of Education and their interference on local educational matters seems to prove that as the State provides more money, the State is going to leave less control to the locality, and if the ratepayers ask for greater contributions from the State I am afraid that one of the things which will necessarily follow is increased bureaucratic control on the part of Whitehall. Therefore, there are none of us, so far as this Debate is concerned, with the exception I suppose of one of the Members for Islington, who does not think that there is little probability of the local expenditure being reduced. We who sit upon the Labour Benches, believe that a great deal more has got to be done. There must be passed many more laws of this 771 character, all of which will undoubtedly enormously increase expenditure, before we can have an efficient race, and therefore, speaking as one of the party to whom I belong, there is no hope that I can see of great economy, if by economy is meant a reduction of rates and taxes. I can see no possibility of that being achieved, however desirable it may appear. I think that many of us in all parties believe that the truest economy is the wise expenditure of money. It does not follow that because of a low rate a town is being economically worked or that a low-taxed country is the best managed country. The real problem is, who is to find the money? I could not help feeling as I read the Amendment under discussion of a poster that appeared upon the walls of London, issued by the party to which the hon. Member for Fulham belonged, in connection with the last County Council election. On that poster were the words, "It is your money we want." That is the idea of this Debate. Where is the money to come from? After all, does it make much difference whether the ratepayer or the taxpayer pays the money? [An HON. MEMBER: "Yes."] It has been argued here this evening that the ratepayer is not represented in this House, and a distinction has been drawn between the rentpayer and the ratepayer. Very often the rates are included in the rent, and therefore the rentpayer is a ratepayer. Speaking for my own town, the two classes who are the most heavily rated are, in the first place, the slum dweller, and, in the second place, the overrated shopkeeper. If you are going to relieve the rates you are not going to do it merely by giving subventions from the State. That may be a necessary thing for the moment, and it may be advisable, and although I may be one of a minority in this House, I look for relief to come from the quarter referred to by the hon. Member for Newcastle when he addressed the House. I read in the paper this morning of a certain Earl whose heir was christened the other day, and there were great festivities to which thousands of poor people were invited. I also read that the rent roll which this heir would eventually succeed to amounts to £300,000 a year. When we hear of the heir of one Earl coming in for £300,000 a year it seems to me that here is a suitable case for greatly increased taxation. When we consider the enormous ground rents in the City of London, and the comparatively few 772 who draw them in proportion to the population, I think I can see without being too dogmatic a way whereby a materially increased amount might be derived for local as well as for national purposes. After all, the land values of London are created in the main by the people who reside in London, and in some measure by the people residing immediately near to London. I do not think it can be said that land values are entirely a local matter, because all the people of a country in a measure contribute to the land values. The fact that the House of Commons is in London adds to the land values of London. The fact that London is the hub of the Empire also adds to the land values of London; and yet all those values today are taken by the merest handful of people. The harder the people work and the more improvements they carry cut the richer the landlord gets and the heavier the shopkeeper is rented. Of course, the working man has to pay, whereas the other man who owns the land simply sits down and waits until his rents increase. It is idle for hon. Members opposite to argue that there is not in the way I have suggested a means of obtaining money for relieving the distressed ratepayers of to-day. I look with hope for the day when a Government will come along and say that no matter how sacred existing contracts may be, this country is for the whole of the people in it, and must be used for their benefit, and they will make those people who draw such enormous revenues pay a fair proportion of what they receive. I am glad this subject has been brought forward, and I thank the House for listening to me.
Colonel WILLIAMS (Dorset, West)
I wish to say a few words on the general question, and especially upon the way in which the present arrangement falls very hardly upon the country districts. We have heard a good deal about London, but we have not heard much, with the exception of the speech of the hon. Member for Tavistock (Mr. Spear), about how this question affects the country. I think it is quite time some attention was drawn to the relation between the Imperial contributions and the local services. The hon. Member who has just spoken referred to the difficulty of deciding what were national and what were local services, I believe that is a difficulty because there are certain things that concern the whole nation, which no doubt affect individuals in a given locality, and education is one of 773 those services. Every person and every locality is no doubt concerned with the education of the children of their own town and neighbourhood, and the education of the nation is also a national concern. It is the same with the care of lunatics. The unfortunate persons mentally affected in every district ought, to a great extent, to be supported by those to whom they are related, but at the same time anything which tends to the abolition of lunacy in the country is decidedly a national care. It is said the highways are entirely local and not national. That may be so with regard to the smaller roads between towns and villages, but the provision of a far-reaching road connecting great centres of population for the accommodation of through traffic is, after all, a national concern. I should like to say a word with regard to the road grant. If hon. Members will look down the list of grants made by the Roads Board they will see that in no case is the whole of the cost of the improvement paid for by the road grant, and a considerable part of it falls upon the locality. A great portion of the improvements for which grants are made by the Roads Board are for the purpose of widening roads which are dangerous, and in this respect they are a national service. Every yard of surface you add to the road means an extra expense in keeping that road and the greater proportion of that expense falls upon the locality. It is quite true that in late years there has been some improvement in the proportion borne by the rates and by Imperial taxation, for whereas in 1879 the local rates bore 89 per cent. of the cost and Imperial taxes only 11 per cent., by 1904 the rates only bore 74 per cent. and Imperial taxes 26 per cent. I am not saying that is not a very considerable improvement, but our contention is that it is not nearly enough, and that for these services the Imperial proportion should be a great deal higher. We have heard something said about the obvious fact that the more responsibility you take away from the locality the greater tendency there will be to extravagance. Of course, to a certain extent that is true; but in their most excellent report the committee on local taxation, over which Lord Balfour of Burleigh presided, sketched out the way in which a distinction might be drawn between extravagant and careful local authorities and a judgment made between rich localities and poor localities. If I remember rightly they recommended that the Exchequer contribution to these services should be larger according as the 774 rateable value was small, and smaller according as the poor rate was larger, so as to check extravagance and yet help the poorer authorities.
There is one favoured example of the tendency to put the burden upon the localities which occurs at the present moment. I mean that addition which we all welcome to the ranks of old age pensioners which came about on 1st January this year. The House is aware that the Chancellor of the Exchequer has said that the Boards of Guardians are to pay over the amount that they save by that extension of the system of old age pensions. It seems to us flagrantly unjust to place practically the burden of this expenditure upon the ratepayers. It is, moreover, we think, in distinct contradistinction to the very terms of the Act itself, because the first section of the Old Age Pensions Act distinctly lays it down that the whole expense of old age pensions is to come out of Imperial taxation, and that same Act provided that the poor law disqualification should be removed on 31st December, 1910. It was, therefore, distinctly foreshadowed in the Act itself that, although the pauper disqualification was to be removed in 1910, yet the whole of the expense was to come out of the Imperial funds. The Chancellor of the Exchequer, however, has called upon the local authorities for a very large contribution to that fund which he himself said was to come entirely out of Imperial taxation.
I do not want the country aspect to be lost sight of in this matter, because, though I believe the burden in London is considerable, it is felt still more in the country districts, where the ratepayers are smaller and where the burden of the rates falls upon production in a way in which it does not in the towns. The last speaker spoke of slum dwellers in his Constituency as being ratepayers. I think he could hardly maintain that proposition, because the fact that rates are paid for you does not constitute you a ratepayer. It is a great problem which we do not know how to get over, how to make the voters feel the burden of the local rates. It may be said with a certain amount of truth that if rates go up rents will follow. Naturally they will, but it takes a long time to come about, and what we want to do is to make the man feel that if he votes for this or that it will make a penny difference to his own pocket. He does not feel that now at all, because slum dwellers never stay in one place and never pay the same amount of rent for the same accommodation for many months to- 775 gether. If a man gives up a house at 2s. 6d. and takes another at 3s., it does not matter to him what extravagant burdens there are upon the rates. It is very seldom a man who occupies a house at 2s. 6d. gets the rent of that house raised to 3s. in consequence of the rates, because the rise in rents in consequence of rates is very gradual. What we want to do is to make the voter, when he votes for this or that improvement, really feel the burden, and that if he votes for this he has to pay for it. A personal burden would in that way fall upon him in consequence of his personal vote.
§ Mr. NEILSON
I have listened with very great attention to one of the most interesting Debates I have heard in this House, and the Amendment is one that has my hearty sympathy in principle. I have for a long time studied the question how we can relieve the great burden on the rates and place a great deal of it upon the National Exchequer. There is some unanimity of opinion as to the reasons for putting the burden that to-day distresses the ratepayer upon the National Exchequer, but there is a very great difference of opinion as to how it is to be done. The Amendment is one raising particularly the manner in which the ratepayer is to be relieved and how particular national burdens now relegated to the rates are to be placed upon the National Exchequer. We have not heard how the burden at present upon the rates and which is to be put upon the National Exchequer is to be met by the National Exchequer. There is no difference of opinion as to the national services which are upon the local exchequer to-day. Referring to the report of the Royal Commission, we can take three services, Education, Main Roads and Poor Law Administration, and I think you will find in this House no difference of opinion as to these services being national. The question is how to transfer them to the National Exchequer and where to find the money to meet the cost of them when they are put upon the National Exchequer. Many hon. Members, it seems to me, have feared in their speeches that a way out of the difficulty might be in raising a fund from land values. But not long have Members who have touched upon this point remained there. I do not know what is in the minds of hon. Gentlemen, or why it is that some of those 776 who have referred to land values have been so anxious to point out that the land values question is particularly a rating question in contradistinction to a taxing question. It it with the speech of the hon. and learned Member for Buckinghamshire (Sir A. Cripps) I should like to deal for a little while. The hon. and learned Member has given us the benefit of his experience, as a Member of the Commission, and he has told us that he is not only in favour of the Majority Report, but also of the Minority Report. He says that nowhere, in either of these reports, do the signatories state that a way out of the difficulty is to be found in the taxation of land values and that they lay special emphasis on rating of land values. He went on to tell us why the members of the Commission came to that decision. I have yet to read through the reports, and to find that they lay special emphasis on the fact that the way out of the difficulty is by rating and not by taxing. The hon. and learned Gentleman says that they came to that conclusion because they saw that the man in the locality who was rated was the one who received special benefit from the improvements that were made, and that, therefore, the value of the land in the locality, if touched at all, should accrue to the person who lived in that locality. I am anxious to know how you are going to decide the specified area which is referred to. What is the locality? Are you to take it, if it is a matter of local affairs in contradistinction to Imperial affairs, that the administrative county is to be taken in the sense that the hon. Member used, as a locality. Will he admit that we should have the County Council enjoying the rate collected within its administrative area, or will he go further and will he say that the borough, and the borough only, must enjoy the value of the land of that borough? Or let us take it still further logically—I want to see what logic there is in this—will he go to the ward, to the Urban District Council, or the Parish Council, or will he take it down to the smallest village in England, and say that the value of the land there is to be enjoyed by the people who live in that village. The moment you begin to examine this, according to the laws of logic, you find no reason at all for the signatories of the Majority or the Minority Reports laying special emphasis and commending so utterly preposterous a suggestion as that the value of land with a specified area must be enjoyed by the people who live in that area.
777 I am only a student in these matters. I have not had the privilege of sitting on a Royal Commission, but I submit very humbly that land values are a matter of national and Imperial importance in contradistinction to local or rating matters. It is said sometimes in vulgar parlance that the land value of London is created by the people of London. We can immediately see how preposterous that is, if we were to raise a wall all round what is called London, and make it impossible for people to get in or out. Land would then soon cease to have the value it now has. Railways, tramways, lighting, roads, sewers, water, and a thousand and one other things looked upon as municipal go enormously to give London its land value. You can see at once it is not the people who live in London, in a water-tight compartment sense, that create the value of London. There is very little food grown in London. The food comes from outside. I do not want to press this matter unduly, but I give this as an instance to show that when you are raising these matters it must be admitted that land values constitute a national and Imperial question.
