FINANCE BILL.

HL Deb 22 November 1909 vol 4 cc730-820

[SECOND READING.]

Order of the Day for the Second Reading read.

THE LORD PRIVY SEAL AND SECRETARY OF STATE FOR THE COLONIES (THE EARL OF CREWE)

My Lords, I beg to move that this Bill be now read a second time.

Moved, That the Bill be now read 2^a.—(The Earl of Crewe.)

^*THE MARQUESS OF LANSDOWNE, who had given notice, on the Motion for the Second Reading, to move, "That this House is not justified in giving its consent to this Bill until it has been submitted to the judgment of the country," said: My Lords, this debate, which bids fair to be a memorable one, has already produced one incident which I think will attract a good deal of public attention; the noble Earl has not thought fit to offer one word of explanation or recommendation of this important Bill. It is sometimes said that there are occasions when silence is more eloquent than speech. I think this is one of them. We regret the decision of the noble Earl, because we always listen to him with pleasure, and upon this occasion it would have been interesting to us to note the arguments by which he might have enforced his case, and to see whether he was content with the more persuasive and sedative style which he usually affects, or whether he resorted to, shall I say, the more blustering rhetoric of some of his colleagues.

The explanation of the noble Earl's silence is, I think, not far to seek. It is, in effect, an announcement to the House that your Lordships have really no concern with this important measure. I note with interest the cheer from the opposite Benches. The noble Earl, by raising his finger to his hat, has intimated that to us with an emphasis which it would probably have taken some of his colleagues three columns of inflated oratory to arrive at. I am afraid that, much as I should like, for reasons which, I think, will be obvious to the House [The noble Marquess was obviously suffering from a severe cold], to imitate the noble Earl's example, I can scarcely expect to escape quite so easily.

But the case which I have to make is, after all, a very simple one. What we have to say about this Bill is this. It is a grave and I think I should be justified in saying an unprecedented measure. It has never been before the people of this country. It needs the concurrence of the House of Lords. The House of Lords should not, in our opinion, undertake the responsibility of giving that concurrence until it has become aware that the people of this country desire that this Bill should become law. My Lords, that is our position. What is the position of noble Lords opposite? We understand it to be something of this kind. They expect us to pass this Bill nemine contradicente, perhaps after a feeble protest, much as we sometimes pass Departmental Bills on the recommendation of a Lord-in-Waiting towards the end of August. That is not how we understand the position, and in our opinion there is absolutely no authority in support of the contention of His Majesty's Government. I should like to know to what authority the noble Earl will be able to point. Is there any organic law which covers the case? Is there any compact between the two Houses to which any one can refer? Are there any obiter dicta of eminent men which support the theory? I am aware of no such authorities to show that this House is precluded either from discussing or from rejecting the Bill upon the Table. I may be told that such a course is unusual. So it is. But is this a usual Budget? We I have here a constitutional safeguard, and we are not, in our opinion, justified in lightly dispensing with it. If this Bill is to pass into law it must be enacted— by the King's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal. Is that some mere musty anachronism? I think not.

I am not going this evening to attempt any elaboration of the historical arguments, illustrating the long controversy between the two Houses of Parliament as to their respective privileges. Those controversies are necessarily somewhat inconclusive, because, obviously, each House has a right to have its own opinions, and the opinion of one House cannot of itself prevail over the opinion of the other. But I do desire to put this to your Lordships, that if you take the House of Commons claim at its highest you will not find that that claim bars the right of the Lords to reject a Bill of this kind. You are probably familiar with the long struggle that went on during the seventeenth and eighteenth centuries between the two Houses. I shall only quote one from the many interesting documents recorded during those years. I find a Commons argument in 1689, which was based upon the assumption that taxes are the sole grant of the Commons. That argument proceeded thus— And the Lords are not to alter such gift, grant, limitation, appointment, or modification by the Commons in any part or circumstance, or otherwise interpose in such Bill than to pass or reject the same for the whole, without any alteration or amendment though in case of the subjects. As the Kings and Queens, by the constitution and laws of Parliament, are to take all or leave all in such gifts, grams, and presents from the Commons, and cannot lake part and leave part, so are the Lords to pass all or reject all without diminution or alteration. There you have clearly and distinctly placed on record the right of this House to reject a Bill of this kind.

