Rule 8 of No. V in Schedule A shall have effect as if at the end of paragraph (2) thereof there were added the words "and additions or improvements to farmhouses, farm buildings, or cottages, but only if no increased rent is payable in respect of the additions or improvements and in so far as they are made in order to comply with the requirements of any Statute or the regulations or bye-laws of a local authority.—[Mr. Snowden.]
I beg to move, "That the Clause be read a Second time."
This Clause deals with the amendment of Rule 8 of No. V in Schedule A, which deals with claims in respect of repairs to farmhouses, etc. It gives practically everything asked for in the Amendment discussed on the Committee stage, although there was then on the Paper one Amendment which went rather further. This new Clause will allow relief from Income Tax for additions or improvements to farmhouses, farm buildings, or farm cottages, but only if no increased rent is payable in respect of the additions or improvements, and in so far as they are made in order to comply with the requirements of any Statute or the regulations or bye-laws of a local authority. I admit it was a real grievance that under the existing condition of things a landowner should be compelled to make certain improvements in his property on instructions or demand of the local sanitary authority, or by Act of Parliament, and that he should not be allowed to recoup himself by increasing the rent, or that he should not get relief from Income Tax in respect thereof. This new Clause will remove that grievance, and I hope it will be accepted.
I think the Chancellor of the Exchequer is anxious to meet the grievance which was raised in the previous discussions on the Finance Bill,
but I think he has rather missed a point in regard to this Amendment. The words,
and in so far as they are made in order to comply with the requirements of any Statute or the regulations or bye-laws of a local authority
limit the concession to those people who have thought it wise to make improvements which were required by Statute or bye-law, and if limited in that way this concession will be very little use to the rural districts. What happens is that you may have a bad cottage, or, at any rate, one which you want to improve. No Statute or bye-law will compel you to do it, but suppose you are anxious to rebuild it and make it more comfortable, and you do not want to charge any more rent to the occupier. If you leave these words in you cut out the man who wishes to do these improvements and give money back to the man who does it because he is obliged to do it, and you give no relief in the other case where it is done voluntarily.
It is quite right to make a limitation that you should not charge any more rent, and if the landlord does charge more it is right to say he must refund whatever payments have been allowed, but these words seem to me quite unnecessary, and they will discourage any body who is trying to improve his cottages of his own accord, and encourage those who are waiting until they are obliged to do the improvements. The Treasury gains if you put a good cottage in place or a bad one because the assessment is raised and the income tax is greater, but by refusing a man a legitimate reduction when he has tried to do his duty it seems to me that the Treasury are entirely blind to what is the right thing in dealing fairly with the man who is trying his best to improve housing in his district. It is most discouraging to find an attitude like this taken up by the Treasury which refuses relief to a man who is voluntarily trying to improve his property without putting anything into his own pocket. I hope the Chancellor of the Exchequer will agree to leave out the last two lines of this new Clause.
I do not think that this new Clause will be much help towards the improvement or rural cottages, and it evidently does not meet the cases brought before the right hon. Gentleman in the previous discussion which are common in the rural districts. These houses are not let at a rack rent in the rural districts, but at the traditional rent of 1s. 6d., 2s. or 2s. 6d. per week. With a desire to improve those cottages the owner may add a bedroom, or a washhouse, or make other improvements. There is no suggestion of any raising of the rents, and to do justice all round that expenditure ought to have the relief which is given to expenditure under this Clause. It is rather difficult to distinguish between that expenditure and expenditure intended to end in a raising of the rent, but the distinction is a very real one, and the number of cases is quite large in the country districts. I wish the Chancellor of the Exchequer could draw that distinction by going a little further.
I have handed in a manuscript Amendment to leave out all words after the word "improvements" in line 4 of this new Clause. I cannot help thinking that those words are practically useless for the purpose for which they are intended. I think a landowner trying to improve the condition of his farm should be able to make a claim for the maintenance allowance. I take it this depends now upon whether the regulations or the by-laws permit it. In every district there are different by-laws and regulations made by the local authorities. I think the Government are leaving this Rule in a great state of ambiguity. I do not know whether the Chancellor of the Exchequer has road the Rule as it will appear with this Amendment in it, and I think it is worth reading to the House. It will read as follows:
For the purpose of this Rule the term 'maintenance' shall include replacements to the farmhouse, farm buildings, cottages, fences, and other works where the replacement is necessary to maintain the existing rent"—
Then the words of the Amendment are added as follows:
and additions or improvements to farmhouses, farm buildings, or cottages, but only if no increased rent is payable in respect of the additions or improvements and in so far as they are made in order to comply with the requirements of any statute or the regulations or by-laws of a local authority.
Not only is this new Rule extremely clumsy, but it is liable to misconception, and I submit that it would be more in the spirit of what is required to encour-
age local rural improvements if the last three lines are left out. It seems to me that if a farmer wishes to have a bathroom put in his farmhouse, or if he wants a washhouse added to a rural cottage, if it is not laid down specially in the regulations of the local authority, the tax collector might say that these things are not laid down under the rules and regulations of the local authority, and that no claim for relief or maintenance claim can be made. Therefore, I contend that a case has been made out for leaving out those words, and in view of what has been said, I hope the Chancellor of the Exchequer will reconsider his decision, and agree to the deletion of these words.
I would like to add my voice to the appeal which has been made to the Chancellor of the Exchequer to amend the new Clause as it is put down on the Paper, because I do not think in its present form it does carry out the undertaking which the right hon. Gentleman gave on the Committee stage. I am not accusing the right hon. Gentleman of wilfully going back upon his promise, but I think I am right in saying that the Clause dealing with this subject on the Committee stage was withdrawn on the right hon. Gentleman undertaking that he would himself draft a new Clause to effect the same purpose. The new Clause which was withdrawn was not in this form, but in an alternative form, that is to say, it dealt with "additions or improvements," and I think the words were "to comply with modern requirements," and then went on as an alternative "or if they are necessary in order to comply with the statute or with the bye-laws." I now have the Chancellor's exact words before me. Those words are impromptu words, and not a very definite pledge, but I think they convey what he intended at the time to do, that is, to carry out the objects which the Mover of the new Clause which was withdrawn had in view. The difference is that the Chancellor of the Exchequer by his proposed Clause is limiting the concession to those cases only where the additions for improvements are made necessary in order to comply with Parliamentary or local statutes or Regulations. There was no such limitation in the Clause as moved on the Committee stage, and therefore as the Chancellor of the Exchequer admits that was the understanding in his own mind at the time, I think it would be fairer to go a little further than the Clause which the Chancellor of the Exchequer has now put forward.
Before the right hon. Gentleman replies, perhaps I might say that apparently there is some difficulty felt by the Treasury as to safeguarding improvements which increase the value, and ultimately increase the rent. Would it not be the fact that when the rent is increased in consequence of improvements the Chancellor of the Exchequer is aware of the fact that his assessors will be able to revise the assessments, and increase the amount of the Income Tax in accordance with the increased value shown by the increased rent obtained? It is clearly a little difficult to understand what is the essential difference of principle between the improvements which are made in the course of maintenance, because, presumably, these improvements would not be made unless they were intended to maintain the value and keep the tenant as the tenant. The improvement is not made without an increase of rent, and is that not a presumption? Cannot the right hon. Gentleman safeguard himself sufficiently by making the assessment higher in this case where an increased rent is charged?