This side of the House has been censured somewhat for making promises to deal with this question of rating and doing nothing to carry out those promises. I am only a new Member of this House, but I have taken very great interest in its action for a long time, and I think I can say, ever since the Government of 1906 came into office, that that Government and the Members of the House have done a great deal to try and carry out the promise that was made in the country on this question. Months and months of valuable time were wasted in Committee and in this House trying to do something towards solving this problem. This House discussed over and over again Bills which, if they had passed the House at the other end of the passage, would really have facilitated very considerably the matter of rating by this time. I think Members must have very short memories, particularly those who were in this House from 1906 to 1910, when they say that the Government have done nothing to try and carry their pledges. I would remind hon. Members that the Budget of 1909 is doing a lot in this direction. It seems to me that a great deal of the opposition to that Budget by hon. Members, who to-day have skirted and somewhat shirked this land values question in their speeches—a great deal of their opposition so far as 778 the ascertainment of the capital value of land was concerned—proved that they knew quite well that the Government, in bringing in that Budget, was taking the first and essential step towards the solving of the rating question of this country. When the capital value of land is ascertained I think there will be no reason whatever for the Government to delay the matter of placing the national services now relegated to the rates on the National Exchequer. It might very easily be done. We are sometimes told that there is to be a large surplus this year. Many Departments are clamouring for that surplus. We have heard that the Admiralty and the Army, and, I daresay, the Local Government Board, all want something out of it. I am hoping, indeed, that something which was said when the last Budget was introduced foreshadows the intentions of the Government as to what will be done with the surplus. We were told that this matter of dealing with the rating question could not be much longer delayed, and something was said about a year's delay. I am quite content to trust to what I will not call the promise, but the hint, that was then thrown out that it was the intention of the Government in some part of this year to deal with the rating question in the Budget; suppose we begin only in a small way by taking over, for instance, the rest of the Poor Law or the main roads. If, moreover, the Budget surplus is to be as large as some of the Conservative papers foreshadow, and if the whole of the cost of education which is relegated to the rates is taken over—if we take over one national service and put it upon the national exchequer, when you have ascertained the capital value of land, there will be a great benefit to the ratepayers of this country—an enormous benefit—particularly to the men in the agricultural districts, that might easily be done by this coming Budget.
There is only one other point that I want briefly to touch upon, and it is this: we have heard to-day that one of the canons of taxation is ability to pay. I daresay it was a canon of taxation when Adam Smith was journeying through France before he met a certain number of men there, who were called single taxers, from whom he got a good deal of information—a great deal of information—for his "Wealth of Nations." I do not know, however, any political phrase that is so difficult to put into practice as that about the ability to pay. There cannot be any system of taxation which is logical, fair 779 and just on the basis of ability to pay. It seems to me that a just system of taxation is that people should pay according to the privilege they receive from the State; that is the true basis of taxation, and shows particularly the justice of taxation of land values, that a man should pay according to the privileges he reecives from the State. All great political economists, whether Adam Smith, John Stuart Mill, Thorold Rogers, and many others that I could name, believe implicitly that all improvements go to enrich the landlords. Go a little distance out of town to-day. You find land which has been agricultural for many years, three or four factories start up, the place extends and the population extends, there are greater needs and greater facilities are required—a water supply system, a system of lighting and of storage, better roads and maintenance of the roads, and so on. The district increases in population and, as the improvements increase, whether they are improvements by the individual or the community, the value of land goes on rising all the time. The landlord can live in Patagonia if he likes. He has not contributed, not a brass farthing to the rates or the taxes, but his land has risen in value all the time, and as a famous political economist said: "While he sleeps he grows rich." How can you apply the system of ability to pay to a man like that?
Take another case which stares us in the face every day. If you take land, miles away from any of the suburbs of London, or from any town of over 10,000 population, you get land which has not produced anything but blades of grass for centuries, or it is lying fallow. Somebody comes along, takes a little bit of it and builds a house. As an hon. Member told us a little while ago, and I think he was dealing with this matter, as the system obtains in agricultural districts now they tax the value of his improvements. I admit sometimes there is a little value of the land included in it, but very little indeed. He is rated upon his value to the extent of 4 per cent., and he is rated on something which is the result of his labour and of his wealth and capital. But if you go and ask the price of a plot of land next to his which has not been used, the landlord will not sell it for less than he sold the plot of land on which a house has been raised, and the great burden falls upon the man who has put up the house—the great burden falls upon the improvement—there is nothing falling upon the land, that is next to it. Where 780 does the ability to pay come in there? The man who is landlord of the vacant land may have a rent roll of £300,000 a year, the man who has built the house may be engaged in work, where he has to enter into competition with other workers in this country. He has to labour hard, he has to take all the risks, and, I say, when you begin to reason the matter out in regard to ability to pay you will see that as a canon of taxation it is dead and ought to be swept away into the limbo of economic fallacies. An hon. Member says all we want is justice. I think that justice can be got the moment hon. Members begin to see that the true canon of taxation ought to be according to the service and privilege which is rendered by the State. The peroration of the hon. Member for Fulham, who introduced this matter to-day, interested me particularly; he said that it was conclusive that rates upon houses raised the price of houses, and yet a few moments afterwards he stated that we would get the money for giving further grants in aid of the local exchequers from taxation of imports. Surely the taxation of imports would raise the price of the imports and the price of similar articles produced at home.
If a rate on a house raises the price of it and it is therefore bad for people who want houses, surely by the same principle, if you work it out, a tax on imports would be paid by the people who consume imports, and similar products produced at home. How he can advise us to take a medicine which he himself rejects in another way passes my comprehension. If the Mover of the Amendment and its Seconder, and those hon. Members who have supported it are in earnest as to the matter of national service being placed upon the Exchequer, I am sure they will join with us on this side of the House—who have done a little towards bringing that Budget of 1909 about—the first step having been taken for the betterment of producers and consumers in this country, namely, to get the capital value of land ascertained, in urging upon the Government not to rest merely upon the provisions of the Budget of 1909, but to go further in the application of its principles. We should not merely rest upon the promise made by Sir Henry Campbell-Banner-man or indeed upon any statement that was made by any other individual. These individuals are not infallible, and in reply to the hon. Member for Aberdeenshire, who said that Sir Henry Campbell- 781 Bannerman said it would be immoral to tax feu duties or ground rents in this country, let me say that there is nothing so lament able or offends more the canons of taxation than to tax a man upon his efforts. That, I think, is the most immoral thing which can be advocated. I hail the action of the Government in relation to the Budget of 1909 with joy, and I think that within a very few years from now this generation which is rising up, these young men who are taking their politics more seriously, will see that these immoralities are swept away.
§ Mr. BRIDGEMAN
I am very glad this Debate has not been confined entirely to the London side of the question, because I think, although, as a London ratepayer, not insensible to the fact that rates might very well be relieved, we in the Midland district have as good a claim to further relief as they have in London, for various reasons, mainly because we are very much poorer, and also because there are greater demands perpetually being put upon us. I have been asked by the county council of my county and by the district council of Oswestry to support any measure which will induce the Treasury to give further help towards expenses which are now being defrayed out of the rates. One point to which my attention has been called by the district council of Oswestry is that the effect of the licensing clauses in the Finance Bill has been to put a further burden on the rates by reducing the assessment on licensed houses, and certainly, if there ever was a just claim put before the Treasury, the claim that they have taken away and appropriated to the Treasury money which before that had gone to the rates, I think is the highest possible claim that anyone could make. With regard to the general question, the county council of the county to which I belong say they object to the increased expenditure in connection with education and other services of the same national character being enforced without making provision for an equitable contribution from the Imperial Exchequer; also to the arbitrary action of the Government Departments in forcing expenditure on the local authorities against their judgment and without regard to the capacity of the ratepayers to bear the increased burden. I think that expresses very well what I feel myself in this matter. As far as I can judge from having listened to the Debate, there is really very little difference of opinion on the subject in the House. There have been very sympathetic speeches made 782 on all sides, and it has been treated in a very fair and reasonable manner, and I hope the Debate will be wound up with a still more sympathetic speech from the hon. Gentleman who represents the purse strings.
There is one thing which appears to me to have been rather left out of consideration. We have heard a great deal very often of the argument that if you have local control you must raise a large amount of the money locally, but I challenge the question now as to whether we are having local control and whether it is within our power to interfere in any way in these things with local bodies. My county council says there has been a tendency to transfer the real direction and control of expenditure out of the rates to bureaucracy in London, and so to undermine the principles on which local administration has been founded. I think there is a good deal to be said for that view. There are a great many things which have been forced upon them which they have not had an opportunity of expressing an opinion about, and which they have to administer, and in order to administer which they have to apply to the rates. I think the only speech which appeared to be in any way strongly opposed to the Amendment was made by the right hon. Gentleman (Mr. Lough). He appeared, especially with regard to education, as a great advocate for economy. He spoke about the large amount of money which was spent on grants given for medical inspection, for feeding children, or for the unemployed, as if he took exception to them. If I remember rightly he voted for everyone of them when they came before the House, and I do not think it rests with him to talk about economy if he was not able to practise it by his vote at that time What is more than that, he said business methods ought to be introduced into the Government Departments. But he himself was Under Secretary to the Board of Education for some considerable time, and I never noticed any sudden change to business methods coming over that Department during the time when we had the pleasure of listening to his speeches on educational conditions in 1906 and 1907. I am afraid I am unable to agree with him that there is very much scope for economy. I am more inclined to agree with the hon. Member (Mr. Parker) in saying that we could not hope very much to reduce expenditure, certainly on education or many other things. I admit I think we could spend it in a better way than we do, but I 783 cannot feel that it is very likely that any great economies amounting to any large sum of money can possibly be effected in these times, and I am not sure that they are desirable.
But the question to which most hon. Members have addressed themselves is the question as to how the money could best be raised if these subventions are to be made. I am not very much in favour of the principle of Grants from the Exchequer, but until some very much more drastic change in our whole rating system is introduced it seems to me that they are the only temporary way, at any rate, of dealing with the situation, and therefore, for my own part, I shall support this Amendment, because I think it is the only practical solution at this moment of the difficulty, which I hope will be tackled with much greater energy at some not very distant time. But the great grievance from the ratepayers' point of view seems to me to be accentuated by the fact on which the hon. Member (Mr. Neilson) seems to glory that the rates are derived almost entirely from one particular kind of property—real property in land or houses. That is the grievance which, to my mind, is the most acute part of the question with which we have to deal. The hon. Member thinks it is all right, and his remedy, so far as I could make it out, would make the grievance more acute. My proposal is to make it less acute. The hon. Member ridicules the principle of taxation according to ability to pay. He said there could be no justice in paying according to ability, but that, I think, would not be endorsed by any other Member of the House. I venture to say, as a good Conservative, that the doctrine is older than Adam Smith, and, at any rate, may be traced back in the matter of rates to the time of Queen Elizabeth. The grievance is due to the senseless policy advocated by the Chancellor of the Exchequer, and the Lord Advocate and supported by hon. Members opposite—the senseless view of trying to put the whole burden of taxation on land. I say the remedy is to make people pay according to their ability. Although the hon. Gentleman thinks that is not possible, I venture with great respect to differ from him. There are a good many people who seem to imagine that those whose profits arise from land have largely escaped the burden placed upon land originally. They say that the Land Tax was originally placed upon land and that sub- 784 sequently it was transferred to other shoulders. That is contrary to fact. The Land Tax, although called the Land Tax, was to start with exactly like rates upon ability to pay, and it was imposed upon various forms of property, and not even first upon land. The Act was passed for granting His Majesty a tax of 4s. in the £ for one year to carry on a vigorous war against France. That was in 1692, and the tax was made permanent in 1697.