I venture to suggest that if that right was necessary in the seventeenth century, it has become indispensable to us to-day. I say that for two reasons. Two practices have lately grown up which seem to me to establish my point. I refer, in the first place, to the tendency to interpret the privilege of the House of Commons with a degree of strictness which, I believe, never obtained to the same extent in former times. We have had examples of that interpretation within the last few days, and I will not further dwell upon that point. But another practice has grown up—quite a recent practice—I mean the practice of grouping together under one Bill a large number of measures dealing with different taxes. That is a recent practice, and it never assumed its present proportions until the year 1894. In the year 1894 the annual taxing Bill ceased to be a mere Customs and Inland Revenue Bill, and became a kind of omnibus finance measure. And this change was made with the obvious intention of embarrassing your Lordships in the exercise of your undoubted rights. You will observe that the mere fact that this practice was resorted to in itself implies the admission that your Lordships have a right of rejection, because the idea of this practice of "tacking" Bills was that you could make it more difficult for the Lords to reject a Bill which they desired to reject by tacking it on to another Bill which they did not desire to reject. What is the combined effect of these two innovations? The effect of them is this—we find ourselves confronted with a kind of hotch-potch of financial legislation, and we are told that while, on the one hand, we are precluded from dealing with each tax upon its merits, on the other we are precluded also from altering a single word or a single line in any one of these measures. Is it not obvious that we are thus driven back upon the only remedy which is open to us—I mean the remedy of rejection—if in such cases we deem it desirable that that should take place?

In order to show your Lordships that I am not preferring any very unreasonable or unprecedented claim, I venture to quote to your Lordships very short extracts from words used in this House by two noble Lords, each of whom filled with great dignity the position now filled by the noble Earl opposite. In 1894 Lord Spencer, in moving the Finance Bill of that year, used these words— We all know that we in this House cannot amend a Money Bill, but we have a perfect right to discuss it, and a full right to throw it out if we so will. And Lord Ripon, two years later said, this— After all, your Lordships cannot alter the Bill, and as you are not going to object to it, which you could constitutionally do I do not think it makes very much difference upon which stage of the Bill the discussion is taken. But this Bill seems to me, if I may say so, to go out of its way in ousting the Lords from their legitimate opportunities of dealing with the subject-matter of the Bill. I may remind your Lordships that in 1907 a Land Valuation Bill dealing with Scotland came before this House, and that your Lordships declined to pass it into law. The following year a similar Bill came before you again. On that occasion you amended it, your Amendments were not accepted, and the Bill was dropped. Now your Lordships will observe that on both of those occasions this question of land valuation was presented to you as a matter with which you were perfectly competent and entitled to deal, and it does seem to me to be a thing unheard of, after that has taken place, that you should now be told that because a measure of precisely the same sort is grafted on to this Finance Bill you are to be deprived of the opportunity which, by common admission, was yours in 1907 and 1908. Again in 1908 your Lordships rejected a Licensing Bill proposed by His Majesty's Government. In the case of the licensing provisions of this Bill you have an equally cynical invasion of your Lordships' rights and privileges. You have included in this Bill another Licensing Bill every bit as crushing in its severity—more crushing in its severity—than the Bill of 1908 with which you had the right to deal, and you are told that you are precluded from dealing with it because it is bound up in the cover of a Finance Bill. I ask your Lordships, What self-respecting Second Chamber would tolerate such treatment?