I do not know how far the Chancellor of the Exchequer can go to meet the difficulty, but I am convinced that the actual working of this Clause will prove in the long run that its effect will be to retard any possible improvement that might take place. This Clause has been very unfortunate. In the first place, it is going to give an advantage to the landlord who is forced to do any improvements whatever. The landlord who has waited until he has received the statutory notice mo Regulations from the local authority axed complies is going to get the authority of this Clause, but the man who has willingly made improvements, not for the purpose of increased rent, but for the purpose of improving the amenities of the farmhouse or cottage, is going to get no such authority. What will that lead to in the future?
The landlord will know perfectly well that he is going to get no allowance for this expenditure. Take the case of putting up a washhouse. Everyone knows, who goes about at all in rural districts, that there are numbers of cottages which could not possibly be built and maintained for the rent that is charged for them, and, although the landlord may be willing to put up a washhouse if he is going to get any advantage from this Clause, he will, if his property is getting into a dilapidated condition, wait until he gets a notice which forces him to do it, so that he may have the advantage of the Clause. It does seem to me that under this Clause the unwilling landlord would get an advantage, while the willing landlord would be discouraged from doing what he would like to do in order to improve the cottage or farm building. Therefore, I think that the request which has been made from the other side is a reasonable one, and, if the Chancellor can possibly accede to it, I hope he will do so.
I am not sure that this Clause, as drafted, will not have a very detrimental effect on the working of the Rule without any Amendment, such as is proposed. As I read the words
in so far as they are made in order to comply with the requirements of any Statute or the regulations or bye-laws of a local authority,
they mean that it is only where the requirements of a Statute or the bye-laws of the local authority insist that certain conditions shall be complied with that relief can be given even to maintain the existing rent. That covers what has already been passed, and limits the con- cession that has already been granted. I think that that would be the correct legal view. Further, I read this Clause differently from my hon. and gallant Friend the Member for Tonbridge (Lieut.-Colonel Spender-Clay). If I understood him correctly, he read it as meaning that, if these requirements exist in a Statute or in a bye-law, then the concession will be made; but, as I read it, it will only be made if they are enforced by the local authority, and everyone knows that nothing is more common in rural England than the failure of rural district councils to enforce these bye-laws. I agree that it cuts both ways, because many of these bye-laws are obsolete and out of date, but I think the words
byelaws of a local authority
would be a limitation on the concession which would really render the concession quite valueless. I am not at all sure whether this Clause in actual practice would not be really more dangerous in the Bill than out of it, and, in view of that, I have two minds as to whether I should vote for the Second Reading of the Clause. I agree that the point is a difficult one, and one which should be very thoroughly investigated by the House before, on the Report stage of the Bill, we add a Clause drafted as this Clause is, and I do hope that the Financial Secretary to the Treasury will very thoroughly clear up the points, and will, if the Clause is read a Second time, see his way to accept such Amendments as will obviate the lamentable results which have been pointed out on both sides of the House, and which, I fear, will be even worse than has been foreshadowed by other Members who have spoken.
I agree with what has been said by my hon. Friend the Member for Stafford (Mr. Ormsby-Gore). It seems clear that every one agrees with the proposed new Clause down to the word "improvements," but the Chancellor of the Exchequer seems to take up the attitude that he must have the remaining words of the Clause. May I suggest that he might please everyone and make the Rule as amended fit his purpose if, for the word "and" after "improvements," he would substitute either the word "or" or the words "and/or"? Then there would be two alternatives, either of which might enable the man who does the repairs to benefit under the new Clause. If the Chancellor of the Exchequer cannot see his way to accept the Amendment of my hon. and gallant Friend the Member for Tonbridge (Lieut.-Colonel Spender-Clay), would he consider this suggestion of mine?
I do not know whether the Chancellor of the Exchequer appreciates to what extent these words go. The additions or improvements which will remain within the limits of the concession he has made are very limited. What are they? They are such additions or improvements as are made in order to comply with the requirements of any Statute or the regulations or bye-laws of a local authority. That means that they are limited absolutely to something in the nature of an offence, to something or other that is wrong. They are, therefore, not additions or improvements at all, and the last words of the Clause are absolutely contrary to the preceding words, "additions or improvements." I suggest that it is not in the power of a local authority to require an addition or improvement, and I hope the Chancellor of the Exchequer will reconsider the last two lines of the Clause between now and another stage of the Bill.
I readily respond to the suggestion which has been made that I should say a word or two in further explanation of this Clause, and I feel that I can best do so by reminding hon. Members briefly of the position regarding maintenance and repairs at the present time. As the House is aware, there is, under the existing legislation, an allowance in respect, of maintenance and repairs of one-eighth of the annual value of the property, and, over and above that—and this is important if these terms are widely interpreted—there is the provision that if taking a five years' average, the expenditure has exceeded one-eighth of the annual value, that allowance may be given to the proprietor of the rural or semi-rural cottage. That is the state of affairs at the present time regarding maintenance and repairs, and I venture to recall the facts to the House for the express purpose of drawing the very clear distinction which exists between these provisions in regard to maintenance and repairs and what is really a provision for capital expenditure, such as my right hon. Friend is now suggesting. That, after all, is the essential distinction.
There is not the least doubt that the Clause which my right hon. Friend has put on the Paper is a Clause making a certain allowance in respect of capital expenditure, because it specifically refers to additions to the farmhouse or other farm property. I need not remind hon. Members that that is a very important departure in Income Tax practice in this country, because the whole practice hitherto has been to rule out anything in the nature of an allowance for capital expenditure. It is perfectly plain that, with the best will in the world to do well by this Clause, we could only take steps in that direction with very great care and hesitation, because, immediately we made a concession to one class, it would be pressed for by other classes, and in course of time the structure of Income Tax administration would be undermined. I feel sure that, if the House understand this aright, they will realise that there is no restriction of the kind that has been suggested. The hon. Member for Stafford (Mr. Ormsby-Gore) and other hon. Members have argued as if this were to be only available on a specific direction by the local authority to do certain things or comply with certain requirements in a Statute. That is not as we understand it. The broad fact is that these are very often—indeed, mostly—general regulations, and, according to the provision embodied in this Clause, it applies to all people, that is to say, to people generally who fall within the regulations or provisions of the local authority in that district. Accordingly, there would be no difficulty whatever in getting this allowance in respect of what I have called capital expenditure, and I imagine that the kind of problem which has been described by hon. Members could not arise.
The word "requirements" is used in the sense of local regulations in the locality. I am perfectly satisfied that that difficulty cannot arise, but, in any event, may I point out that we are carrying out in this Clause exactly what is intended by the Clause standing later on the Paper, in the name of the hon. and valiant Member for Ashford (Major Steel) and other Members, in which are used the words
…. and the term 'replacement' shall include replacement according to an improved standard necessary to meet modern requirements, or to comply with any Act of Parliament or any regulation or bye-laws of a local authority.