§ Mr. NEILSON indicated dissent.
§ Mr. BRIDGEMAN
I am glad to find that the hon. Member has such respect for ancient history. I am speaking of the Land Tax, which I have seen referred to on platforms as originally placed on land and subsequently placed on other shoulders. It did not begin until 1692. By the second and third sections of the Act the tax of 4s. in the pound was imposed on different kinds of property, and it is only when you come to Section (4) that you find that the Act imposed the tax on land. I say that it is indisputable that the tax, although called the Land Tax, was originally a tax upon other kinds of property as well, and was imposed upon people according to ability to pay. I notice that the learned Lord Advocate wishes to put all the taxes upon the land.
§ Mr. BRIDGEMAN
I have often seen a speech quoted—and never before contradicted so far as I know—in which the Lord Advocate said that the Budget of last year and the year before formed a first step, and that the valuation to be made was with the view of putting the whole of the taxes eventually upon the land.
§ Mr. BRIDGEMAN
I have seen the statement quoted, and I think it ought to have been contradicted before. Every one now will realise that the learned Gentleman did not say that. I hope he does not think it either. The other day the Chancellor of the Exchequer went to France and was interviewed by one or two journalists. In the interview he asked the Frenchmen if they knew that land in England paid hardly any tax. I do not know whether that was snobbery. I think I should say it was something more clear and definite. It was absolutely untrue and unworthy——
§ Mr. JONATHAN SAMUEL
Has not the Chancellor of the Exchequer disputed the accuracy of that interview?
§ Mr. BRIDGEMAN
The substance of the interview was admitted by the Chancellor of the Exchequer. He first of all denied some particular statement in it, and afterwards admitted the substance was true. [An HON. MEMBER: "No."] I adhere to what I have said, unless any hon. Gentleman can say that it was not so. I wish the right hon. Gentleman were here himself. I think it would be a better practice if the Chancellor of the Exchequer did not allow himself to be interviewed by journalists in France at all. That is the sort of idea that hon. Gentlemen are trying to force upon the people of this country—that land is bearing little or no taxation, though, as a matter of fact, land is bearing a far greater burden than any other kind of property. The hon. Member for Halifax asked where the money was to be got, and the hon. Member for the Hythe Division ridiculed the idea of its being got by ability to pay. He said it was impossible. I say it is not impossible. There is no reason why, if people can pay Income Tax according to ability, they should not also pay an income rate. The new Land Tax puts the burden upon land, whether it belongs to rich or poor, indiscriminately. The hon. Member for Cheshire said that the proper principle was to impose taxation according to the privilege you receive from the State. If that is so, who is to pay the Poor Rate except the person who goes to the poor-house? What is the privilege that anyone receives from the State by paying the Poor Rate?
§ Mr. NEILSON
Those who own the land have the greatest privilege from the State, and therefore their burden will be higher, and the greater the privilege the heavier will be the burden.
§ Mr. NEILSON
All others will pay on the increment. Those who have no privilege direct will pay indirectly through their food and everything that comes from the land.
§ Mr. BRIDGEMAN
I do not admit that a gentleman who has property in a bank, or a large income from foreign investments, is denied any of the privileges which the owner of land possesses. For my part I do not see why that gentleman 786 should not pay his share of the rates. Surely, if there is any principle at all on this question of paying the Poor Rate it is that a man should pay according to his riches, that the richest man should pay the largest share of keeping the poor of the country. If that is so, why cannot you raise the rates according to the income of the people? The hon. Member for Halifax talks about Lord Fitzwilliam and £300,000 a year. If he has got £300,000 a year tax him according to his income. Why tax a man on his land who has got nothing a year, or very little. If it were done in this way it would be done according to some principle and some justice instead of in the clumsy way suggested by hon. Gentlemen opposite of putting the tax on the land, and not caring two pins whether the land belongs to somebody rich or somebody poor. Not until we get back to the principle of taxing according to ability to pay, which has been British justice for many years, and which I hope will be British justice soon again, will you have any just principle on which to raise the money required for the subvention of local rates.
§ Mr. BEAUCHAMP
I do not wish to take up the time of the House by entering into the general question which has been so ably stated this evening further than to say that I am in general sympathy with the views propounded by the Mover of the Amendment, and especially with the main object before him, that is to relieve the payer of the rates and to pay them, to a certain extent, by transferring the burden to the Imperial Exchequer. But I desire to say a few words with regard to one class of local authorities, and I appeal particularly for the non-county boroughs. It is generally known, I think, to hon. Members in this House that the money which is paid from Imperial sources to the local authority does not, in the case of county boroughs, come to them directly, but comes through the channel of the county council. With regard to rural districts, the county council is no doubt very largely composed of those members who represent the rural districts and therefore their interests are really divergent, or certainly not the same as those who belong to the urban district. I happen to represent a very large Constituency, and the principal half of my Constituency is the town of Lowestoft. Representations have been made to me from the borough council there who feel that they are not very fairly treated by the county council, both with regard to main roads 787 and certain other things. They appeal, therefore, that in addition to the claim which they make in common with the other boroughs for further assistance from the Exchequer, steps should be taken to ensure that they shall in future receive their due proportion not only of any additional financial aid to be granted in future, but of that which is now allocated to county areas. I think it is a little bit unfortunate that this question has been raised in the way it has been raised on this particular occasion, because it places hon. Members on this side of the House in a somewhat difficult position. We sympathise, or some of us at least do, to a great extent with the views put forward by the Mover of the Amendment and those who have spoken on that side; but we cannot vote in favour of those views because this is really an Amendment which in the way in which it comes before the House is really a vote of censure upon the Government. It is for that reason that I feel, however much I may be in favour of the general principle of the transfer of burdens from the ratepayer to the Imperial Exchequer, I am unable to support the Amendment in this form as a vote of censure on the Government.
Mr. MONTAGUE BARLOW
As a new Member I claim the indulgence of the House in order to voice the views of an area which, so far as I am aware, has not yet had any expression in this Debate. There are among us in this House Members of distinguished position of the London County Council, and there is no doubt that the views of London have been put very adequately before the House. I should like to say a word or two on behalf of some of the poorer areas in the North of England, particularly in Lancashire. One thing quite clear as a result of this Debate is that the grievance raised by this Amendment is felt in many parts of the country; indeed, I may justly say in all parts of the country. It is felt by the local authorities, and, not only by local authorities, but by a greater authority to which in the end even the Government of the day must bow. Hon. Members opposite need not be alarmed. I am not referring to the House of Lords, but to the electorate and people of this country. The Debate has also shown that this is by no means a question of party. It comes up, of course, in the form of an Amendment to the Address. But we have heard expressions of opinion, and most valuable expressions of 788 opinion, from both sides of the House on the matter; not only is that so, but the Government themselves have admitted that there is a grievance. I think it was in March, 1909, that a deputation under the ægis of the London County Council waited upon the Chancellor of the Exchequer and the Prime Minister. Both of these right hon. Gentlemen admitted that the time was long overdue for the readjustment of the whole question of local taxation. Not only so, but we also are aware that the Chancellor of the Exchequer in his great popular Budget—[HON. MEMBERS: "Hear, hear"]—I thought that that description of the Budget would be cheered by hon. Members opposite—set aside a certain proportion of new land duties to meet this grievance on the part of the local authorities. No portion of money so set aside has yet reached them, and I very much doubt if it is going to be any considerable sum when it does. But so far as it goes it is a recognition, and to that extent is valuable, of this grievance of which we are all complaining. The general burden is exemplified in fifty-two of the chief boroughs. The general burden of expenditure has risen of, course, during the last few years. Since 1892, the amount expended on local objects under the Local Government Act, 1888, and apart from education has risen to nearly double—by about eighty-five per cent.; the amount received from Imperial resources during that period has risen by only eighteen per cent. while the amount contributed from the rates has increased by no less than 124 per cent. If we refer for a moment to the case of Salford, in that area, which is a poor one, the burden has increased very largely in the last few years. Anyone who takes the figures for Salford from 1893, and compares them with figures of 1910, will see the difference. In 1893, the expenditure was £38,000 from all sources. The grant received from the Imperial Exchequer was £35,000, and the deficiency to be made up by the rates was only £3,000. But in 1910, the expenditure of that place was £54,000; the grants received from Imperial sources amounted to £38,000, and the deficiency to be made up by the Borough rates, was no less than £16,000. The burden in that borough is felt to be very serious. I have been approached by leading citizens amongst my Constituents, irrespective of party, and urged to put this matter before the House.
In regard to education there is a very special case from the point of view of 789 Lancashire and other portions of the country in the North. If the Chancellor of the Exchequer is disposed to chastise us with whips, I am rather inclined to think the Minister for Education is disposed to do it with scorpions. We have got to bear certain burdens for education in common with the rest of the country, and I honour and respect many Gentlemen on the other side of the House, especially on the Labour Benches, for the devotion they have always shown to education, but we on this side of the House yield to no man in devotion to education, or sympathy with the children. Policy in these matters, however, is the point in dispute. But I think one can say quite fairly, that no nation can long be prosperous whose children are not well fed and nourished. For the purpose of this debate, what I wish to draw attention to is the imposition of burdens on local authorities without the Imperial authority proposing to share the cost of those burdens itself. It throws the whole cost upon the ratepayers. Apart from this general burden, which we in the North share in common with the rest of the country, we have rather a special case against the Minister of Education on two special points. There has been a disposition, as many in the North think, to use the administrative machine rather unfairly in order to bring pressure to bear upon the local education authorities in the North. One instance is that of Liverpool. I suppose Liverpool is perfectly capable of taking care of itself, but in that city, in regard to no less than 110 schools, great pressure has been exercised by the Board of Education, and Liverpool has been told that the accommodation in those schools must be suddenly increased at a cost of something like £60,000 to £80,000, or 12,000 school places would be cut off, and the Government grant be reduced accordingly. [HON. MEMBERS: "Hear, hear."] Hon. Members opposite express approval of that If they knew as much about Liverpool as I do, I think they would be disposed to modify that approval. Even stronger is the case of the Lancashire County Council. Last March a letter—and I do not think anybody can deny it was rather a threatening letter—was sent to the Lancashire County Council demanding that fourteen schools should be condemned, and that the accommodation should at once be increased in many others or else 20,000 places would be cut off, and the grant accordingly diminished. This produced very considerable consternation in 790 the North. The Education Committee duly met and considered the matter, and they pointed out that they were already doing their best, in spending a little less than £100,000, to replace those schools which the Board of Education wished to condemn. They deprecated the action of the Board as being very hasty, and in all the circumstances unnecessary. I should like to read you a few words of their report, which was presented last December. They said if the schools were shut up they would throw the whole responsibility upon the Government. And they went on to say:—We feel that we would not be justified in throwing additional cost on the county rates to make up the Government grant withdrawn, and if the Board of Education withdraws the grant in respect of any particular school that school would be closed.In other words their attitude was this, that the pressure brought upon them was not a fair pressure, at the moment at any rate, and if the schools were closed they could not take the responsibility. They went on to point out that the pressure brought by the Government at that moment was bringing about the very result which we on this side of the House are suggesting will be brought about—namely, that they will excite a feeling amongst the ratepayers against the excessive cost of education. They say:—The Education Committee should avoid the risk of exciting a feeling among the ratepayers against education on account of excessive cost, and that the Education Committee will be fully justified in firmly resisting the pressure to incur largely increased expenditure on purposes which are not in their opinion of pressing necessity.[An HON. MEMBER: "What was the date of that report?"] The date of the report was the 12th December, 1910. It was presented on that date, and was confirmed seven days afterwards. I do not wish for a moment to take up the position of defending schools that are defective or unsanitary, but if it should suddenly become necessary to issue a threatening order of this kind, condemning a whole series of schools and threatening a lot more on account of want of accommodation, one begins to ask how is it those same schools have been recognised as satisfactory by the Board for so many past years. If the Board suddenly decide to speed up education in a particular area, then it seems to me one of two alternatives is before them. Either they should be prepared to come to this House and say that that locality wants assistance because they are determined to drive its standard of education higher than it has been driven in the years past, or else they must be prepared to run the risk of some- 791 thing like a revolt on behalf of the local authorities themselves. I am told that there is a prospect of this matter being adjusted amicably. I hope it may be so. If there is not, then remember this, that in the end it is extremely difficult to mandamus or coerce a local authority which feels that it has a just grievance. If I may venture to say so, I do not think it will be any easier to mandamus or coerce that authority because it happens to reside in Lancashire.
