Skip to main content

Clause 2—(Definition Of Increment Value)

Volume 7: debated on Wednesday 30 June 1909

The text on this page has been created from Hansard archive content, it may contain typographical errors.

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

(2) The site value of the land on the occasion on which Increment Value Duty becomes due shall be taken to be:—

  • (a) Where the occasion is a transfer on sale of the fee simple of the land, the value of the consideration for the transfer; and
  • (b) where the occasion is the grant of any lease of the land, or the transfer on sale of any interest in the land, the value of the fee simple of the land calculated on the basis of the value of the consideration for the grant of the lease or the transfer of the interest; and
  • (c) where the occasion is the death of any person and the fee simple of the land is property passing on that death, the principal value of the land as ascertained for the purposes of Part I. of the Finance Act, 1894, and where any interest in the land is property passing on that death the value of the fee simple of the land calculated on the basis of the principal value of the interest as so ascertained; and
  • (d) where the occasion is a periodical occasion on which the duty is due in respect of land held by a body corporate or unincorporate, the value of the fee simple of the land is ascertained for the purposes of the assessment of duty under this Act;
  • subject to such deduction (if any) as the Commissioners allow in each case in respect of any part of the value which is proved to their satisfaction to be attributable to the value of buildings or structures of which the land is deemed to be divested under this Act for the purpose of ascertaining the site value, or to any matter in respect of which a deduction may be allowed under this Act in estimating that site value, or to goodwill, or any-other matter which is personal to the occupier or other person interested for the time being in the land, and, in the case of agricultural land the value of which is due solely to its capacity for agricultural purposes, also in respect of any part of that value which is proved to the satisfaction of the Commissioners to be attributable to

    works of a permanent character, executed by or on behalf of any person interested in the land.

    (3) Where, on any occasion on which Increment Value Duty is due in respect of any land, it becomes necessary, for the purpose of ascertaining the original site value of the land on which the duty is to be assessed, to apportion any original site value as first adopted for the purposes of this part of this Act, that value shall be apportioned between that part of the land on which duty is to be assessed and the remaining part of the land in such proportions as the Commissioners think just, and the value attributed on any such apportionment to each part of the land shall, for the purposes of this part of this Act, be treated as the original site value of that part of the land.

    (4) Where the owner of any land proves to the satisfaction of the Commissioners that he, or any of his predecessors in title, has purchased the land within twenty years before the thirtieth day of April, nineteen hundred and nine, and that the amount then paid by him for the purchase of the land exceeds the total value of the land as first adopted for the purposes of this part of this Act, such sum shall be substituted for the purposes of Increment Value Duty for the original site value of the land as the Commissioners consider, having regard to the amount so paid for the purchase of the land, was at the time of the purchase the site value of the land.

    The Amendment, of which I have given notice in manuscript, is not, as it might appear to be, a dilatory Motion, but, on the contrary, it is one of substance. The Increment Duty is to be levied upon the difference between a valuation made under the conditions of Clause 2 and a valuation made under the conditions of Clause 14, and the reason that I think it is necessary to move this Amendment is that the valuation under Clause 14 chronologically must come before the valuation under Clause 2, and consequently the latter clause refers directly to the condition of things on page 3, line 6, set up under Clause 14, but of which no indication is given in Clause 2. Furthermore. Clause 14 contains expressions the exact meaning of which it is absolutely necessary to take into consideration in considering Clause 2, but they are expressions which are not themselves mentioned there, and consequently cannot be raised on the discussion of this clause. Clause 14, for instance, makes imperative certain things which are to be divested or disregarded, whereas Clause 2 leaves this divesting or disregarding at the option of the Commissioners. For instance, in Clause 14 provision is made for divesting the land for the purpose of ascertaining the site value of all buildings, structures, timber, and so forth, but it is quite evident that when you come to Clause 14 these things of which the land is to be divested will probably be very materially altered and added to, and that other things will be included in them. But my point is that the action which we take on Clause 2 is absolutely dependent upon what is or is not done on Clause 14. Then we have another difficulty, and that is, that in Clause 14 certain things are disregarded. That is to say, the land is considered without regard to encumbrances. In Clause 2 there is no mention of encumbrances, and therefore the clause, as it stands, means that the land will be subject to those encumbrances. Of course, I know that this arrangement, so far as Increment Duty is concerned, is in favour of the landowner, but I venture to say that the question of these encumbrances is one which must necessarily be cleared up now,. because it may have the most curious effect unless we thoroughly understand what encumbrances are included. For instance, such things as Land Tax and tithe, where there has been commutation of tithes, or a redemption of the Land Tax, will be very serious matters to consider. I have had very great difficulty in getting an expression of legal opinion, and I have consulted many people as to whether or not they are encumbrances on land. I am aware of the definition of encumbrance in section 7 of the Act referred to in the definition clause, but there seems to be a difference of opinion, and it seems to me that the definition of this question of encumbrance is one which is essential to the discussion of Clause 2. Of course, if the Land Tax is an encumbrance, the redemption of the Land Tax is a thing which can never be done in the future without increasing the Increment Duty, because the redemption of the duty and the removal of the tax will increase the in-crement by the amount of the capital value of the tax which is redeemed.

    Then there is another difficulty, and that is the difficulty of deductions. Under Clause 14 provision is made to deduct im- provements of a permanent character—of course, most reasonable and proper—but it also goes on to provide for deducting the cost, by reducing the site to an imaginary condition. I venture to think that this provision will necessarily give rise to very considerable differences of opinion in debate. It is extremely difficult to find what is the cost of the removal of various things to reduce the site to a natural condition, and unless we have some clear idea of what is likely to be done by Clause 14 in that respect, it will be extremely difficult to discuss Clause 2 in an intelligent manner. Then, again, I know, as far as deduction goes, Clause 2 and Clause 14 make both of these deductions, but in one case they are optional, whereas in the other they are obligatory. In the former case they are levied at the discretion of the Commissioners. For these reasons, it seems to me, that it is necessary to discuss this clause with those which are connected with it—that is to say, with the valuation clauses—or else on the discussion of Clause 2 it will be necessary to ask you, Sir, to allow very considerable latitude in debating this clause and Clause 14 very considerably together. Otherwise if we are confined to the discussion of Clause 2 alone, it seems to me impossible to carry on the Debate in an intelligent or useful manner.

    This is a very familiar Motion which is made by every Opposition upon every Bill and upon every clause of that Bill, and I do not think it really very much matters what the arguments may be for or against it, because its only use is delay, and the argument is only a secondary consideration. The Motion is a Motion for delay. The hon. Member has moved this Amendment on grounds which are identical with those which were used in order to support the postponement of Clause 1—namely, that valuation ought to come first. That is substantially what it means. The Motion to postpone Clause 1 was supported by that argument, and the Motion to support Clause 2 is also supported by it.

    I think it is quite evident that this is not really intended to be a dilatory Motion. In regard to Clause 1 the argument was, the right hon. Gentleman has said, that valuation should precede the tax, but in this case the argument is very different, and it is founded upon an argument used by the right hon. Gentleman himself three or four hours ago, when he said that Clauses 2 and 14 must be considered very much together. That is the foundation of the whole argument of my hon. Friend.

    The hon. Gentleman is really very much excited over a very little difference. I said the reason we were invited to postpone Clause 2 was because valuation ought, it was said, to come before the tax, but that is the same thing as saying that Clause 14 ought to come before Clause 2, because valuation ought to come first. Let us see what this means. There may have been something to be said in favour of valuation before you impose any tax, but I think the balance of argument is in favour of putting on the tax first and the valuation afterwards. But there is nothing to be said for interpolating a valuation which is common to all the taxes between Clauses 1 and 2. Clause 14 deals with valuation, which is the basis of all the taxes, and it ought to come either before all the taxes or after them. I do not think any draftsman would ever accept the responsibility of advising the Government to put Clause 14 at this particular stage.

    I do not think the right hon. Gentleman has quite appreciated the point of the Amendment. The question is not whether valuation should come first. The question is this: Under the Bill there must be a valuation. The original valuation will be made immediately after the passing of the Act, and then upon any transfer of property, whether by sale, lease, or by death, the second valuation. We contend that in the Bill the Government have put the cart before the horse, and have put the second valuation first, which will be a very great practical inconvenience, because while the discussion is proceeding upon Clause 2, which is the second valuation, we must refer to the first valuation, otherwise our arguments will be unintelligible, and we shall come under the ban of the Chair. We shall therefore be unable to have free discussion at all. We should get rid of all these difficulties if we proceeded first of all to discuss the original valuation. There are in the Bill vital differences between the method of arriving at the original value and the method of arriving at the secondary value. Take the case of the original valuation of agricultural land. There in the eye of imagination you are to see the land stripped of buildings and growing timber, whereas when you come to Clause 2 not a word is said about growing timber at all, and there are other differences and inconsistencies. Surely, dealing with the matter as a practical Assembly, we ought to take the valuations in the order of time in which they will occur. It will conduce to the celerity of our business instead of getting ourselves into a morass of doubt, difficulty, and inconsistency.

    The reasons for postponing consideration of the clause are such as, from my point of view, go deep into the consideration of Clause 2 itself. It has already been pointed out that the whole point about Clause 2 is that it institutes a comparison of something which is supposed to be already known, otherwise you could not make the comparison, namely, that which is called by the Bill original site value, with something else which is referred to in section (2), namely, the actual price when sold, less certain deductions, to be made in order, by the comparison of the one with the other, to arrive at what the Bill calls increment value. It has already been pointed out, and, at first sight, it seems unanswerable, that you cannot possibly discuss a proposal to compare two things together unless you have the two things before you. It is perfectly obvious that to consider the result of comparing the original site value with the price less certain deductions, which are described in section 2, is all futility and waste of time unless you may examine the thing with which comparisons is to be made. It is necessary to under-stand what are the points of difference between these two things which the Bill asks us to compare. It is only, if we realise effectively how different these two things are, that the expediency or propriety of postponing Clause 2 until we have Clause 14 before us can be judged of at all. It is not at all improbable that a good many of us have read the Bill without realising that the two clauses in question both deal with site value, and deal with it from entirely opposite points of view, and propose that it should be arrived at by totally different methods of valuation, which have not only nothing to do with each other, but are contradictory of each other, and yet it is on a comparison of these two things that we are asked to arrive at increment value, which obviously could only be arrived at fairly if you compare like with like. These two clauses must be compared together, because the moment you look at them you will see that they propose to compare unlike with unlike. If that is so, it is absolutely necessary that we should have them both before us for comparison if we are to discuss Clause 2 at all. The conception which underlies these two clauses is in each case entirely different. Chronologically we begin with the original site value, which in its conception is imaginary altogether. You begin by imagining that all the buildings and structures, all the timber, all the gooseberry bushes, and everything that grows on the land have been removed from it, that you are left with the bare site, and that you ask yourselves the question: What would that bare site fetch in the market? That is not an impossible, but it is a difficult form of valuation. It is not impossible, because you are dealing with something which might physically exist, namely, a perfectly bare site instead of a site covered with buildings. What you are asking to be compared with that is not a revaluation of the same thing on the same imaginary basis, but something totally different. Here is the conception of Clause 2. It starts with a hard fact. I take for simplicity the case of a transfer on sale. Under Clause 2 you begin with the actual price fixed by the transaction, and then the conception of the clause then is that you deduct from the actual price the value attributable to the value of the buildings, trees, bushes, and anything growing on the site. Just observe how completely different these two things are. If I were valuing original site value the existence of the buildings on the site would be of no importance, because I have to suppose that they are non-existent. The buildings may be valued at anything. The value may be £500 only or £50,000; it would make no difference to the original valuation of the site value. The condition of the buildings, their cost, and their state of repair, would be as immaterial as their existence itself. See how the scene shifts when you come to the second valuation. You begin with the site, and you deduct from it the value of the buildings. That is the only bit of valuation there is under Clause 2, and that is precisely the valuation which you totally ignore in the valuation of original site value under Clause 14. It is perfectly plain that the two things are totally different in method. Moreover, another thing is perfectly plain about it. Whereas, if you take the imaginative method of stripping the site of buildings, you may value that. You may value that ten years later, and you compare like with like, but if you begin with the original site value on the basis of the imaginary bare site, 10 years afterwards the price, less the value of the buildings, will depend on what may be the value of the buildings. There may be a valuable building on the site at the beginning, and no building 10 years afterwards. Nay, more, two sites, lying next door to each other, may be identical in every respect except one. On one there is a building worth £5,000, and on the other a building worth £10,000. When you make the valuation these sites will have two different values. It is as plain as can be that these two methods of valuation are not the same. I challenge anyone to say they are the same. One begins by valuing the site in regard to which buildings are of no importance, and the other takes the value of the complex subject and deducts the value of the buildings. You cannot get a comparison between these two things, and if you cannot get a comparison of like and like, I venture to think it is absolutely idle to suppose that you can arrive at any reliable measure of increment value.

    I want to point out the difference in another way. While I admit quite frankly that it is feasible to have an original site valuation on the basis of land being clear of buildings, I defy any man to do it in any way that will produce a reliable result. The second valuation requires that you should have regard to the valuation of the buildings whose value is to be deducted, and here, again, it is necessary to have these two clauses together. Then the subject of deduction from the price, namely, the value of the buildings, must be valued on the footing that there is no site. Well, what is the answer to that? You are going for the purpose of the second valuation to arrive at site value, and you are going to take the price of the complex subject and deduct from that the value of the buildings. Are you going to include part of the value of the site in the value of the buildings? If you do, you will not arrive at site value, and if you arrive at site value you are going to do what nobody ever did in this world except in very exceptional circumstances—you are going to ask people to value buildings without site at all. I would like to know what value there would be without a site. If you consider the difficulty which this problem presents in comparison with the comparative simplicity of Clause 14, you cannot fail to see the necessity of having the two clauses before you at the same time. All the instances of valuing buildings, apart from site, which I know of, were cases in which it was legitimate to treat the value of the buildings as a mere matter of construction cost less depreciation. I wish to know whether this Committee is to be asked to accept the view that, under this clause, the valuation is to be on the basis of construction cost less depreciation.

    I have said enough to make it perfectly clear that these two valuations are completely different. They are of no service except for comparison, and the result of comparison is vain unless it gives you increment value. I think I have said enough to show that these two clauses, as they stand, are not comparable, and that it would be idle for us to commit ourselves to the method of valuation proposed in Clause 2 unless we had before us the method of valuation proposed in Clause 14. The right hon. Gentleman, the Chancellor of the Exchequer, said that his only reason for objecting to this Motion was merely that there was nothing in Clause 2 that could be changed on consideration of Clause 14. My proposition is that Clause 2 from beginning to end would require alteration if it is to be made comparable with Clause 14, and, therefore, if it is to be valuable for a discussion of the method of valuation disclosed in Clause 14 this result can only be attained by bringing in at the same time for criticism and comparison the method proposed in section 14.

    We have listened to a very interesting speech on the methods of valuation, whereas the question which the Committee is invited to consider is whether we should postpone Clause 2 until we have considered and discussed Clause 14 as to definition and machinery. My hon. and learned Friend (Mr. Clyde) thinks that it is very desirable to have the two clauses before us at the same time. I am afraid that that is a Parliamentary impossibility. One must come before the other, and the question which the Committee has to decide is which of the two clauses is to come first. The argument which he has offered to the Committee would be conclusive in favour of taking the definition clause in every Bill the first clause of the Bill. That might in some cases be very convenient, and I think I know one or two Acts of Parliament which commence with the definition clause, but they were certainly not Finance Bills, and certainly did not relate to the raising of taxation. What I ask you to consider really seriously is whether it is an inconvenience to us or something graver than an inconvenience to consider Clause 2 here before we consider Clause 14. Clause 2 defines the increment value, and it says the increment value is the difference between two things—first, the original site value; and, secondly, the site value at the date of the transfer on sale. What does it signify what your definition of original site value is, or what does it signify what your definition of site value at the time the duty is to be assessed is until you have determined that it is the difference between these two from which the Increment Tax is to come off. My hon. and learned Friend apparently has not read the clause. You assess the difference between the two things. Original site value is just the value of the land alone, divested of buildings and structures, and other things which my hon. Friend has described. Having ascertained the original site value you must find out in order to assess the Increment Duty what is the site value at the time the duty is to be paid. So my hon. and learned Friend is quite correct in saying that the methods by which you arrive at the two are different. They are not in the least degree inconsistent, but they are different; but even though they were inconsistent it would not in the least degree affect the argument, the argument being that Clause 14 should come before Clause 2, because that is the only question at issue.

    Necessarily the method by which you reach site valuation is different in the two cases. In the case of the original site value you have no standard to go by. You must rely undoubtedly on the question of opinion, the question of opinion being the price that the willing buyer would pay for the land alone divested of buildings, and the rest of it. Is there any other method? I am assuming at the present moment that we are going to ascertain what is the original site value. Is there any other method conceivable by which you could arrive at original site value than by according to the valuation it may be of a skilled expert, ascertaining what the willing seller would take for that piece of land if it were put on the market at once. If for example a railway company or a bank, or a corporation came on with compulsory powers, and said "we want to take that bit of land." That is original site value. "Now," said my hon. and learned Friend, "when you come to your site value at the date of the transaction you proceed upon a different principle." Certainly we proceed upon a different principle because there you have, ex hypothesi, an actual transaction before you, a sale and transfer.