[HON. MEMBERS: "The word is 'or'!"] The whole point that I am making at the moment is that the hon. Members in whose name that Clause stands have in view the requirements of the local authority. Our information is that there is no danger of a difficulty of this kind, but, quite frankly, my right hon. Friend
feels that he could not go beyond this provision in regard to what is a matter of capital expenditure, and I beg the House to keep that very clearly in view. We are satisfied that there will be no restriction in practice, and, if the Clause were widened as suggested, it would open the door to a large class of capital expenditure which in Income Tax practice could not be justified at all.
Do I understand the hon. Gentleman to make a distinction between the requirements of a Statute and the requirements of a local authority? If that be so, would he consider substituting for the word "requirements" the word "terms," which would only apply to the one and not to the other?
Do I understand the hon. Gentleman to say that, if the landowner desires to put a bath-room into his farm house, because the majority, at any rate, of the new houses that are now being erected are fitted with bath-rooms in rural districts, and especially in urban districts, that fact, that he is putting in a bath-room in accordance with modern requirements, would enable him to obtain a return of Income Tax in respect of maintenance?
If I may, by leave of the House, add a word, I should not like to reply to that point off-hand. It is rather difficult to make statements which are interpreted outside, applying to a large number of people, but, on the suggestion of the right hon. Member for Lady-wood (Mr. N. Chamberlain), I see no objection to the acceptance of the words "terms," or perhaps the word "provisions" would be a better word.
There is one important matter to which the Financial Secretary to the Treasury has not replied. My hon. Friend the Member for Stafford (Mr. Ormsby-Gore) suggested that the addition, of these words would have a limiting effect on the present Rule, and would, in fact, take away concessions that had been made already. I think, before going further, that point ought to be cleared up. I do not know whether the learned Attorney-General has given his attention to it, but I think the point ought not, to be left in doubt.
There is no doubt on that point. It would not have the limiting effect suggested, and I was endeavouring to make it clear in dealing with the capital expenditure, and the ordinary arrangements for maintenance and repairs.
I have already given reasons why I think it is important that this Rule should be amended. I agree with the hon. Member for Stafford (Mr. Ormsby-Gore) that the effect of this new Rule is absolutely to take away the concession previously granted. I think it would be an advantage to the House if we could have some response from the learned Attorney-General as to what the Rule, as amended, really means, because I think that there is a distinct danger that, instead of gaining, we are actually losing.
I really do not think there need be any fear of the kind suggested. I understand that that fear was really based upon the reading of the word "requirements," as meaning requirements which were started by proceedings. The word never really meant that, and now it is proposed to put the word "provisions" in its place. My view was always that you should read the word "requirements" in the same way as "provisions." There was something to be said for the fear as long as any hon. Member had in his mind the danger of the word "requirements," but now, that the word "requirements" is to be changed to "provisions," I have not the slightest hesitation in saying that there is not the least danger as suggested.
Would the hon. and learned Gentleman accept, instead of the words "in order to comply," the words "consistently with the provisions of any Statute"? We want to encourage the landlord who goes actually ahead of legal obligations, and does what he believes to be his moral duty, but if you limit it in the words as they appear on the Paper, they do seem to impose some law of compulsion. As the Attorney-General said, by altering the word "requirements" into "provisions," it takes away part of that. It seems to roe my suggestion would remove the whole trouble.
May I answer that, not from the point of view of policy, but merely from the point of view of the effect of the words? I think the words suggested would lead to the gravest doubt as to what is meant. The words "in order to comply with the provisions" mean that where the provisions of any statute or the regulations say that there shall be bathrooms, or various forms of improvements, it has nothing to do with legal proceedings. It merely means to say that a person carries out of his own motion that which the by-law says shall be carried out. To put in the other words suggested, I think, would lead to very grave doubt as to what they do mean.
The Financial Secretary to the Treasury said the Chancellor of the Exchequer could not agree to any further concession with regard to capital expenditure, but it is a concession to capital expenditure, if you apply it merely to people who make their improvements, because they are told to do so by the local authority. If you can make that concession to people who do it under com- pulsion, cannot you make it to people who do it of their own free and, possibly, go beyond the bare requirements of the local authorities?
The one case is that of a man who makes the least improvements he can before he gets the Order, and the other case is that of a man who makes the most generous improvements, going beyond the minimum requirements of the local authority. If the right hon. Gentleman means that a man who goes considerably beyond the bare requirements of the local authority will get the relief, that is a very different matter.
May I ask my right hon. Friend to make this point clear? There is not the least doubt that the Financial Secretary led us to believe that if it was a capital expenditure, notwithstanding the fact that it did comply with the Order, it would be allowed. Now he says that, if it complies with certain regulations, it will be allowed.
May I suggest there will be no need to add words if certain words are omitted? The hon. Gentleman does not want to confine these allowances to cases where the local authority is taking action against a recalcitrant landlord, and, therefore, I suggest he can make these words fit by simply leaving out the words "are made in order to." I suggest that would meet the situation as described by the Chancellor of the Exchequer and the Attorney-General.
I am not at all satisfied either by the Attorney-General or by the Financial Secretary. It seems to me vital in the discussion to have the Rule before us, because this is adding words containing a limitation of an existing Rule. The existing Rule is a definition of the word "maintenance." That is where I think the Financial Secretary is wrong. All his fears about large concessions being made to capital expenditure are ruled out, because the
whole Rule applies to maintenance. Let me read the Rule:
For the purpose of this Rule, the term 'maintenance' shall include the replacement of farmhouses, farm buildings, cottages, fences and other works where the replacement is necessary to maintain the existing rent.
All these words deal with maintenance. On the top of that, you are adding, without comment, and without any stop, words ending with
and in so far as they are made in order to comply with the provisions of any Statute or the regulations or bye-laws of a local authority.
It seems to me it is quite definitely a limitation of the definition of the word "maintenance" in the old Rule, and I am not satisfied that the Inland Revenue authorities would not so read it. I think the words are absolutely fatal to the smooth and effective working of the concession that was granted.
I had not the Rule before me when I spoke last, though I had it in my mind. I have it before me now, and I think the hon. Gentleman will see that his fear is one which he really need not anticipate. This is how it would read:
For the purpose of this Rule, the term 'maintenance' shall include replacement of farmhouses"—
and so on, where the replacement is necessary. So that the term "maintenance" includes the replacement of the building add "additions or improvements." The limitation is only in regard to "the additions or improvements in so far as they are made," and so on. The latter words only regulate the additions or improvements. They do not affect maintenance at all. The maintenance stands by itself.
Will the hon. and learned Gentleman consider this point? I think my hon. Friend was wrong, perhaps, in referring to maintenance. The point is that the rule as it stands deals with replacement.