I hope in this appeal which we are making on a non-party basis to the Government in this matter that we shall not be met by the answer which the Prime Minister gave to that very influential deputation I have mentioned, that, after all, it does not matter, that either in malt or in meal, in rates or in taxes, the money has got to be found, and that there is no difference between them. If the Chancellor of the Exchequer does not pay, that the rates will pay, and, therefore, what does it matter from which source the money comes. In answer to that, may I say, first of all, that that position comes with very ill-grace from gentlemen who foster or, at any rate, pat on the back, the passive resister. The whole case for the passive resister was that there was an essential difference—a difference of conscience between rates and taxes. The taxes had been used for the subvention of the Church schools and for the Catholic schools for many years and there was no disturbance. Suddenly grants from the rates were given by Act of Parliament to those schools, and many consciences began to prick. Far be it for me to condemn or to throw any aspersion on honest conscientious objection, but if there is this serious difference, which has been recognised by the Government, between taxes and rates surely it does not lie in their mouths to answer that there is no difference between them. Furthermore, I think with regard to the kind of areas with which I am particularly conversant in Lancashire, poor areas like that of Salford, the principle laid down by the Commission to which reference has often been made has not been quite fairly and squarely met in this Debate, the principle that rates in their incidence are not anything like as fair as taxes. To that I do not think there can be any answer. Land in areas of the kind to which I have referred, where artisans live who must of necessity live close to their work—areas, so to speak, which you may call workshop 792 and dormitory areas—in those areas land has something of the nature of monopoly value. If you impose extra rates upon areas of that kind, in the end they must inevitably fall on the tenant of the houses in the form of increased rent. There is no getting away from that.
There are more people want land than there is room for the people to live upon, and they must live near their work, and the eventual bearer of increased rates must be the person who pays the rent. The wealthy manufacturer has works in the area it is true, and he pays rates on those works, but by means of the labour which is employed in those works he possibly amasses a very large fortune. Possibly he devotes very little time to the interests of the locality, and possibly spends very little money there. I think we could point to instances on both sides of politics where that kind of Thing happens. We will assume our manufacturer is a millionaire. During his lifetime he may have paid a large sum in Income Tax. If the Chancellor of the Exchequer is determined to raise the Income Tax and to take large portions by way of Death Duties, in cases of that kind why is it not perfectly equitable that a portion of that money so taken or Income Tax and Death Duties should go back into the locality to equalise the ad justment of the local burdens and so on. The amount of instances of that kind could be increased ad infinitum. [An HON. MEMBER: "What about royalties?"] This is no case in royalties. I know that the inevitable answer of hon. Gentlemen opposite when cornered on any point is to shout "royalties." I am quite willing to meet my hon. Friend on that point, but royalties have nothing to do with the particular instance I have given. If you will give me an answer to the case I gave as to why it is not fair that the Income Tax and Death Duties should contribute to the burden in an area like that which I have the honour of representing, then I shall be very glad to receive the answer at the earliest possible moment. I would make an appeal to the Prime Minister and to the Chancellor of the Exchequer if they were here, and an earnest appeal, that they should really set themselves, with the power at their disposal, to give a remedy, and to give redress to a grievance which they themselves have admitted, a grievance which has increased, is increasing, and, so far as I can see, shows no immediate prospect of being diminished.
§ Mr. DICKINSON
The Debate has ranged over a very wide field, including education, the taxation of ground values, and many other matters, but I hope I may ask leave to bring the House back to what I believe to be the intention of the Mover and Seconder of this Amendment, namely: the consideration of the inequitable treatment which has been dealt out by means of our present system of local subvention to London in particular and to the great towns. The Amendment contains a special reference to London. London bulks very largely in this question by reason of the fact that it is the case in which this inequitable system operates most harshly. It is only an example of the other great towns and other urban areas, but it is the greatest example, and, moreover, it has been the authorities in London who have brought this question to an issue. The hon. Member for Fulham, who moved the Amendment in an extremely moderate speech, admitted that, so far as he knew, Governments of both parties seemed to be equally callous to representations on this question. As I have had the honour of moving in this matter for many years, and have gone through precisely the same process that he is now going through, namely, appealing to a Government to do justice to this great city, I can bear him out that up to the present no Government has appeared really willing to tackle this question properly. I could point to many instances in which, during the ten or fifteen years the Conservative Government were m office, London was treated even more harshly than she is being treated at the present time. I remember very well when a right hon. Gentleman opposite brought in a proposal for dealing with swine fever, and put the cost of compensation on the Local Taxation Account. The result was that London was called upon to pay enormously for the suppression of swine fever in the rest of the country, and it was reckoned that every pig that died in London cost us £200. The same thing held good with regard to agricultural rates and the Tithes Relief Bill. In the latter case London ratepayers were robbed of £30,000, whereas London parsons received only £700. So that what with the agricultural landlord, the pig, and the parson, we have suffered seriously from the fact that the then Government would not recognise that we had a claim.
I submit that the question at issue is one of equity as between various local authorities. With regard to education, 794 the Minister for Education has stated today that in his opinion the injustice to London has been remedied to a certain extent. But it still stands out in a remarkable fashion. At present, in regard to education, the taxes bear 31 per cent. of the cost in London, whereas they bear 61 per cent. of the cost in country districts. The operation of the aid grant has been extremely harsh upon London and the great towns. The hon. Member for Fulham gave figures to show this. I will only add that the Exchequer contributions, including what is paid for education, work out at 15 per cent. of the cost of administration in London, and at nearly 50 per cent. of the cost of administration in the rural districts. This inequality has been so clearly proved that the Royal Commission reported in favour of a very considerable addition to the grant to big towns and especially to London, so as to bring their proportion to a more reasonable figure. The problem to be solved is what are we to do if we abolish the system set up in 1888. That system is now recognised to have been unsuitable. It was supported by Mr. Gladstone; it was objected to by so experienced a financier as Lord Farrar; and it has been more and more proved to be unsuitable and unjust. The reason for it was that the system adopted in 1888 was to relieve the Government of all responsibility for future local expenditure. It took the expenditure as it was at that time and handed over all the future to the local authorities. The result is now apparent. Taking the case of London as an example, we find that in the ten years from 1898 to 1908 Exchequer contributions have practically not increased at all, whereas the expenditure on items on which the County Council is bound by law to spend money out of these contributions, has increased by 19 per cent. Seeing that if the old system had continued the State would have found itself now answerable for the greater portion of that increase, it is clear that the system adopted in 1888 has not done justice to the local authorities.
What we have to do is to go back to the old system, with the experience of what it did and of what its disadvantages were, and to take care that those disadvantages do not recur. The great disadvantage of Grants-in-Aid was that they did not discourage extravagance, and we have to find some system whereby the extravagance of local authorities in spending Imperial money is checked. I have not time to elaborate a scheme at this moment, but I suggest that if we are going to increase 795 the subventions to local authorities—and I believe that no Government can resist doing so for many years longer—we ought to set up in this House a Committee to investigate and to be responsible for these grants of public money to local authorities. I believe that if such a Committee, more or less permanent, were set up—a Committee something like the Committee for Local Legislation, or the Public Accounts Committee, with members who continued to sit on it year after year, who would receive reports from Government Departments of all expenditure of Imperial money by local authorities—they would soon be able to devise a system and to lay down rules by which the economical expenditure of that money would be attainable. I suggest that that is really the solution of the question. In my opinion we are bound to proceed in this matter very cautiously and slowly. I think if we were to try the adoption of a new system, abolishing the grants altogether, and having a system of grants for special objects, taking first of all, say, the Poor Law, we should find that it was practicable and not very expensive. The question of the Poor Law has been much simplified by the reports of the Poor Law Commission and of the Royal Commission on Taxation. The Poor Law Commission has recommended that, as regards taxation, the county, and not the union, shall be the area. The Royal Commission on Taxation has recommended that there should be a considerable addition to the grants given for Poor Law purposes. If we could take the £2,247,000 now granted by the Government for Poor Law purposes, and add £1,000,000 to it, we could have a scheme by which the payments would be measured out to every county according to its needs upon a basis of threepence a day for each indoor pauper, a penny per day for outdoor paupers, sevenpence for lunatics, and so on. The result of such a plan would be that no county would receive less than it is receiving at present, while at the same time many places which have been suffering very greatly by reason of the injustice of the present system would be considerably relieved. The same process could be applied to police and to higher education. The State would have free the £5,800,000 which is now handed over to the local authorities in England and Wales, and with less than another £1,500,000 I believe we could remedy the injustice that is complained of so far as regards the Poor 796 Law, police, higher education, and a few other things to which Exchequer contributions are now applicable. I should like to add my voice to the request that was so well put by my hon. Friend the Member for Fulham, to ask that the Government should appoint some committee for the purpose of considering this question. I do not believe that any Government will take up this question in its present condition. It is a very ticklish and a very difficult one. But it would not be so very hard for a Government to carry out their desires if they were backed by the recommendations of a Committee of this House. In 1906 this House instituted several inquiries by means of Committees which investigated various questions and reported upon them. The result has been that the Government have been able to carry through several measures in accordance with the recommendation of a Committee. Why should we not have a Committee of this House charged with considering the Report on Local Taxation? The Members of the Committee might consider the whole question of subventions to local authorities, and make recommendations on it; and the Government would be fortified by the knowledge that a Committee, representative of both sides of the House, had made propositions with regard to this question. I hope the Government will not reply this evening to this Motion by absolute hostility. I feel certain that sooner or later they will be bound to consider this question, and will be bound to come to a conclusion that the many local authorities have made out an unanswerable case for further help. If we were to have given to us an opportunity of placing our claims before a Committee of this House, and developing them, at any rate the subject would be advanced further this year than it has advanced any time during the twenty years in which I remember very well this question has always been a burning one.