    I was just going to say so, certainly; but you do not, in point of fact, sell, as the hon. and gallant Gentleman says, the land apart from the buildings and improvements; and the object of this tax is to sever the land from the buildings and improvements and not to impose the tax upon the buildings and improvements. We have an actual transaction before us of which the complex subject, as the hon. and gallant Member has said, is the subject matter of sale, and you do not want any comparison of the original site value with the price which the owner receives. What you want to compare is the original site value with the site value which he is receiving for the composite subject, a price which is not severed. You have a price which is a stock price for the composite site. You must do your best to sever that. My hon. and gallant Friend thinks this is a bad method. Can he suggest a better? The method proposed in the Bill is that you should take the price which is got for the composite site and then endeavour to obtain what is the price of the buildings actually upon the ground and the improvements that have actually been made. That is a matter of estimate. The hon. and learned Gentleman said he had never known of a case in which it had been attempted to sever the valuation of buildings from the valuation of the land, but he added "with some exceptions," and we shall make those exceptional cases normal. I have known instances in which building value has been taken separately from the site value, and, curiously enough, I have seen very considerable differences between the valuers with regard to the value of land, but I have never seen any serious difference between them with regard to the buildings on the land. In regard to the latter there are certain very familiar methods.

    Does the right hon. Gentleman refer to a case in which the valuation of the buildings was independent?

    It was absolutely independent. The valuer was told to sever absolutely the site value, and he valued the buildings.

    He took the buildings, found what they cost, and then allowed for depreciation. The fact is that the same operation has been frequently followed, though hon. Gentlemen opposite say that it is an impossibility. The net result is this, that in this Clause 2 the duty is taken on the difference between the value of the two things. You have got the value of one of these things fixed and ascertained by the method laid down in Clause 2; you have got the value of the other thing defined by Clause 14, and the duty is upon the difference between the two. Hon. Gentlemen opposite tell us that we cannot fix the difference between the two until we have laid down absolutely the definition of both.

    I differ entirely from the hon. Gentlemen opposite. I say the clause as it stands tells you that you are to take the duty as the difference between the two valuations. Clause 14 elaborately defines what is the value which, ex hypothesi, is greater than the value which is set out in Clause 2, and it seems to me that we can with propriety proceed to the discussion of Clause 2, disregarding altogether for the moment the definition in Clause 14.

    I will call the right hon. Gentleman's attention to the consequence of the proposition which he has just laid down, that the original site value is to be obtained first, and is to be compared afterwards with the site value in Clause 2. It is impossible for us to discuss adequately what is to be done under Clause 2 until we know exactly what form Clause 14 is going finally to take. The right hon. Gentleman admits that under Clause 2 you have to take the composite subject of the land and the buildings upon it, and that you have to take the actual value of that at the sale price. Then you have to take from that the value of the buildings, and we now ascertain from him for the first time what the value of buildings means. He quite clearly stated that it means the value totally apart from the site, and he further admitted that the only method in which the buildings could be valued apart from the site was by taking their cost less depreciation. I think we are greatly indebted to the right hon. Gentleman for that statement, because we are really now on a clear and definite basis. I cannot emphasise that too much. Under this clause we are simply to arrive at the site value by deducting the cost less depreciation of buildings from the total sale price.

    We could not have a higher authority, and we are prepared to accept that. The right hon. Gentleman has made a great study of this subject, and he has looked at it from the point of view of a very ardent advocate trying to discover the best way of doing it. Take the instance where you have two sites adjoining one another. Both, first of all, would be valued under Clause 14 as bare site at the same value. You have then upon these two sites buildings of a similar character costing the same sum of money, but one building 10 or 20 years older than the other. Under the method suggested by the right hon. Gentleman as the best method the site value in these two cases would be absslutely different. My point is that if this be the result you get no comparison, and therefore we cannot rely on this at all until we have a point of departure. When under Clause 14 the original valuation is definitely established then we have a point of departure. I suggest that the Government should consider their position. Clause 2, as at present drafted, is so utterly hopeless, impossible, and inconsistent with the principles on which the Government advocated the introduction of the Bill, that they would do well to postpone it, and give it a little more consideration, and in the meantime we may consider Clause 14, which is comparatively simple.

    This discussion has brought out a most valuable point from the Lord Advocate as to site value. Take a site value of £1,000, the question we have to determine is what will be the value 10 years hence when a sale is effected, and when you have erected upon it buildings worth £2,000, less some small sum for depreciation, you have a property which produces the sum of £3,000. He deducts £2,000, less depreciation, and the residue is the site value. Can you imagine any business assembly ever arriving at such a valuation? Has he ever in his life known a person who built a private house at considerable expense who could ever realise the full value of the building even four months afterwards. I will not discuss the merits of the two separate clauses. I am only thanking the Lord Advocate for having brought out into clear prominence the disadvantages we are under in discussing clause 2. The value will have to be taken, as he says, by taking the land for building on it, and taking the cost price of the building from the selling price, whatever it is, which is an absolutely delusive way of arriving at such a value. We have to discuss that question without having discussed a totally different valuation which comes under Clause 14, which is taking a piece of land at what it will fetch in the market, which is a comparatively simple operation. Surely this Motion has been justified, and it will be advisable to take Clause 14 to know where we are before we pass this extraordinary proposal.

    I think the discussion has amply justified the hon. Member for Windsor in bringing forward this Motion, which cannot possibly be called a dilatory Motion after the argument used by the other side. It seems to me absolutely plain that we cannot discuss Clause 2 until we discuss Clause 14, for the reason that section (1), Clause 2, says:—"For the purposes of this part of this Act the increment value of any land shall be deemed to be the amount (if any) by which the sits value of the land, on the occasion on which Increment Value Duty becomes due, exceeds the original site value of the land." Therefore, we have two site values, the original site value and the increment site value. The latter part of Clause 2 goes on to say what shall be done and the amount of the increment value, with certain deductions. How can we discuss the increment site value until we have discovered what really is the original site value, which is dealt with in Clause 14? It is perfectly absurd to attempt to discuss Clause 2 without having discussed Clause 14 on which it is dependent.

    This Motion seems to me to be in the common form which is applied to every clause. We are always told that we should postpone a clause until a later clause is reached, but we all know that if the later clause were in the position of this clause the same Motion would have been made. The only way in which we could discuss the two would he by discussing them both together, and that the Rules of the House would not allow, and it would be very difficult to do so even if the Rules did allow. It seems to me that there is really little or no fundamental distinction between the two. In the original valuation it is proposed to ask how much a man puts down for the market value of the clear site, and in the subsequent operation the object is to arrive at precisely the same thing, but only to take as a basis the actual price. I feel certain if we did not take the actual price as a basis those who are criticising this clause would condemn us for neglecting the actual price and for making our valuation entirely in the air. I understood that the criticism of the hon. and gallant Gentleman (Mr. Pretyman) was along these lines, that you have two properties of similar size, situation, and position, and on each of them a building of the same cost, but with one 40 years older than the other, and which has, therefore, suffered greater depreciation. Then he went on to say that that gave us two different site values for similar sites. I do not think that that conclusion follows unless you assume that the two purchase prices were the same to start with. It seemed to me that the hon. and gallant Gentleman overlooked the fact in these two cases that there would be an important difference in the original purchase prices, namely, the difference for the depreciation of the second building, and that if that had been properly allowed for his argument would have failed, and the two site values would work out. I was interested to hear the argument of the hon. Gentleman the Member for Cambridge University (Mr. Rawlinson). He said you have a site, and on the site you had a building.

    Those are arguments into the merits of the Question. We are dealing with the Question to postpone, and although I quite admit great latitude has been taken, we had better keep to the Question of postponement.

    I thought one might be allowed to answer a case put. The argument of the hon. Member that a house is worth less four months after it is built tells in favour of the Government Bill, and not against it, and the proposal instead of being ungenerous is really more than generous under the circumstances.

    I should like to add another argument in favour of postponing this clause, that is in reference to the reply which came from the Secretary of the Treasury to-day as to the taxes on royalties. It appears to me, so far as this valuation is concerned, that the reply, which stated that there was a possibility that royalties would be taxed instead of ungotten minerals, really alters the case altogether in reference to the valuation of land. It was definitely stated by the Chancellor this afternoon, and I believe it has been stated previously, that as far as the valuation of land is concerned that the question of the value of minerals must be taken into account in land for the increment value.

    That is really going outside the question whether this clause should be postponed.

    What I want to point out is that when we are discussing the question of value it is necessary to know what our definition of land is. It is impossible to define the value of land if we do not know whether ungotten minerals or royalties are to be taxed. It is really necessary for us to have from the Chancellor of the Exchequer a definite reply on this point before we discuss Clause 2.

    The Lord Advocate said that the value of a building was quite distinct and divorced from the site. May I ask whether the building he had in mind was somewhere in the lowlands of Scotland?

    The building I had in mind was in the City of Glasgow, and it was valued by a firm of Scotch valuers. I admit there is a difference of opinion among the experts.

    Would that building have the same value in St. Kilda, or in the Shetlands?

    Therefore part of the value of the building was attributable to its site in Glasgow.

    The cost of erection in St. Kilda would be greater because of the cost of transporting the materials. On the other hand, the value of the building would be greater in Glasgow because of its site. Therefore the value of the building in either case must depend upon the site. The Chancellor of the Exchequer said that the grounds alleged against this Clause were the same as under Clause 1. That is not so. In this case the argument arises out of the extraordinarily difficult position the Committee is in owing to the fact that in the Bill there is what purports to be a double definition of the same thing one in this clause and one under Clause 14. In this clause the definition is in a sense subordinate. The clause does not profess to be a definition clause, but in working out the clause a definition is introduced. In Clause 14 you have a definition not only of the original site value, but of site value generally for all purposes of this part of the Act—a definition which is entirely different from that in Clause 2. When you have two definitions of the same thing in the same Bill, which of the two is to prevail in a construction before the Courts? I submit you would have to take the superior definition in the definition clause, and if it came in conflict with the subordinate definition the superior definition would prevail. If that is so, we ought obviously to take the definition clause first, otherwise when we come to deal with that we should override what we had already done. I submit that we ought to deal first with the main governing definition, and afterwards bring the subordinate definition into harmony with it.

    Whilst I am generally out of sympathy with anything in the nature of mere dilatory Motions, I think on this occasion we are bound to make a protest against the position in which the Committee finds itself entirely owing to the astonishing order in which these clauses are placed. We have apparently decided that there is to be an Increment Duty imposed upon land, but we are still without a definition of land. We are told that we must wait for Clause 27 for that definition. The Lord Advocate says, "What is the difficulty of arriving at a difference between two numbers when you do not know what the numbers are? I can substract one from the other without knowing either of the two numbers."I have always given Gentlemen from the other side of the Tweed credit for an enormous ability and sagacity, but I think that that task even they would find exceedingly difficult to carry out. We have no right to be embarrassed in this way by the manner in which the Bill is framed. It would have been very simple and only reasonable to have put these clauses in their chronological order. The first thing we want to know is how you are going to fix the valuation of to-day, which is to be at the basis of the whole thing. But what does the Bill do? In Clause 1 it tells us that some day or other, about 15 or 20 years hence, there is to be an Increment Duty. It goes on to say that when various events happen such as a sale and so on, there is to be a valuation. When you come to ask what the Increment Duties are to be you have to wait till you get to Clause 14 to see how the valuation is to be arrived at. Not only has this extraordinary difficulty arisen through an entire reversal of the chronological order of events, but when you come to compare the wording of the clause with that of Clause 14 you find, much to your astonishment, that each of these two sets of valuations which are supposed to be compared together and deducted one from the other have to be taken in an absolutely different and contradictory manner. I think by a serious Amendment we shall have to try to put the methods of valuation of Clause 14 bodily into Clause 2, so as to arrive at the same basis of valuation both for comparative reasons and for justice; or else we shall have to decide when we come to Clause 14 to take the words of Clause 2, and put them into Clause 14. Really, on an occasion like this we are entitled seriously to complain of the very great embarrassment which has been caused to us by the order and method of arranging these valuation clauses, and for that reason I support this Motion.

    It is obvious that Clause 2 should be read subsequent to Clause 14, otherwise it is absolutely unintelligible, for Clause 14 was obviously drafted before Clause 2. I submit it is perfectly impossible to understand Clause 2 unless you understand Clause 14, and it is ridiculous if we enter upon a discussion of a clause that sets out in the margin to define increment value, when it becomes apparent in the clause that what purports to be the definition cannot be decided until you have a subsequent definition which appears in Clause 14?

    I have not had the opportunity of hearing them, and I only wish to move this Amendment on behalf of my hon. Friend who has put it down. I am not aware if the arguments have been repeated that an answer has been given by the Front Bench. Certainly the arguments seem to me to lose nothing of their force by repetition.

    I rise to ask the Chancellor of the Exchequer if he will kindly reply to the arguments which have been advanced from this side of the House——

    So far as I understand the only hon. Member on the other side who has spoken to these points' is the right hon. Gentleman the Lord Advocate, whom I am informed has given the whole case away. It is in the interests of hon. Gentlemen opposite that I ask the Chancellor of the Exchequer to reply. I also wish to know how I am to vote upon this question, for I desire to give an intelligible vote. It seems to me that there are three clauses, all of which are definition clauses, and from the point of view of the efficiency of the House these three definition Clauses, 2, 14, and 27 ought to be discussed together.

    There is one question certainly which has not been answered by any hon. Gentlemen responsible for the conduct of the Bill, and that is the question asked by my hon. Friend the Member for Sheffield, whose point is this: There are two definitions, if not three— one is in Clause 2 and one in Clause 14. Supposing we pass Clause 2 before passing Clause 14, and these two definitions are inconsistent, will an Amendment to Clause 14 be ruled out of order, because we have passed Clause2?

    That question was raised by the hon. Gentleman the Member for Winchester (Mr. Baring), and it was one of the points to which I endeavoured to give an answer.

    I am afraid I did not hear the answer, but the question has been pressed since, and has attempted to be answered by the Lord Advocate; certainly no satisfactory answer has been given. Those who have listened to the speech of the Chancellor of the Exchequer say that he really gave no answer. The point seems to be a very simple one, the definition of Clause 2 is a definition of "increment value." The definition of Clause 14 is of "total value and site value of land excluding minerals." If you are going to take a jump——

    The hon. Member is repeating arguments which have been used by several speakers in the Debate.

    I did not think that when a point is raised, and has not been answered, that it cannot be raised again. If that is so of course I am bound to give way, but in previous Debates when a point was raised and not answered hon. Members pressed for an answer. This question has not been answered, and I say if you are going to take a jump from Clause 2 to 14——

    The hon. Member is persisting in repetition of arguments used by previous speakers.

    I want to try and make it quite clear. I have listened to a great deal of the Debate, and I have not heard this point raised.

    I rise to a point of order. I desire to know whether it is not a fact that when arguments have been urged in Committee and have been answered fully by the representative of the Government, and when these arguments are reiterated over and over again, is it not perfectly competent for the Chairman to put the Question without further delay?

    On that point of order if the Question has not been fully answered, as we contend it has not, are we not entitled to continue the Debate, and to press for an answer. It is open to hon. Members opposite to do now as they have done over and over again, to move the closure. I only wish finally to beg for an answer. Is it not better to start from high ground to make your rise rather than to start from a quagmire to take a jump?

    I understand from the answer given by the Chancellor of the Exchequer earlier in the day that minerals are to be part of the site value upon which Increment Value Duty will be charged. I venture to press upon the right hon. Gentleman, in view of that, whether this clause should not be postponed until at any rate we know what is to be included in the word "minerals." Of course, we know that" minerals" does come into the word "land"; we do-not know what conies into the word "minerals." I appeal to the Chancellor of the Exchequer to give the House some assistance in that matter. We asked him to have re-printed for the use of the House the words out of the decision on which he relies for the meaning of the word "minerals." That has been refused —I do not know why. It appears to me to be a very reasonable request, and I do think, in these circumstances, the Committee will find themselves in some difficulty in discussing Clause 2, and I think the clause should be postponed until the Government tell us what they include in. the word "minerals."

    The Chancellor of the Exchequer, in reply to a question by my hon. Friend the Member for Windsor (Mr. Mason) said it might be necessary in Clause 2 to insert words which might safeguard Clause 14. What are the words the Chancellor of the Exchequer proposes to insert in Clause 2. Are we to take it that they are included in the Bill? I cannot find in Clause 2 any words of the kind referred to by the Chancellor of the Exchequer.

    If there are two inconsistent definitions of the same thing in a Bill, I wish to know which will override the other. Will it be the first in order, or will it be the one which is to act expressly as a definition and not merely as an illusive explanation of something else. I ask the Attorney-General to say which is the right construction where you have two inconsistent definitions in the Bill.

