CHAPTER VII

THE AREA OF THE UNITED KINGDOM

Let us now consider the area of the United Kingdom. I use the word area with intention, for it is its area which differentiates land from all other commodities. Man can make soil by disintegrating rock. He can entirely strip the soil from a given superficies. He can change a fen into a farm. He can rob land of its fertility by careless cultivation. He can rear floors above land or sink shafts below it. Upon the base afforded by a small piece of land he can manufacture enough cloth to clothe a multitude. There is one thing, however, which he cannot do. He cannot change the geographical position of land. The element of area, of extension, is inherent and immobile, unchangeable and indestructible.[21]

It follows that the manner of the control of land is an exceedingly important matter to a community. The immobile area is the base of all human activities. Upon it we needs must live, and the manner of our distribution upon it largely determines our happiness.

In the United Kingdom, as we have already seen, the people collectively own but little property, and of the entire area of the country, the control of which so largely determines their relations with each other, but the roads, rivers, and a few insignificant commons and parks are public property. The whole area measures 77,000,000 acres and nearly 77,000,000 acres are private property.

As we might expect from the facts we have already examined, the greater part of the area is in a comparatively small number of hands. There are a large number of landowners, but great landowners are few.

As in many other parts of these enquiries, we are faced with a plentiful lack of precise information as to the ownership of the soil. The more important the subject, the less trouble we take, as a people, to keep record of it. In 1910 it is impossible for any man to say precisely how many persons own British land. No Bluebook on the subject has been published for thirty-five years. The last return of landowners, known as the "New Domesday Book," was made in 1873, and is forgotten by the present generation, although it created much interest and controversy upon its publication.

The contents of the New Domesday Book were carefully corrected and analysed by Mr John Bateman.[22] For England and Wales alone his summary of the figures, revised as to the great estates down to 1883, is as follows:—

OWNERSHIP OF LAND IN ENGLAND AND WALES

Number of Owners. Class of Owner. Acres.

400 Peers and Peeresses 5,729,979 1,288 Great Landowners 8,497,699 2,529 Squires[23] 4,319,271 9,585 Greater Yeomen[23] 4,782,627 24,412 Lesser Yeomen[23] 4,144,272 217,049 Small Proprietors 3,931,806 703,289 Cottagers 151,148 14,459 Public Bodies 1,443,548 Waste 1,524,624 ------- ---------- 973,011 34,524,974 ------- ----------

While the number of owners came out at nearly 1,000,000, it will be seen that the ownership of the greater number is a very small thing indeed. For practical purposes, about 38,000 persons owned by far the greater part of England and Wales. The analysis shows:

38,214 people owned 27,473,848 acres: average 719 acres each. 934,797 people owned 5,526,502 acres: average 6 acres each.

Again of the 934,797 small owners:

703,289 people owned 151,148 acres: average less than 1 rood.

As to the United Kingdom, Mr Bateman's analysis showed:

UNITED KINGDOM LAND OWNERSHIP: 1883

Acres. Total Area 77,000,000 Owned by 2,500 persons 40,426,000

It has been quaintly observed in mitigation of these facts, and with a view to reconciling the British people to the humiliation and economic servitude involved in these facts, that some part of the 2,500 persons' 40,000,000 acres consists of mountain and waste land. As a matter of fact, this plea is a further condemnation of the position, for very little indeed of our small British area ought to be "waste." British landowners are responsible to the nation for their wanton neglect of afforestation. Let the "waste" land of the rich be handed over to the nation if it is declared to be valueless to its few owners.

Since 1883 the number of owners has doubtless increased, but not largely, for even those people who own little strips of land bearing houses chiefly do so on leasehold tenure, being in effect employed in the engaging process of nursing ground rents for a future generation of the few who own. It may be that in the United Kingdom at the present moment there are about 1,250,000 freeholders, but the substantial ownership of British land remains as it is faithfully pictured in the above figures.

As need hardly be added, these facts about land ownership are a most striking confirmation of the conclusions arrived at in these pages as to the monopoly of capital.

As we are land animals, we are compelled, such of us as cannot command the capital necessary to buy a base to live upon or work upon, to come to terms with the individuals who are in possession of the British area. The payment which is made for permission to use land is commonly called rent, and the total amount of the rent paid for the use of the 77,000,000 acres is a considerable sum. We can form a very fair estimate of it from the Income Tax returns already examined.

First, as to the landlords' revenue from agricultural land. This we obtain from Schedule A of the Income Tax. The income assessed in 1908-9 was £52,000,000 gross, but as we have already noted, part of this was not real income. Between the cost of repairs (for which the Commissioners allowed £6,360,000), adjustments on appeal, etc., the net income from agricultural lands taxed in 1907-8 was about £44,000,000. But this is the rent, not of the land alone, but of the farms as going concerns, with all their buildings, fences, roads, ditches, etc. The actual rent of the land alone may perhaps be put at £35,000,000.