Oliver Cromwell invented a little House of Lords of his own for the express purpose—as he put it—of protecting the people of England against "an omnipotent House of Commons—the horridest arbitrariness that ever existed in the world." I think we detect signs of this horrid arbitrariness in the measure which we are now discussing. In all seriousness, my Lords, we have a right to ask where this kind of thing is going to stop. If you can graft Licensing Bills and Land Valuation Bills and measures of that kind on the Finance Bill, what is to prevent your grafting on it, let us say, a Home Rule Bill—setting up an authority in Ireland to collect and dispense all the taxes of that country? There is literally no limit to the abuses which might creep in if such a practice were allowed to go on without restriction. Upon this ground alone I venture to think your Lordships' House might consider very seriously whether you are justified in passing this Bill into law.

But there are other matters included in its scope, and upon these I desire to say a few words. I trust, however, I have said enough to show your Lordships that the question before you is not whether you can reject this Bill but whether you ought to reject this Bill—a wholly different thing. You have to consider its results as they would affect all classes of the community, and the principles that underlie it, and you have to consider whether the people of this country have been consulted with regard to it. If you find that the results are likely to be disastrous and that the principles underlying it, which we detect not only from the official utterances of members of the Government, but also from the more indiscreet explanations of so-called supporters of the Government, are pernicious and that the whole matter is one that has never been duly referred to the people of this country, then I venture to say that your Lordships have a clear duty before you—not to decree the final extinction of the Bill—because that is not what we propose, but to insist that before it becomes law an authoritative expression of the opinion of the electors of the United Kingdom shall have reached us with regard to it.

Let us look for a moment at the group of Bills included in this measure. Is this an ordinary Budget? His Majesty's Ministers have never ceased explaining that it is anything but an ordinary Budget. Take the language of the Prime Minister a few weeks ago in the City. He spoke of the Budget as having "far-reaching political and social results"—political and social, mind you, not financial. The President of the Board of Trade describes it as containing "a new idea, pregnant, formidable, full of life"—" a tremendous question never put to the country." The Lord Advocate said of it that it was "designed to inaugurate a new era." The Chancellor of the Exchequer the other day, comparing it with other financial measures, said: "Here I confess there is a larger number of new and novel methods of raising taxation than have been incorporated in any single Bill within the last forty-eight or fifty years." After such an exegesis as that it is idle to talk of the Bill as being an ordinary Budget Bill, to which the ordinary treatment of the annual Budget Bill would of necessity apply.

Now, my Lords, I will not attempt to pass in review at any length the different portions of the measure, that task no doubt will be adequately performed by noble Lords who will take part in the debate, but I will just notice very briefly one or two of them. In the first place there is the Income Tax. Well, the Income Tax payer is the milch cow of British finance, and as His Majesty's Government have got us into a financial scrape no doubt Income Tax payers are prepared to help them to get the country out of it. But we are, I think, justified in calling to mind that not very long ago the present Prime Minister, speaking of a uniform tax of 1s. in the pound, told his hearers that in his view such a rate was impossible to justify in time of peace, and he said— It is a burden on the trade of the country which in the long run affects not only profits, but wages. It tends to destroy, or at any rate, contract a most readily available reserve on which the State can draw in sudden unforeseen emergency. Now here you have, in time of peace, an Income Tax running up, in some cases, to 1s. 8d. in the pound, and naturally you ask yourselves, "What becomes of the detriment to wages? What becomes of the security of this reserve on which Chancellors of the Exchequer so properly rely to provide means for great emergencies?" Income Tax payers would, however, I believe gladly bear their share of the new burden, and there would possibly be very much less said about this particular tax were it not for the fact that this Bill deals with another group of taxes which would fall with tremendous severity on the same people who are already expected to pay this very high rate of Income Tax.