§ Mr. WALTER LONG
I am very sorry to see the hon. Gentleman who has just sat down has had to curtail his remarks, because all of us who have taken part in previous Debates on this subject know very well that he is full of knowledge of local taxation, and especially in its effect upon London. But he will permit me to say that it is not due to any demand on my part that he has had to abbreviate his speech. Rather should he look to his own Front Bench and Friends. When demands are made by the Government to take 797 away the time of the House they are silent, and then occasionally find themselves—as he has found himself to-night. He has deprived himself of the legitimate opportunity of making his own views known in order that he might, with that courtesy which distinguishes him, allow the Debate to proceed on both sides. I think it is almost without precedent to find that a Government approach a very important question of this kind in a Debate which everybody who has listened to it will admit has been conducted on a very high level, being faced with this difficult problem that the Government should not say one single word to explain to the House what their intentions are. I know I am to be followed by the right hon. Gentleman who represents the Treasury. He is perfectly entitled to expect that the right to wind up the Debate shall rest with the Government, as, on the Address, it invariably does. But when that right is concerned—and we, of course, are the first to follow precedent, in this House it has invariably been on the understanding that at an earlier stage in the Debate some Member of the Government is put up to indicate what is the line of policy which the Government intend to pursue. In this case it was particularly desirable that the usual course should have been adopted. For this reason one hon. Gentleman who spoke from the other side of the House expressed himself as being in general sympathy with the object of this Amendment, and also expressed his regret that the subject was raised upon an Amendment to the Address, as it prevented those who, like himself, are in sympathy with the object from voting, because such a vote on the Address is regarded as a vote of censure. My hon. Friend the Member for Fulham who moved this Amendment in a speech of rare power and knowledge, stated to the House at the commencement of the proceedings that he would be prepared not to divide the House if the reply of the Government were satisfactory. We are to be left until the very few minutes preceding the Division without any knowledge of the intentions of the Government.
Therefore, I say at once, and that apart from the merits of the question, as a protest against the course which the Government have thought fit to follow, that we must divide at the end of this Debate in order to express our strong disapprobation of the policy followed, I believe, for the first time, of the Government remain- 798 ing absolutely silent, and forcing the other side to make their declaration and their position known without any knowledge of the Government policy. I would like also to express our profound regret that it has not been possible for the Prime Minister, who, in the absence of the Chancellor of the Exchequer is the Minister obviously responsible for a great Government question of this kind to be present and take part in our debate. Even though the Government may offer us some small suggestion, satisfactory, or of a semi-satisfactory character, the course which they have followed renders our course absolutely inevitable.
The hon. Gentleman who has just sat down and with whose concluding remarks I am in entire sympathy, began his speech with a statement which he might just as well have left unmade. In most speeches, perhaps all in this Debate, the speakers have done their best to avoid dragging party politics or controversial questions into the Debate. The hon. Gentleman told us that he believed that London had been treated worse by the Government of which we were Members than it has been by the Government in power. He must indeed have been deaf to the speeches which have been made in this Debate if he really remains of that opinion now. The fact is perfectly true of all Governments, and for the reason given at the end of his speech, namely, that this subject is an extremely complicated one and it is a very difficult task to allocate the money so that everybody takes their just share of it. It is perfectly true that all Governments have rather aggravated than lessened the injustice to the ratepayers. But there are two essential features in the present situation which differentiate the attitude of the Government of the day from that of any of their predecessors. In all previous cases, without, so far as I know, a single exception, when Governments have found it necessary to cast fresh duties, involving new expenditure upon local authorities, they have made contributions, whether adequate or inadequate, in respect of those new charges. But there is a more serious feature still. No Government before, I think, the present Government produced the Budget of 1909, has at the same time that it threw fresh charges upon the local authorities, and indicated their intention of throwing additional charges later on; no Government, I say, has deliberately set itself to work to take away from the local authorities a portion of the new 799 revenue which many of them—amongst whom the hon. Gentleman finds himself—contemplated as possible sources of income for themselves, and by their policy have depreciated the existing sources of income.
My hon. Friend in the speech he made earlier in the afternoon reminded the House of what had been the effect of the policy of the Government in regard to the valuation of London. He reminded the House of what had been the effect of recent policy of the Grants-in-Aid to London, and he showed that the Grants-in-Aid are gradually disappearing. The valuation of London shows for the first time, in consequence undoubtedly of the policy of His Majesty's Government's increased difficulties, and in face of these facts the hon. Gentleman is able only to say that the present Government has treated London better than its predecessors, or rather that we treated London far worse than the present Government have. I could not let a remark of that kind pass without comment, but I am not concerned to inquire as to the relative failings of the two Front Benches. Sufficient for me it is to know that this difficulty is here in an aggravated form, and that it has been made perfectly clear to the House, from the speeches this afternoon, and something more. The hon. Gentleman who has just sat down indicated what he believed, at all events, would be a satisfactory course to take with a view of obtaining some more information. He says the subject is very difficult and very technical. I probably know that as well as he does, having spent many years at the Local Government Board. He says no Government can be expected to deal with in a moment. If that be the case why did two distinguished Members of the Government—the Chancellor of the Exchequer in this House and the Leader of the Government in the other House—make distinct declarations upon this subject only last Session. The Chancellor of the Exchequer said:—It is of supreme importance that you have to deal with the readjustment of Local and Imperial Finance, and I do not believe it will be possible to postpone it beyond this year and whoever is standing at this box——He was speaking, of course, from the Treasury Bench—whoever is standing at this box, next year will have to deal with it thoroughly.And the Leader of the Government in the House of Lords went even further still. He said:—I can say quite definitely that if we are next year in the position of advising the Crown, we shall make an attempt to deal with the whole of this subject.800 In face of these two statements the hon. Gentleman opposite, who speaks with authority, and is no doubt very well acquainted with the policy of His Majesty's Government, says that the subject is so difficult that we cannot expect the Government to deal with it at once, and suggests another committee of inquiry. We have not made any such definite statement, as those which I have read, but we did make more than one attempt to deal with it, and when the hon. Gentleman says that the efforts we made in 1888 turned out to be unjust and unfair to London, he will remember, although perhaps he was not then a member of this House, that we had long Debates upon the subject, and that we did our best to take steps to consult with our political opponents as to the best way of distributing the money in aid of local taxation. During all that time, although creating new local authorities in the shape of the County Council, we were not throwing upon the ratepayers any unnecessary burdens.
The Debate this afternoon mainly turned upon the growing charges and the decreasing sources of revenue and the necessity for doing something to readjust matters. With the suggestions made I absolutely associate myself, namely, first of all the suggestion to define your burdens into two categories described by my hon. Friend the Member for Buckinghamshire (Sir A. Cripps), who speaks with great authority upon the subject, and in the second place to so make your allocation of Imperial revenue as to prevent extravagance, so as to throw upon the local authorities the burden of paying for that which is their own proper duty, and sharing it with them those burdens the benefits of which are shared by the whole community.
We who have taken part in these Debates now for nearly thirty years know there is another difficulty which has not been faced. I mean the difficulty of making Personalty contribute to this share which now falls entirely upon Realty. The hon. Member for Newcastle under-Lyme (Mr. Wedgwood) told us to-night—he has told us before—what is his remedy. He simply suggested another tax upon land. We know his views about land. He believes that by drastic reforms in regard to land you are going to bring about the millennium. I do not share his views, and I will not stop to discuss them at any length, because they were very adequately dealt with by an hon. Member sitting below him on the other side, and, 801 for the present, at all events, I am prepared to leave hon. Gentlemen opposite to fight out this question between them. For my part, I do not believe any responsible Government would adopt the hon. Gentleman's suggestion to throw additional burdens upon land in order to deal with the difficulty of the rating question.
The hon. Gentleman who last spoke shares the views of the hon. Member for Newcastle-under-Lyme to this extent. He criticised the Agricultural Rates Act, for which I myself was responsible for contributions in aid of rates which fall upon the owners and certain other charges thrown upon the local authorities which he thought had worked unsatisfactorily. Those of us who were here when the Agricultural Act was passing through this House remember how hon. Gentlemen opposite who were then in opposition denounced us. We were told it was a Landlord's Relief Bill; we were told it was a scandalous misappropriation of money, and I think the Leader of the Opposition of that day, said that the money might as well be thrown into the river. If all these statements were true and are still held by hon. Gentlemen opposite, then what on earth has the Government been doing. They have been in office for four years. If they could not give us some system of relief and if they were unable to deal with this question of taxation and rating in a satifsactory manner, one would, at all events, expect they would have repealed that which they regarded as mischievous and wasteful and wrong in application. We know perfectly well that they have made no attempt to do anything of the kind, and if they say that they have not made the attempt because they knew they would be opposed on this side of the House, I say that I do not believe in that excuse. I believe they realise that, however partial those Acts may have been in their operation, and however little they may have effected towards the end in view, they were substantial attempts to make Personalty contribute, in some degree, to the charges that fall upon the ratepayers. Realty in its relation to agricultural land is closely allied with one of the most important recommendations made by the Royal Commission which laid stress upon the fact that your charge should, if possible, be placed upon the benefit the ratepayers derive from the expenditure. I do not care what form of expenditure you take, whether it is the maintenance of the poor, the sanitary rate, or the education 802 rate, I defy anybody who believes the Agricultural Rates Act and the other Acts referred to to be wrong to prove that I am wrong when I say that the benefit derived by the agricultural ratepayer as a whole is far more indirect and remote than that derived by the Urban ratepayers. When it is sought to prove that the urban ratepayer calls for relief first because the actual amount he has paid is higher than the rural ratepayer you are losing sight of the important fact on which so much stress was laid by the Royal Commission, namely, that you must have regard to the benefit the ratepayer gets when you are deciding what proportion he should bear of the charge. Whatever be the grievance of the ordinary ratepayer as against Personalty that is doubled and trebled when you come to the case of the agricultural ratepayer. When you come to the general question of how you are to distribute these charges and what form of relief you are to give to them we come at once to the difficulties which the right hon. Gentleman opposite said would be best met by a Committee. This view was supported by the hon. Member for Salford (Mr. M. Barlow) in the admirable speech which he delivered a few minutes ago. We have to find, first of all, what is the best method of dividing the charges, and, secondly, what is the best way of making a contribution in their aid. My hon. Friends who have spoken from this side of the House have reminded hon. Members that ten years have passed since the Royal Commission reported, and that no attempt whatever has been made to carry out any of the suggestions which were then made. They have further pointed out that our grievance has been increased by the action of the Government and not diminished. They have also indicated what they believe ought to be the course taken by the Government now if, as we are given to understand, they have abundant funds which they can apply to public purposes, and if they are really determined and prepared to deal with this question. We have also been told the best way to deal with a portion of the problem, and that portion which seems to be most pressing.
London's case undoubtedly stands out as the most pressing. The hon. Member who preceded me pointed out that London suffers under the Contagious Diseases Animals Act administration and also under the administration of the Education Act. It can be shown, as it was shown by the hon. Member for Fulham (Mr. Hayes 803 Fisher), that the Grant-in-Aid which London receives is 2s. less than the Grant-in-Aid received by the rest of the country. But although my hon. Friend proved the case of London up to the hilt, he does not ask that the London question should be dealt with alone, but as part of this great question. One branch of this subject has received this afternoon inadequate consideration, not because hon. Gentlemen are not conversant with it or willing to raise it, but because the time at our disposal is very limited, and it is therefore necessary to confine the Debate within somewhat narrow bounds—that is, that you cannot deal satisfactorily with this question unless you are prepared to deal with the question of assessment There can be no doubt whatever that, in regard to the amount of the rates and the amount of the contributions you make in aid of them, you must deal with the assessment of the country or else your rate is not in itself an adequate proof of the sufferings of the locality, and your contributions in aid may go astray as the hon. Gentleman has said ours has gone astray At all events, during the four years that the Government have been in office, they might, in our opinion, have made a real attempt to deal with assessment; they might have produced a Bill which would have been passed into law by this time. If they had done that, they would have made tome real attempt in regard to the solution of this question.
