95

9th February, 1928

PERSONAL AND CONFIDENTIAL

My dear P.M.,

In the King's Speech on the opening of Parliament this week, there is a brief mention of Rating Reform-'...The burdens imposed upon industry and agriculture by the present incidence of local rates have attracted the anxious attention of My Ministers. They are now engaged upon enquiries into the possibility of affording some relief from these burdens to the producing community and into the changes in local government which would thereby be involved.' Although this is not 'featured' in any way in the Speech, it is, I am told, a major part of His Majesty's Government's programme during this last year or so of this Parliament.

The position briefly is as follows. In districts that tend to go downhill, such as East Ham which you may have read about, the rates tend to go up at an alarming pace owing to the fact that the local factories and industries are the only solvent bodies who can pay rates. The burden on them increases as the district goes downhill, until the time comes when it pays them to abandon their factory sites and go elsewhere. This, and similar abuses, has led Winston Churchill [1] to devise a scheme for the Nationalisation of Rating, which I am told is most promising and ingenious.

The country has been crying out for some relief from the inequity of the present local rating system but until Churchill produced this scheme to the Cabinet no political party has been in a position to tackle it.

It is, I am told, to be made a major political gambit during the present and future remaining sessions of this Parliament. It necessitates twelve months' valuation work and, of course, an immense administrative upheaval and a good deal of legislation. It is not likely to be completed before the end of this Parliament, but it will be well under way, they hope, and will raise this Government in the estimation of the many people interested. They hope that it will finally take the wind out of the sails of the other political parties.

I am not sufficiently familiar with the rating position in Australia to know if we have a problem in this regard, but I give you the above brief story as a matter of interest.

I am, Yours sincerely, R. G. CASEY

1 Chancellor of the Exchequer.