    I do not think it is open to any hon. Member to put a highly hypothetical question of that kind relating to a hypothetical Bill and to claim as a matter of right to have an answer from the Law Officer. If the hon. Member put some concrete case pertaining to the subject matter of the Debate, then it might become necessary that he should receive an answer, but where a question of this kind is put dealing with the contingency I never heard of, and that does not—as far as I know—arise upon this Bill, I do not think it is at all proper to take up the time of the Committee by answering

    Division No. 217.]

    AYES.

    [9.50 p.m.

    Acland-Hood, Rt. Hon. Sir Alex. F.Craig, Charles Curtis (Antrim, S.)Lane-Fox, G. R.
    Ashley, W. W.Craik, Sir HenryLaw, Andrew Bonar (Dulwich)
    Balcarres, LordDalrymple, ViscountLockwood, Rt. Hon. Lt.-Col. A. R.
    Baldwin, StanleyDavies, David (Montgomery Co.)Lowe, Sir Francis William
    Banbury, Sir Frederick GeorgeDoughty, Sir GeorgeMagnus, Sir Philip
    Banner, John S. Harmood-Douglas, Rt. Hon. A. Akers-Mason, James F. (Windsor)
    Barrie, H. T. (Londonderry, N.)Duncan, Robert (Lanark, Govan)Mildmay, Francis Bingham
    Beach, Hon. Michael Hugh HicksFardell, Sir T. GeorgeMoore, William
    Beckett, Hon. GervaseFell, ArthurMorpeth, Viscount
    Bignold, Sir ArthurForster, Henry WilliamMorrison-Bell, Captain
    Bowles, G. StewartGardner, ErnestNewdegate, F. A.
    Bridgeman, W. CliveGooch, Henry Cubitt (Peckham)Nicholson, Wm. G. (Petersfield)
    Bull, Sir William JamesGretton, JohnPease, Herbert Pike (Darlington)
    Campbell, Rt. Hon. J. H. M.Guinness, Hon. R. (Haggerston)Percy, Earl
    Carlile, E. HildredHamilton, Marquess ofPowell, Sir Francis Sharp
    Cave, GeorgeHardy, Laurence (Kent, Ashford)Pretyman, E. G.
    Cecil, Evelyn (Aston Manot)Harris, Frederick LevertonRandles, Sir John Scurrah
    Cecil, Lord R. (Marylebone, E.)Hermon-Hodge, Sir RobertRawlinson, John Frederick Peel
    Chamberlain, Rt Hon. J. A. (Worc'r.)Hope, James Fitzalan (Sheffield)Renwick, George
    Clyde, J. AvonHouston, Robert PatersonRenaldshay, Earl of
    Coates, Major E. F. (Lewisham)Kennaway, Rt. Hon. Sir John H.Ropner, Colonel Sir Robert
    Cochrane, Hon. Thomas H. A. E.Keswick, WilliamRutherford, W W. (Liverpool)
    Courthope, G. LoydKing, Sir Henry Seymour (Hull)Salter, Arthur Clavell

    questions which cannot possibly be pertinent to the object of the Bill.

    The learned Attorney-General is in the same unfortunate position as most of us—that he has to find time to refresh wearied nature, and he has not heard the whole of the Debate. The question put by my hon. Friend is not a hypothetical question referring to a hypothetical Bill, but it is a question arising on this clause when read with Clause 14, which has been so clearly argued by my hon. Friend the Member for the West Derby Division of Liverpool. The occasion, therefore, for answering such a question has arisen here and now. This is not a hypothetical question we are discussing; it is a practical question, of which the Attorney-General would have been aware had he, like many of us, not been obliged to be absent for a while.

    It certainly does appear to me that when a very important question of this kind arises as to whether two clauses are inconsistent, and where the question before the Committee is which should be taken first, that the Attorney-General, who is in receipt of a salary, and is the paid servant of the House, shall answer. We are entitled to ask for a serious answer to a reasonable question, and not to be put off as the Attorney-General has sought to put us off.

    Question put, "That the clause, as amended, be postponed."

    The Committee divided: Ayes, 80; Noes, 249.

    Sandys, Col Thos. MylesWalker, Col. W. H. (Lancashire)Wortley, Rt. Hon. C. B. Stuart-
    Stanier, BevilleWalrond, Hon. Lionel
    Talbot, Lord E. (Chichester)Warde, Col. C. E. (Kent, Mid)TELLERS FOR THE AYES.—Mr. G. D. Faber and Viscount Helmsley.
    Thomson, W. Mitchell- (Lanark)Wilson, A. Stanley (York, E.R.)
    Valentia, ViscountWinterton, Earl

    NOES.

    Abraham, W. (Cork, N.E.)Greenwood, G. (Peterborough)Morse, L. L.
    Greenwood, Hamar (York)Morton, Alpheus Cleophas
    Acland, Francis DykeGriffith, Ellis J.Murphy, John (Kerry, E.)
    Agnew, George WilliamHarcourt, Rt. Hon. L. (Rossendale)Murray, Capt. Hon. A. C. (Kincard.)
    Alden, PercyHardie, J. Keir (Merthyr Tydvil)Murray, James (Aberdeen, E.)
    Allen, A. Acland (Christchurch)Hardy, George A. (Suffolk)Myer, Horatio
    Allen, Charles P. (Stroud)Harmsworth, Cecil B. (Worc'r.)Nannetti, Joseph P.
    Armitage, R.Hart-Davies, T.Napier, T. B.
    Astbury, John MeirHarvey, A. G. C. (Rochdale)Nicholls, George
    Atherley-Jones, L.Haslam, James (Derbyshire)Nicholson, Charles N. (Doncaster)
    Baker, Joseph A. (Finsbury, E.)Haslam, Lewis (Monmouth)Nolan, Joseph
    Balfour, Robert (Lanark)Haworth, Arthur A.Norman, Sir Henry
    Baring, Godfrey (Isle of Wight)Helme, Norval WatsonNorton, Capt. Cecil William
    Barlow, Percy (Bedford)Hemmerde, Edward GeorgeNugent, Sir Walter Richard
    Barnes, G. N.Henry, Charles S.Nuttall, Harry
    Barran, Sir John NicholsonHerbert, T. Arnold (Wycombe)O'Brien, K. (Tipperary, Mid)
    Barry, Redmond J. (Tyrone, N. )Higham, John SharpO'Connor, John (Kildare, N.)
    Beauchamp, E.Hobart, Sir RobertO'Connor, T. p. (Liverpool)
    Beck, A. CecilHodge, JohnO'Doherty, Philip
    Bell, RichardHogan, MichaelO'Donnell, C. J. (Walworth)
    Bellairs, CarlyonHope, W. H. B. (Somerset, N.)O'Kelly, Conor (Mayo, N.)
    Berridge, T. H. D.Hudson, WalterParker, James (Halifax)
    Bethell, Sir J. H. (Essex, Romford)Hyde, Clarendon G.Partington, Oswald
    Boulton, A. C. F.Idris, T. H. W.Paulton, James Mellor
    Bowerman, C. W.Isaacs, Rufus DanielPearce, Robert (Staffs, Leek)
    Bramsdon, Sir T. A.Jackson, R. S.Pearce, William (Limehouse)
    Branch, JamesJardine, Sir J.Philipps, Col. Ivor (Southampton)
    Brigg, JohnJohnson, John (Gateshead)Philipps, Owen C. (Pembroke)
    Brodie, H. C.Jones, Leif (Appleby)Pickersgill, Edward Hare
    Brooke StopfordJones, William (Carnarvonshire)Pointer, J.
    Brunner, Rt. Hon. Sir J. T. (Cheshire)Jowett, F. W.Power, Patrick Joseph
    Buckmaster, Stanley O.Joyce, MichaelPrice, C. E. (Edinburgh, Central)
    Burke, E. Haviland-Kavanagh, Walter M.Priestley, Arthur (Grantham)
    Burns, Rt. Hon. JohnKekewich, Sir GeorgePriestley, Sir W. E. B. (Bradford, E.)
    Burt, Rt. Hon. ThomasKelly, George D.Radford, G. H.
    Byles, William PollardKilbride, DenisRea, Rt. Hon. Russell (Gloucester)
    Cameron, RobertLaidlaw, RobertRichardson, A.
    Charnning, Sir Francis AllstonLamb, Edmund G. (Leominster)Ridsdale, E. A.
    Cheetham, John FrederickLambert, GeorgeRoberts, Charles H. (Lincoln)
    Cherry, Rt. Hon. R. R.Lamont, NormanRoberts, G. H. (Norwich)
    Cleland, J. W.Law, Hugh A. (Donegal, W.)Robertson, J. M. (Tyneside)
    Clough, WilliamLayland-Barrett, Sir FrancisRobinson, S.
    Compton-Rickett, Sir J.Lehmann, R. C.Robson, Sir William Snowdon
    Cooper, G. J.Levy, Sir MauriceRoch, Walter F. (Pembroke)
    Corbett, C. R. (Sussex, E. Grinstead)Lloyd-George, Rt. Hon. DavidRoe, Sir Thomas
    Cornwall, Sir Edwin A.Lundon, T.Rogers, F. E. Newman
    Cotton, Sir H. J. S.Lupton, ArnoldRowlands, J.
    Craig, Herbert J. (Tynemouth)Luttrell, Hugh FownesRunciman, Rt. Hon. Walter
    Crooks, WilliamLyell, Charles HenryRutherford. V. H. (Brentford)
    Crosfield, A. H.Lynch, H. B.Samuel, S. M. (Whitechapel)
    Crossley, William J.Macdonald, J. H. (Leicester)Schwann, C. Duncan (Hyde)
    Dalziel, Sir James HenryMacdonald, J. M. (Falkirk Burghs)Schwann, Sir C. E. (Manchester)
    Davies, M. Vaughan- (Cardigan)Macnamara, Dr. Thomas J.Sears, J. E.
    Davies, Timothy (Fulham)MacVeagh, Jeremiah (Down, S.)Shaw, Sir Charles E. (Stafford)
    Davies, Sir W. Howell (Bristol, S.)MacVeigh, Charles (Donegal, E.)Shipman, Dr. John G.
    Dewar, Arthur (Edinburgh, S.)M'Callum, John M.Silcock, Thomas Ball
    Dickinson, W. H. (St. Pancras, N.)M'Laren, H. D. (Stafford, W.)Smeaton, Donald Mackenzie
    Dickson-Poynder, Sir John P.M'Micking, Major G.Smyth, Thomas F. (Leitrim, S.)
    Dilke, Rt. Hon. Sir CharlesMaddison, FrederickSnowden, P.
    Dobson, Thomas W.Mallet, Charles E.Soames, Arthur Wellesley
    Duncan, C. (Barrow-in-Furness)Manfield, Harry (Northants)Soares, Ernest J.
    Duncan, J. Hastings (York, Otley)Markham, Arthur BasilSpicer, Sir Albert
    Elibank, Master ofMarks, G. Croydon (Launceston)Stanger, H. Y.
    Esslemont, George BirnieMarnham, F. J.Stanley, Hon. A. Lyulh (Cheshire)
    Evans, Sir S. T.Mason, A. E. W. (Coventry)Steadman, W. C.
    Everett, R. LaceyMassie, J.Stewart, Halley (Greenock)
    Fenwick, CharlesMasterman C. F. G.Stewart-Smith, D. (Kendal)
    Flavin, Michael JosephMeagher, MichaelStrachey, Sir Edward
    Flynn, James ChristopherMenzies, Sir WalterSummerbell, T.
    Foster, Rt. Hon. Sir WalterMicklem, NathanielSutherland, J. E.
    Fullerton, HughMiddlebrook, WilliamTaylor, John W. (Durham)
    Gibb, James (Harrow)Molteno, Percy AlportTaylor, Theodore C. (Radcliffe)
    Gill, A. H.Mond, A.Thomasson, Franklin
    Glover, ThomasMontagu, Hon. E. S.Thompson, J. W. H. (Somerset, E.)
    Goddard, Sir Daniel FordMooney, J. J.Thorns, G. R. (Wolverhampton)
    Gooch, George Peabody (Bath)

    Toulmin, GeorgeWatt, Henry A.Wilson, P. W. (St. Pancras, S.)
    Trevelyan, Charles PhilipsWeir, James GallowayWilson, W. T. (Westhoughton)
    Ure, Rt. Hon. AlexanderWhite, Sir George (Norfolk)Winfrey, R.
    Verney, F. W.White, J. Dundas (Dumbartonshire)Yoxall, Sir James Henry
    Vivian, HenryWhite, Sir Luke (York, E.R.)
    Walters, John TudorWhitehead, Rowland
    Ward, W Dudley (Southampton)Whitley, John Henry (Halifax)TELLERS FOR THE NOES.—Mr. Joseph Pease and Mr. Herbert Lewis.
    Wardle, George JWills, Arthur Walters
    Wason, John Cathcart (Orkney)Wilson, Hon. G. G. (Hull, W.)
    Waterlow, D. S.Wilson, John (Durham, Mid)

    My hon. and gallant Friend (Captain Craig) has asked me to move to leave out sub-section (1).

    It seems to me that to leave out the sub-section would make the rest of the clause rather unintelligible. The discussion should come on the Motion that the clause stand part of the Bill.

    What I wanted to raise was the distinction between the original value and the site value. There is nothing hypothetical about the tax. It is a grim reality. The question is between the site value and the original value.

    That raises the question of the whole clause, and the Motion must be taken at the end of the clause. If taken at the end of the clause it cannot be taken now.

    If this sub-section were left out now, would it not be possible to move a consequential Amendment?

    The point that has been raised is one of some importance, and I have dealt with it according to our Rules of Procedure. I do not think that the question should be raised now, but, as I have said, at the end of the clause.

    As I have said, the point is one of some importance, and it should be raised at the end of the clause. It will not do to discuss all these principles on the first sub-ssction.

    It is very difficult for us to forego any opportunity of discussion when there is so much uncertainty as to what we shall be allowed to discuss.

    May I ask whether we cannot raise a discussion on any part of the clause? It is very important that there should be a ruling on the subject.

    I take it that this Amendment is hostile to the clause as a whole. That is how I understand it. The right hon. Gentleman for East Worcestershire has asked me a question which I cannot answer. Until I know how the clause is discussed I cannot bind my hands.

    We wish to raise the question that a comparison should bo made. We do not desire to go into details.

    If the hon. Member desires to move the sub-section it will be equivalent to defeating the whole clause, because that is the very essence of it.

    Then do I understand from you that it will not be possible for me either to dilate on the sub-section, or even to move its omission, without prejudicing the general discussion at the end of the clause?

    Certainly: to discuss the clause in the way I have stated will be to anticipate a discussion which ought to be taken at the end of the clause.

    I take it I shall not prejudice that discussion if, by way of protest, I move simply to leave out the first subsection?

    I think your ruling is quite clear. There ought only to be one general discussion on the substance of this clause, and that general discussion can be taken on two occasions without transgressing the Rule. It can take place on the motion to omit the sub-section, or it can more legitimately take place on the motion that this clause stand part of the Bill. That being so, I hope the Committee generally will decide on the second alternative, and will take the discussion on the Motion that the clause stand part of the Bill. I trust that any general arguments we may wish to put forward will not be prejudiced by any prolonged discussion on this sub-section, and that we shall have a full opportunity of discussing the matter on the Motion that the clause stand part of the Bill. But I take it that a Division would not militate against any future discussion. All you desire to lay down is that the general discussion can only take place once on this subject.

    If the sub-section is omitted, as proposed, it is perfectly clear it will be equivalent to the omission of the whole clause, because the rest of the clause is purely dependent upon it. Subsection 1 declares what the increment value is, and proceeds to define it, and if that sub-section goes it is equivalent to knocking out the next sub-section. I submit that there should be neither discussion now nor a Division taken on this point.

    May I press for an answer to my question whether or not it is not in order to discuss any part of a clause, or any sub-section of a clause, and then when the Question is put, "that the clause stand part of the Bill," to discuss whether or not the clause should stand part of the Bill, whether the Amendment of the clause is good or bad, or whether the clause should be omitted altogether? Is it not a fact that the discussion on the point that the clause stand part has nothing whatever to do with any discussion which may take place upon any individual word, or line, or sub-section?

    Is it not the fact, Sir, that it is always within the power of any Member to move the omission of a sub-section? Of course, I quite admit your ruling as to the Debate taking place at once, but it is rather a serious precedent if this is to be established, and if an old custom of the House which has enabled us to move the omission of subsections should be broken. Applied to a great many other cases., it would be a serious breaking down of the privileges of this House, and therefore I would suggest that it is still in order for the Motion to be made.

    Is it not the case that precisely the same objection could have been made to omitting sub-section (1) of Clause 1, which has already been passed, but I understand it was allowed.

    But was not the ground on which it was ruled out of order purely owing to the printing?

    On the point of order, I desire to know whether, you, Sir, having given your ruling on this point, and having called upon an hon. Member in whose name the next Amendment stands, this whole discussion is not out of order?