What is our prospect now? The hon. Gentleman the Member for St. Pancras (Mr. Dickinson) criticised and condemned the line we took in 1888. I welcome the suggestion of my hon. Friend the Member for Fulham (Mr. Hayes Fisher) that we should have some inquiry by some committee, but I hope if that suggestion is adopted by the Government the committee will be a very small one, and that their reference will be a very clear and a very simple one. We want immediate treatment of this question. We want prompt solution of this difficulty. The longer the settlement of it is postponed, the more difficult and the more pressing it will become. More than one hon. Gentleman, speaking to-night with a full knowledge of the views of local authorities, said, and I believe said with absolute truth, that if the settlement of this question is much longer delayed you will have a rising on the part of the local authorities. Every day some fresh duty is cast upon them. Now we are told, in addition to those injuries already 804 inflicted upon sources of revenue open to local authorities, they are in future to collect their own licences, which means throwing a very heavy expense upon them. We are told, also, that in consequence of the removal of the pauper disability in connection with Old Age Pensions, local authorities are expected to make some contribution in this respect. If these additional charges are to be thrown upon the local authorities, and if no real step is taken to meet existing difficulties and to prevent the occurrence of fresh ones, I believe, what my hon. Friend has said is absolutely true, that the local authorities will refuse to obey the commands of this House, and will decline to carry out fresh Acts of Parliament, involving, as they do, new burdens upon the already overweighted ratepayers.
I personally regret very much that this Debate has been curtailed, because it makes it inevitable that very important branches of it are left out altogether, while some can only be dealt with in part and inadequately. I wish very much that we could have discussed it without time-limit, and that there might have been a full opportunity for those who represent London and those who represent the towns and the country to put their case fully before this House. I myself believe, if it was not for the existence of what I believe to be the most undesirable person—namely, the compound householder—we should hear much more about the injustice of the rates. I know, if I may give an experience of my own, that in the case of the Peabody Trust, of which I have been for many years a governor, the occupants of the Peabody Buildings had not the faintest idea what proportion of their rents go in rates and what in repaying the capital and interest which provided their buildings. But, as the House knows, in London the compound householder rate is fixed at a higher sum than in any other part of the country, and consequently a very large number of people escape direct payment of taxes in the Metropolis. We made an effort some years ago to bring home to our tenants the amount of the rates that was to be paid in respect of the tenancies. I can assure the House that there was the utmost indignation on the part of these people when told that they had to pay the rates separately from their rent. For the first time it was brought home to them what was the amount of the rates. I do not think that in any case we have persisted in the effort because of the inconvenience to them and the injustice of it 805 as between buildings in different parts is manifest. If every compound householder, and if every person on whose property rates are levied were called upon to pay their own rates I do not think it would be possible to postpone or delay dealing with this question, and the Government would be made to realise that it is a question of primary importance calling for careful consideration and prompt decision. I am not going to take advantage of the occasion to interfere with the reply of the Government. We are all anxious to hear that, but I do protest against the treatment of this question on this particular occasion. I assert that we have been left for the first time in ignorance of the policy of the Government, because the President of the Board of Education, who spoke earlier, carefully confined himself to the educational side of the question, and said nothing as to the general policy of the Government. Of that we have been left in ignorance up to the very last moment. We do not know whether they are going to redeem the pledges they gave last year, or whether they are going to ask for further time. We cannot judge of their policy, and we call upon them to act now on the promises they made so glowingly last year. We say that they are committed to deal with this question immediately, and we ask them to state to-night what their policy is, and whether immediate effect will be given to it.
§ The FINANCIAL SECRETARY to the TREASURY (Mr. Hobhouse)
The hon. Member for Fulham who introduced this subject to the House as an Amendment to the Address, did so in a speech marked by both power and moderation. I think I might draw attention to the fact that he commenced by saying he would deal as little as possible with the question of London, and would rather discuss the case of the country. But the Amendment by which after all the Government is to be judged goes upon far different lines. It draws attention to the growing cost of education and other services: it emphasises the difference of treatment between London and the provinces, and it lays the blame for any disastrous financial effects in either one case or the other upon the legislative and departmental administration of the Government. I cannot admit that there is anything to the discredit of the Government in this particular, and I cannot possibly allow this Amendment to pass without dealing with the question from that point of view. 806 The Member for Fulham reminded us of the days in which he sat in this House, and, I think, he certainly supported Mr. Ritchie in the Local Government Act of 1888. That Act, as the House knows, changed the relations between the local authorities and this House as to the methods of payment and also as to the sorts of revenue from which Imperial Contributions were drawn. It abolished the direct grants in aid and it substituted for them Exchequer Contributions by way of an assigned revenue. I do not mean to discuss the merits of a system of assigned revenue. It had various obvious failings, and those obvious failings arose. It enormously complicated the accounts both of of the Exchequer and of the local authorities. It produced uncertainty of income from the point of view of the local authorities, and it retarded the payment of income to the Departments. It rendered the local authorities uncertain as to what their revenue was to be and complicated the whole raising of rates and their yearly budgets. These were defects which were not taken sufficiently into account when the system was first introduced. In my judgment—and I speak entirely from the individual point of view, and as one who for many years was connected with local matters—I think these were fatal, both from the point of view of the Exchequer and the local authority. But with the alteration of the system there also came into force the London County Council, for which right hon. Gentlemen were so largely responsible, and in response to the criticism of this Amendment I have to consider what was the attitude of the Government of the day to their own creation, not only at the time they created it, but during subsequent years. There are certain distinctions between London and the provinces to which I shall refer in a moment, but I wish to deal with the attitude of the late Government towards the London County Council. In the report to the London County Council of their own Finance Committee—and the hon. Member did not refer to that report—there are some very remarkable facts set out, to which I should like to draw the attention of the House. In the year 1888–9 the County Council started with a free balance of £200,000; in the following year it had gone up to £379,000, and by the next year 1891–2 it had gone up to £450,000. By the legislation of the then Government by 1902–3 at the time that the late Conservative Government commenced their Education Bill—not 807 under the administration and legislation of a Liberal Government, but entirely by that of a Conservative Government that free balance had dwindled from £459,000 in 1903–4 to £100,000. That is a remarkable omission from the statement of the hon. Gentleman. I should like to quote this report. It does not call attention as this Amendment does to the administration of the last five years, but this financial report tells the London County Council that it is legislation since 1888 which has depleted their accounts and reduced their balance, and it proceeds to set out what that legislation was, and it also recites the loss attributable to the each individual act. I will quote chapter and verse for my statement. There is the Public Health Act of 1891, which cost the London County Council £17,000. There is the Diseases of Animals Act, 1894, which cost £5,000 a year. There is the Tithe Rent-Charge Act of 1899, which they say cost £30,000 per annum. There is the Education Act of 1902—and I make an allowance of the sum of £88,000, which is the last estimate, the estimates for this year, of the cost of meals and the inspection of children—which cost, according to the London County Council's own statement £370,000 a year. The Unemployed Workmen's Act, 1905, cost them £45,000 a year, and all these sums added together come to this that out of the free balance of £459,000 with which they started, the legislation and the administration of the late Government cost the London County Council £467,000. What becomes, therefore, of this charge against the present Government? It dwindles down to two Acts of an important character, but of comparatively unimportant financial effect, the Provision of Meals and the Inspection of Children, and of these the first cost £65,000 a year on their last estimate, and the other costs, I think £25,000.
It is very curious in respect of the statement which I have quoted that there are also mentioned in this report three Acts passed during the same period by Liberal Governments. I do not comment upon the fact that when there was a Conservative Government occupying these benches there was a Progressive majority in the London County Council. But it is curious that of the three Liberal Acts which are mentioned in this Report, drawn up under the auspices of a Municipal Reform chairman of the London County Council, the Finance Act of 1894, which is the first mentioned, provided the exact equivalent of its 808 predecessor, and the Finance Act of 1908, which is alleged to have cost the ratepayers of London £8,000 in the collection of the local taxation licences, has given to the London County Council the first expanding revenue which has been given to it for something like fifteen or sixteen years, and it is unquestionable that, though the cost of the collection exceeds the amount allowed for the collection, the London County Council has made a pretty good thing out of these revenues which have been assigned.
Now I come to the second part of the Amendment. It is said by the Amendment, and I think by the right hon. Gentleman (Mr. Walter Long), that London has an especially heavy burden to bear as compared with the provinces, and the same statement is repeated in the Finance Report of the London County Council. Two or three Members on the opposite side of the House, and I think my hon. Friend behind me drew attention to the inequality of the 30 per cent. and the 19 per cent. in the proportion of expenditure in London and the provincial local authorities. That is not the view of the figures which I will give to the House, and it is not the view of the hon. Member for Shropshire (Mr. Bridgeman). What is the actual expenditure for the last year for which it is possible to have complete figures? The percentage of expenditure in London for 1902–3—I go back five years—was 6s. 9d. in the £; in the county boroughs it was 6s. 7d. In 1907–8—the last year for which we have figures—the London expenditure was still 6s. 9d., and the county borough expenditure went up from 6s. 7d. to 6s. 10d. It still does not look as if the expenditure of London is greater than that of the county boroughs in the provinces, and if there are discrepancies in the burdens laid on by the two sets of authorities—the metropolitan and the provincial—it is again to the Government represented by right hon. Gentlemen that these discrepancies are due. It is entirely the fault of the late Conservative Government. Under the originating Act of 1888, the London County Council lost grants for the medical officer of health and the sanitary officer. Under the same Act they lost grants in respect of the city police. They had a bad year in respect of grants for main roads. The third ought to have been an important source of revenue, and they were lost either by the carelessness or deliberation of the right 809 hon. Gentlemen on the Benches opposite. The Education Act cost £56,000 for grants in aid. All these are discrepancies between the metropolitan and the provincial authorities, but they are in no way due to the legislation or the administration of this Government. The blame must be laid upon the shoulders of hon. and right hon. Gentlemen opposite and not upon ours. I now come to the third part, which I think the House will agree is in some respect the most important part of the Amendment. It refers to the growing cost of the national services. The right hon. Gentleman (Mr. Long) quoted from speeches made by the Prime Minister and the Chancellor of the Exchequer, admitting the growth and saying that the Government are willing and ready to deal with the subject. I do not wish to go back upon these speeches. I would not, if I could, depart from them.
§ Mr. HOBHOUSE
It is "to deal." I am quite prepared to stand by the statement made by my right hon. Friend the Chancellor of the Exchequer. I am sure he regrets that he is not here to make a statement. It is only owing to physical disability that he is not. He says: "It is true that when we come to deal with the readjustment of local and Imperial finance I do not think it will be possible to postpone this question beyond this year." That was said last June, and he goes on: "I think that whoever stands at this box next year will have to deal with that problem and deal with it thoroughly." I agree and admit if the Chancellor of the Exchequer—and I say that by no means by way of apology—did not wish to have another general election and the Constitutional question settled, I think that, looking at the complexity of the rating question, and admitting to the full its difficulty and importance, there is no doubt that as regards many Members on either side of the House, if the Government were to determine on the constitution of this question, they would have very short ceremony with it.
