The Budget, The Land And The People.

The New Land Value Taxes Explained and Illustrated

Lloyd George

• Publisher: Routledge
• Year: 2019
• Print ISBN:
  9781138318328
• eBook ISBN:
  9780429846380
• Topic: History
• Subtopic: World History
• Index: History

First published in 1909 , this book explored the Land Value Clauses of the Finance Bill issued in this year. Designed to be accessible for a common readership, Lloyd George in this book , on behalf of the Budget League, set forth the motives of the revised land values tax so to educate the public of Britain.

CHAPTER V

THE METHOD AND NECESSITY OF LAND VALUATION

AS regards the method of putting the New Land Value Taxes into operation, the Chancellor of the Exchequer, in his Budget Speech, said:

The Chancellor of the Exchequer on valuation.

“These proposals necessarily involve a complete reconstruction of the method of valuing property. The existing taxes upon real property are levied upon the annual value of such property as a whole without distinguishing between the value which resides in the land itself and that which has been added to it by the enterprise of the owner in erecting buildings or effecting other improvements. Even apart from this the methods of valuation vary in different localities, with the result that the incidence of existing burdens is very uneven. It becomes necessary, for the purposes both of the increment value duty and of the undeveloped land duty, to distinguish between the two elements in the value of real property, while as the increment value duty and the reversion duty will both of them have to be collected from the particular interests to which these accretions respectively accrue, a complete register of the owners and other persons interested in land, with full details of the various interests, will ultimately be required. The preparation of such a register will be a lengthy task, which must in the main be proceeded with as each separate property comes under taxation, but the question of valuation is of greater urgency, and it will therefore be necessary to provide machinery for a complete valuation on a capital basis of the whole of the land in the United Kingdom.”

Mr. Churchill said, at Edinburgh:

“We shall obtain a complete valuation of the whole of the land in the United Kingdom. We shall procure an up-to-date Doomsday Book showing the capital value, apart from buildings and of of land.”

Mr. Lloyd George, Chancellor of the Exchequer, speaking at Limehouse, on July 30, 1909, said:

All land will be valued.

“We mean to value all the land in the Kingdom. And here you can draw no distinction between agricultural and other land, for the simple reason that East and West Ham was agricultural land a few years ago.”

I. HOW LAND WILL BE VALUED

Method of valuation and rights of appeal.

For the purpose of the taxes it is undeniably necessary to secure a universal valuation forthwith. The basis for the levy of the Increment Tax wherever it may become due must be laid by valuing all land at once. The Commissioners of Inland Revenue are to cause a valuation to be made of all land in the United Kingdom, each piece of land which is separately occupied being separately valued, and, if the owner requires, any part of such being separately valued. Owners will be required to furnish returns showing the rent received by them and any other particulars which the Commissioners may want and which it is in the owners’ power to give, and the owner may, if he thinks fit, furnish to the Commissioners his estimate of the value of the land, which the Commissioners shall consider.

The Commissioners will serve on the owner a copy of their provisional valuation, and unless objection is taken, it will be adopted for the purposes of the Act. If the owner considers that the valuation is not correct, he may give notice of objection to the Commissioners, stating the amendments he desires; and if the Commissioners amend the valuation so as to be satisfactory to the objector, the amended valuation will be adopted. If the amendment is not satisfactory to the objector, he may give notice of a reference. The reference is to be heard by a Referee who will be appointed out of a panel of experts by an independent Reference Committee consisting of the Lord Chief Justice, the Master of the Rolls and the President of the Surveyors’ Institution. The Referee will determine the matter in consultation with the Commissioners and the Appellant and may, if he thinks fit, make an order for payment of expenses by the Commissioners or by the Appellant. Any person aggrieved by the decision of the Referee may appeal to the High Court as directed by Rules of Court. The machinery proposed will, it is hoped, enable any disputed cases to be decided to the satisfaction of the parties without involving for the most part the expenses of formal hearing with counsel and witnesses before the Court_ The result will be that we shall have a complete, uniform, impartial valuation of all land in the United Kingdom, made with the privity and assistance of owners, and with all the skill and experience which the great national tax office can command, guaranteed by a right of reference to an impartially appointed expert, and a right of to a of the Court.