    I have been very patient, as the matter is of some importance, and I have come to the conclusion— and this answers the question of the hon. Baronet—that to move the omission of sub-section (1) is equivalent to moving the omission of the whole clause, and is out of order.

    Your ruling, Sir, as I understand it, is that if sub-section (1) is omitted from the clause the rest of the section is nonsensical, and, therefore, you take it that the omission of the sub-section means the omission of the whole clause. May I submit that it is within the power of any Member of this Committee to move an Amendment at a future stage which, while omitting the whole of sub-section (1), may make the clause perfectly in order? Is it not within the power of any hon. Member to move an Amendment to any part of the clause at any time, and I ask therefore whether you can decide before you have seen the whole Amendment whether the omission of the sub-section would make the clause nonsensical?

    There is no consequential Amendment of that kind, and that is a hypothetical question.

    There is no consequential Amendment at the present moment on the Paper, but if the Amendment is carried that does not prevent any hon. Member from moving an Amendment; whereas, if you rule sub-section (1) cannot be omitted, then an Amendment cannot be moved.

    I apologise for intervening again, but this is very important. You, Sir, said just now there was a precedent for the decision which you ruled. You did not state what the precedent was, nor should I think myself justified in pressing you to give it, unless you thought that was a proper course; but, unless my memory greatly deceives me, in the many Bills which it has been my business to promote or oppose in this House, it has constantly occurred that the first sub-section has been moved to be omitted, although it made nonsense, and I am quite sure that no man has moved more omissions of that kind than the Chancellor of the Exchequer. I do not at all say or suggest for a moment that the ruling you are disposed to give is not perfectly correct, but I would ask whether it is not a restric- tion upon the general practice of the House so far, and, therefore, whether it ought not to be taken with all solemnity as guiding the deliberations of this House, whichever party is in power.

    The right hon. Gentleman has put a question to me. I feel I must answer him frankly. Similar cases have been allowed, but they have been allowed in the case of Bills which are under the closure. In regard to Bills such as this, where there is no such Order of the House, this precedent holds good. It is a precedent of 1896, on the Education Bill of that year, and, indeed, I have myself once or twice ruled it also in similar cases. I am in somewhat of a difficulty about the matter, because, having stated that, I must frankly say we do discuss Bills here under different conditions, and, therefore, I do not want to carry my ruling further than the clauses of this Bill to-night under the conditions under which we are dealing with this Bill.

    moved to leave out the words "of this part." There are a number of additional clauses already down to the Bill which do not come under the first part, which relates to land, while the subsequent parts do not touch on that question. The additional clauses, if carried, would form part of the Act, but I do not see how they can come in the first part of the Act, because we shall not be able to discuss them till the Bill is practically passed.

    All the clauses relating to the Land Tax are in the first part of the Bill, and any clause subsequently added will be added to the first part.

    Amendment, by leave, withdrawn.

    rose to move after the word "Act" to insert the words "Increment Duty shall only become payable in respect of any land which on 30th April, 1909, shall, in the opinion of the Commissioners, be neglected, uncultivated, unbuilt upon or inadequately built upon, and not utilised to a reasonable extent having regard to its capabilities, and——"

    The hon. Member's Amendment is not in order at this stage. We already have words in Clause 1 "the increment value of any land. "Clause 2 must deal with "any land in the sense of Clause 1. We cannot now restrict Clause 1 by inserting the words which the hon. Member desires to insert in Clause 2.

    When Clause 1 was under discussion we on this side felt very considerable difficulty with regard to the definition of the word "land." It was urged by the Chancellor of the Exchequer, and I think you rather entertained the suggestion, that the proper place to define the word "land" would be in Clause 27 (Definitions). Acting on that suggestion, which was not exactly a ruling, some of us have bean studying the question as to where we could in the most convenient way have a definition of the "land" to which the Increment Duty is to apply. I may be allowed to point out that in Clause 27 there is a definition, but it is not exactly a definition of land. It says that "land" shall not include something, but it does not say what shall be included. The word "land" there applies to the three taxes on land, and it is quite clear that land for the purpose of each of these three duties is an entirely different thing. It is not the same for the purpose of undeveloped land, and it is not the same for the purpose of increment.

    The hon. Member is really making a long speech. I perfectly understand his point, but I must say that, in my opinion, his Amendment is not in order at this stage. We cannot now change the words in Clause 1.

    ruled that an Amendment by the hon. Member for York (Mr. G. D. Faber) was not in order.

    On a point of order, I desire to address myself to the Amendment standing in my own name. My Amendment is to insert after the word "any"("any land shall be deemed") the word "urban." When you ruled that Amendment out of order it was, I understand, on the ground that the matter had already been decided. I would point out that what was decided by the first clause was that there shall be charged increment value in respect of any land. Now the question is, the method of arriving at it, and the point raised by the Amendment is that, although in respect of urban land, the method prescribed by Clause 2 may be a fit and proper one, in respect of agricultural land it is not.

    The specific point of the hon. Member was, as a matter of fact, settled upon Clause 1 on the Amendment moved by the hon. Member for Chelmsford (Mr. Pretyman).

    I moved an Amendment this afternoon, the first of a series of consequential Amendments on this clause. Does that Amendment come in here? If it is out of order I should be glad of your ruling, so long as it is not passed over by mistake I shall be satisfied.

    That does not arise at this point. We can deal with it at a point later on. The Amendment of the hon. Member for Blackpool (Mr. Ashley) is out of order——

    There is no question about this being settled by the previous clause. I am really very much surprised that hon. Members should argue about this. Let me finish my ruling on a point of order, and if there is any point afterwards I am willing to consider it. The, Amendment of the hon. Member for Fins-bury (Mr. Remnant) will come in under deductions in a later part of the paragraph.

    May I submit, with due respect, that Clause 1 decides that Increment Value Duty shall be charged on all, while Clause 2 proposes to define in a particular way the increment value on which that duty is to be charged. May I ask whether it is not in order for a Member, conforming himself to the decision of the House on Clause 1, to propose that the provisions, as laid down in Clause 2, shall apply to a particular class of land, and, if he has succeeded in confining it to that, then to submit to the House complementary proposals for the other class of land comprised in Clause 2.

    The first section decided, first of all, that there should be an Increment Duty, and then decided the subject, the subject being land. Several exceptions were moved. For instance, agricultural land was moved as one exception, so that in that clause we decided the subject-matter of the Increment Duty, and we also decided the exceptions. Now we come to the definition not of the subject-matter, but the amount of the increment. These are totally different points.

    We decided that there should be an Increment Duty in the first clause. We have now to decide what is the value on which the Increment Duty is to be charged. I submit that though the Increment Duty applies to the land, the value need not be the same in respect to different classes of land.

    The right hon. Gentleman distinctly said that he intends to safeguard the interests of agricultural land. How is he going to do that after we have already decided that there should be an Increment Duty on all land, and that cannot be altered?

    One fact will not be disputed, that land which is the property of rating authorities is specifically included in a later part of the Bill.

    We have decided that the increment value of land must be charged. We cannot alter that now. Clause 2 defines what the increment value is to be. I am ruling entirely in accordance with all precedents. There is no question at all about it that my ruling is perfectly proper.

    I am very sorry if I have not answered it. I say that we have already decided that a charge shall be levied and paid on the increment value of land. Now we have to decide what the increment value is to be. It must be the increment value of any land, as in Clause 1, otherwise this clause would not be intelligible.

    Clause 1 does not say what the increment value is. We have decided that the Increment Duty is to be charged on the increment value of any land. We have decided that Increment Value Duty is to be charged on all land, and we have now to define what that increment value is to be. My hon. Friends have been pressing to move Amendments which would differentiate between the method of calculating the increment value in the case of one kind of land and another. My argument is that that is a wholly distinct question from that which is embodied in Clause 1, and if Clause 1 had settled it there would be no necessity for Clause 2 in the Bill at all.

    Supposing Clause 2 ran as follows: "For the purposes of this part of this Act the increment value of any urban land shall be deemed to be," and so on, "and the increment value of any rural land or agricultural land shall be deemed to be," and so on, would not that be perfectly consistent with Clause 1; and what is to prevent a Member of the Committee moving the insertion of the word "urban"?

    Are we to understand from your ruling that it would be impossible for us in the future, in spite of the pledges of the Chancellor of the Exchequer, to get any further protection for agricultural land?

    Oh, no; nothing of the kind. I am simply dealing with what is before me now.

    moved in section (1), after the words "shall be deemed to be the amount," to insert the words "not being less than one-tenth of the original site value." The right hon. Gentleman will be aware it has been on the Paper before the discussion took place last night. The object of the Amendment is, of course, to secure that there should not be valuations for trivial increases over the original site value, and that those valuations should only take place when the increase was 10 per cent. on the original site value. If I understood correctly, last night we came to a sort of agreement that there should be a dispensing discretion given to the Commissioners ranging up to the amount of 15 per cent. on the original valuation. If I am correct in that assumption I think there may be no necessity to move this Amendment, and at this stage, if he thinks it will be more convenient, I would move it in the form of 15 per cent. now. I am anxious that we should get a statement from the right hon. Gentleman on the point. While I quite agree with his desire that there should be some means for effecting this protection, I do not agree altogether that there should be a dispensing discretion given to the Commissioners. I should like to see provisions made by which the expense—and it will be very large and frequent—of small valuations would be avoided, because, let it be remembered, these valuations will have to be made on every occasion. The right hon. Gentleman says if there is no increase there will not be any tax, but there will be a valuation, and the unfortunate owner has to make the valuation, which cannot be done for nothing. I think in the interests of the right hon. Gentleman's. Bill, if for nothing else but the practical working of it, valuations of small increases are not worth the trouble, and that they are a mistake. The same money will be obtained, and it is only a question of the intervals. It is only reasonable that the intervals should be fairly substantial. Therefore, if I may, I will move the Amendment in this form: "not being less than one-fifteenth of the original site value."

    Question proposed, "That the words 'not being less than one-fifteenth of the original site value' be there inserted."

    I think my hon. Friend has made a slight mistake as to the understanding with the Chancellor of the Exchequer. As I understood, it was not that there should be any discretion so far as the Commissioners were concerned in regard to the 15 per cent.; the discretion only came in in the case of a second valuation being necessary.

    I have already stated twice that I think cases of small increment ought to be excepted. I do not pledge myself as to the percentage, because there are a good many things to be considered. But the present Amendment would not effect the purpose the hon. Member has in view, inasmuch as it exempts only the first transaction. I am prepared to go even farther than the hon. Member suggests, and that is my reason of objecting to his Amendment. The concession which I think I shall be in a position to make will be more substantial than the one he is pleading for now, but this is not the point at which to introduce it. I think you ought to safeguard all small transactions, not merely the first. You do not want the worry, expense, and trouble of obtaining the Increment Duty in every small case, and later on I will place on the Paper words substantially raising the point. The words are at present being considered by the Government, but it is a question whether they should be in Clause 2 or Clause 4. There was a valuable suggestion last night by the hon. Member for Basingstoke (Mr. Salter), that the object would be better effected by means of a discretion vested in the Commissioner under Clause 4, so that where there appears to be a very small increment the vendor should not be put to the expense of inquiring into the matter. Whether it will come on Clause 2 or Clause 4 depends on the nature of the Amendment. I hope the Committee will not press the Government at the present moment to state the form in which they propose to make the concession; all I can say is that we are prepared to meet the case, and are only considering what is the best way of dealing with these small transactions.

    I desire to make two observations: first to express the hope to, or to urge upon the Chancellor of the Exchequer the importance of placing this Amendment, or any similar one, upon the Paper at the earliest possible moment. If the Government are going to introduce an important modification it is only fair that we should have the longest time possible to consider it.

    The other observation is that the right hon. Gentleman must not think that it will be satisfactory to Members of these Benches if his concession takes the form of the extension of the already enormous discretion of the Commissioners. Many of us feel that the powers conferred upon the Commissioners are already too wide; that, in fact, while this House is nominally imposing a tax upon certain individuals, what that tax will be is not and cannot be decided by us, but will vary enormously according to the judgment or the mood in which the matter strikes the Commissioners.

    I take note of the warning that the right hon. Gentleman has been good enough to give of the form in which the Amendment will be acceptable to his friends and himself. With regard to the other part of his remarks, I think it is reasonable that the Amendment should be put down in time so as to give hon. Members full opportunity to examine it before it comes up for discussion.

    I only wanted to be clear as to the concession promised by the Chancellor of the Exchequer last night that there shall be an absolute right not to have the duty charged if it is less than 15 per cent.——

    Well, upon an increment value lower than a certain amount; also the power of the Commissioners not even to have a valuation in that case. The two points are quite distinct. A great deal of the cost, inconvenience, and objection to the tax will be the valuation, and the great thing is, therefore, if possible, to avoid the valuation in small cases. In addition to that there is the burden of the small man paying the tax. I am not certain whether that point has been considered or dealt with by the Chancellor.

    I ventured to suggest last night that whatever course was taken care should be taken not merely to exempt the taxpayer, but to frank the land up to that point.

    The Chancellor will agree that the object is to exempt the taxpayer in cases of small increment not merely from payment, but from accounting. The responsibility is thrown upon the payer of this duty to account if increment value is due. The, difference is this, whether you do not think in cases of a small fractional increment it would be better to exempt a man from accounting altogether, or whether you say in that case the Commissioners shall have a discretion in this, that, and the other case. It is most important to say that a man shall be exempt not merely from payment, but from accounting.

    I wish to ask the Chancellor of the Exchequer whether it is his intention in the case of a small increment to exempt the payment of duty altogether until the increment is sufficiently large? The distinction is an important one. As I understand the Amendment, the object of it was that no duty should be charged for a time in the case of a very small increment.

    The point I made was not only as regards the duty, but also as regards the valuation, because in small cases it is not the payment of the duty so much that matters as the cost of making the valuation.

    As I understand, the hon. Member's point is that the Exchequer, will get the money in the long run. It is only a question of time as to when the duty shall be collected.

    I am very much obliged for the suggestions that have come from all parts of the House to help the Government to understand the Amendment. At the same time, I rather deprecate the discussion in advance, and I think it better not to enter into this question now.

    The right hon. Gentleman has given me a very reasonable promise, and under these circumstances I ask leave to withdraw the Amendment.

    Amendment, by leave, withdrawn.

    moved, after "any, "["amount (if any)"] to insert the words "as ascertained by the Commissioners specially appointed for this purpose." And further to add the words "and subject to appeal as hereafter provided."

    I move this Amendment at this stage, because it seems to me to be most desirable that the question of the position of the Commissioners under this Bill and the immense work with which they are entrusted should be raised at the earliest moment in these discussions. This is the first clause in which the Commissioners are referred to. The question must occur to any one who has read this Bill and considered the enormous interests which are to be dealt with by the Commissioners and the uncontrolled powers with which they are vested. Is the authority to whom all these powers are to be entrusted to be an independent authority and not merely officials of the Government? In regard to the questions with which they will have to deal, and especially with regard to agricultural land, they should certainly have some practical knowledge and experience of their own. We know from what the right hon. Gentleman has said that not one of the Commissioners to be nominated have had any experience of that kind, and it is obvious that neither of the conditions which I have laid down are fulfilled. The new duties are enormous, the powers of the Commissioners are practically uncontrolled, and I think it is safe to say that no such authority, having regard to the character, kind, and amount of the property with which they are to deal, has ever been submitted to Parliament before by any English Government as a proper authority for the purpose. Those gentlemen have very onerous duties at the present time, and how they are going to perform the additional duties which are to be cast upon them under this Bill I cannot understand, if they are to be carried out in the way which we all desire.

    I have endeavoured to ascertain what are the duties which they have to perform

    now, and I find they have to deal with the Income Tax, Property Tax, Land Tax, stamps on documents, the Death Duties, including the Estate Duty, and the Settled Estate Duty, Succession Duty, and the Legacy Duty. I have often heard that even with their present duties great difficulties arise in getting replies from the Inland Revenue Commissioners, and it is no uncommon thing to hear complaints made; and altogether their duties are not fulfilled with as much punctuality as might be desired. What is going to be the case when in addition to all these duties you cast upon them such an enormous burden as will inevitably be entailed by this Bill? The Chancellor of the Exchequer undoubtedly entertains a different view to that which I hold as to the position of the Inland Revenue Commissioners at the present time. It must be borne in mind that all the houses in the country and all the land on which they stand must be separated from each other, because all the land, agricultural and otherwise, is to be placed under this Bill, and will be practically at the mercy of these four Commissioners. I wonder whether the Committee has considered at all the amount and the extent of this property which these four gentlemen will have-to deal with in the future. It cannot be less than four thousand millions at the very least, and that is probably a considerable under estimate. I have a table here showing the rateable value of England and Wales on a 20 years' purchase;. The value of the property which will have to be dealt with by the Inland Revenue Commissioners amounts to 4,224 millions. One of the first duties of these gentlemen will be to call for returns dealing with the valuations. That is no simple task to begin with, but it is a task to be given to these Commissioners.