I come now to what we propose to do. There are, first of all, as everybody in this House knows, four services which may be called national—Poor-law, police, education and on the whole main roads.
§ Mr. HOBHOUSE
Yes, all branches of Poor-law relief. In respect of these services in the five years from 1902 to 1907 the increase of expenditure, save in the case of education, has been relatively small. Highways have only gone up £330,000; lunatics have only gone up £200,000—which I hope will satisfy the hon. Gentleman opposite; police have only gone up £540,000; and sanitary cost has only gone up £180,000. Nearly the whole of the increase is represented by elementary education and the relief of the poor. Education shows an increase of over £12,000,000. The relief of the poor stands for £1,100,000. And even with the relief of the poor a large portion is disappearing by reason of the alteration of the Old Age Pensions Act. You are, therefore, brought back to this, that the question you have really got to face is the growth of expenditure through rates upon education. All the rest of the services may, by common consent, the consent of the London County Council, the Municipal Corporations Association, and of both sides of the House, be traced to the gradual growth of the population, and with the growth of population a growth of property assessable to rates. [HON. MEMBERS: "No."] Yes. I do not quote the figures, as I forget them, but I think I can show the House that with the growth of the population has come a growth, allowing for the operation of the Agricultural Rates Act, in the assessable value. We have in respect of these national services to establish four things: first of all we have to establish a uniform basis of taxation, and we have gone much further and far more successfully than any of our predecessors in arriving at a uniform basis of taxation. We have got also to determine the question—I do not think this point has been taken throughout the Debate—who is to administer what are the national services? Are they to be administered locally as most of them are at present, or by means of some centralised Board? We have to ask ourselves what will be the principal sources of revenue for these services; there is also the difficult question whether we shall keep to the system of assigned revenue, or whether we shall hand over a lump sum to the local authorities in substitution for the present system. These are all exceedingly difficult questions on which the Royal Commission gave no final, and, on the whole, no satisfactory 811 answer. They must be answered before any new departure can be taken. In fact, I think the hon. Gentleman who moved this Amendment told the House that he proposed it in order to give the Government an opportunity to renew their pledges, and it has also been observed that we cannot move without deliberation, caution, and care. The suggestion has been made by one of my hon. Friends, the hon. Member for St. Pancras (Mr. Dickinson), and the right hon. Gentleman opposite, that a small Committee should be appointed to deal expeditiously with the subject, and the Government are disposed to accept that proposal. We quite agree with the local authorities—in fact, a good deal can be said on behalf of the local authorities in this matter—that the assigned revenues have not expanded as they ought to do. We cannot, I think, proceed piecemeal, and give a grant to tide over a bad year in order to make up for it in a good year at some other time. We must proceed expeditiously, and the Government will appoint a small committee to go as soon as possible into the points which still stand over, in order that the pledges given by the Chancellor of the Exchequer, by the Prime Minister, and by the Leader in the other House may be kept and redeemed in good faith as they were made.
§ Mr. HOBHOUSE
I am endeavouring to answer. The two points which will have to be settled are principally the management of these services, the sources of revenue, and whether they are to be lump sums. These would have to be dealt with by this Committee. I do not think I can say at this moment whether it shall be a Committee partly of this house and partly outside, or a Departmental Committee. For the moment, and for the moment only, we desire to retain our freedom in this matter. The real object of the Government is to arrive at a decision on one point which it is true has remained unsolved for ten years, which has not really been touched by one side or the other, but which I think has remained unsolved, and to a large extent unattempted simply because of the difficulty, complexity, and magnitude of the subject.
§ Mr. AUSTEN CHAMBERLAIN
I had no intention of taking part in this Debate, but I must repeat and emphasise the pro- 812 test made by my right hon Friend beside me against the course which the Government has seen fit to take. Presuming on their right to reply, which nobody grudged them on the whole Debate, they have refrained from giving any answer on the general question raised in the Debate until the very last moment, and accordingly it is only at five minutes to eleven, and the Debate has to close at eleven, that we know what is the policy of the Government. Every speaker on whichever side of the House he sits who has taken part in the Debate has spoken without knowing the Government's intentions. That would not be a serious matter if after all the right hon. Gentleman who has just represented the Government had confirmed in the full and natural sense of their words the promises made and the expectations held out by leading Ministers last year. What were those promises—I will take care not to talk the Debate out, as I am desirous we should have a Division on this—What were those expressions of opinion? They have been quoted before, and unless hon. Gentlemen desire it I will not read the whole of the quotation from the Chancellor of the Exchequer. I will read only the material words:—Whoever stands at this box next year will have to deal with that problem, and deal with it thoroughly.And Lord Crewe in another place said:I can say quite definitely——That is a pretty strong expression in the mouth of a Minister—that if we find ourselves next year in the position of advising the Crown we shall make an attempt to deal with the whole of this subject.Was there a single man listening in either House to those words, or reading them in a paper; was there a single member of any local authority who did not believe that the Government had pledged themselves to come down with a definite scheme which it would submit, and, as fat as it was concerned, would carry into law in the present Session of Parliament. I will undertake to say that there is not a Member who did not place that interpretation and I doubt if there is a Member who referred to the matter when he went to his Constituents who did not give his Constituents the same interpretation of the Minister's words. Now we are told by the right hon. Gentleman opposite, who approached the subject at a quarter to eleven, and made the announcement at ten minutes to eleven, that what the Government meant by dealing thoroughly with the question was the appointment of a Com- 813 mittee which would make it impossible to have any legislation on the subject this year, not a Commission of the kind recommended by my right hon. Friend or of the kind recommended by my hon. Friend, who moved this Amendment in a speech that has met with commendation from everybody who has followed, but a wide inquiry in order to find out what the Government ought to do upon a question on which they promised to legislate. I say that is a pretty
§ monstrous thing, but it is still more monstrous when the Government knew that they were going to withdraw to-night from the assurance they had given last year, and when they delayed to the last moment any indication of their intention. It is a scandalous abuse.
§ Question put, "That those words be there added."
§ The House divided: Ayes, 189; Noes, 254.817
|Division No. 6.]||AYES.||[11.1 p.m.|
|Anson, Sir William Reynell||Fletcher, John Samuel (Hampstead)||Neville, Reginald J. N.|
|Anstruther-Gray, Major William||Forster, Henry William||Newdegate, F. A.|
|Archer-Shee, Major Martin||Gardner, Ernest||Newton, Harry Kottingham|
|Arkwright, John Stanhope||Gastrell, Major W. Houghton||Nicholson, Wm. G. (Petersfield)|
|Astor, Waldorf||Gilhooly, James||Nield, Herbert|
|Bagot, Lieut.-Colonel J.||Gilmour, Captain John||Norton-Griffiths, J.|
|Baird, John Lawrence||Goldman, Charles Sydney||O'Brien, William (Cork)|
|Baker, Sir Randolf L. (Dorset, N.)||Goldney, Francis Bennett-||Ormsby-Gore, Hon. William|
|Balcarres, Lord||Goldsmith, Frank||Paget, Almeric Hugh|
|Baldwin, Stanley||Gordon, John||Parker, Sir Gilbert (Gravesend)|
|Banner, John S. Harmood-||Greene, Walter Raymond||Pease, Herbert Pike (Darlington)|
|Baring, Capt. Hon. Guy Victor||Gretton, John||Peel, Capt. R. F. (Woodbridge)|
|Barlow, Montague (Salford, South)||Guiney, Patrick||Perkins, Walter Frank|
|Barnston, Harry||Guinness, Hon. Walter Edward||Peto, Basil Edward|
|Bathurst, Hon. Allen B. (Glou., E.)||Haddock, George Bahr||Pole-Carew, Sir R.|
|Bathurst, Charles (Wilts, Wilton)||Hall, D. B. (Isle of Wight)||Pollock, Ernest Murray|
|Beckett, Hon. William Gervase||Hall, Fred (Dulwich)||Pretyman, Ernest George|
|Benn, Ion Hamilton (Greenwich)||Hall, Marshall (E. Toxteth)||Quilter, William Eley C.|
|Bentinck, Lord H. Cavendish-||Hambro, Angus Valdemar||Ratcliff, Major R. F.|
|Bigland, Alfred||Hamersley, Alfred St. George||Rawson, Col. Richard H.|
|Bird, Alfred||Hamilton, Lord C. J. (Kensington)||Rice, Hon. Walter Fitz-Uryan|
|Boscawen, Sackville T. Griffith-||Hardy, Laurence (Kent, Ashford)||Roberts, S. (Sheffield, Ecclesall)|
|Boyle, W. Lewis (Norfolk, Mid)||Harris, Henry Percy||Ronaldshay, Earl of|