This would distinctly allow the concession to extend over the very sort of case the Chancellor of the Exchequer and the Attorney-General wished. It will be possible for this concession to be asked for in case of additions or improvements which comply with the provisions of any Statute or the regulations or by-laws of a local authority and it would not confine it to cases where die local authority has taken action against the landlord.
I am afraid that Amendment would be extremely dangerous and I certainly cannot allow my right hon. Friend to accept it. If you leave out these words the landlord may do the very thing the Chancellor of the Exchequer does not desire him to do. He may expend money on the house not in order to comply with regulations or Statutory requirements, and having done the work he desires to do he could apply for exemption, and when the Inland Revenue objected he would say, "What I have done complies with the regulations. I have put in a lot of things and they all comply with the regulations." The result would be that everyone could always come with any work he had done and say, "It complies with the regulations." The whole purpose of these words, as I understand them, is that this provision shall only apply in the case of improvements which are bound to bring the cottages up to the requirements of the local authority or Statute, and the words "in order to comply with" make that quite clear. If you take them away the greatest danger would result.
I want to put to the Government one concrete question with regard to certain by-laws which are very well known in many parts of the country. They are by-laws which deal with new houses. The bedrooms have to be of a certain cubic space, there has to be so much space between the floor and the ceiling, and the windows are to be in a certain position with regard to ventilation. They do not apply to existing houses. Under this Clause if a landlord, in repairing his cottage, takes off the roof and raises the height of the bedroom, would he be able to say that complies with the requirements for a new house. The local authority could not make him comply with these, but if the landlord comes along in order to improve his property and complies with the by-laws affecting new houses would he be able to get the exemption?
I want to put a similar question on a practical point. Where a wash-house is added to a cottage it is new capital expenditure. The rent is not raised, and there is no requirement in the by-laws. It is of great advantage to the cottage. Will that expenditure be allowed?
It would be rather an audacious thing to give a definite reply to a hypothetical question. The cases put are very largely of a legal character. If I were to express my own opinion, I should say neither case would come within the provisions of this Clause, because they would Loth be distinctly of the nature of capital expenditure.
What my hon. Friend has suggested is this. Even in cases where no increase of rent is to be allowed and the landlord cannot benefit in any way he cannot improve the property and bring it up to modern requirements without having at the same time to pay Income Tax on the very necessary expenditure which he makes. My hon. Friend put a case in which the landlord was trying to bring his property up to the modern standard and the Chancellor of the Exchequer gives it admittedly as his own personal opinion that in that case, with the words that are now inserted, the landlord will not be able to obtain a reduction on his Income Tax for that expenditure. Surely that hits at the whole object of the Clause and the whole object of the right hon. Gentleman's concession. There are throughout the country an enormous number of properties, farm buildings, cottages, and so forth, which have at some time or other to be brought up to modern requirements, and it seems to me that the concession made with one hand is now being taken away with the other. So far as this point is concerned in regard to the Treasury being mulct in a very large amount by persons making great capital expenditure, not really for the purpose of improving the property from the point of view of the tenants, but improving it so that at a later stage they can obtain increased rent, I suggest that the right hon. Gentleman is entirely covered already in the Clause, because if, at a later date, the rent is increased by virtue of these additions, it is open to the Income Tax Commissioners to go to the landlord and say, "You only obtained this concession because you were not going to increase the rent. We have given you this concession and you have made these improvements, and you have increased your rent and you must pay us the hack money you owe." In that case the Chancellor is entirely covered. I suggest that the Amendment should be pressed to a Division because it raises a very important point to fill the rural districts in the country and without it a willing landlord will be discouraged from improving his property and bringing it up to the modern standard of requirements.
May I ask the Chancellor of the Exchequer to consider one other point? When we discussed the Clause I pointed out that the house would be assessed at a considerably higher value after these improvements had been made, and therefore, even if the Treasury made the concession that you should deduct as an allowance the capital expenditure you had made in making this improvement, they would still be gaining annually on the Income Tax because the assessment of the house would have been raised. What they are doing now is to say, "We are going to mulct you in Income Tax by raising your assessment although you may not be getting any more rent, and we are also going to refuse you any concession which other people, who have not done nearly such useful improvements as you, are going to get."
I quite realise that the Chancellor thinks he has made a considerable concession. I do not want to appear ungrateful, but it is difficult to reconcile the last speech of the Attorney-General with either his previous speech or with the Chancellor's speech. If they really mean not to confine this to cases where the local authority are requiring the owner of a cottage or a farm to do certain things, which, as I understood it, was the speech of the Attorney-General and of the Chancellor of the Exchequer, I suggest that they must leave out these words. What do they mean if they a-re left in? I am unfortunately not a lawyer and the Chancellor of the Exchequer is not a lawyer, but they must mean something in the nature of a requirement issued by the local authority requiring something to be done. If they do not meet us on this point the whole value of the concession which I am sure the Chancellor wants to give would be gone, and I feel very much disposed to ask the House to divide.
I quite see the Attorney-General's point, and I think he is perfectly right. When you have the words "in order to comply with" it means that you must not do more than comply. The Attorney-General suggested that, if you leave out the words, a man might build a Buckingham Palace and so comply with the Regulations regarding houses for the working classes. But that only shows the difficulty we are in and the lack of any real necessity on the Chancellor's part for including these words at the end of the Clause, because, taking that simile, it is certain that no landowner is going to build a Buckingham Palace by way of improvement. The whole point is, that he must not get any extra rent. That prohibition of getting any additional rent will give the right hon. Gentleman all the protection he requires. On the other hand, there is this very serious objection, that if you are going to have this qualification at the end, you may not only be giving no benefit, or very little benefit, but you may be bringing about an even worse state of affairs, because you encourage people to let things go until they get to the very worst in order to make quite certain that they will get the benefit of this provision.
It is against the principles of our law that a man should be required to criminate himself, but as far as I can see the only ground on which a landlord can appeal to the Inland Revenue with regard to this expenditure is on the ground that "before I spent the money I was breaking the law by keeping the house in such a condition that it was not complying with the Statute." Statutes only fix a minimum standard; we want something better than that. The real difficulty is that the Chancellor will not accept the word "reasonably." If the question is whether the landlord has reasonably complied with the improved standard required by the modern conditions, the Inland Revenue can interpret it and can interpret it fairly. If you are going to refuse to allow any question of fact of that kind to be considered, I think you wilt have the greatest difficulty in getting any form of words which will encourage the decent landlord, which is what I think the House wants.
Will the Chancellor of the Exchequer tell us what concession he thinks he is making if he refuses this Amendment? As I understand it, he says that in regard to old houses if a landlord tries to improve an old house by adding a bathroom or a wash house, or putting in windows, that as these are not done in order to comply with regulations relating to old houses and are only in accordance with regulations relating to new houses, the landlord is not to be allowed deductions in respect of that expenditure. Seeing that the whole object of this series of Amendments is that we may improve existing housing, it seems to me that the right hon. Gentleman is making no concession at all. If, on the other hand, he can see his way to accept this Amendment, that is, provided that the alteration is in accordance with the regulations relating to new houses, bringing the old houses up to date, then he is making a concession, but not otherwise.
