Evening Post. MONDAY, MAY 17, 1909. BRITISH BUDGET DEBATE.

Evening Post, Volume LXXVII, Issue 115, 17 May 1909, Page 6

Evening Post. MONDAY, MAY 17, 1909. BRITISH BUDGET DEBATE.

Mr. Lloyd-George has got his proposals relating to duties on land values through the House of Commons, as the cable informed us at the end of last week.'" Mr. Austen Chamberlain and Mr. Balfour indulged in the usual protests against the haste with which the Government is forcing its financial proposals through the Commons, but as it is now I more than a fortnight since the Budget was introduced, -it is high time that some piogress was made. If pur cabled reports have represented the position fairly, the new land taxes have excited far less opposition than it was natural to expect. The landed interest usually knows how to look after itself as well as any, and it has probably been far from idle or silent during the past fortnight, but its protests have perhaps been dwarfed by the shriller clamour of the vendors of strong drink and tobacco and the owners of motor cars. The principle of Mr. Lloyd-George's proposals is one of which the House of Lords has more than once during the present Parliament expressed its disapproval. The Scottish Land Values Bill, which merely proposed to piepare the way by providing for a separate valuation of land apart from buildings and improvements after a fashion which has long been familiar in New Zealand, was actually rejected by the Lords in 1907, after the Commons had carried the third reading by a majoAty of 130 votes. Last year the Lords confined their efforts principally to making the adoption of the Bill optional on the part of each local authority. The proposals of the Budget meet at any rate one of the fundamental objections previously urged by their lordships' to the machinery measure. If the principle is sound, why confine its operation to the north of the Tweed? Mr. LloydGedrge had met this objection by proposals which apply to the whole United Kingdom, but it is to be feared' that the objectors will not be profuse in their giatitude on that account. Last year Mr. Asquith's Budget speech was eulogised even by The Times as being "generally recognised to be a masterpiece of clear and unpretentious statement." Mr. Lloyd-George has nob achieved a similar success. His speech was long and discursive, yet not long enough to elucidate properly some of the most important points in his Budget. "It is a bold Budget," said the Daily Chronicle, which is of course a friendly critic, "but a bad speech. It wearied the Commons." Mr. LloydGeorge, most vivacious and audacious of debaters, had probably never done such a thing before, and it must have been particularly mortifying to have his first experience of it on the supreme occasion which might have put the seal upon his reputation. Nor can it be said that he has since done much to retrieve the position. The clearness and the firmness which characterise his chief, and which he himself hus so often displayed, have not been forthcoming, and there has actually been an appearance of uncertainty and indecision which is particularly unfortunate when so bold a Budget is in question. The effect both of the income tax and of the license duties appears to have been considerably underestimated, and the rival estimates of the interests affected have been treated with a respect, not to say timidity, which must be very demoralising to the party. Even the land proposals were involved in an uncertainty whicn should not have survived the delivery of the Budget speech by a single minute. "Notwithstanding that the Budget has been debated for a week," said a Press Association message which reached us a week ago, "the operation of several of its proposals is still obscure, e&peeially the proposals for taxing the unearned increment of land." These proposals have now oeen carried by the overwhelming majority of 330 votes to 120, but airy elucidation that the Chancellor of the Exchequer may have contributed during the debate has not been cabled. As a revenue measure, the new taxation on land is of small importance, for [it is only estimated to yield £500,000, against the £3,500,000 to be derived from the increase of the income tax, £2,850,000 from the new death duties, j and £2,600,000 from license duties, not to mention several other items ranging from £600,000 upwards. But the principle of the new taxation on land is of great importance, and landowners may well fear that when once established it may grow. The proposals under this head were described in our cabled report of the Budget as follows :— (1) 20 pe>cent, of the unearned increment of land, payable at death of owner, or when thehind is sold; (2) a further half -penny in the £ on the capital value of undeveloped land and ungotten minerals ; (3) a halfpenny in the £ on mining royalties ; (4) 10 per cent, of the reversion duty on benefit accruing at the termination of a lease of land. How the "unearned increment" is to be calculated we have not been informed, and, presumably, that is one of the points on which the Chancellor of . the Exchequer has been charged with obscurity. In view, however, of pr.p #icus discufsions of the subject, and of the provisions of the Land Values (Scotland) Bill, we are safe in assuming that the unearned increment will bs the increase in the unimproved value of the land between the given dates. To take 20 per cent, of the future unearned increment and then only to enforce payment on the occasion of a ; denih or r. talc in not in itself a very :-»*«?: -»*«? torv. ov alarming proposal In. the

United Kingdom it should excite less alarm than in New Zealand, since land values are not mounting up there at the pace which is inevitable in a young and rapidly developing community. In large parts of rural England, indeed, land values have been for many years on the decline. There is, however, no proposal in the Budget to compensate "the unfortunate owner whose property is the subject of an undeserved decrement, nor can the House of Lords insert such a provision or any .other amendment in a money bill. Most of the arguments used against this branch of Mr. Lloyd-George's proposal strikes us on this side of the world as approaching the antediluvian. But it must be remembered that tho specific appropriation of a part of the unearned increment, as such, goes beyond the New Zealand law, which merely exempts improvements from the land tax and levies it on the whole of the unimproved value for the time being. The cost of the valuations is another point on which Opposition critics are laying much stress. It will doubtless take a very big bite out of the £500,000, and critics will derive no consolation from the thought that the extension of the principle to local taxation may soon reduce the proportionate cost of this item.