I refer, of course, to the Death Duties. Of the Death Duties I think it may be said without contradiction that there is no tax more naturally odious to those who have to pay it. It is odious, because it is capricious and uncertain in its operation. You may have an estate which will go harmless for half a century while upon another estate a succession of levies may fall one after the other in such a manner as literally to eviscerate the estate. Another consideration is this: this tax falls on the victims in circumstances of peculiar hardship. The head of the family is gone; he may have been the bread-winner of the family; his widow and children, or his relations, have to be provided for, and in addition to the numerous calls which the heir has to meet, the Exchequer comes down on him with these tremendous claims. So long as those Death Duties can be kept within anything like a reasonable compass there is no doubt a great deal to be said for them. I daresay the noble Earl remembers a very interesting Report of a Treasury Committee on the question of a graduated Income Tax. I find attached to that Report an admirable Memorandum written by Sir Henry Primrose in which he says in regard to the Death Duties— The owner will treat them as a recurring charge to be met by prudent arrangement without breaking up the home or shattering the family fortune. Now, Sir H. Primrose's authority is a very high one, and his views were I believe in the main shared by the Committee; but the point surely of Sir H. Primrose's observation is this, that you have to regard these Death Duties really in the light of a capitalised Income Tax. It is quite easy to state them in terms of Income Tax, and we all know that they do in fact involve, if so stated, a formidable addition to the Income Tax. You are increasing now both the Income Tax and the Death Duties, and you are raising them to a prodigious level. It is said that the Death Duties after all have not been a very formidable burden, and that they have been met with comparative ease. I very much doubt whether that is really the case. It is quite possible that there are colossal fortunes which can stand almost any amount of taxation—for a time at any rate. But you have to think not only of colossal fortunes. Of the estates which were dealt with by Somerset House last year, I am told that more than one-half were fortunes of between 5,000l. and 25,000l. Those are not the fortunes of very wealthy people, and they are precisely the fortunes that can ill-bear these additions to their tax liabilities. One thing I think is absolutely established, and that is that these Death Duties really constitute a charge upon the capital and not upon the income of those who pay them. That is the view I believe of the majority of the bankers of this country who issued a circular upon the subject not very long ago.

I notice that the Secretary of State for War announced the other day that, in his view, emphatically, these are duties upon capital, and properly duties upon capital. These new and enhanced Death Duties seem to me to leave very far behind the point insisted upon by Sir Henry Primrose—the point at which the duties are payable without breaking up the home or shattering the family fortunes. And I have no doubt whatever that after the tax gatherer, who has only up to the present time in the case of most estates made one round for the collection of these duties, has been round a second and a third time to the same estates and the same families you will find that that process of breaking up the home and shattering the family fortune which Sir Henry Primrose deprecated so strongly has not only begun, but is proceeding apace. I feel that in addressing this argument to His Majesty's Government I am appealing to a quarter where I shall encounter very little sympathy. The theory which finds favour with the present Government is, as I understand it, one altogether destructive of the family life and family tradition. I see a look of surprise upon the face of the noble Viscount, Lord Morley. But is he familiar with the Chancellor of the Exchequer's oft-cited dictum that in the case of a succession the new owner gets something to which he is not legally entitled, and which is an absolute gift to him whether it comes from a relative or from a stranger? That to many of us is a new and somewhat startling doctrine. And it sounds a little startling, not only to us, but to people in other countries who have happened upon this obiter dictum of the Chancellor of the Exchequer's. My attention was called the other day to a very interesting paper by a well-known French writer, M. Leroy-Beaulieu, upon the subject of our Finance Bill. This is what he says with regard to the theory that the heir gets something to which he is not entitled. He says— This is a reversion to the theory which prevails in Musulman countries, where the Sovereign is the sole proprietor of all property, and private individuals have to be grateful to him for any portion of that property which he permits them, not to own, but to enjoy, without any permanent enjoyment, or the right to transmit it to their heirs.

