THE RELIEF OF AGRICULTURE. T HE Government are going to help
the distressed agriculturists by paying half the rates now levied on the farms, and are going to pay them out of the fund raised by the Death-duties on personal property. This latter arrangement is, however, rather a matter of argu- ment than a substantial enactment. Since the Government are apparently going to pay a fixed sum, it cannot matter which pocket they take it out of. They are not going to over the proceeds of a tax, but to pay half the rates on agricultural land, and therefore there is nothing gained, in theory at any rate, by ear-marking a par- ticular fund. In practice, however, the arrangement may perhaps be defended as an advertisement of the fact that personal property almost entirely escapes local burdens, and ought therefore to have a heavier Imperial burden. But ear-marking a tax does not make it draw more money. Except, then, as a finger-post to show the direction which fiscal reform ought to take, we see no great object in the setting forth that the Commissioners of Inland Revenue shall pay the new contribution " out of the proceeds of Estate-duty derived in England from personal property." But, putting this question of detail aside, the fact remains that the Government intend to relieve the agricultural interest of a million of rates this year, and in the future of two millions,—the amount which will ultimately be required to pay half the farmers' rates. In other words, there is to be a new Imperial dole of £2,000,000 in aid of local taxation.
In our opinion the Government, in acting as they are acting, are doing right in the wrong way. That agricul- ture, as an industry, is over-taxed we cannot possibly doubt, and we desire to see its burdens lightened, but we want to see a better remedy than that of a new dole. Before, however, going into the question of how the relief should be given, we should like to say a word or two as to the allegations that agriculture does not need help, that it is unfair that it should have it, and that the present Bill is a mere piece of plunder on the part of the landlords. That agriculture does not need help is a statement that will not bear investigation. The reason that Essex corn-land cannot compete with Canadian is not half so much a matter of soil and climate as of charges. The soil does not produce so much an acre in Canada as in Essex, wages are very much higher on the other side of the Atlantic, and the markets are much harder to get at. Again, the Canadian has his mortgage interest to pay, which is often nearly as high as an Essex rent. But in Essex there is often 3s. or 4s. an acre to pay in Land-tax, and possibly 10s. per acre in tithe, and yet another 2s. an acre in rates. Hence, 15s. or 16s. an acre is often raised in Government charges on which no relief can be given and which must be paid to the day. We do not of course mean for a moment to say that the pressure of the rates will account for the depression of agriculture, but we think there can be no question that the rates often cut deeply into the margin of profit. But surely it is both unfair and inexpedient that a special industry like agri- culture should be singled out for exceptional fiscal treat- ment. As we pointed out a week or two ago, rates in the country are, in reality, two things, though they appear to be one. They are, in effect, an inhabited house and business premises duty and a tax on agricultural profits, estimated on the rental of the land. We leave out of sight for a moment the comparatively unimportant rates levied on tithes, underwoods, coal-mines, &c. But surely it is grossly unfair that the agricultural alone of all our local industries should bear this tax. Why should not the auctioneer, the doctor, the solicitor, the wheelwright, the owner of the big general-shop, pay each on his profits instead of merely paying rates on his dwelling- house and business premises, if any ? A concrete case may be taken to show what we mean. A is a large farmer who holds five hundred acres of land rated at 25s. an acre. He pays rates, then, on £625 a year. Let us suppose, how- ever, that the house in which he lives and the buildings would be valued separately at £75 a year,—a very high valuation indeed. The land alone, then, will stand at £550 a year. On this sum A will be rated on the presumption, apparently, that the annual profit of a farm is equal to the rent. Let us next suppose the local rates come to 2s. in the £1. In that case A will pay in local burdens £7 10s. on his house and £50 on his land. Take now the case of B, a flourishing auctioneer who makes £550 a year or thereabouts out of his business, and lives, as is just conceivable, but by no means likely, in a house and office rated at £75 a year. He will then pay £7 10s. to local burdens and no more. Hence the man whose business is farming, rather than selling, will be burdened to the tune of £50 a year. But the man who farms five hundred acres in reality seldom, if ever, makes a profit equal to his rent, and therefore in all probability the case is even a harder one than we have put. Probably the farmer who pays £50 a year more to local burdens than the auctioneer of £550 a year has not an equal income, but only ene of £200, or at most £300, a year. But it may be said that this inequality does not really matter to the farmer, because he allowed for the rates when he took the farm. He nominally pays the rates, but in reality they are paid by the landlord. Again, it is urged that the landlord has nothing to complain of, be- cause he bought or inherited the land subject to the burden of rates. Let us take this last argument first,- i.e., the argument that since the landlord bought the land subject to the rates he has no case for relief. Surely this argument is one which can be pressed too far. It involves the assumption that no tax once levied on an industry ought ever to be taken off. For example, the Newspaper-tax ought not to have been taken off, for plenty of papers were sold and inherited under it. In truth, the argument is merely one of convenience. If an industry has a special tax on it, but is doing well all the same, there is no good ground for relieving it, and the bought-and-sold argument may fairly be applied. If, however, an industry is languishing owing to over-taxation, and relief would probably help it to new life, it would be most inexpedient to do nothing on the pedantic ground that land was accustomed to the burden. It is not a valid excuse for keeping a man in prison to say that he was born there. The question is, Does he deserve, and can he bear, the treatment he is receiving ? Even then, if the relief went wholly to the landlord, there would be no case for refusing him help. As a matter of fact, however, the relief will not go to the landlord, or at any rate for some time. It may be that the fact of the rates being halved will have a certain effect in making farms easier to let, but this effect will be very gradual. The first thing that will happen will be that the farmer will pocket the reduc- tion. When he took his farm he reckoned his rate outgoings to be so much, and behold! they will be in the future only half what he calculated on. That the landlord will immediately raise the rent by this amount is, of course, a pure delusion. They must know very little of the conditions of country life who imagine that it would be possible for " Lord Castlewood" to beg his tenants to note that to the half-year's rents must in future be added a sum equal to half the old rates. The farmers are far more likely to say that they must have a substantial reduction " owing to this fresh worritin' and inter- ferin' on the part of Government." As we have said above, the landlords will, of course, gain ultimately, partly in increased rent and partly in facility of letting when a new tenancy is created, but at present the gain will be exclusively that of the occupier. We have said above that we hold the Government to be doing a right thing in a wrong way, and we must repeat it with all the emphasis of which we are capable. Instead of trying to reform our system of local taxation, they are adding to the wretched system of grants-in-aid,—the most demoralising, wasteful, and inefficient ever devised by the ingenuity of fiscal man in order to turn a nasty corner. Money paid in lump-sums to local bodies and not collected by them is always liable to be squandered. There are very few people who spend an allowance paid quarterly by a father as economically and well as they spend money they are forced to earn. We do not say this because we think we can teach the Cabinet its business. We believe that Ministers realise as well as we do the evils of the dole system. and have only resorted to it because they are what old-fashioned servants call " that druv that they don't know where to turn." Let us hope, then, that they have resolved to face the question of local taxation next year, and to face it with a view of disentangling local and Imperial finance. In reality the question is not so alarming a one as it might at first be supposed. The Central Chamber of Agriculture made an excel- lent contribution in regard to this side of the question by suggesting that the Land-tax and the Inhabited House duty levied in their respective districts should be handed over to the local authorities. That is a very practical proposal. If it did not prove enough there is no reason why a system of local liquor-licenses should not be added. In any case, the problem of dissociating local from Imperial taxation is quite soluble, and should, we hold, be regarded as a first charge on the attention of the Ministry.
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