    The right hon. Gentleman is now arguing with regard to powers to be given to the Com-missioners which are dealt with in another part of the Bill.

    I am endeavouring to show, first of all, what are the duties given to the Commissioners at present; and, secondly what will be the new duties which will be placed upon them.

    Within the scope of the Amendment. The right hon. Gentleman must confine his remarks to his Amendment, and he cannot wander over the whole of the Bill.

    I move the Amendment for the purpose of raising the whole question of the Commissioners. I do not see otherwise how the matter can be dealt with.

    The object of the right hon. Gentleman is something other than is shown in the Amendment. I can only deal with the Amendment. The right hon. Gentleman may incidentally mention that the Commissioners appointed will have heavy duties which they will be unable to perform. One purpose in asking that they shall be a special body is that those duties should be referred to a special body. But the Amendment is that special Commissioners shall be appointed for a special purpose, and that is the only question that can be argued.

    The Increment Duty affects all the different kinds of property to which I have referred, and undoubtedly it is one of the subjects which the Commissioners in the Bill as it stands will have to deal with over and over again. I am endeavouring to show that for that purpose of Increment Duty—one of the main purposes of the Bill—the present Commissioners will not be adequate and that there ought to be a body specially appointed for the purpose.

    I do not want the right hon. Gentleman to misunderstand me. He is perfectly entitled to argue that for the purpose of ascertaining the increment the proposed Commissioners will not be adequate, but the argument cannot extend all over the Bill and to the other duties proposed to be put on the Commissioners.

    I will adhere as closely as possible to the ruling you have laid down, but limited as you make it I suppose I may refer to the duties cast upon the Commissioners. So far as the Increment Duty is concerned, I was pointing out that under Clause 16 their first duty will be to call for a return, because the Increment Duty cannot be ascertained without these returns. I was then proceeding to make certain criticisms upon the manner in which these returns were called for and on the powers given to the Commissioners for this purpose. I think that would be in order. With regard to these valuations, certainly the powers placed at the disposal of the Commissioners are of a most extreme and extraordinary character. They are powers involving duties which are cast on the Commissioners as well as upon the owners of land from whom the returns will be required.

    I think the right hon. Gentleman desires to raise the whole question whether the Commissioners shall be special. Commissioners or Commissioners of Inland Revenue. I submit the right hon. Gentleman really wants to discuss a proposal that special Commissioners shall be substituted throughout, not merely for the purpose of Clause 2, but for all the other important functions cast upon the Commissioners by this Bill. May I just point out to you and the right hon. Gentleman that we have raised that point specifically in the Bill—who the Commission is to be—in Clause 74, and the right hon. Gentleman can address the survivors when we come to that clause. I will call your attention to Clause 74:—

    "Any reference to 'the Commissioners' In Part II. Part VI., or Part VII. of this Act shall be construed as a reference to the Commissioners of Customs and Excise, and any reference to the Commissioners' in any other part of this Act shall be construed as a reference to the Commissioners of Inland Revenue."
    That raises specifically the question of who the Commissioners shall be, and then it will be competent for the right hon. Gentleman to say that a special Commission ought to be appointed for the purpose, but I do not see how he can possibly argue it at this stage.

    The whole Amendment would be out of order, if we had to wait till Clause 74 was reached. I consider it in order at this stage as applying to increment value. He must confine himself, however, to those points which are in order.

    I pointed out that I would confine the Debate strictly to Increment Duty, and I was pointing out the extraordinary difficulty of the task, with regard to increment alone, which would be thrown upon the Commissioners under the Bill, and I will endeavour to adhere as closely as possible to that particular subject. I am quite aware of the fact that the constitution of the Commission and the question who ought and who ought not to be Commissioners is perhaps the most important thing in the Bill, for it must be remembered that all through the Bill all control and guidance at every point which is raised by the measure of the right hon. Gentleman is referred to the Commissioners. Not only that, but there is no appeal from the Commission, except one which is nothing but an appeal from the Treasury to the Treasury. One of my chief objections to the present Commission, even with regard to this single duty—this most important Increment Duty—is this, that they represent a Department which is really a branch of the Treasury and nothing else, and consequently we are in this position, that however arbitrary, however unjust, however unfair the decisions of the Inland Revenue Commissioners may be, or may appear to be to those who feel that they are suffering from them, their only redress is an appeal to certain referees appointed by the Commissioners themselves.

    For the purpose of settling what that Increment Duty is or is not to be, it should be done by Commissioners specially appointed for this purpose. Their other duties must interfere with the practical performance of their duties under the Bill. They will be placed in great difficulty by the collection of the returns. The extraordinary and exceptional powers you have given them for this purpose alone make it clear that in the mind of the Government they have a most onerous task to perform. They are to call on every landowner for a return of every estate, big or small,' separating one from the other, and the value of the houses apart from the land has to be returned, and they may be called upon to make it within a period of 30 days, and if they are unable or neglect to do so most terrible penalties are to be inflicted on them.

    On a point of order, the right hon. Gentleman is now discussing the functions of the Commissioners under Clauses 15 and 16 in regard to returns on an Amendment which deals with the functions of the Commissioners in ascertaining the difference between the site value and the original site value. I submit that it is quite impossible to discuss that at this stage.

    The right hon. Gentleman's Amendment is that these special Commissioners have to settle increment value. His argument is that part of the settlement of the increment value involves these returns, and that there are other duties under a good many other clauses. I must say I think that is so, and I cannot see that he is out of order in raising that. What he would not be in order in doing would be raising any duties they might have to perform on Reversion Duty, Undeveloped Land Duty, Ungotten Minerals, and things of that kind. But what really applies to increment value I cannot help because it is involved in the Amendment.

    I am grateful for your ruling, but it is certainly what I expected. I am not in the least surprised that the right hon. Gentleman should be extremely desirous of postponing the discussion. He suggested that the question could be discussed on the seventy-fourth clause, but it seems to me that if the clause is ever reached it must necessarily be twelve months hence. A good many of the difficulties in connection with the Bill have already been submitted to the right hon. Gentleman, and in regard to the majority of them he has hardly favoured us with any answer at all. I hope he will in some way meet the difficulties which I have suggested, and that he will explain why the Commissioners should not be a separate body created for this purpose. What are the objections? The appointment of an independent body would be only in accordance with the precedents to be found in connection with other great measures dealing with vast quantities of property. The proposal of the Chancellor of the Exchequer is that the tribunal is to consist of his own officials; they are not independent of him and of the Government. So far as I can remember the position taken up by the right hon. Gentleman is opposed to all the precedents in regard to such appointments.

    Question proposed, "That those words be there inserted."

    As I understand your ruling the question which the Committee is now called upon to deal with is whether the functions which are assigned to the Commissioners in the fixing of the Increment Duty and in the valuation which is the basis of the Increment Duty should be discharged by the Commissioners of Inland Revenue or by a Special Commission set up in some manner which the right hon. Gentleman (Mr. Chaplin) no doubt will explain later on if this Amendment is carried. I think that is a very important matter, but I am surprised at the right hon. Gentleman moving such an Amendment. It is a very revolutionary proposal. It is that you should set up a special land board, nominees of the Government, to decide questions of this sort. The Government are leaving these functions to gentlemen of very wide experience—gentlemen to whose experience the right hon. Gentle- man has testified. He gave us a list of the gigantic operations these gentlemen are conducting. They are superintending revenue amounting to scores of millions a year, and they are superintending the Income Tax, a work which involves the review of £800,000,000 or £900,000,000 of income.

    I wish to ask whether the right hon. Gentleman is in order in referring to Clause 74? That refers entirely to Part II. of the Bill.

    If the right hon. Gentleman had taken the trouble to read the whole clause, which is very short, it would have saved the necessity of interruption. The Commissioners are commissioners of very wide experience, who have got enormous duties of very great importance to discharge. They have got to review an income of £900,000,000 every year. They have got to collect something like 30 or 40 millions Income Tax. They have got to deal with the Death Duties of about 18 or 19 millions a year. That is a much more considerable revenue than anything that we propose to consider under this clause, and it is a much more important and a much heavier charge on land in many respects. Yet those duties are discharged by the Commissioners of Inland Revenue in a very responsible manner. Then there are the taxes on stamps and many other questions of a similar character with which they have to deal. They are men of experience whose impartiality has never been challenged in this House. The right hon. Gentleman is the first Gentleman who ever criticised them as a body, and his criticism was of a very perfunctory character. The only charge he brought against them was that they were not very punctual. That is not a subject of complaint against the Commissioners. It may be a question of increasing their staff. But I never heard the charge brought against the Commissioners that they were not a very able, judicious, hard working, body of men. If you will consult those at the Treasury you will be told that no finer body of men could possibly advise any Government on questions of revenue.

    The right hon. Gentleman might confine himself to the question under debate. The whole question here is who is to determine the Increment Duty? The other question is who are the people who are to superintend the increment valuation? The right hon. Gentleman wants to draw me on the question who is to perform the valuation in each case. That surely is beyond a debate of this kind.

    The right hon. Gentleman very properly eulogises the Commissioners of Inland Revenue. The only relevancy of that observation is that they are competent to perform the particular task of valuing for that particular duty. What I have to ask is on another matter, in order to ascertain are they to perform that duty or is somebody else to perform it?

    Does the right hon. Gentleman mean this, that he so interprets the remarks of his colleague that he thinks he is going to set up a special Commission to go valuing land all over the country?

    I am examining an Amendment, an alternative proposal by the right hon. Member for Wimbledon (Mr. Chaplin), and the right hon. Gentleman (Mr. Lyttelton) interrupts me by asking will the Commissioners of Inland Revenue value land? My answer is that these Commissioners are only set up to superintend and direct operations. The right hon. Gentleman does not mean to suggest that he is going to have a body of six Commissioners going over the country and valuing every plot of land. I say if you are going to have a body of Commissioners to superintend this valuation you cannot have a more experienced, impartial, and responsible body to discharge the function to the satisfaction of every party in this House than we have at the present moment. The Death Duties, for example, involve valuations of a very important character, and they involve the imposing of not a small but a heavy duty. The valuation, it is true, is not conducted by the Commissioners, but it is directed by them. And the same thing would happen in the present case. The valuation would, of course, be by expert valuers, but the operation would be directed by the Commissioners, and I submit that no better body could possibly be set up than those Commissioners, who are men of experience, and who have discharged the duties up to the present without the slightest suggestion of partiality from any quarter of the House.

    The Amendment of my right hon. Friend has been left entirely unanswered by the right hon. Gentleman, who has absolutely ignored the principal difficulties put forward by the right hon. Member for Wimbledon (Mr. Chaplin) in regard to the duties to be performed. He stated with a considerable amount of reason that the Commissioners have already an enormous burden on their shoulders of exceedingly technical and complicated work. The considerations put forward by my right hon. Friend in support of his Amendment should really be more fully discussed by the Committee. The work to be done under this Bill requires to be done by persons of real technical training in valuation, and I submit that it is a physical impossibility for it to be done in the way proposed by the Bill, however great the staff they may have. The greatest Transatlantic hustlers, let alone the gentlemen trained in the leisurely ways of Whitehall, even working 18 or 20 hours a day, could not possibly deal with the work which it is asked should be done under this Bill. One point mentioned by my right hon. Friend has been quite ignored by the Chancellor of the Exchequer, and that is the question of the time at which the valuation is to be made. It is impossible for any person who has not been trained and versed thoroughly in land valuation to know what is a reasonable time to ask for a separate valuation. This is a matter which affects all of us who have an interest in land. We are going to be at the absolute mercy of these gentlemen. If we are going to have our throats cut by Government servants we should have them cut by men who know how to perform the execution. I am rather surprised at the objection of the right hon. Gentleman to nominees of the Government, because I understand quite recently he nominated an outsider to advise him with reference to the land clauses of the Bill. If he went outside for that purpose I do not see why he should have any objection to asking gentlemen to work the Bill. It is obvious the right hon. Gentleman has not the slightest idea how these gentlemen are to carry out the duties. That is obvious from the answer he gave to the interruption of the right hon. Gentleman the Member for St. George's, Hanover Square (Mr. Lyttelton), and that he has not the faintest idea of how the whole thing is going to be carried out. The Chancellor of the Exchequer told us that he had spent on the Bill as many weeks as my right hon. Friend had spent minutes; but those weeks did not enable him to tell us how these gentlemen are to carry out their duties or how the valuation is to be made.

    So far little has been said on what I think is the most important part of the Amendment. The Amendment consists of two parts. In the first part my right hon. Friend suggests that an ad hoc body should be appointed to carry out the valuation; the second part suggests that the decision of that ad hon. body should be subject to an appeal. Personally, I should certainly desire that the appeal should be to a judicial tribunal. I am by no means sure that I do not agree with the Chancellor of the Exchequer that the Inland Revenue must be in the first instance the primarily responsible body for the collection of the tax. You would have to add greatly to their strength; but as at present advised my inclination is to believe that you cannot have two separate bodies dealing with separate fragments of revenue—and with separate fragments of revenue from land. I would rather this initial work was done by permanent civil servants than by an ad hon body. I am not particularly in love with the machinery we have set up in Ireland, and in the first instance I should like to continue the ordinary traditional method of the country and employ the Inland Revenue. But how are the Inland Revenue to do the work? Does the right hon. Gentleman propose that they shall work simply through the local land valuers in different parts of the country; that there shall be a body of expert valuers; or that the number of Inland Revenue Commissioners should be augmented? What is the right hon. Gentleman's idea of the additional machinery which will unquestionably have to be set up?

    Further, what view do the Government take of the second part of the Amendment, which I think is of far greater importance than the first? What is their view as to an appeal on the question of valuation in connection with Increment Duty? The right hon. Gentleman reminded us, quite truly, that the Inland Revenue are responsible for work in connection with Death Duties which is remotely analogous to the work they are asked to do under this clause. But their operations in that matter were clearly laid down in the Bill, with the methods they were to pursue, and the appeal to be granted against their decision. Without arguing the matter further, does not the right hon. Gentleman think that this is a convenient opportunity for giving some general view of the constitution of the body which is to decide these questions, and of the expediency of granting an appeal from the all-important decisions which from time to time will be given?

    The right hon. Gentleman invited me to enter into an explanation on two or three questions, the provisions of which are especially set out in subsequent clauses of the Bill. For instance, he asked for a full exposition of the position in Clause 22 with regard to appeals. But a Minister cannot make a statement with regard to that which cannot be made a subject of discussion. On the other hand, the right hon. Gentleman asks me to make a special statement as to the whole of the machinery that is going to be set up by the Commissioners of Inland Revenue in Clauses 14 to 21. The right hon. Gentleman knows perfectly well that I cannot comply with that request. I think he will see that it would be rather unreasonable to call upon me to make a statement upon a thing that I shall have to state fully and minutely afterwards. I shall have to tell the House of Commons all the arrangements—provisional, of course—made by the Inland Revenue with regard to valuation. When that time comes I shall be glad to give the house full information as to the provisional arrangements and the intentions of the Government.

    I was not able to hear all that the right hon. Gentleman said, but from what I gather from the Chancellor of the Exchequer's remarks, I do not think an exposition of what should be done under Clause 22 would be at all in order. If you were going to settle the whole question of appeal on this point it might be in order, but we are only concerned with the appeal suggested in the Amendment.

    It would be quite impossible for me, without trenching upon Clause 22, to say that which the right hon. Gentleman invites me to say. Sub-section (3) of Clause 22, under which appeals can be made, raises an important point. It raises the question of appeal from the referee to a judicial tribunal. But if I made a statement on the point I would be anticipating Clause 22. For that reason I would rather the right hon. Gentleman did not press me, because I hesitate to refuse to answer. The right hon. Gentleman quite forgot that he had given verbal notice of the latter part of his Amendment; he never explained it, and he never told us what it meant, and, therefore, I attached no importance to it. That is the reason I never said a word about it.

    The answer which the Chancellor of the Exchequer has made, although it meets some of the points, leaves us still in some considerable doubt. He made no reference to the question of appeal because he said my right hon. Friend did not address himself to that part of the subject. Quite true; but I should like to remind the right hon. Gentleman that in his reply he dwelt upon the present powers of the Inland Revenue Commissioners under the Estate Duties Act, and he entirely omitted to tell us that all their power under that Act, which differ entirely from the powers you are now conferring upon them, are subject to appeal. Under the Act of 1894, if the person against whom a decision is given by these Commissioners feels aggrieved, he has a right of appeal to a court of law. I quite agree, those of us who have had experience of conducting Bills know, there is nothing more inconvenient for a Minister than to commit himself in regard to clauses that are to come up subsequently for consideration, but I think the Chancellor has exaggerated the effect of my right hon. Friend's argument. I do not think all the clauses the Chancellor has referred to would be involved by the Amendment. Clause 22, which is the clause dealing with appeal, would be involved. The duties the Commissioners of Inland Revenue have to perform now are perfectly simple duties compared with those which this Bill would throw upon them. Let me remind the Committee what are the duties they have to perform. They have to value for the purposes of Probate and Estate Duty, and so on, at a figure which a willing seller would obtain from a willing buyer. They have in reality no discretion. There is a certain piece of property like a certain piece of furniture, and it is governed by a price. What are the duties they will have to perform under this clause of this Bill? The clause as it stands is rather difficult to understand. Many Gentlemen opposite would, I think, be very reluctant to get up and explain it if suddenly called upon to do so. I venture to say a good many lawyers would find it very difficult to explain it. This clause has got to be interpreted by the Commissioners. They have to decide as to the incidence of the Increment Duty upon accommodation land.

