22 MAY 1920, Page 14

NATIONALIZATION,MINING ROYALTIES AND HOUSING. [To THE' EDITOR OF THE "

SPEOTAVOR."]

Sin,—Your correspondent- Mr. E. T. Good, in your issue of May 15th, makes-out a strong case against the nationalization of mining royalties. But his case is much stronger than he thinks if the subject of Scottish mineral royalties- -is- taken into mount. The law-in Scotland differe from that prevailing south of- the Tweed,- inasmuch as the mineral royalties, with- out any deduction, form-an assessable subjeot along- with land and houses, and pay the local rates as well as income-tax, mineral rights duty and super-tax. This important- fact was apparently unknown to Mr. Lloyd George during his attack on the landed interest about 1909, when. the mineral rights duty was imposed: In one of his violent outbursts against the land- lords he said, if I remember rightly, that since the royalty owners- did not contribute a single penny to the- local rates they should now have. a special- tax laid upon. them.

The unfortunate royalty owners in Scotland were-not thought about, and they have ever since been made to bear the heavy load of imperial taxation Mr. Good refers to., plus the steadily increasing burden of county and parish rates, greatly increased last year by the operation of the- new Education Acb. The owner's share of the county- and parish rates comes- to about 4s. in the pound in my district, and in some parishes is. still higher,-so that the mineral owner- has to pay, including super- tax, 12s. or more, and only receives 8s. per pound, or about 2id. from each ton of coal sold at a royalty of 6cL In- other words, mining royalties are already nationalized- to the extent o'f more than half their gross value in at least, some parts of Scotland.

Now, from the point of view of the assessing authority, viz., the county council, parish council, education. authority, or the Imperial Exchequer, the proposal must also be seriously con- sidered.. By nationalizing the mineral royalties as is proposed, no more imperial taxation will be exigible from this source, and the exchequer will find- one of the regular springs of revenue entirely dried up. But the effect on the local rates in mining districts will be far more severely felt. In some parishes the mineral royalties provide more than half of the whole• assessable rental, and if these are taken away without com- pensation the rates on land and-houses will of. necessity be mom's, than doubled. The local rates have of late years become a very serious burden, especially in rural districts, and every year the cost of public administration continues to grow at an alarming pace. In any equitable scheme of nationalization an adequate sabvention will have to be paid out of imperial funds to every parish affected, to prevent the disaster to the local rating authorities that the removal of a. large part of this assessable rental will certainly involve. This payment will, of course, be a permanent and probably an increasing drain on the Treasury, and will correspondingly diminish the profits that are expeoted to accrue from the acquisition of the minerals by the State.

The bearing of nationalization of minerals on the urgent housing problem is also worthy of notice. One difficulty in bnilding. on an economic basis is the-question of local rates. The new workmen's cottages that are being planned, and. begun in some places (with great hesitation, it must be admitted) will cost not less than £600 each. A rent of at least £30 will be required, and that will not even make ends meet and give much encouragement to further building. Now in the case referred to, where the owners' rates are 4s., the occupiers' rates are as much as or more than this. The whole rates exigible on a £30 house, at 8s. per pound. divided between owner and occupier, will thus come to £12, and the occupier will have to pay at least £36 for such a dwelling, or say 14e. a week, while the owner will only get £24 after paying his share, or four per cent. on his outlay. If by nationalization of minerals any further increase

is made on the already far too-high rates-and taxes, no.worhing: man, will he able to pay nhe rent required, and no, proprietor,. will be able. to.spend- more money on. building, but will invest in sounder and more remunerative securities.

The. land legislation- of 1909 effectually stopped. the normal growth of building, and the Valuation Department then set. up was, as has now been tardily admitted, a gigantic and extravagant blunder, the effects, of which the country is. now feeling acutely. The, preposed nationalization of mining royal- ' ties would be. a. similar blunder, very costly to- carry into- effeet, Productive• on the balance...oE very little additional revenue, whileat the same. time- likely -to do great injury not only to mineral owners, but to the whole community in many-