I pass for a moment to those clauses of the Bill which deal with the question of licensing. It is on record that when this House threw out the Licensing Bill last year the hearts of Ministers were filled with rage. That is a statement made by one of the Ministers themselves, and we certainly detect in the clauses of this measure some survival of that ebullition of wrath. These taxes have been described as moderate, and as intended solely for the purpose of raising revenue. I have great doubts as to their moderation, and I have great doubts as to their appropriateness from the revenue point of view. They are taxes imposed upon an industry which already yields one-third of the total tax income of this country; and it is a revenue which for some time past has shown unmistakable indications of drying up. The Liquor Duties at this moment even on the higher scale yield less, I believe, than they did ten years ago on the lower scale. Let me, in particular, call attention to the case of the on-licence-holders under this Bill. The on-licence-holders are to be subjected to taxation which, in many cases, will impose upon them a burden higher than the monopoly value which the State was to have taken under the Government Bill of last year after a respite of fourteen or twenty-one years. And it is notorious that the effect will be to squeeze out of existence a number of the weaker of these on-licence-holders. Let it be remembered, too, that these are men who, under your existing legislation, have been paying for some time past contributions to a compensation fund instituted under the Act of 1904, so that these poor people have actually been as it were paying insurance premiums, and now find that you are going to forfeit the policy which they had taken out. That is not an unfair description of the case. The brewers will be subject to a charge which in the case of some of the larger breweries will absorb the whole of the profits available for the purpose of meeting the ordinary dividends and, I believe, in some cases the preference dividends also. The hotels—harmless institutions—are to find themselves suddenly called upon for new and large benevolences.

Then there is the Spirit Duty, which differentiates unfairly between certain parts of the United Kingdom—Scotland, Ireland, and the rest. You have so completely overshot the mark in the case of these duties, that a Spirit Duty upon which you counted to bring in £1,600,000, is, according to the revised estimate, only going to bring you in £800,000. Moreover, I am assured that that sum will also prove to be a very considerable over-estimate. I know noble Lords opposite will rejoice greatly and say, "What a splendid thing this is. This means that we are doing something for the sake of temperance. We aimed at Finance and we struck Temperance instead." I believe it to be bad temperance legislation. I believe it to be bad financial legislation. I believe these taxes are well conceived for one purpose only, and that is the purpose of paying off old scores against what is commonly spoken of as "the trade," and depriving this House of its legitimate right of dealing with the whole question of licensing.

I pass now briefly to the question of Land Taxes and land valuation, and I am obliged to speak with bated breath upon this subject, because I shall be told that this House, comprising as it does a large number of landowners, should be extremely careful how it criticises proposals which are supposed specially to affect our own pockets. I should be inclined to reply, in the first place, that this is not by any means a House composed entirely of landowners; in the next place, that, if it does contain some landowners, they are probably some of the most competent landowners in the country and, in the third place, that we have acquired a considerable experience of dealing with questions connected with the land—an experience for which we have in the past sometimes had to pay somewhat dearly. I believe that no part of your financial scheme is more economically unsound than the portion which includes the Land Taxes. You have singled out for specially severe financial treatment a form of wealth which is derived from an enterprise in which the profits are small and uncertain—an enterprise which is only just recovering from a very serious crisis, an enterprise which fills relatively a much smaller place in the wealth of the country than it did forty or fifty years ago. It is, moreover, an enterprise which, as we now know, and as His Majesty's Ministers frankly admit, has for years past been paying, in consequence of the manner in which it has been assessed for Income Tax, a great deal more into the Exchequer than it could reasonably have been expected to pay. So that "these rapacious landowners." who have monopolised so much power in the political system of this country, have, after all, really been themselves the sufferers and victims rather than the occasion of suffering or illusage to others.

My Lords, we ask, and I think we are entitled to ask, what discredit, in your opinion, attaches to the ownership of land that you should single us out for treatment of this kind. Of two men, one of whom has invested his fortune in land and the other in securities—which is, upon the whole, the more harmless and more useful citizen? May we not claim that the man who is content with a modest return, who submits to all the obligations which attach to the ownership of land, who contributes to the rates of his neighbourhood, who bears his part in local affairs, is at least as fully en-titled to just and equitable treatment as his neighbour, who has invested his fortune in, let us say, American shares and spends an agreeable and irresponsible existence at watering places or wherever he chooses to go? Yet, my Lords, the one escapes and the other suffers, and in order that the latter may be sufficiently harassed you are going to set up the colossal edifice of valuation which forms a conspicuous feature of the Bill upon the Table. It is, according to your own showing, to cost the public a couple of millions at the outset. Those who are authorities on the subject greatly doubt whether your couple of millions are in any way nearly sufficient. Besides that you have to consider the expense to which you will put the owners of land, who will naturally have to watch the case on their own behalf. These clauses seem to me to open out an interminable vista of litigation which will worry and unsettle the whole face of the country. It is the more preposterous because the result of all these taxes will not be to make any appreciable addition to the sums available for your immediate necessities. Yet you call these grants in aid and supplies to His Majesty.