Secondly, we come to the rents of all lands bearing houses, factories, business premises, etc. The gross income assessed under Schedule A of the Income Tax in 1908-9 was £217,000,000, of which £49,000,000 was for the Metropolis alone. From this figure considerable deductions have to be made to arrive at net income. The Commissioners allowed for repairs £33,700,000, for Charities, etc. £7,400,000, for empty property £8,000,000, for over-assessments, etc. £3,900,000. Thus the real income from houses and the land upon which they stand, accruing to private landlords is reduced to £164,000,000. Of this £164,000,000 how much is rent from land alone?

In London about one-third of the gross assessment is land rent. In the Provinces the proportion is smaller; probably less than one-fourth. As to the former figure, the L.C.C. surveyor, after careful examination of the subject in detail, a few years ago estimated the land values of the Metropolis at £15,000,000, which was just over one-third the gross assessment of land and buildings together. I take, then, the Metropolitan land rents at £16,000,000 and those of the rest of the United Kingdom at one-fourth of the gross assessment (£164,000,000), or £41,000,000. Thus we arrive at £57,000,000 for the whole of the United Kingdom. To this we have to add £1,000,000 of miscellaneous sporting rents, tithes, etc.

But Schedule A does not exhaust the profits derived from the ownership of land. Under Schedule D are assessed Railways, Mines, Quarries, Ironworks, etc., which are undertakings attached to land, and in the profits of which land rents form a part. The most important case is that of mines. In 1893 the Royal Commission on Mining Royalties carefully calculated all mining royalties, dead rents, etc., received by freeholders in 1889 at less than £5,000,000.[24] This sum has now probably increased to about £7,000,000, including mines and quarries of all descriptions. The rental value of the land employed in Railways, Canals, etc., can hardly be taken as more than £6,000,000 per annum.

Collecting the figures we have estimated, we get:

ESTIMATE OF LAND RENTS OF THE UNITED KINGDOM

From Farm Lands £35,000,000 From Lands bearing Dwelling-Houses, Factories, Business Premises, etc. 57,000,000 From Sporting Rents, etc. 1,000,000 From Mines, Quarries, etc. 7,000,000 From Other Property 6,000,000 --------------- [25]£106,000,000 ===============

Thus, in round figures, we get £106,000,000 as an estimate of the tribute which is paid to private owners for permission to use the area of the United Kingdom. As we have seen, 2,500 persons own one-half the whole area, while 38,200 persons own three-fourths of the area of England and Wales, so that the greater part of this income of £106,000,000 goes into few hands.

In view of the fact that the total income of the United Kingdom has been estimated at £1,840,000,000, it is at first surprising that the amount of this land rent is not larger than £106,000,000, and it is of interest to ask why it is, in view of the monopolization of so much of the whole area by so few people, that the land rents are not greater than they are.

The first explanation is the influence of free imports and cheap transport in putting at our disposal the harvests of the entire world. Cheap food for our people has spelt "loss" to the landowner. The landowners possess just as much land as before, neither more nor less, but as the produce which it yields is lower in price, they have been able to exact, for permission to produce the kindly fruits of the earth, a smaller rent. As our wealth has grown in the last generation the tribute paid to the owners of agricultural lands has grown less. Now that food is again appreciating in price the land tribute will on this account rise again.

But, while the rent paid for farm lands has fallen since the seventies, the rent paid for urban sites has increased, and, of course, a further portion of the whole area has passed from the first category into the second. The country-side has been increasingly deserted, and our big towns have grown,[26] both by their own natural increase, and by a continual influx from the villages and small towns.

How is it, then, that the landlords have not been able to exact a greater rent than about £57,000,000 for the use of urban sites? In the first place, while this sum may seem small in proportion to the total income of our people, it is very large in relation to the exceedingly small area for the use of which it is exacted. Almost the entire area of the United Kingdom is sparsely populated. It is an empty country dotted with small crowded spots called towns. When we reflect, then, that the land rent of the great empty country is £35,000,000, while the land rent of the crowded towns is £57,000,000, we see the latter item in its true light, as enormous in relation to the insignificant area for permission to use which it is paid.

In this connexion it is important to observe that an exceedingly large manufacturing business can be carried on upon a small piece of the earth's surface, measuring 50 feet by 100 feet, or only an eighth part of an acre. The whole of the manufacturing plant of the United Kingdom stands upon a base which cannot possibly amount to more than a negligible fraction of the whole area of the country. Thus, while the industrial has to bid high for the use of land, he needs, as a rule, but a very small piece for his purposes. The area needed for a tennis court is often sufficient for the base of a business in which 100 or 200 hands are employed and which draws a huge profit from their labour.

Or take the subject of housing. All the urban sites of the United Kingdom together occupy a negligible part of its area. If our 9,000,000 houses occupied half an acre each, as unfortunately they do not, they would account for but 4,500,000 acres out of our 77,000,000 acres.

But apart from the fact that the size of the area which yields urban land rents is exceedingly small, local rates are a perpetual charge upon land rents. The point is that, as the renter of fixed property is rated according to his rental, the size of the rental he is able to pay is in part determined by the amount of the rates. The higher the rates, the less rent he can afford, and therefore the less can the landowner obtain for the use of his land.