In his concluding observation, the right hon. Gentleman has crystallised the whole matter. Hon. Members opposite, supported by a few hon. Members sitting on this side, want to include for allowances capital expenditure employed in the rebuilding and modernising of a cottage.
Let us see what that really amounts to. There may be no increase of rent in the first year or during the period in which that particular landlord is the owner, but what guarantee is there that he is not going to sell that house and that he is going to get the actual value of the expenditure that he has incurred and the man who buys the house then charges an increased rent?
At the expense of the Inland Revenue. [HON. MEMBERS: "No!"] Undoubtedly. Hon. Members have forgotten the existing allowances that are made. The existing allowances are quite sufficient to meet such expenditure as putting in new windows, mentioned by the right hon. Member for Colchester, in place of old windows. The right hon. Gentleman asks me what my Amendment will do. Suppose a local authority required the water supply to be improved. That would be covered. Suppose the local authority insisted upon the drainage being improved. That would be covered. Suppose they insisted upon new sanitation so as to make the property come up to the requirements of the local authority. That would be covered. Any large expenditure of that kind would come within the terms of my Amendment.
I do not dispute the Attorney-General's ruling. The sort of condition which the Chancellor of the Exchequer has been considering is where a local authority makes a drainage order, or some such order, applying to old houses. If the same sort of works were carried out on the 1st January, and the order applying to old houses was not made until the 1st June, the man who carried out the work on the 1st January would not he allowed a deduction, but if he did it on the 2nd July, under compulsion from the local authority, he would come within the Regulations applying to old houses. We want to bring the old houses no to the standard of the new.
The hon. Member who moved the Amendment said that if my view was right and was adopted by the Chancellor of the Exchequer, that what we intended to cover were cases where work was done in compliance with Regulations, without waiting for orders, we might accept these words. The answer to that comes from what has been said by the right hon. Member for Colchester (Sir L. Worthington-Evans), because he hopes to get some sort of an Amendment which will give the right to bring old cottages up to the requirements of new cottages, which is far beyond anything which I suggested, and far beyond what my hon. Friend intended by his Amendment. The right hon. Member for Colchester wants much more than that, and it is because of that that we cannot accept the Amendment. The reason why my right hon. Friend cannot accept the Amendment is because he sees the danger that if he does accept it, the view of the right hon. Member for Colchester will prevail, and that will he doing more than my right hon. Friend intends. All that we intend is to put in a provision that any landlord who, without waiting for compulsion of any kind, carries out requirements which are thought by the local authority to be desirable and right for houses of that sort and of the age and condition which they then are, should get the allowance. [Interruption.] Take an ordinary case of a street in a village, and the local authority says, "These houses are insanitary"—
Let me take, then, farm houses and farm cottages. The local authority says: "All these cottages are insanitary. They will have to be modernised in the sense that the sanitation has to be improved, and wash-houses and bathrooms must be provided." Under the present law the landlord would have to do it and he would get nothing allowed for the purpose of Income Tax. [HON. MEMBERS: "That is not so!"] That is so. The reason why we cannot accept the Amendment is because we think it is dangerous and goes far beyond what we are prepared to concede.
Will the Attorney-General explain what is the concession that is being made and how he will give effect to it? I wish to confine my Amendment to what I said when I moved it. I do not follow whether that is in conflict with what hag been said by the right hon. Member for Colchester. If the Attorney-General has any suggestion to make that would meet the point I have raised, I should be glad to hear it. I am certain that if these five words are left in, that the point will not be met, whether the point raised by the right hon. Member for Colchester is met or not.
Whether I be right or wrong, I am satisfied that the words as they now stand carry out what my hon. Friend desires. Perhaps the right hon. and learned Member for Central Bristol (Sir T. Inskip) will contradict me if he thinks I am wrong. My point is that the words
in order to comply with the provisions of any Statute or regulations
are not limited to cases where there has been an order, or any compulsion, but include the case of a landlord who voluntarily does without any order that which is necessary in order to bring the house up to the requirements of the regulation or standard. That is what my hon. Friend desires to see brought about, and
I can assure him that the words as they now stand do that.
The Attorney-General has appealed to me on a matter of technical construction. I agree with the statement that the inclusion of the words "and in order to comply with the provisions of a Statute" have a different effect from the words "and comply with the provisions of a Statute." But what I think, with all due respect, the Attorney-General has missed is that when he speaks of the case of a man anticipating the requirements or the provisions of the Statute with regard to any existing buildings, the local authority has no power to make any requirements with regard to those buildings so as to kiting them up to the standard which is laid down for new buildings. The Attorney-General imagined a case of the requirements of a local authority which might require a new wash-house or a bathroom to be put into an existing building, but no local authority has any such power, and I do not suppose that any Act of Parliament which this House is likely to pass will enable a local authority to do any such thing. They may close the House but they cannot compel a man to spend money. Therefore, the principle is being made that this Clause as drawn is that, inasmuch as it only applies to provisions, which a local authority has power to make, it really gives nothing to the landlord who desires some relief, because the cases which the learned Attorney-General has imagined are cases which cannot exist under the existing state of the law.
I am sure that everyone wishes to arrive at a proper conclusion as to what this really means. It is quite true that a local authority cannot say, "You shall put in a bathroom," but a local authority may make requirements, and in the case of a house being insanitary the local authority has power to close it and the local authority has also power to say what houses are insanitary. This covers all requirements. There are full powers under which a local authority can say that a house is insanitary. If a house is insanitary and a large amount of money has to be spent on doing certain things, and these things are not done, the local authority has power to say that the house must be closed.
It is true in general terms that there is not. The only reason why I said "wash-house" was that that word has been used. I was only dealing with a point made by my right hon. Friend that the local authority has no power to make a person do something, but the local authority has full power to say that if a house is not put into a certain condition it may be regarded as insanitary.
I should be very sorry if this controversy were to be continued, and I would make a suggestion. The Chancellor of the Exchequer is very rightly solicitous about the increase the revenue. But in the case quoted, of a man who makes a large capital expenditure, and sells a house, the Chancellor of the Exchequer has the Stamp Duty, and when an increased rent is finally obtained.
the Income Tax assessment is likewise increased. However, I pass from that. What is not met is the case of the landowner who, without any order from the local authority, does something which is really necessary to have the house brought up to a proper standard, and whatever may happen under this Amendment I would suggest the omission of the words
or the regulations or by-laws of a local authority
at the end of the Clause, and the addition, instead of the words omitted, of the words
are certified by the Meal authorities as necessary for modern needs
I would suggest that the Chancellor of the Exchequer should consider this between now and the time when we arrive at these words.