    I have not the smallest doubt there are lawyers in the House who would not hesitate to get up and tell us what accommodation land is, but to ask those who own that land to pay an Increment Duty upon a decision of that kind is to make a demand upon owners of that kind of property which is very unfair. You are throwing upon the Commissioners of Inland Revenue duties which they will find it almost impossible to perform. The Government claim to be a democratic and popular Government who trust the people, and yet in every single Bill they bring in— [An HON. MEMBER: "Order, order."] I am perfectly in order. The Government are granting under this Bill powers to the Commissioners in a way in which they have never been granted before. Nobody will suggest that there is any charge to be brought against these officers. The public officials of this country are beyond reproach, and nobody suggests that they are liable to pressure, or anything of that kind. What we do say is that you are proposing to throw upon them duties which they cannot perform, and you are not giving them what they ought to have, namely, the plainest possible instructions. The Chancellor of the Exchequer talked about accommodation land. When you come to building land that is a most important matter. What definition are you going to adopt which will accurately describe building land in such a way as will guide the Commissioners in the execution of their duty. If you do constitute a body of this kind and give them these wide powers you certainly ought to make their duties perfectly clear. The Chancellor of the Exchequer objects to the Amendment and the criticisms we have advanced, but he does not realise that he does not give the only safeguard which can be given, namely, an appeal to a court of law, by which an ill-considered or unfair action may be subject to revision. The only way in which this can be satisfactorily done is through a court of justice. In these circumstances, between the two courses, although I object to both, I shall decline to vote for either the one or the other, and I shall reserve myself to oppose the whole proposition that you should leave this discretion to any body of Commissioners, and if you do appoint Commissioners you must define clearly what their duties are.

    Having had some experience in these matters, I may say that I am in favour of a special body of Commissioners, for the Inland Revenue officers are totally unable to cope with the work that will be placed upon them by this Bill. Under this Bill there is a legalised system of robbery, and we want to know by whom the Commissioners are to be appointed. I understand that the Commissioners are not to be controlled by legal decisions. I should like to move that you do report Progress, owing to the conduct of hon. Members below the Gangway who do not understand the details of the Bill.

    Perhaps I have misunderstood the interruptions of the hon. Members below the Gangway, and I do not now propose that you move to report Progress and ask leave to sit again. The right hon. Gentleman proposes by this Bill to take away the right of appeal, and in order to maintain that right I shall support the Amendment.

    What I want to know from the right hon. Gentleman is this: In Clause 23 of the Bill it is distinctly laid down that whoever the Commissioners may be, any appeal against their decisions will be to persons who have experience in the valuation of land. Surely, then, if the appeal is to be to such persons it is only right that those who appraise the increment value in the first place should also have expert knowledge on the subject. The right hon. Gentleman says that Inland Revenue officials will perform that duty. What duties are they at present performing? Are they so slack that they are able to undertake this burden, the enormous extent of which the Government do not appear to have appreciated in the slightest degree. I cannot speak for England, Scotland, or Wales, but as far as Ireland is concerned, I can assert confidently that the duties imposed by this Bill must prove to be of a very arduous nature. What is the object of the Amendment? It is to secure that special Commissioners shall be appointed for this purpose? Could anything be more reasonable. They will have to deal with a highly intricate problem, very different indeed from that imposed on them by the Death Duties, when they simply had to call for a return from a stockbroker as to the value of certain stocks and shares.

    Here we have an entirely novel principle established, and you are beginning a system which has been hitherto unknown in this country. All of a sudden you? press upon that department work which is probably more arduous than all these other duties put together. How is the Inland Revenue to keep track of an estate for the purpose of this increment value? In some instances societies are started for purchasing estates that come into the market in order to divide them up into small holdings and for every lease of an acre or half an acre a certain increment value may possibly accrue, but until the last half acre, or perch, or rood of that property is sold, the owner cannot tell whether in the long run he will have an increment or a decrement in the profit. During all that time the Commissioners of Inland Revenue, according to the Bill, will have to keep track of every small transaction which takes place on the property. It is absolutely absurd to suppose that they have it within their capacity to deal with such a matter. Take an estate of 2,000 acres, where half an acre is sold to-morrow, and a few acres next year, a careful record will have to be kept. They cannot possibly do it. Hon. Members below the Gangway have some experience of land in Ireland, and the blocks there are already in regard to Irish land with special Commissioners appointed for the purpose of dealing with small fractions of lands in parts of the United Kingdom. But here you have to deal with the whole of the land in the United Kingdom, and not merely agricultural land. The idea that the Inland Revenue will be able to deal with a subject of that sort is absolutely absurd. Not very long ago there was an estate sold, and hon. Members opposite are all for facilitating the sale of land to small holders, so that they may become proprietors of their own particular holding——

    I apologise for trespassing; at the same time I was only pointing out to hon. Members what the absurdity of this Bill was. You cannot expect a clerk in a great Department to know anything about the intricacies of land in Ireland.

    May I call your attention to the fact that the present speaker has repeated that argument three times.

    I was carefully listening to the hon. Member. That is a matter which is within my discretion.

    I take an instance where tenants have purchased under the last Act, and I defy the right hon. Gentleman to produce anyone in the Inland Revenue Department to cope with that subject, where there are annuitants who hold their property under the Government for 68½ years, and to differentiate in their appreciation of the increment value between what is due to the expired term of the 68½ years and what to the increment value. I think the right hon. Gentleman may have in view certain classes of property nearer home, but his advisers have escaped altogether the rather intricate subject of Irish land in proposing that the Inland Revenue should take it up as a branch of their duties.

    Amendment negatived.

    In view of the very laborious day we have had, and of the importance of the subject raised by my Amendment to leave out the word "site" ("the site value of the land"), and insert the word "capital," I would move: "That the Chairman do report Progress, and ask leave to sit again."

    I do trust that my hon. Friend will not press that Motion. While I do not say that this is an attempt to delay the progress of the Bill, I would point out that the progress on Clause 2 has been slow enough. We have only got two lines of the clause, and I trust that my hon. Friend will see his way to go on with his Amendment now. It is no more important than the Amendment which we have just been discussing.

    The right hon. Gentleman says that the Amendment of the hon. Member for the Chippenham Division (Sir J. Dickson-Poynder) is no more important than the last one. We discussed the last Amendment for two-hours, and we are now asked to begin the discussion of a question of very great importance. Do the Government seriously propose that at half-past twelve we are to go on and deal with an Amendment raising perfectly fresh issues which have an important bearing on the future of their own Bill commencing these questions at half-past eleven o'clock? For my part I offer no objection. I have sat in the House for a long time, and I do not mind sitting up at night. But a great many Members of this House object strongly to sitting up. In their interests let me remind the House that the present Government altered the hour from 12 to 11 and took great credit to themselves. But what becomes of this additional hour's saving if in regard to the most important measure of the Session which is making greater charges in our system than any other measure we have had before us, certainly during the time that I have been in Parliament, we are asked to deal with it at an hour at which the Government themselves declared we ought not to be asked to dispose of business? If the Government really expect the House to deal with these grave questions as they ought to be dealt with they should, now approaching one o'clock in the morning, adjourn and resume consideration of the matter at a proper hour.

    If the right hon. Gentleman (Mr. Lloyd-George) will not accede to my request, I beg formally to ask leave to withdraw my Motion to report Progress.

    Leave to withdraw Motion withheld.

    I cannot accede to the request of the hon. Member (Sir J. Dickson-Poynder) because I wish to protest against the question of site value, which is one of the most important points in the Bill, being raised in the House at almost a quarter to one o'clock. The country takes an interest in this question. Everybody knows that it is impossible at this hour for Debates to be reported in the papers. The Prime Minister, who is now here, has not been present during the night. He went away and enjoyed a pleasant evening, after having imposed the closure on the Leader of the Opposition, and spoken before dinner, so that he could go away himself, I suppose, to get a comfortable dinner; and now, after a few hours rest, he comes down to the House of Commons and insists on us continuing. The right hon. Gentleman insists on our sitting still longer. [Interruption.]

    These cries are most disorderly, and we cannot get on with the business at all if they continue.

    It is a remarkable fact that the Prime Minister should come down at the moment when Progress is moved, and that he should insist on our continuing until the small hours of the morning. I think that every Member on this side of the House and a good many on the other side will agree with me that it is a monstrous proposal that the Prime Minister should ask us to enter on a Debate of this character at this hour, and if he had been here half an hour ago he would have seen many of his own supporters asleep. I trust those hon. Members who were asleep just now will enter their protest. ["Name"] The hon. Member for Sleaford (Mr. Lupton)——

    Had I been twice as fast asleep I could have understood much better reasons than those which have come from the benches opposite.

    The hon. Member for Sleaford may continue his slumbers. I protest strongly against such an important Debate being entered upon at this hour of the night.

    I think it would facilitate matters if the right hon. Gentleman (Mr. Lloyd-George) would give us some indication of how far in the Bill he intends to proceed to-night, so that we may arrange as far as we can with our small numbers that some may go home, take a rest, and come back again. We are desirous of debating all the subjects in the fairest manner possible. If some indication is not given it is only fair to press the Motion to a Division.

    Right hon. Gentlemen take credit to themselves for making a good many precedents as we go along in the course of these Debates, but I am not quite certain that they know what great new precedents they are making in the matter of our procedure. It is no doubt true, and always has been, that the Finance Bill is not subject to the Eleven o'clock Rule, or in former days to the Twelve o'clock Rule. On a special occasion, after prolonged debate for many days in order to finish a stage of a discussion, from time to time there has been a single very prolonged sitting. I do not think any parallel can be found for the course which the Government are now asking us to adopt of habitually sitting, not half an hour after the time, for rising, but one, two, three, and four hours after the time for rising. I am quite certain if the Chancellor of the Exchequer would turn back to the conduct of his great predecessor, Sir William Harcourt, when he was conducting a most contentious Budget through this House, he would find that Sir William Harcourt did not put the Committee to the strain to which the right hon. Gentleman is putting them. I do not say that they never sat very late, but they did not habitually sit two, three, and four hours after the usual hour for the rising of the House.

    The Patronage Secretary can make his speech afterwards. I would be very glad if he did. The particular observation he interjected was that they did set to one o'clock. That is to say that they sat one hour after the usual time for rising. We sat one hour after the usual time yesterday and four hours after the usual time on Monday. That is a method of getting the Bill through. It is perhaps more derogatory to the House, renders less possible the proper discussion of the points raised, than any system of gag, guillotine, or closure which

    Division No. 218.]

    AYES.

    [2.50 a.m.

    Acland, Francis DykeCraig, Herbert J. (Tynemouth)Higham, John Sharp
    Agar-Robartes, Hon. T. C. R.Crosfield, A. H.Hobart, Sir Robert
    Agnew, George WilliamCrossley, William J.Hobhouse, Rt. Hon. Charles E. H.
    Ainsworth, John StirlingDalziel, Sir James HenryHorniman, Emslie John
    Allen, A. Acland (Christchurch)Davies, Sir W. Howell (Bristol, S.)Howard, Hon. Geoffrey
    Allen, Charles P. (Stroud)Dewar, Arthur (Edinburgh, S.)Hudson, Walter
    Armitage, R.Dickinson, W. H. (St. Pancras, N.)Hutton, Alfred Eddison
    Asquith, Rt. Hon. Herbert HenryDuncan, C. (Barrow-in-Furness)Idris, T. H. W.
    Astbury, John MeirDuncan, J. H. (York, Otley)Illingworth, Percy H.
    Balfour, Robert (Lanark)Dunn, A. Edward (Camborne)Isaacs, Rufus Daniel
    Baring, Godfrey (Isle of Wight)Dunne, Major E. Martin (Walsall)Jardine, Sir J
    Barlow, Percy (Bedford)Edwards, Sir Francis (Radnor)Jenkins, J.
    Barry, Redmond J. (Tyrone, N.)Elibank, Master ofJohnson, John (Gateshead)
    Beauchamp, EEssex, R. W,Jones, Leif (Appleby)
    Bellairs, CarlyonEsslemont, George BirnieJones, William (Carnarvonshires)
    Bennett, E. N.Evans, Sir Samuel T.Jowett, F. W.
    Berridge, T. H. D.Everett, R. LaceyKelly, George D.
    Birrell, Rt. Hon. AugustineFalconer, JamesLamont, Norman
    Boulton, A. C. F.Fenwick, CharlesLayland-Barratt, Sir Francis
    Bowerman, C. W.Fiennes, Hon. EustaceLehmann, R. C.
    Bramsdon, Sir T. A.Fuller, John Michael F.Levy, Sir Maurice
    Branch, JamesFullerton, HughLloyd-George, Rt. Hon. David
    Brocklehurst, W. B.Gibb, James (Harrow)Lough, Rt. Hon. Thomas
    Brooke, StopfordGill, A. H.Lupton, Arnold
    Brunner, J. F. L. (Lancs., Leigh)Gladstone, Rt. Hon. Herbert JohnLyell, Charles Henry
    Bryce, J. AnnanGoddard, Sir Daniel FordMacdonald, J. R. (Leicester)
    Burns, Rt. Hon. JohnGooch, George Peabody (Bath)Macnamara, Dr. Thomas J.
    Buxton, Rt. Hon. Sydney CharlesGrey, Rt. Hon. Sir EdwardM'Callum, John M.
    Byles, William PollardGriffith, Ellis J.M'Kenna, Rt. Hon. Reginald
    Carr-Gomm, H. W.Gulland, John W.M'Laren, Sir C. B. (Leicester)
    Causton, Rt. Hon. Richard KnightHaldane, Rt. Hon. Richard B.M'Laren, H. D. (Stafford, W.
    Channing, Sir Francis AllstonHarcourt, Rt. Hon. L. (Rossendale)M'Micking, Major G.
    Cherry, Rt. Hon. R. R.Harcourt, Robert V. (Montrose)Maddison, Frederick
    Churchill, Rt. Hon. Winston S.Hardy, George A. (Suffolk)Markham, Arthur Basil
    Cleland, J. W.Harmsworth, Cecil B. (Worc'r.)Mason, A. E. W. (Coventry)
    Clough, WilliamHarmsworth, R. L. (Caithness-shire)Massie J.
    Cobbold, Felix ThornleyHarvey, A. G. C. (Rochdale)Micklem, Nathaniel
    Collins, Sir Wm. J. (St. Pancras, W.)Haslam, Lewis (Monmouth)Middlebrook, William
    Compton-Rickett, Sir J.Haworth, Arthur A.Mond, A.
    Cooper, G. J.Hazel, Dr. A. E.Montague, Hon. E. S.
    Corbett, C. H. (Sussex, E. GrinsteadHedges, A. PagetMorrell, Philip
    Cornwall, Sir Edwin A.Helme, Norval WatsonMurray, Capt. Hon. A. C. (Kincard.)
    Cotton, Sir H. J. S.Henry, Charles S.Newnes, F. (Notts, Bassetlaw)
    Cowan, W. H.Herbert, Col. Sir Ivor (Mon. S.)Nicholls, George

    has hitherto been attempted. For my part I do hope even now the Government will have some regard to the importance of the questions which are raised, to the necessity for having fair discussion at reasonable hours, and that they will not insist night after night in proceeding in this way. I am surprised the hon. Baronet (Sir J. Dickson-Poynder) should have been ready so hastily to withdraw the Motion. I read the other day in the "Westminster Gazette" that great satisfaction was expressed amongst the Liberal party at the haste with which the Gentleman who had momentarily formed a cave had again, come to heel. I thought the observation offensive, and I did not know to what it referred. I begin now to understand.

    rose in his place, and claimed to move, "That the Question be now put."

    Question put, "That the Question be now put."

    The Committee divided: Ayes, 209; Noes, 95.