For the reason just stated, it is often argued that the landowner actually pays local rates.[27] The fact that he is unable to exact as much rent as though no rates existed is said to be equivalent to an actual payment by the landowner of the difference between the rent which he receives and the rent which he might receive. This economic doctrine is worth examination.

In the first place it is not only the rates which the occupier takes into consideration when he decides that he can afford to rent a certain property. He considers "rates and taxes." The Inhabited House Duty is taken into consideration fully as much as the poor rate. If it did not exist the tenant could afford to pay a higher rent.

Let us carry this a little further. What is the Inhabited House Duty? It is an Income Tax roughly proportioned to the size of a man's income by the size of the house which he inhabits. But there is another Income Tax, the Income Tax commonly so-called, levied at so much in the £ on incomes over £160 per annum. Is the Income Tax taken into consideration by a family man looking out for a house? Not directly, perhaps, in the same way that he adds the "rates and taxes" to the rent before deciding that he can afford a certain eligible residence, but indirectly there can be no question whatever that the Income Tax has great influence in deciding a man's rental. Indeed, the raising of the Income Tax from 6d. to 1s. may directly cause a man to leave a £60 house for a £50 house. We see, then, that if the landowner pays the local rates, he most certainly pays the Inhabited House Duty, and further that if he pays the form of Income Tax called the House Duty, it is at least arguable that he pays the Income Tax proper.

But that is not all. There is another determinant of the rent which a man can afford, and that is the price of gas. In and around London the variation in price is considerable, and the careful householder does not forget the fact when deciding whether to live North, South, East, or West. South of the Thames gas is cheaper than in the North. According to the doctrine under examination, therefore, the landowners North of the Thames must at least "pay" the difference between the two rates.

Again, on the same lines it might be argued that, as a rise in the price of building materials checks building and therefore makes a landowner ready to accept a lower rent for his land, the landowner actually pays the increased cost of building when materials rise.

And so we might proceed from one logical step to another until we arrived at the comfortable conclusion that, if the sole expense of a householder were his rent, he could pay his whole income as rent, and that, therefore, the real "loss" of the landowners is the difference between the entire income of the nation and the land rents which they now actually receive.

The whole truth of the matter is: For long years rates have been levied upon the occupiers of fixed property. Contracts as to the use or sale of land and the property affixed thereto have been made between man and man with full knowledge of the existence of rates. While, therefore, it is perfectly true that, but for the existence of local levies, the owners of the soil would be receiving a higher tribute than is actually the case, it is straining the meaning of language to say that they pay the rates, or that the rates are an actual burden upon them. In so far as present-day landowners have inherited their land from men who were given it by a worthless Sovereign or in any other way came by it without proper consideration, to talk of the burden of rates upon real property can scarcely excite sympathy. In so far as present-day landowners acquired their property for proper consideration or inherited it from those who so acquired it, the rates were taken into account when the price was paid, and no burden can therefore truly be said to exist. If to-day A gives £1000 for a piece of land he does so with full knowledge of local rates, and the seller gets less for his land because of his knowledge. Therefore, when A, in his turn, leases his land and a house built upon it to another person, he cannot allege that he bears the burden of the rates. Yet it remains true that, if the burden did not exist, the land would yield A a higher rent. In a word the rates have become a rent-charge upon the property.

To sum up the conclusions of this chapter, we have seen that while the total income of the nation is £1,840,000,000, the landowners take £106,000,000 as land rent, and that this amount would be much greater but for (1) the untaxed admission of competitive foodstuffs, (2) the very small area occupied by the towns, and (3) the levying of local taxation upon fixed property.

[Footnote 21: _Cf._ Marshall, "The fundamental attribute of land is its extension."—"Principles of Economics," Book I, p. 221.]

[Footnote 22: "Great Landowners." John Bateman (Harrison).]

[Footnote 23: These classifications are purely arbitrary.]

[Footnote 24: See C 6980, page 79.]

[Footnote 25: It has been constantly stated that the land rents of the United Kingdom amount to £250,000,000. Such an estimate is unwarranted.]

[Footnote 26: It is only in the large towns that land rents have risen. Many towns of less than 20,000 in population are decreasing in size and their rents consequently falling. In the ten years ended 1901 no less than 187 towns of from 2,000 to 50,000 inhabitants declined in population.]

[Footnote 27: The point is of so much importance that it may be well to quote some expressions of opinion on the subject.

"In practice there is little doubt that the majority of intending tenants, both in town and country, do take the precaution of enquiring what rates or taxes they will have to pay, and vary their estimates accordingly. In their case, then, it is the landlord, and not the tenant, who bears the burden of the rates." "Land Nationalisation" (p. 86), by Harold Cox. (Methuen & Co.).

"We have assumed with most economists, that in the end, on the average, the rates, however levied, fall upon the owner (inasmuch as they compel him to lower the rent which he demands for his property)." "Towards a Social Policy" (p. 49), by a Committee of Liberals. "The Speaker" Publishing Co. Ld.]