|Division No. 152.]||AYES.||[5.52 p.m.|
|Acland, Rt. Hon. Francis Dyke||Dickson, T.||Henderson, T. (Glasgow)|
|Adamson, Rt. Hon. William||Dukes, C.||Henderson, W. W.(Middlesex,Enfield)|
|Adamson, W. M. (Staff., Cannock)||Duncan, C.||Hirst, G. H.|
|Alexander, A. V. (Sheffield, Hillsbro')||Dunn, J. Freeman||Hore-Belisha, Major Leslie|
|Allen, R. Wilberforce (Leicester, S.)||Dunnico, H.||Hudson. J. H.|
|Ammon, Charles George||Edwards, C. (Monmouth, Bedwellty)||Isaacs, G. A.|
|Aske, Sir Robert William||Edwards, G. (Norfolk, Southern)||Jackson, R. F. (Ipswich)|
|Attlee, Major Clement R.||Edwards, John M. (Accrington)||Jewson, Dorothea|
|Baker, Walter||Egan, W. H.||John, William (Rhondda, West)|
|Banton. G.||Emlyn-Jones, J. E. (Dorset, N.)||Johnston, Thomas (Stirling)|
|Barclay, R. Noton||Falconer, J.||Jones, C. Sydney (Liverpool,W.Derby)|
|Barker, G. (Monmouth, Abertillery)||Foot, Isaac||Jones, Henry Haydn (Merioneth)|
|Barnes, A.||Franklin, L. B.||Jones, Rt Hon. Lelf (Camborne)|
|Barrie, Sir Charles Coupar (Banff)||Gardner, B. W. (West Ham, Upton)||Jowett, Rt. Hon. F. W. (Bradford,E.)|
|Batey, Joseph||Gardner, J. P. (Hammersmith, North)||Keens, T.|
|Benn, Captain Wedgwood (Leith)||Gavan-Duffy, Thomas||Kenworthy, Lt.-Com. Hon. Joseph M.|
|Birkett, W. N.||Cibbins, Joseph||Kirkwood, D.|
|Black, J. W.||Gillett, George M.||Lansbury, George|
|Bondfield, Margaret||Gosling, Harry||Laverack, F J.|
|Bonwick, A.||Gould, Frederick (Somerset, Frome)||Law, A.|
|Bowerman, Rt. Hon. Charles W.||Graham, D. M. (Lanark, Hamilton)||Lawrence, Susan (East Ham, North)|
|Bramsdon, Sir Thomas||Graham, W. (Edinburgh, Central)||Lawson, John James|
|Briant, Frank||Greenall, T.||Leach, W.|
|Broad, F. A.||Greenwood, A. (Nelson and Colne)||Lee, F.|
|Bromfield, William||Grenfell. D. R. (Glamorgan)||Lessing, E.|
|Brown, A. E. (Warwick, Rugby)||Griffiths, T. (Monmouth, Pontypool)||Livingstone, A. M.|
|Brown, James (Ayr and Bute)||Groves, T.||Lowth, T.|
|Buckle, J.||Grundy. T. W.||Lunn, William|
|Buxton, Rt. Hon. Noel||Guest, J. (York, Hemsworth)||McCrae, Sir George|
|Cape, Thomas||Guest, Dr. L. Haden (Southwark, N.)||MacDonald, Rt. Hon. J.R.(Aberavon)|
|Chapple, Dr. William A.||Hall, G. H. (Merthyr Tydvil)||McEntee, V. L.|
|Charleton, H. C.||Hamilton, Sir R. (Orkney & Shetland)||Mackinder, W.|
|Church, Major A. G.||Harbord, Arthur||Maclean, Nell (Glasgow, Govan)|
|Clarke, A.||Hardle, George D.||Macnamara, Rt. Hon. Dr. T, J.|
|Climie, R.||Harris, John (Hackney, North)||Macpherson, Rt. Hon. James I.|
|Clynes, Rt. Hon. John R.||Harvey, T. E. (Dewsbury)||Maden, H.|
|Collins, Sir Godfrey (Greenock)||Hastings, Sir Patrick||March, S.|
|Compton, Joseph||Hastings, Somerville (Reading)||Marks, Sir George Croydon|
|Cove, W. G.||Haycock, A. W.||Marley, James|
|Cowan, D. M. (Scottish Universities)||Hayday, Arthur||Martin, W. H. (Dumbarton)|
|Crittall, V. G.||Hayes, John Henry||Masterman, Rt. Hon. C. F. G.|
|Darbishire, C. W.||Hemmerde. E. G.||Maxton, James|
|Davies, Rhys John (Westhoughton)||Henderson, Rt. Hon. A. (Burnley)||Meyler, Lieut.-Colonel H. M.|
|Davison, J. E. (Smethwick)||Henderson, A. (Cardiff, South)||Middleton, G.|
|Mitchell, R. M.(Perth & Kinross,Perth)||Scurr, John||Tillett, Benjamin|
|Montague, Frederick||Seely, H. M. (Norfolk, Eastern)||Tinker, John Joseph|
|Morel, E. D.||Sexton, James||Toole, J.|
|Morrison, R. C. (Tottenham, N.)||Shaw, Rt. Hon. Thomas (Preston)||Tout, W. J.|
|Morse, W. E.||Sherwood, George Henry||Trevelyan, Rt. Hon. C. P.|
|Muir, Ramsay (Rochdale)||Shinwell, Emanuel||Turner, Ben|
|Murray, Robert||Short, Alfred (Wednesbury)||Turner-Samuels, M.|
|Naylor, T. E.||Simon, E. D. (Manchester,Withingtn.)||Varley, Frank B.|
|Nichol, Robert||Simon, Rt. Hen. Sir John||Viant, S. P.|
|Nixon, H.||Simpson, J. Hope||Vivian, H.|
|O'Connor, Thomas P.||Sinclair, Major Sir A. (Caithness)||Wallhead, Richard C.|
|O'Grady, Captain James||Smillie, Robert||Ward, G. (Leicester, Bosworth)|
|Oliver, George Harold||Smith, Ben (Bermondsey, Rotherhithe)||Ward, Col. J. (Stoke upon Trent)|
|Oliver, P. M. (Manchester, Blackley)||Smith, T. (Pontefract)||Watson, W. M. (Dunfermline)|
|Paling, W.||Smith, W. R. (Norwich)||Webb, Lieut.-Col. Sir H. (Cardiff, E.)|
|Palmer, E. T.||Snell, Harry||Webb, Rt. Hon. Sidney|
|Parkinson, John Allen (Wigan)||Snowden, Rt. Hon. Philip||Wedgwood, Col. Rt. Hon. Josiah C.|
|Pethick-Lawrence, F. W.||Spence, R.||Welsh, J. C.|
|Ponsonby. Arthur||Spencer, George A. (Broxtowe)||Westwood, J,|
|Potts, John S.||Spencer, H. H. (Bradford, S.)||Wheatley, Rt. Hon. J.|
|Pringle, W. M. R.||Spero, Dr. G. E.||Whiteley, W.|
|Raffety, F. W.||Stamford, T. W.||Wignall, James|
|Rathbone, Hugh H.||Stephen, Campbell||Williams, Dr J. H (Llanelly)|
|Raynes, W. R.||Stewart, J. (St. Rollox)||Williams, Lt.-Col. T.S.B.(Kenningtn.)|
|Rendall, A.||Sullivan, J.||Williams, T. (York, Don Valley)|
|Richards, R.||Sunlight, J.||Wilson, C. H. (Sheffield, Attercliffe)|
|Richardson, R, (Houghton-le-Spring)||Sutherland, Rt. Hon. Sir William||Wilson, R. J. (Jarrow)|
|Ritson, J.||Sutton, J. E.||Windsor, Walter|
|Robertson, T. A.||Terrlington, Lady||Wintringham, Margaret|