National Anti-Corn-Law League claimed revaluation as a constitutional right.

Richard Cobden on land valuation and taxation.

With regard to the constitutional right to a revaluation of land for a land tax based on the true value, it may be of interest to recall that the question was raised by the Council of the National Anti-Corn-Law League. They submitted a case to counsel, and obtained an opinion that such a constitutional right did exist; and they published a pamphlet in 1842 setting out the case and opinion.

Richard Cobden, speaking at Derby on December 10, 1841, said:

“When I look into the question of the land tax from its origin to the present time, I am bound to exclaim that it exhibits an instance of selfish legislation secondary only in audacity to the corn law and provision monopolies. Would you, gentlemen, who have not looked into the subject—but go home and study it, I entreat you—would you believe that the land tax, in its origin, was nothing but a commutation rent charge to be paid to the State by the landowners, in consideration of the Crown giving up all the feudal tenures and services by which they held the land ? Yes, exactly 149 years ago when the landed aristocracy got possession of the throne in the person of King William, at our glorious revolution they got rid of all the old feudal tenures and services … which yielded the whole revenue of the State; and besides which the land had to find soldiers and maintain them. These incumbrances were given up for a bond fide rent charge upon the land of four shillings in the pound; and the land was valued and assessed, 149 years ago, at nine million a year; and upon that valuation the land tax is still laid.

“Now, you gentlemen of the middle classes, whose windows are counted, and who have a schedule sent you every year, in which you are required to state the number of your dogs and horses; and you who have not window and dog duty to pay, but who consume sugar, and coffee, and tea, and who pay a tax for every pound you consume—I say to you, remember that the landowners have never had their land revalued from 1696 to the present time. Yes, the landowners are now paying upon a valuation made just 149 years ago. The collector who comes to you to count the apertures through which Heaven’s light enters your dwellings, who leaves you a schedule in which to enter your dogs, horses, and carriages, passes over the landowner, leaves no schedule there in which to enter last year’s rent roll under certain penalties; but he takes out his old valuation, dated 1696, and gives the landlord a receipt in full, dated 1841, upon the valuation made a century and a half ago. I say we are indebted to Sir Robert Peel for calling our attention to this subject.

“I exhort the middle classes to look to it. It is a war on the pockets that is being carried on; and I hope to see societies formed calling upon the legislature to revalue the land, and put a taxation upon it in proportion to that of other countries, and in proportion to the wants of the State. I hope I shall see petitions calling upon them to revalue the land, and that the agitation will go on collaterally with the agitation for the total and immediate repeal of the corn laws, and I shall contribute my mite for such a purpose. There must bea total abolition of all taxes upon food, and we should raise at least £20,000,000 a year upon the land, and then the owners would be richer than any landed proprietary in the world.”

II. THE NECESSITY OF VALUATION FOR HOUSING AND TOWN-PLANNING

Mr. Asquith on necessity of valuation: complete reconstruction of rating system required.

Municipal attempts to deal with housing thwarted.

With regard to the probable effect of the Housing and Town Bill standing by itself, Mr. Asquith, in the House of Commons, on May 12, 1908, stated that “the were quite as alive as his hon. friends were to the necessity of accompanying this by legislation for a proper system and method of valuation.” Again, speaking to the National Liberal Federation at Birmingham, on June 19, 1908, Mr. Asquith referred to the Bill, and said: “I agree with those who think that its necessary complement is a complete reconstruction of our valuation and rating system.”

In this connection it must be remembered that, besides the for the of the we have in our large towns City Improvement Acts and Housing Schemes in operation, under which Corporations have tried to build down to the effective demand of low-paid labour, and, very naturally, under present conditions, have failed in the attempt. Chief among those present conditions—the predisposing causes of bad housing—is the present system of assessment, which exempts from rates and taxes unused land, however much it may be in demand, and piles the whole burden on occupied premises. While those conditions remain, municipalities and Governments contend in vain with the problem. The attempt to deal with it under conditions is, in fact, being abandoned.