    Norman, Sir HenryRoch, Walter F. (Pembroke)Ure, Rt. Hon. Alexander
    Norton, Capt. Cecil WilliamRoe, Sir ThomasVerney, F. W.
    Nuttall, HarryRogers, F. E, NewmanVilliers, Ernest Amherst
    O'Donnell, C. J. (Walworth)Rose, Sir Charles DayWard, W. Dudley (Southampton)
    Parker, James (Halifax)Rowlands, J.Wardle, George J.
    Paulton, James MellorRutherford, V. H. (Brentford)Warner, Thomas Courtenay T.
    Pearce, Robert (Staffs, Leek)Samuel, S. M. (Whitechapel)Wason, Rt. Hon. E. (Clackmannan)
    Pearson, W. H. M. (Suffolk, Eye)Schwann, C. Duncan (Hyde)Wason, John Cathcart (Orkney)
    Philipps, Col. Ivor (Southampton)Seely, ColonelWaterlow, D. S.
    Pickersgill, Edward HareShaw, Sir Charles EdwardWatt, Henry A.
    Pointer, JosephSilcock, Thomas BallWedgwood, Josiah C.
    Ponsonby, Arthur A. W. H.Simon, John AllsebrookWhitbread, Howard
    Price, C. E. (Edinburgh, Central)Soares, Ernest J.White, Sir George (Norfolk)
    Price, Sir Robert J. (Norfolk, E.)Spicer, Sir AlbertWhite, J. Dundas (Dumbartonshire)
    Priestley, Arthur (Grantham)Stanley, Hon. A. Lyulph (Cheshire)White, Sir Luke (York, E.R.)
    Radford, G. H.Stewart-Smith, D. (Kendal)Whitley, John Henry (Halifax)
    Rainy, A. HollandStrachey, Sir EdwardWiles, Thomas
    Raphael, Herbert H.Summerbell, T.Williamson, Sir Achibald
    Rendall, AthelstanSutherland, J. E.Wilson, Hon. G. G. (Hull, W.)
    Richardson, A.Taylor, John W. (Durham)Wilson, P. W. (St. Pancras, S.)
    Ridsdale, E. A.Tennant, H. J. (Berwickshire)Wilson, W. T. (Westhoughton)
    Roberts, Charles H. (Lincoln)Thomas, Abel (Carmarthen, E.)Winfrey, R.
    Roberts, G. H. (Norwich)Thompson, J. W. H. (Somerset, E.)Wood, T. M'Kinnon
    Robertson, Sir G. Scott (Bradford)Thorne, G. R. (Wolverhampton)
    Robertson, J. M. (Tyneside)Tomkinson, JamesTELLERS FOR THE AYES.—Mr. Joseph Pease and Mr. Herbert Lewis.
    Robinson, S.Toulmin, George
    Robson, Sir William SnowdonTrevelyan, Charles Philips

    NOES.

    Anson, Sir William ReynellGooch, Henry Cubitt (Peckham)Oddy, John James
    Arkwright, John StanhopeGretton, JohnPeel, Hon. Wm. Robert Wellesley
    Ashley, W. W.Guinness, Hon. R. (Haggerston)Pretyman, Ernest George
    Balcarres, LordGuinness, Hon. W. E. (Bury St. Edm.)Randles, Sir John Scurrah
    Baldwin, StanleyHamilton, Marquess ofRatcliff, Major R. F.
    Banbury, Sir Frederick GeorgeHardy, Laurence (Kent, Ashford)Renwick, George
    Banner, John S. Harmood-Harris, Frederick LevertonRonaldshay, Earl of
    Baring, Capt. Hon. G. (Winchester)Harrison-Broadley, H. B.Ropner, Colonel Sir Robert
    Barrie, H. T. (Londonderry, N.)Hay, Hon. Claude GeorgeRutherford, John (Lancashire)
    Beach, Hon. Michael Hugh HicksHelmsley, ViscountRutherford, W. W. (Liverpool)
    Beckett, Hon. GervaseHill, Sir ClementSalter, Arthur Clavell
    Bignold, Sir ArthurHope, James Fitzalan (Sheffield)Scott, Sir S. (Marylebone, W.)
    Bridgeman, W. CliveHunt, RowlandSmith, Abel H. (Hertford, East)
    Bull, Sir William JamesJoynson-Hicks, WilliamSmith, F. E. (Liverpool, Walton)
    Campbell, Rt. Hon. J. H. M.Kerry, Earl ofSmith, Hon. W. F. D. (Strand)
    Carlile, E. HildredKeswick, WilliamStanier, Beville
    Cave, GeorgeLambton, Hon. Frederick WilliamStarkey, John R.
    Cecil, Evelyn (Aston Manor)Lane-Fox, G. R.Staveley-Hill, Henry (Staffordshire)
    Chamberlain, Rt. Hon. J. A. (Worc'r.)Law, Andrew Bonar (Dulwich)Talbot, Lord E. (Chichester)
    Clive, Percy ArcherLockwood, Rt. Hon. Lt.-Col. A. R.Thornton, Percy M.
    Clyde, James AvonLong, Rt. Hon. Walter (Dublin, S.)Walker, Col. W. H. (Lancashire)
    Coates, Major E. F. (Lewisham)Lonsdale, John BrownleeWalrond, Hon. Lionel
    Cochrane, Hon. Thos. H. A. E.Lyttelton, Rt. Hon. AlfredWarde, Col. C. E. (Kent, Mid.)
    Craig, Charles Curtis (Antrim, S.)MacCaw, William J. MacGeaghWilliams, Col. R. (Dorset, W.)
    Craig, Captain James (Down, E.)M'Calmont, Colonel JamesWilson, A. Stanley (York, E.R.)
    Craik, Sir HenryMagnus, Sir PhilipWinterton, Earl
    Dalrymple, ViscountMason, James F. (Windsor)Wortley, Rt. Hon. C. B. Stuart-
    Douglas, Rt. Hon. A. Akers-Meysey-Thompson, E. C.Wyndham, Rt. Hon. George
    Du Cros, Arthur PhilipMoore, WilliamYounger, George
    Faber, George Denison (York)Morpeth, Viscount
    Fell, ArthurMorrison-Bell, CaptainTELLERS FOR THE NOES.—Sir
    Forster, Henry WilliamNewdegate, F. A. N.Alexander Acland-Hood and Viscount Valentia.
    Foster, Philip S. (Warwick, S.W.)Nicholson, Wm. G. (Petersfield)

    Question put accordingly, "That the Chairman do report Progress; and ask leave to sit again."

    Division No. 219.]

    AYES.

    [1.0 a.m.

    Acland-Hood, Rt. Hon. Sir Alex. F.Beckett, Hon. GervaseCoates, Major E. F. (Lewisham)
    Anson, Sir William ReynellBignold, Sir ArthurCechrane, Hon. Thomas H. A. E.
    Arkwright, John StanhopeBridgeman, W. CliveCraig, Charles Curtis (Antrim, S.)
    Ashley, W. W.Bull, Sir William JamesCraig, Captain James (Down, E.)
    Balcarres, LordCampbell, Rt. Hon. J. H. M.Craik, Sir Henry
    Baldwin, Stanley.Carlile, E. HildredDalrymple, Viscount
    Banbury, Sir Frederick GeorgeCave, GeorgeDouglas, Rt. Hon. A. Akers-
    Banner, John S. Harmood-Cecil, Evelyn (Aston Manor)Du Cros, Arthur
    Baring, Capt. Hon. G. (Winchester)Chamberlain, Rt. Hon. J. A. (Worc'r.)Faber, George Denison (York)
    Barrie, H. T. (Londonderry, N.)Clive, Percy ArcherFell, Arthur
    Beach, Hon. Michael Hugh HicksClyde, J. AvonFoster, P. S.

    The Committee divided: Ayes, 96; Noes, 214.

    Gooch, Henry Cubitt (Peckham)MacCaw, Wm. J. MacGeaghSmith, Abel H. (Hertford, East)
    Gretton, JohnM'Calmont, Colonel JamesSmith, F. E (Liverpool, Walton)
    Guinness, Hon. R. (Haggerston)Magnus, Sir PhilipSmith, Hon. W. F. D. (Strand)
    Guinness, Hon. W. E. (B'y St. Edm'ds)Mason, A. E. W. (Coventry)Stonier, Beville
    Hamilton, Marquess ofMason, James F. (Windsor)Starkey, John R.
    Hardy, Laurence (Kent, Ashford)Meysey-Thompson, E. C.Staveley-Hill, Henry (Staffordshire)
    Harris, Frederick LevertonMoore, WilliamThornton, Percy M.
    Harrison-Broadley, H. B.Morpeth, ViscountValentia, Viscount
    Hay, Hon. Claude GeorgeMorrison-Bell, CaptainWalker, Col. W. H. (Lancashire)
    Helmsley, ViscountNewdegate, F. A. N.Walrond, Hon. Lionel
    Hill, Sir ClementNicholson, Wm. G. (Petersfield)Wardle, Colonel C. E. (Kent, Mid)
    Hope, James Fitzalan (Sheffield)Oddy, John JamesWhitbread, S. Howard
    Hunt, RowlandPeel, Hon. W. R. W.Williams, Col. R. (Dorset, W.)
    Joynson-Hicks, WilliamPretyman, E. G.Wilson, A. Stanley (York, E.R.)
    Kerry, Earl ofRandles, Sir John ScurrahWilson, W. T. (Westhoughton)
    Lambton, Hon. Frederick WilliamRatcliff, Major R. F.Winterton, Earl
    Lane-Fox, G. R.Renwick, GeorgeWortley, Rt. Hon. C. B. Stuart-
    Law, Andrew Bonar (Dulwich)Ronaldshay, Earl ofWyndham, Rt. Hon. George
    Lock wood, Rt. Hon. Lt.-Col. A. R.Rutherford, John (Lancashire)Younger, George
    Long, Rt. Hon. Walter (Dublin, S.)Rutherford, W. W. (Liverpool)
    Lonsdale, John BrowniceSalter, Arthur ClavellTELLERS FOR THE AYES—Lord
    Lyttelton, Rt. Hon. AlfredScott, Sir S. (Marylebone, W.)Edmund Talbot and Mr. Forster.

    NOES.

    Acland, Francis DykeEvans, Sir S. T.Lyell, Charles Henry
    Agar-Robartes, Hon. T. C. R.Everett, R. LaceyMacdonald, J. R. (Leicester)
    Agnew, George WilliamFalconer, J.Macnamara, Dr. Thomas J.
    Ainsworth, John StirlingFenwick, CharlesMacVeagh, Jeremiah (Down, S.)
    Allen, A. Acland (Christchurch)Fiennes, Hon. EustaceMcKenna, Rt. Hon. Reginald
    Allen, Charles P. (Stroud)Flavin, Michael JosephM'Laren, Sir C. B. (Leicester)
    Armitage, R.Fuller, John Michael F.M'Laren, H. D. (Stafford, W.)
    Asquith, Rt. Hon. Herbert HenryFullerton, HughM'Micking, Major G.
    Astbury, John MeirGibb, James (Harrow)Maddison, Frederick
    Balfour, Robert (Lanark)Gill, A. H.Markham, Arthur Basil
    Baring, Godfrey (Isle of Wight)Gladstone, Rt Hon. Herbert JohnMassie, J.
    Barlow, Percy (Bedford)Glover, ThomasMicklem, Nathaniel
    Barry, Redmond J. (Tyrone, N.)Goddard, Sir Daniel FordMiddlebrook, William
    Beauchamp, E.Gooch, George Peabody (Bath)Word, A.
    Bellairs, CarlyonGrey, Rt. Hon. Sir EdwardMontagu, Hon. E. S.
    Bennett, E. N.Griffith, Ellis J.Morrell, Philip
    Berridge, T. H. D.Gulland, John W.Murray, Capt. Hon. A. C. (Kincard.)
    Birrell, Rt. Hon. AugustineHaldane, Rt. Hon. Richard B.Nannetti, Joseph P.
    Boulton, A. C. F.Harcourt, Rt. Hon. L. (Rossendale)Newnes, F. (Notts, Bassetlaw)
    Bowerman, C. W.Harcourt, Robert V. (Montrose)Nicholls, George
    Bramsdon, Sir T. A.Hardy, George A. (Suffolk)Nolan, Joseph
    Branch, JamesHarmsworth, Cecil B. (Worcester)Norman, Sir Henry
    Brocklehurst, W. B.Harmsworth, R. L. (Caithness-sh.)Norton, Captain Cecil William
    Brooke, StopfordHarvey, A. G. C- (Rochdale)Nuttall, Harry
    Brunner, J. F. L. (Lancs., Leigh)Haslam, Lewis (Monmouth)O'Brien, K. (Tipperary, Mid)
    Bryce, J. AnnanHaworth, Arthur A.O'Donnell, C. J. (Walworth)
    Burns, Rt. Hon. JohnHazel, Dr. A. E.Parker, James (Halifax)
    Buxton, Rt Hon. Sydney CharlesHedges, A. PagetPearce, Robert (Staffs, Leek)
    Byles, William PollardHelme, Norval WatsonPearson, W. H. M. (Suffolk, Eye)
    Carr-Gomm, H. W.Henry, Charles S.Philipps, Col Ivor (Southampton)
    Causton, Rt. Hon. Richard KnightHerbert, Col. Sir Ivor (Hon., S.)Phillips, John (Longford, S.)
    Channing, Sir Francis AllstonHigham, John SharpPickersgill, Edward Hare
    Cherry, Rt. Hon. R. R.Hobart, Sir RobertPointer, J.
    Churchill, Rt. Hon. Winston S.Hobhouse, Rt. Hon. Charles E. H.Ponsonby, Arthur A. W. H.
    Cleland, J. W.Hogan, MichaelPrice, C. E. (Edinburgh, Central)
    Clough, WilliamHorniman, Emslie JohnPrice, Sir Robert J. (Norfolk, E.)
    Cobbold, Felix ThornleyHoward, Hon. GeoffreyPriestley, Arthur (Grantham)
    Collins, Sir Wm. J. (St. Pancras, W.)Hudson. WalterRadford, G. H.
    Compton-Rickett, Sir J.Hutton, Alfred EddisonRainy, A. Rolland
    Cooper, G. J.Idris, T. H. W.Raphael, Herbert H.
    Corbett, C. H. (Sussex, E. Grinstead)Illingworth, Percy H.Rendall, Athelstan
    Cornwall, Sir Edwin A.Isaacs, Rufus DanielRichardson, A.
    Cotton, Sir H. J. S.Jardine, Sir J.Ridsdale, E. A.
    Craig, Herbert J. (Tynemouth)Jenkins, J.Roberts, Charles H. (Lincoln)
    Crosfield, A. H.Johnson, John (Gateshead)Roberts, G. H. (Norwich)
    Crossley, William J.Jones, Leif (Appleby)Robertson, Sir G. Scott (Bradford)
    Dalziel, Sir James HenryJones, William (Carnarvonshire)Robertson, J. M. (Tyneside)
    Davies, Sir W. Howell (Bristol, S.)Jowett, F. W.Robinson, S,
    Dewar, Arthur (Edinburgh, S)Kelley, George D.Robson, Sir William Snowdon
    Dickinson, W. H. (St. Pancras, N.)Kilbride, DenisRoch, Walter F. (Pembroke)
    Duncan, C. (Barrow-in-Furness)Lamont, NormanRoe, Sir Thomas
    Duncan. J. Hastings (York, Otley)Layland-Barrett, Sir FrancisRogers, F. E. Newman
    Dunn, A. Edward (Camborne)Lehmann, R. C.Rose, Sir Charles Day
    Dunne, Major E. Martin (Walsall)Levy, Sir MauriceRowlands, J.
    Edwards, Sir Francis (Radnor)Lloyd-George, Rt. Hon. DavidRutherford, V. H. (Brentford)
    Elibank, Master ofLough, Rt. Hon. ThomasSamuel, S. M. (Whitechapel)
    Essex, R. WLundon, T.Schwann, C. Duncan (Hyde)
    Esslemont, George BirnieLupton, ArnoldSeely, Colonel

    Shaw, Sir Charles E.Thompson, J. W. H. (Somerset, T.)Watt, Henry A.
    Silcock, Thomas BallThorne, G. R. (Wolverhampton)Wedgwood, Josiah C.
    Simon, John AllsebrookTomkinson, JamesWhite, Sir George (Norfolk)
    Smyth, Thomas F. (Leitrim, S.)Toulmin, GeorgeWhite, J. Dundas (Dumbartonshire)
    Soares, Ernest J.Trevelyan, Charles PhilipsWhite, Sir Luke (York, E.R.)
    Spicer, Sir AlbertUre, Rt. Hon. AlexanderWhitley, John Henry (Halifax)
    Stanley, Hon. A. Lyulph (Cheshire)Verney, F. W.Wiles, Thomas
    Stewart-Smith, D. (Kendal)Villiers, Ernest AmherstWilliamson, Sir A.
    Strachey, Sir EdwardWard, W. Dudley (Southampton)Wilson, Hon. G. G. (Hull, W.)
    Summerbell, T.Wardle, George J.Wilson, P. W. (St. Pancras, S.)
    Sutherland, J. E.Warner, Thomas Courtenay T.Winfrey, R.
    Taylor, John W. (Durham)Wason, Rt. Hon. E. (Clackmannan)Wood, T. M'Kinnon
    Tennant, H. J. (Berwickshire)Wason, John Cathcart (Orkney)
    Thomas, Abel (Carmarthen, E.)Waterlow, D. S.TELLERS FOR THE NOES.—Mr. Joseph Pease and Mr. Herbert Lewis.