|Robinson, S. W. (Essex, Chelmsford)||Thomas, Rt. Hon. James H. (Derby)||Woodwark, Lieut.-Colonel G. G.|
|Robinson, W, E. (Burslem)||Thompson, piers G. (Torquay)||Wright, W.|
|Romeril, H. G.||Thorne, G. R. (Wolverhampton, E.)|
|Rose, Frank H.||Thorne, W. (West Ham, Plaistow)||TELLERS FOR THE AYES.—|
|Royle, C.||Thornton, Maxwell R.||Mr. Frederick Hall and Mr. Warne.|
|Scrymgeour, E.||Thurtle, E.|
|Agg-Gardner, Rt. Hon. Sir James T.||Davies, Sir Thomas (Cirencester)||Lamb, J. Q.|
|Amery, Rt. Hon. Leopold C. M. S.||Davison, Sir W. H. (Kensington, S)||Lane-Fox, George R.|
|Astor, Maj. Hon. John J.(Kent,Dover)||Dawson, Sir Philip||Leigh, Sir John (Clapham)|
|Atholl, Duchess of||Doyle. Sir N. Grattan||Lloyd-Greame, Rt. Hon. Sir Philip|
|Austin, Sir Herbert||Dudgeon, Major C. R.||Locker-Lampson, G. (Wood Green)|
|Baird, Major Rt. Hon. Sir John L.||Eden, Captain Anthony||Lord, Walter Greaves-|
|Baldwin, Rt. Hon. Stanley||Edmondson, Major A. J.||Lorimer, H. D.|
|Banks, Reginald Mitchell||Ednam, Viscount||Lowe, Sir Francis William|
|Barnston, Major Sir Harry||Elliot, Walter E.||Lumley, L. R.|
|Beamish, T. P. H.||Elveden, Viscount||Lyle, Sir Leonard|
|Beckett, Sir Gervase||England, Colonel A.||MacDonald, R.|
|Benn, Sir A. S. (Plymouth, Drake)||Erskine, James Malcolm Monteith||Macnaghten, Hon. Sir Malcolm|
|Bentinck, Lord Henry Cavendish-||Eyres-Monsell, Com. Rt. Hon. B. M.||McNeill, Rt. Hon. Ronald John|
|Berry, Sir George||Fade, Major Sir Bertram Godfray||Makins, Brigadier-General E.|
|Betterton, Henry B.||Ferguson, H.||Marriott, Sir J. A. R.|
|Birchall, Major J. Dearman||FitzRoy, Captain Rt. Hon. Edward A.||Martin, F. (Aberd'n & Kincardine, E.)|
|Bird, Sir R. B. (Wolverhampton, w.)||Forestler-Walker, L.||Meller, R. J.|
|Blundell. F. N.||Gilmour, Colonel Rt. Hon. Sir John||Millar, J. D.|
|Bourne, Robert Croft||Greene, W. P. Crawford||Mitchell. W. F. (Saffron Walden)|
|Bowater, Sir T. Vansittart||Grenfell, Edward C. (City of London)||Moore-Brabazon, Lieut.-Col. J, T. C.|
|Bowyer, Capt. G. E. W.||Gretton, Colonel John||Moulton, Major Fletcher|
|Brass, Captain W.||Guinness, Lieut.-Col. Rt. Hon. W. E.||Nail, Lieut.-Colonel Sir Joseph|
|Brassey, Sir Leonard||Hacking, Captain Douglas H.||Newman, Sir R. H. S. D. L. (Exeter)|
|Bridgeman, Rt. Hon. William Clive||Hall. Lieut.-Col. Sir F. (Dulwich)||Newton, Sir D. G. C. (Cambridge)|
|Buckingham, Sir H.||Hannon, Patrick Joseph Henry||Nield, Rt. Hon. Sir Herbert|
|Bullock, Captain M.||Harland, A.||O'Neill, Rt. Hon. Hugh|
|Burney, Lieut.-Com. Charles D.||Harmsworth, Hon. E. C. (Kent)||Ormsoy-Gore, Hon. William|
|Butler, Sir Geoffrey||Hartington, Marquess of||Owen, Major G.|
|Butt. Sir Alfred||Henn, Sir Sydney H.||Pease, William Edwin|
|Caine. Gordon Hall||Hennessy, Major J, R. G.||Pennefather, Sir John|
|Cautley, Henry Strother||Herbert, Dennis (Hertford, Watford)||Percy, Lord Eustace (Hastings)|
|Cayzer, Sir C. (Chester, City)||Herbert, Capt. Sidney (Scarborough)||Perring, William George|
|Cayzer, Maj. Sir Herbt,R.(Prtsmth.S.)||Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.||Pielou, D. P.|
|Cecil, Rt. Hon. Sir Evelyn (Aston)||Hobhouse, A. L.||Pilditch, Sir Philip|
|Chamberlain, Rt. Hon. N. (Ladywood)||Hogbin, Henry Cairns||Pownall, Lieut.-Colonel Assheton|
|Chapman, Sir S.||Hogg, Rt. Hon. Sir D. (St. Marylebone)||Raine, W.|
|Clayton, G. C.||Hope, Rt. Hon. J. F. (Sheffield, C.)||Rawson, Alfred Cooper|
|Colfox, Major Wm. Phillips||Home, Sir R. S. (Glasgow, Hillhead)||Rees, Sir Beddoe|
|Conway, Sir W. Martin||Howard, Hon. D.(Cumberland,North)||Reid, D. D. (County Down)|
|Cope, Major William||Howard-Bury, Lieut.-Col. C. K.||Remer, J. R.|
|Craig, Captain C. C. (Antrim, South)||Inskip, Sir Thomas Walker H.||Remnant, Sir James|
|Craik, Rt. Hon. Sir Henry||Jackson, Lieut.-Colonel Hon. F. S.||Rentoul, G. S.|
|Crooke, J. Smedley (Deritend)||James, Lieut.-Colonel Hon. Cuthbert||Rhys, Hon. C. A. U.|
|Curzon, Captain viscount||Jephcott, A. R.||Roberts, Samuel (Hereford, Hereford)|
|Davies, Alfred Thomas (Lincoln)||Joynson-Hicks, Rt. Hon. Sir William||Robinson, Sir T. (Lanes., Stretford)|
|Davies, David (Montgomery)||Kindersley, Major G. M.||Ropner, Major L.|
|Roundell, Colonel R. F.||Sykes, Major-Gen.Sir Frederick H.||Wolmer, Viscount|
|Russell, Alexander West- (Tynemouth)||Thomson, Sir W. Mitchell-(Croydon,S.)||Wood, Major Rt. Hon. Edward F. L.|
|Samuel, A. M. (Surrey, Farnham)||Titchfield, Major the Marquess of||Wood, Sir H. K. (Woolwich, West)|
|Sandeman, A. Stewart||Tryon, Rt. Hon. George Clement||Worthington-Evans, Rt. Hon. Sir L.|
|Savery, S. S.||Waddington, R.||Wragg, Herbert|
|Sheffield, Sir Berkeley||Ward, Lt.-Col. A.L.(Kingston-on-Hull)||Yate, Colonel Sir Charles Edward|
|Shepperson, E. W.||Warrender, Sir Victor||Yerburgh, Major Robert D. T.|
|Spender-Clay, Lieut.-Colonel H. H.||Weston, John Wakefield|
|Stanley, Lord||Wheler, Lieut.-Col. Granville C. H.||TELLERS FOR THE NOES.—|
|Steel, Samuel Strang||Windsor-Clive, Lieut.-Colonel George||Commander B. Eyres-Monsell and|
|Sueter, Rear-Admiral Murray Fraser||Wise, Sir Fredric||Colonel Gibbs.|
Question put, and agreed to.