|Boyton, James||Harrison-Broadley, H. B.||Rothschild, Lionel de|
|Brassey, H. Leonard Campbell||Helmsley, Viscount||Royds, Edmund|
|Bridgeman, William Clive||Hickman, Colonel Thomas E.||Rutherford, Watson (L'pool, W. Derby)|
|Bull, Sir William James||Hill, Sir Clement L.||Salter, Arthur Clavell|
|Burdett-Coutts, William||Hillier, Dr. Alfred Peter||Samuel, Sir Harry (Norwood)|
|Burn, Colonel C. R.||Hills, John Waller||Sanderson, Lancelot|
|Butcher, John George||Hoare, Samuel John Gurney||Scott, Sir S. (Marylebone, W.)|
|Campion, W. R.||Hohler, Gerald Fitzroy||Sheehan, Daniel Daniel|
|Carille, Edward Hildred||Hope, Harry (Bute)||Spear, John Ward|
|Carson, Rt. Hon. Sir Edward H.||Hope, James Fitzalan (Sheffield)||Stanley, Hon. Arthur (Ormskirk)|
|Cassel, Felix||Horne, William E. (Surrey, Guildford)||Stanley, Hon. G. F. (Preston)|
|Cator, John||Houston, Robert Paterson||Starkey, John Ralph|
|Cautley, Henry Strother||Hume-Williams, Wm. Ellis||Steel-Maitland, A. D.|
|Cecil, Lord Hugh (Oxford University)||Hunt, Rowland||Stewart, Gershom|
|Chaloner, Col. R. G. W.||Hunter, Sir Chas. Rodk. (Bath)||Strauss, Arthur (Paddington, North)|
|Chamberlain, Rt. Hon. J. A. (Worc'r.)||Ingleby, Holcombe||Sykes, Alan John|
|Chambers, James||Jessel, Captain Herbert M.||Talbot, Lord Edmund|
|Clay, Captain H. H. Spender||Kebty-Fletcher, J. R.||Terrell, Henry (Gloucester)|
|Clive, Percy Archer||Kerr-Smiley, Peter Kerr||Thomson, W. Mitchell- (Down, North)|
|Clyde, James Avon||Kerry, Earl of||Thynne, Lord Alexander|
|Cooper, Richard Ashmole||Kinloch-Cooke, Sir Clement||Tobin, Alfred Aspinall|
|Courthope, George Loyd||Kirkwood, John H. M.||Touche, George Alexander|
|Craig, Captain James (Down, E.)||Lawson, Hon. H. (T. H'm'ts., Mile End)||Walker, Col. William Hall|
|Craig, Norman (Kent, Thanet)||Lewisham, Viscount||Ward, A. S. (Herts, Watford)|
|Crean, Eugene||Lloyd, George Ambrose||Warde, Col. C. E. (Kent, Mid)|
|Crichton-Stuart, Lord Ninian||Locker-Lampson, (Ramsey)||Wheler, Granville C. H.|
|Croft, Henry Page||Long, Rt Hon. Walter||Williams, Col. R. (Dorset, W.)|
|Dalrymple, Viscount||Lyttelton, Rt. Hn. A. (S. Geo., Han. Sq.)||Willoughby, Major Hon. Claude|
|Dalziel, Davison (Brixton)||Mackinder, Halford J.||Wilton, A. Stanley (York, E. R.)|
|Dickson, Rt. Hon. C. S.||Macmaster, Donald||Winterton, Earl|
|Dixon, Charles Harvey||M'Calmont, Colonel James||Wolmer, Viscount|
|Doughty, Sir George||Magnus, Sir Philip||Wood, John (Stalybridge)|
|Douglas, Rt. Hon. A. Akers-||Malcolm, Ian||Worthington-Evans, L. (Colchester)|
|Eyres-Monsell, Bolton M.||Meysey-Thompson, E. C.||Wortley, Rt. Hon. C. B. Stuart-|
|Faber, Capt. W. V. (Hants, W.)||Mildmay, Francis Bingham||Wyndham, Rt. Hon. George|
|Falle, Bertram Godfray||Mills, Hon. Charles Thomas||Yate, Col. C. E.|
|Fell, Arthur||Moore, William||Yerburgh, Robert|
|Finlay, Sir Robert||Morpeth, Viscount||Younger, George|
|Fisher, William Hayes||Morrison, Captain James A.|
|Fitzroy, Hon. Edward A.||Morrison-Bell, Major A. C. (Honiton)||TELLERS FOR THE AYES.—Sir A. Acland-Hood and Viscount Valentia.|
|Fleming, Valentine||Mount, William Arthur|
|Abraham, William (Dublin Harbour)||Furness, Stephen||O'Connor, T. P (Liverpool)|
|Acland, Francis Dyke||Gill, Alfred Henry||O'Doherty, Philip|
|Adamson, William||Goddard, Sir Daniel Ford||O'Dowd, John|
|Addison, Dr. Christopher||Goldstone, Frank||O'Grady, James|
|Adkins, W. Ryland D.||Greenwood, Granville G. (Peterborough)||O'Kelly, Edward P. (Wicklow, W.)|
|Agnew, Sir George William||Greenwood, Hamar (Sunderland)||O'Malley, William|
|Ainsworth, John Stirling||Greig, Col. James William||O'Neill, Dr. Charles (Armagh, S.)|
|Alden, Percy||Griffith, Ellis Jones||O'Shaughnessy, P. J.|
|Allen, Arthur Acland (Dumbartonshire)||Guest, Major Hon. C. H. C. (Pembroke)||O'Sullivan, Timothy|
|Allen, Charles Peter (Stroud)||Gulland, John William||Palmer, Godfrey Mark|
|Anderson, Andrew Macbeth||Gwynn, Stephen Lucius (Galway)||Parker, James (Halifax)|
|Armitage, Robert||Hackett, John||Pearce, Robert (Staffs., Leek)|
|Asquith, Rt. Hon. Herbert Henry||Haldane, Rt. Hon. Richard B.||Pearson, Weetman H. M.|
|Atherley-Jones, Llewellyn A.||Harcourt, Robert V. (Montrose)||Pease, Rt. Hon. Joseph A. (Rotherham)|
|Baker, Harold T. (Accrington)||Harmsworth, R. Leicester||Phillips, John (Longford, S.)|
|Balfour, Sir Robert (Lanark)||Harvey, A. G. C (Rochdale)||Pickersgill, Edward Hare|
|Barran, Sir John N. (Hawick B.)||Harvey, T. E. (Leeds, West)||Pointer, Joseph|
|Barran, Rowland Hirst (Leeds, N.)||Haslam, Lewis (Monmouth)||Ponsonby, Arthur A. W. H.|
|Barry, Redmond John (Tyrone, N.)||Havelock-Allan, Sir Henry||Power, Patrick Joseph|
|Beale, William Phipson||Haworth, Arthur A.||Price, C. E. (Edinburgh, Central)|
|Beauchamp, Edward||Hayden, John Patrick||Price, Sir Robert J. (Norfolk E.)|
|Beck, Arthur Cecil||Hayward, Evan||Priestley, Sir Arthur (Grantham)|
|Benn, W. W. (Tower Hamlets, S. Geo.)||Henderson, Arthur (Durham)||Pringle, William M. R.|
|Booth, Frederick Handel||Henderson, J. M. (Aberdeen, W.)||Radford, George Heynes|
|Bowerman, Charles W.||Henry, Sir Charles S.||Raffan, Peter Wilson|
|Boyle, Daniel (Mayo, North)||Higham, John Sharp||Rainy, Adam Rolland|
|Brace, William||Hinds, John||Raphael, Sir Herbert Henry|
|Brady, Patrick Joseph||Hobhouse, Rt. Hon. Charles E. H.||Rea, Rt. Hon. Russell (South Shields)|
|Brigg, Sir John||Holt, Richard Durning||Rea, Walter Russell (Scarborough)|
|Brocklehurst, William B.||Home, Charles Silvester (Ipswich)||Reddy, Michael|
|Brunner, John F. L.||Hudson, Waiter||Redmond, John E. (Waterford)|
|Bryce, John Annan||Hughes, Spencer Leigh||Redmond, William Archer (Tyrone, E.)|
|Burke, E. Haviland-||Hunter, Wm. (Lanark, Govan)||Richardson, Albion (Peckham)|
|Burns, Rt. Hon. John||Johnson, William||Roberts, George H. (Norwich)|
|Buxton, Noel (Norfolk, North)||Jones, W. S. Glyn- (T'w'r H'mts, Stepney)||Robertson, Sir G Scott (Bradford)|
|Byles, William Pollard||Jowett, Frederick William||Robertson, John M. (Tyneside)|
|Carr-Gomm, H. W.||Joyce, Michael||Robinson, Sydney|
|Cawley, Sir Frederick (Prestwich)||Keating, Matthew||Roch, Walter F. (Pembroke)|
|Cawley, H. T. (Lancs., Heywood)||Kellaway, Frederick George||Roche, John (Galway, E.)|
|Chancellor, Henry George||Kelly, Edward||Rose, Sir Charles Day|
|Chapple, Dr. William Allen||Kemp, Sir George||Rowlands, James|
|Clancy, John Joseph||Kilbride, Denis||Runciman, Rt. Hon. Walter|
|Clough, William||King, Joseph (Somerset, N.)||St. Maur, Harold|
|Collins, Stephen (Lambeth)||Lambert, George (Devon, S. Molton)||Samuel, J. (Stockton-on-Tees)|
|Compton-Rickett, Rt. Hon. Sir J.||Lambert, Richard (Wilts, Cricklade)||Samuel, S. M. (Whitechapel)|
|Condon, Thomas Joseph||Lansbury, George||Scanlan, Thomas|
|Corbett, A. Cameron||Law, Hugh A.||Scott, A. M'Callum (Glasgow, Bridgeton)|
|Cornwall, Sir Edwin A.||Lawson, Sir W. (Cumb'rld., Cockerm'th)||Seely, Col. Right Hon. J. E. B.|
|Cotton, William Francis||Levy, Sir Maurice||Sheehy, David|
|Craig, Herbert J. ((Tynemouth)||Lough, Rt. Hon. Thomas||Sherwell, Arthur James|
|Crawshay-Williams, Eliot||Low, Sir Frederick (Norwich)||Shortt, Edward|
|Crooks, William||Lundon, Thomas||Simon, Sir John Allsebrook|
|Crumley, Patrick||Lyell, Charles Henry||Smith Albert (Lancs., Clitheroe)|
|Dalziel, Sir James H. (Kirkcaldy)||Lynch Arthur Alfred||Smyth, Thomas F. (Leitrim, S.)|
|Davies, Ellis William (Eifion)||Macdonald, J. Ramsay (Leicester)||Soares, Ernest Joseph|
|Davies, Matthew Vaughan- (Cardigan)||MacGhee, Richard||Spicer, Sir Albert|
|Dawes, James Arthur||Macnamara, Dr. Thomas J.||Stanley, Albert (Staffs, N. W.)|
|Delany, William||MacVeagh, Jeremiah||Strauss, Edward A. (Southwark, West)|
|Denman, Hon. Richard Douglas||M'Callum, John M.||Sutherland, John E.|
|Devlin, Joseph||McKenna, Rt. Hon. Reginald||Taylor, John W. (Durham)|
|Dickinson, W. H.||M'Micking, Major Gilbert||Tennant, Harold John|
|Dillon, John||Manfield, Harry||Thomas, James Henry (Derby)|
|Donelan, Captain A.||Marshall, Arthur Harold||Thorne, G. R. (Wolverhampton)|
|Doris, William||Mason, David M. (Coventry)||Thorne, William (West Ham)|
|Duffy, William J.||Masterman, C. F. G.||Trevelyan, Charles Philips|
|Duncan, C. (Barrow-in-Furness)||Mathias, Richard||Ure, Rt. Hon. Alexander|
|Edwards, Allen C. (Glamorgan, E.)||Meagher, Michael||Verney, Sir Harry|
|Edwards, Enoch (Hanley)||Meehan, Francis E. (Leitrim, N.)||Ward, John (Stoke-upon-Trent)|
|Edwards, Sir Frank (Radnor)||Menzies, Sir Walter||Ward, W. Dudley (Southampton)|
|Edwards, John Hugh (Glamorgan, Mid.)||Molloy, Michael||Wardle, George J.|
|Esmonde, Dr. John (Tipperary, N.)||Molteno, Percy Alport||Warner, Sir Thomas Courtenay|
|Essex, Richard Walter||Mond, Sir Alfred M.||Wason, Rt. Hon. E. (Clackmannan)|
|Esslemont, George Birnie||Money, L. G. Chiozza||Wason, John Cathcart (Orkney)|
|Falconer, James||Mooney, John J.||Watt, Henry A.|
|Farrell, James Patrick||Morrell, Philip||Wedgwood, Josiah C.|
|Fenwick, Charles||Morton, Alpheus Cleophas||White, Sir George (Norfolk)|
|Ferens, Thomas Robinson||Munro, Robert||White, Sir Luke (York, E. R.)|
|Ffrench, Peter||Neilson, Francis||White, Patrick (Meath, North)|
|Fiennes, Hon. Eustace Edward||Nolan, Joseph||Whitehouse, John Howard|
|Fitzgibbon, John||Norton, Capt. Cecil W.||Whittaker, Rt. Hon. Sir Thomas P.|
|France, Gerald Ashburner||O'Brien, Patrick (Kilkenny)||Whyte, A. F. (Perth)|
|Wiles, Thomas||Wilson, Henry J. (York, W. R.)||Yoxall, Sir James Henry|
|Wilkie, Alexander||Wilson, T. F. (Lanark, N. E.)|
|Williams, John (Glamorgan)||Wilson, W. T. (Westhoughton)||TELLERS FOR THE NOES.—Master of Elibank and Mr. Illingworth.|
|Williamson, Sir Archibald||Wood, T. M'Kinnon (Glasgow)|
|Wilson, Hon. G. G. (Hull, W.)||Young, William (Perth, East)|
§ ADJOURNMENT.—Resolved: "That this House do now adjourn."—[Mr. Gulland.]
§ Adjourned accordingly at Ten minutes after Eleven o'clock.