Glasgow schemes abandoned.

The Corporation of Glasgow, in 1902, sought power to purchase acres of land either within or beyond the City, and to borrow £750,000 for the purpose of providing houses for the poorer or labouring classes. An inquiry was ordered by the Secretary of State for Scotland into the Provisional Order promoted by the Corporation. The inquiry was held by the Commissioners in Glasgow, and evidence in support of the scheme was given by the Corpora-tion officials. The Chairman of the Commissioners, the Right Hon. W. E. Macartney, M.P., gave the decision of the Com-missioners by saying: “The Commission finds the preamble of the Order, so far as applicable to the acquisition of additional land, not proved.” The Commissioners authorised the Corporation to borrow a sum not exceeding £150,000 to complete the purposes of an Act of 1897, but they refused to give any borrowing powers for the new housing scheme.

Overcrowding continues.

Meanwhile the evils remain. On November 6, 1908, 21 cases of overcrowding were taken before a Glasgow magistrate. One case was that of a man in whose house of two rooms the sanitary officers found 19 persons, 8 adults and 11 children. On November 24, 19 cases were heard before the Court. Here there was one case where 13 persons, 7 men and women and 6 children, were found trying to spend the night in one room. On December 6, 24 cases were brought up, and again on January 22, 1909, 15 cases were heard, with the most revolting details. Land on the out-skirtsof Glasgow is frequently feued at £100 per acre per annum, which was previously yielding £2 to £3 per annum.

At a meeting of the Glasgow Town Council, held Thursday, November 19, 1908, the following resolution was adopted by 30 votes to 14:

Glasgow Town Council approves taxation of land values in Budget.

“Looking to the fact that the Corporation of Glasgow have, on several of the of the Taxation of Land Values, and looking to what has occurred in Parliament in connection with the matter, the Corporation resolve to petition the Government to include in, or in connection with, the next Budget the provisions necessary to give effect to the principle of the Taxation of Land Values.”

III. MUNICIPAL HOUSING IN LONDON

London’s housing difficulties.

High prices paid for insanitary Old inhabitants not rehoused.

The experience of London with regard to municipal housing corresponds with that of Glasgow, and indicates a similar failure owing to the present economic position with regard to rent. At first the housing schemes undertaken by local authorities in London were chiefly for the rehousing of the population displaced by public improvements or the clearance of areas. Those schemes resulted in little or no rehousing in the sense of the persons displaced occupying the new dwellings in the areas. In the case of the Blackwall Tunnel, the works displaced 1210 persons, and housing close by was provided for 1104 persons; but only nine of the original occupants availed themselves of the new dwellings. In the Boundary Street area, Bethnal Green, out of 5719, only r x persons. In the Falcon Court scheme, out of Boo displaced, only 40 of the Soo provided for were original occupants. The public authority buys up slums at exorbitant prices (land excessively dear because it had been excessively crowded), pulls down the houses, and builds new and healthy ones. But the slum-dwellers do not return to the municipal houses; they go elsewhere and create other slums. There is evidence showing that the degeneration of what were once decent six-roomed houses in West Ham is partly due to the influx of people driven out of London by the improvements there. Meanwhile, the new houses have been built on land for which so much has been paid that the municipality must either charge a loss upon the rates for the benefit of the tenants, or fix the rents so high that the poor cannot possibly pay them. The London County Council has charged enormous losses upon the rates, and yet the rents in the Council’s tenements are higher than the poorer classes can pay.

“Writing down” the value of land.

The method adopted for charging the losses upon the rates, and yet to make it appear to a casual inquirer that the housing schemes are paying their way, was to “write down” the value of...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Original Title Page
• Preface
• Table of Contents
• Introduction: The Taxation of Land Values a Well-Established Principle
• I. The Increment Value Duty
• II. The Reversion Duty
• III. The Undeveloped Land Duty
• IV. The Mineral Rights Duty
• V. The Method and Necessity of Land Valuation
• VI. Agriculture and Business
• VII. The New Taxes and Social Reform
• Conclusion: The Social and Economic Importance of the New Taxes and Valuation