I beg to move as an Amendment to the proposed new Clause, in lines 5 and 6, to leave out the words "the regulations or by-laws of a local authority," and to insert instead thereof the words
are certified by the local authority as necessary for modern needs.
This is the Amendment to which I referred a few minutes ago. The object of it is to meet the view of the Chancellor of the Exchequer, that the landlord should not get the benefit of what might be called fancy or unnecessary expenditure, or any capital expenditure which is really not required by the property. The object is also to meet the case where such expenditure is really morally required but would not fall within the definition of the Clause at present as complying with the regulations or by-laws of a local authority. The effect will be that if a landowner has cottages for which repairs are necessary, old cottages, for example, which are obviously not up to the modern standard, he can go to the local authority and say, "Here are my plans. I wish to bring these cottages up to your standard of new cottages and up to a proper modern standard. You cannot force me to do this, but your certificate will show that I am doing as much as, but no more than, is necessary to bring them up to a modern standard." In that case he could have the benefit of the concession.
It is quite obvious that I cannot accept this Amendment. It goes even further than any attempt that has been made from the opposite side of the House in the course of this Debate. In the first place, the right hon. Member asks that the maintenance expenditure shall be admitted to relief if it is certified by the local authority as coming up to the standard of modern requirements or needs. Who is going to define modern requirements or needs? You might have a local authority which says that a bathroom is not necessary. Therefore, the property would not be certified if a bathroom were put in. Another local authority might say that a washhouse was not necessary. There might be other local authorities with different views of modern requirements. The landlord would get exemption in one case and not in the other. If you had a local authority with very exalted ideas of what is necessary for the comfort and convenience of a farm labourer, there would be no limit at all to the amount which the landlord could claim for capital expenditure. I framed my new Clause in order to meet hon. Members opposite. I was under the impression that the Clause was to be accepted, and I have been very much surprised at the trend of the discussion which has taken place. It is only fair that I should say plainly and straightly that I am not prepared to go beyond what I have conceded in this new Clause.
I am very sorry that the Chancellor of the Exchequer has taken this unnecessarily firm stand. What is the object of this Amendment? It is to improve the cottages in the rural areas. When the Chancellor of the Exchequer says, "If there is an enlightened local authority there would be no limit to the expenditure," he has to remember that he has not been called upon to make that expenditure. The State is not called upon to make it, and the people who benefit by it are the occupants of the houses, against whom no additional rent is to be charged. So the right hon. Gentleman is getting the housing done for the benefit of people without any charge upon the Exchequer at all. I agree that the Chancellor of the Exchequer is entitled to some protection. Even though improvement in housing is very desirable, we do not want enormously extravagant expenditure to be made. Surely the protection which my right hon. Friend has put in this Amendment is sufficient. It is not the landlord who is to say how much he will expend. He has to go to the local authority and say, "How much do you want me to spend in order to bring the old cottage up to modern requirements?" The Chancellor of the Exchequer replies, "But the local authority may also be extravagant, and you cannot define modern requirements.'" But you can, in the regulations relating to new houses.
All that we want is to be allowed to bring up the old houses to the standard required by the regulations relating to new houses. That is the limit of the protection of the Chancellor of the Exchequer. When he says that one local authority might differ from another, I reply that that is local self-government. Such things happen in every case now. The building regulations of one local authority frequently differ from the building regulations of another. There is no harm in that. Unless the Chancellor of the Exchequer wishes to get rid of local self-government altogether I cannot understand him. All that he needs to protect himself against is some extraordinary landlord who for the love of expenditure spends a ridiculous sum. The right hon. Gentleman is protected by the Amendment, because the local authority will have to assent to expenditure which is reasonably necessary to bring the house up to modern needs. The Chancellor of the Exchequer even now ought to realise that we are not asking for anything extravagant, but for something which is for the benefit of rural housing.
I think the House will have to let experience tell its own tale with regard to this matter. The Chancellor of the Exchequer has hardened his heart because he is sincerely and genuinely persuaded that his Clause is something and will give some relief. In my opinion it will do absolutely nothing. I cannot conceive any Statute making any provision with regard to old farmhouses, farm buildings or cottages. With regard to the regulations and by-laws of a local authority, I would point out that a local authority has not power to make regulations or by-laws with regard to existing cottages. It has power only to condemn them or not. It may give advice as to what sorts of alterations are necessary to avoid condemnation. But that is not regulation or by-law. We proceed slowly in these matters. I wish that successive Chancellors of the Exchequer were a little more reasonable and generous to landowners who honestly desire to improve their property without benefiting by it themselves. But Chancellors have always been very stubborn, and it has taken long years to get to the present position. There is nothing for it but to show the Chancellor of the Exchequer by experience that this really means absolutely nothing, and then he may be inclined to draft words which really will go in the direction in which he wants to go.
In my opinion the Chancellor of the Exchequer is justified in protecting himself only with regard to that class of landlord who would carry out these improvements on purpose to sell. If this Amendment made provision for protecting the revenue against such a landlord, who improves his cottages in order to sell them and not to benefit the tenant, I would go into the Division Lobby against my own Government. As the Amendment stands it means that the landlord who has cottage property belonging to farms might put them in repair and immediately sell them, and there would be no guarantee that afterwards the rents would remain the same. That is the failure of the Amendment. I am not over-concerned about the revenue; that is the Chancellor's look-out. But I do say that if you have cottage property in a rural area, and the landlord is prepared to spend money upon it and to put it in order, even to the standard of requirements of modern cottage property, whether it is capital expenditure or not, so long as he is going to let the tenants stay in the cottages at the same rent, I shall support the proposal. But I would not support it if the improvements were made with a view to the sale of the houses. That would be simply deceiving the Chancellor of the Exchequer and everybody else. If an Amendment can be designed by the other side making possible the improvement of property on behalf of the tenant, and giving the landlord no chance of selling the property so as to evade his responsibility, I would support such an Amendment.