    I rise to move the Amendment which stands in my name, namely, to leave out the word "site" and to insert the word "capital," and I do so because on looking through this Bill, with all its difficult, complicated clauses, it is borne in on my mind that that process for arriving at the site value will not only be complicated but almost impossible. I want to refresh the memory of the Committee as to the process' by which the Commissioners arrive at the basis upon which they are to impose the Increment Tax. It will be found in Clause 14, section (2). They will arrive at the site value by eliminating all that is appurtenant to it used in connection with any buildings, and all growing timber, fruit trees, fruit bushes, and other things growing thereon. We have, in arriving at this naked state, not merely to imagine a particular site, but the whole country in a somewhat pre-historic condition; and, having arrived at this imaginary condition, then, according to sub-section (b) at the bottom of the page, Commissioners will have to call in skilled engineers to give them an estimate as to what the cost of the operation of eliminating everything from the land will be. Let me take a concrete case. The Surrey Docks are a great centre of trade and industry. The Commissioners or those they appoint will have to go down and reduce those docks to a mud-flat condition. They will remove all the dry docks, the quays, the buildings, and everything that has gone to make the docks the industrial centre they are. Having reduced them to a mud-flat condition, they will then have to deduct from that value the cost of removing all the material to some distant place. It is not, however, the Surrey Docks only which will be in that condition. I could give a hundred other concrete cases which would reduce the thing to rather absurd proportions.

    This proposal to reduce the value to a naked site value appears to me to be a quite unnecessary and complicated operation, when a much simpler one might be resorted to. It is a novel suggestion which has never been made in any previous proposals for valuation. In Sir William Harcourt's Bill of 1894 you had what was called a "principal value," and in all subsequent measures of the same character you had valuations known as "capital value." Even in this Bill itself, in different clauses, you have what is called "total value" and that is practically the same as capital value. I would suggest to my right hon. Friend that it would be very much simpler in the future operations of this complicated clause if the basis of valuation were the simple, well-known basis of capital value. I would say that in order to arrive at this site value the Commissioners would first of all have to arrive at the capital value, because they will have to estimate both the capital value of the buildings and of the land before they can arrive at the full capital value. It will be said, and it is thought by some hon. Members, that if this form of valuation is substituted it will bring about a greater hardship for owners of property upon whom this Increment Tax is to be placed. I cannot see why that should be the case. A capital value will be taken after the passage of the Act, and, when the time comes for putting into operation any of these taxes, another valuation will be taken, and that value will be compared with the former, with all the necessary deductions made for any improvements that have taken place on the part of the owner between the time of the original valuation and the time when the tax is imposed, whether at the time of death or on the grant of a lease or on the sale of the land. You will have a complete valuation on the one side compared with a complete valuation on the other, and the only deductions which it-will be necessary to estimate will be those which can be shown to be improvements due to the energy or the capital placed in the land or property on the part of the owner. If that operation is to be carried out it should be carried out by those who understand the conditions of the land. It is no earthly use asking Commissioners from London to go down to remote districts of the country, utterly ignorant of the conditions, and value the land. There must, of course, be a system of local valuation, and the whole of the success of this scheme must depend upon the knowledge of those who undertake the valuation. This scheme of a universal valuation by a State bureaucracy applied partially to land and property under certain conditions is, in my judgment, a great mistake to introduce in a Budget Bill. I wish the Government had introduced a measure, comprehensive in its character, giving a complete reform of the whole system of valuation throughout the country, so that you could have a complete system, both local and Imperial, going on at the same time. If that had taken place, then the present system of assessment, with certain forms attached to it, might have been introduced to carry out a valuation on a capital system, such as I have indicated in my Amendment.

    A Bill was, I think, introduced in 1894 by the right hon. Member for Dublin (Mr. Long) which would have carried out in spirit a complete reform of the assessment committees throughout the country. It would have got rid of small assessment committees and would have enlarged them. I would have liked to have seen the substitute of capital value for annual value proposed by the right hon. Gentleman, you could then have applied it to the whole system of local as well as Imperial taxation, and that instead of having the old system continued with its imperfect conditions, and having alongside it created a new system on a capital basis for State purposes, conducted by State officials, the expense of which is bound to be very great, and the machinery of which, unless these local committees are brought into operation in the working of it, must be very imperfect. This subject is one of very great importance. If site value, as interpreted in Clause 14, is continued in the Bill, it is bound to lead to the greatest possible complication in the future. It will undoubtedly be a matter of very great expense and one which at the end must be very imperfect in its character. I would far prefer to see the well-recognised system of capital value in- troduced into this Bill, and that the capital value should be estimated by those who fully understand the conditions of the locality. The assessment committees have proved themselves on the whole to be thoroughly satisfactory in character. There is undoubtedly room for improvement in them, and they might be enlarged, but on the whole they have done their work very well and there is no reason at all why this work should not be placed upon their shoulders and the capital system substituted for the present annual system. They know the conditions of the locality and the value of the land, because they can value it in relationship to the land around them. You might have upon these committees what was proposed in the right hon. Gentleman's Bill, namely, an official from the Inland Revenue, so that you would have a direct connection between the Treasury and the local authorities.

    Yes. Then instead of the double and cumbersome system introduced by a side wind in this Finance Bill you would have one uniform system. I admit it would be difficult to carry out what I am proposing under the present provisions of the Bill. I should have liked to see this tax confined to those occasions when without a universal system of valuation a comparison could be made simply by the existing staff of officials at the Treasury. If the occasions had been confined to those of reversion, sale, the conversion of agricultural land into building land, and the granting of such leases, I believe it would have caused very little loss to the revenue, while the cost of collection would have been very light and the work of supervision reduced to the smallest dimensions. Unfortunately the Amendment on that subject was refused by the Government, and other occasions are now inserted in the Bill, such as death and the general granting of leases, which must necessitate a general system of valuation throughout the country. All I say is that if a general system is to be established under this Bill, let it be one which in days to come we can apply to the readjustments and the reform of our local system of taxation as well. It would be far simpler to have the well known system of capital valuing in place of the novel proposal now introduced in the Bill of site valuation. It is for these reasons that I ask the Chancellor of the Exchequer to consider the proposal I make, and I hope that in the answer he gives he will be able to indicate to us not only that he will look favourably upon it, but also indicate the way in which the valuation is to be carried out under the direction of the Commissioners. If it is to be carried out with any sense of justice and in any satisfactory way it must be done with the aid and co-operation of those who alone know the conditions of the locality.

    My hon. Friend has raised what is undoubtedly an important point, which I am sure both sides of the House desire should be dealt with carefully but, so far as possible, briefly. The Committee is not unaware of what is likely to be put forward by way of reply. My hon. Friend has pointed out that if we substitute the total value with capital value—these expressions are interchangeable in this connection—for site value we should not need to have a valuation Of such a complicated character as that which now appears in the Bill. That is no doubt true., and so far as valuation and its cost is concerned, pro tanto, that argument is sound and has to be met by showing that there are compensating advantages. First of all my hon. Friend has not quite appreciated the nature of the valuation either of the original site value or of what we might call the second valua-tion. I do not like the word valuation. I should prefer to call it computation, when the tax comes to be imposed. He has drawn a somewhat alarming picture, such as we are accustomed now to see, of the denudation of this ancient and beloved land of ours of all its buildings, the very water that is drawn from its docks, and so forth. That is not to be done even hypothetically. He has forgotten one part of Clause 14 which deals with allowances to be made for the purpose of divesting the land of buildings. It says the Commissioners shall allow as deductions "any sums which, in the opinion of the Commissioners it would be necessary to extend in order to divest the land of buildings, timber, trees," and so on. That is only given in the somewhat rare and particular case where land has not already been put to its full site value. For the purpose of putting the tax on you must make an allowance for land if it has not been adequately used. The words I have given are a direct quotation from Clause 14, sub-section 4 (b.) What is laid down there is necessary in order to divest the land of those various matters for the purpose of realising the full site value, and not for the purpose of destroying site value.

    I should like to have this point clearly explained. I understand we were referred to the deduction which has to be made in the first instance in order to arrive at the site value. That is in Clause 14, sub-section 4 (b), but under Clause 14, sub-section 2, as applied to the Surrey Docks, the hon. Baronet (Sir J. Dickson-Poynder) says that in order to arrive at the site value you have to remove the whole structure—quays, wharves, and docks—and leave the site bare. That does not come under 4 (b,) but under section 14, sub-section 2.

    This rather illustrates the inconvenience of this kind of interruption. It is perfectly clear to me what the hon. Baronet said. He describes what happens under section 2 of Clause 14 as a mere hypothetical valuation of the land.

    The hon. Baronet went on to say that there was to be an allowance. What I was pointing out was that that is only an allowance in a special case where it is necessary to get the full site value to clear the land of buildings. Now my hon. Friend raises another point of interest and he introduced a novelty. He spoke of what would happen if the valuation were taken at probate value, and he suggested that valuation might well be committed to the hands of local authorities. I am not quite sure whether he implied that even under the Bill as it now stands there ought to be a valuation reform which would put the valuation of site values in the hands of the local authorities. Clearly that is not possible.

    There again the hon. Member is interrupting without full reflection. I think he will see that what he says does not apply. When you are dealing with rateable value which expresses itself in a given year, your assessment committees and local authorities could apportion the value without much difficulty. But they are not land agents, and therefore they cannot make a hypothetical valuation. They cannot say what is the value of a particular spot if it is divested of the buildings upon it. That is a task which evidently requires an expert. I think we all agree upon that. Therefore for that purpose you cannot avail yourselves of the local authorities. The same thing may be said with regard to the capital values of land, such as would have to take place if we adopted the suggestion of the hon. Baronet. There, again, where you are dealing with the capital value of undeveloped land your local authority would have to deal with what requires expert knowledge. It will be seen that even under my hon. friend's suggestion you would still have to have experts. For that reason, I do not think he would find quite a satisfactory tribunal if he took the tribunal suggested in the Bill of the right hon. Gentleman (Mr. Long) of 1904. The real difference between the hon. Baronet and us on this matter is something much more vital and important, and I think the Government are entitled to say that the difference between us is one which is really due to the desire on the part of those who framed this Bill not to make this tax as burdensome or as severe as my hon. Friend would make it.

    The principle upon which we base our tax is very simple. The effort that we have made is to see that we keep away from the scope of this tax anything that can be ascribed to men's labour—that we should tax only that which has not come into existence by any special degree of personal labour. In dealing with the premises my hon. Friend would deal with the goodwill belonging to a particular business because of the great increase in the value of them. All that would come in under my hon. Friend's proposal. We are careful to put our tax only upon the site. Why? In order that we may not tax anything other than that which arises from what we call social co-operation, i.e., the labours of the community as a whole. We have been careful to exclude everything resulting from a man's own labour. That is the principle on which we stand and undoubtedly that principle does involve this elaborate, costly, and extensive valuation. Is it worth it? Now there are on the two sides of the House totally different opinions on the question. We think it is worth it. We think the principle so just and so fair to all classes. That shortly stated is the reason why we are determined to put the tax upon the site rather than upon the capital value. It is a much smaller tax and falls with much less hardship upon those who have to live by labour.

    I am sure we are indebted to the hon. and learned Gentleman for the endeavour he has made to enlighten us upon the very complicated proposals contained in the clause to which the hon. Baronet has moved an Amendment, but I think the Committee has hardly realised the effect of the explanation which the hon. and learned Gentleman has just given. He resists the Amendment on several grounds, one of which is that if adopted it would result in a system of valuation more costly to the owners of property concerned than would be the case under the Bill as it stands.

    I only said that this system, like ours, would involve a valuation by experts.

    The hon. and learned Gentleman also suggested that if the Amendment were adopted it might result in a more unsatisfactory valuation. But I pass that by. What he did undoubtedly say at the end was that the adoption of this system by placing a special valuation upon the land necessitated a system of valuation which he described as elaborate, extensive, and costly. As we go along we learn from the Government by slow degrees a little more as to what the real effect of this Bill would be. We have constantly asserted on this side of the House that under this Bill you are throwing not only a new and a very heavy taxation upon a particular class of property, but in addition a very heavy expense in connection with valuation. The hon. and learned Gentleman has taken up the challenge of the hon. Baronet, and has made a comparison between the system of valuation adopted under this Bill and some proposals I had the honour to submit to Parliament some years ago in connection with general valuation, and he finds, for some reason I cannot follow, that the Bill which the Government of that day produced would not be sufficient for the purpose, because experts are required. We now appreciate for the first time the effect of the system of valuation of the site as separate from the buildings and other appurtenances which we were told, during the earlier stages of this Bill, was so much easier and simpler. We are now told that this system is so difficult and costly that a local authority, although fortified by being drawn from a very wide area, and having on it the Government Commissioner of Taxes, and having full power to obtain expert advice, could not discharge this duty, which we are now told the body of Commisioners are fully able to discharge. I really do not think the learned Attorney-General ought to blame us if we do not fully understand this Bill.

    We do not wish to levy any charges against the Government, and certainly not against the Attorney-General, who has to do work even harder than that which ordinarily falls to the lot of an Attorney-General, because he has to explain many details of the Bill which Ministers are unable to explain. I am not, therefore, making any complaint, but I do submit that as we go along and find revelations in the Bill which throw an altogether new light on its provisions, it is a little difficult for us to live up to the high standard of intelligence required to appreciate the fact that the Bill means something which is not on the face of it. Moreover, the attitude of the Government upon Clause 2 is exactly the reverse of their attitude on Clause 1. We have had some rather sharp lessons during this Debate. The hon. Member for Leicester (Mr. Ramsay Macdonald) holds us as having approved the principle of the Increment Duty because we have urged that if you can justify it in regard to one class of property you can in regard to another. It therefore becomes necessary for anyone on this side who thinks the hon. Baronet's scheme better than that of the Government to be chary of expressing that opinion, otherwise he may be held to approve of the principle. I disapprove of the principle, and of the hon. Baronet's Amendment. I disapprove of site value and of capital value. I believe that the whole principle involved in this clause is wrong, and therefore, so far as I am con-concerned, I leave it to the Government and their supporters to fight it out between them.

    I am not quite sure that I undertand in detail the exact nature of the proposal of the hon. Baronet who moved the Amendment. I find the expression "capital value" used in this Bill in relation to minerals, and from his speech I gather that by the expression "capital value" he means that which is described as "total value" in Clause 14, section (1). I would venture with great respect to suggest that he should use the technical expression which finds a place in this Bill, and not complicate the matter further by using a term which has a special meaning in this Bill with regard to minerals. I gather that it is not the intention of the hon. Baronet to tax improvements, but it appears to me that without a great deal more elaboration than he has given us, the effect of his Amendment would be to tax those improvements which have come into existence between the periods when the capital value is taken. Assuming that to be guarded against, I am disposed to look with great sympathy upon this or any proposal which would eliminate from this Bill that basis of site value which at present underlies the whole of this scheme. I think I can understand prairie value. I can understand it, at any rate, in those new countries where prairie value is talked about and used as the basis of taxation. I can also understand a valuation such as takes place under our own Agricultural Rating Act, where the task of the valuer is quite simple, where there is no element of denudation, but where the valuer values separately those portions of the farm which are agricultural land and the other portions which constitute the buildings.

    But that is obviously a very different task from that which is proposed to be put on the valuer in this case. Here, to take a simple instance, how is one to ascertain the site value of an old pasture field? The site value is conceived to be the value of the field denuded of the herbage which has grown on it for ages. How is any valuer to assume what will be the value of these three acres of land denuded of their pasture? Is the valuer to say that the value would be the value of the field if it were ploughed? Anything which would eliminate this basis of site value would be an advantage. I should' have thought that if there was any-country in the world where there had been a warning against basing taxation on legal fictions it was this country. What has been the cost to us in years past owing to the fact that our rating value system has been based to a large extent on legal fictions? No one who is familiar with rating law will challenge me when I say that the existence of the hypothetical tenant and the unreal basis of fiction on which our rating laws have been based has been nothing less than a national calamity and has cost millions to this country. Yet, in spite of that, we are now deliberately starting a new unreal system.

    I must confess that it is rather discouraging to have to deal with this Question at this late hour when hon. Gentlemen on the other side of the House are asleep and the Chancellor of the Exchequer is absent. I should like to say a word or two about the remarks of the Attorney-General. We are learning something. We now know what this valuation means. The hon. and learned Gentleman tells us that his valuation is of such a nature that no one at present accustomed to valuation can make it. Yet it has to be performed by four gentlemen who have no experience. He says it requires experts. Where is he going to get experts on hypothetical cases of this kind? It will take him much longer than this Parliament will last to create his experts who are going to carry out the provisions of this Bill. I am in favour of the Amendment rather than of the Bill as it stands, for though in my opinion the two proposals mean the same thing in 99 cases out of 100, there is the difference that the hon. Baronet states openly what he means, while the Government, meaning the same thing, do not admit it. The objection of the Attorney-General to the Amendment was that the hon. Baronet proposed to tax something which would not be taxed in the Bill as it stands. What the Government propose to do is to tax not unearned increment, but the profit which anyone may make out of dealing in property. Let us take an ordinary case which will come under this Bill. A man sees a piece of land suitable for a building, and buys it for £200, spends £3,000 on it, and the