My Lords, I will ask whether you have really considered the immense difficulty of this system of valuation which you are going to set up. A member of the Government said that it was to be a costly, elaborate, and expensive system of valuation. There are, I am told, about 1,000,000 owners of land in this country, and there are thousands and thousands of persons who hold under leases with more than fifty years to run. All of these are cases that will have to be gone into thoroughly if this business is to be properly carried through. Have you considered the utter unreliability of these wholesale valuations? Why, whenever we read of, let us say, a compensation case in which a railway or any other company is concerned, what is the first thing to strike you? The most eminent members of the profession are brought forward, and their estimates of value are as wide as the Poles asunder. You are not going to have the most eminent members of the profession—you are advertising, I am told, for young men at £500 a year, and these are the Daniels come to judgment who are going to solve these insoluble conundrums! These valuations based on hypothesis are, of course, sometimes inevitable—you cannot help it—but it is to my mind rank folly to multiply them as you do under this Bill needlessly and on the kind of scale which is followed here.

I know, of course, that these valuations are to be the groundwork of your new taxes, on which I shall say something presently, but that is not the only purpose which they are to serve. Again I am obliged to quote the Chancellor of the Exchequer. The Chancellor of the Exchequer offers such a wide field of criticism, not only in his Parliamentary statements, but in his speeches out of doors and in his contributions to the Press that it is very difficult to keep away from him. Mr. Lloyd-George has announced in a letter to the papers that this new valuation is to be the basis on which municipalities ought to buy land which is essential to the development of their towns and on which the State will also buy up land necessary to the policy of recreating rural life in Great Britain. My Lords, that. I confess does seem to me to open a most disconcerting prospect. Are we going to have the State engaged in wholesale land-jobbing transactions with the object of recreating rural life in Great Britain? What recreating rural life in Great Britain means for the life of me I am unable to comprehend, but the prospect is most alarming to my mind. With regard to the Land Taxes, I will notice very briefly one or two salient points that strike one at first sight. In the first place I would venture to say that the greatest merit which legislation can have is that it should be simple and easily intelligible and that if you judge this legislation by that standard you will find that you have descended into the very lowest depths of obscurity and confusion. Who do you suppose is going to understand all the different kinds of values specified in these clauses? I am told there are a dozen or more. Imagine this code in operation. Imagine all the perplexities which will arise. Why, my Lords, everybody will be unsettled; nobody will know where he is, except, perhaps the young man at £500 a year, who, of course, will see a boundless prospect of profitable employment and advancement opening up before him.

Then, is it not true that these taxes offer an almost unlimited opportunity for what I am afraid I must call predatory taxation? You are told to possess your souls in patience because you are only going to be charged ½d. in the pound for this undeveloped Land Duty. My Lords, if the young man at £500 a year or the Department that he serves chooses to discover that your uninteresting acres have a potential value for some remote purpose your ½d. in the pound at once becomes not a ½d., but 3s., 4s., or 5s. in the pound, and I need not say that by one turn of the screw nothing can be simpler than to turn the initial ½d. into 1d., 2d., 6d., or whatever you please. Then I notice that under these taxes the same people are liable to be taxed not once, but twice, thrice, or four times on the same property, and also that they are liable to be taxed when their property is remunerative, but that they do not get relief when it is unremunerative. Finally, I notice that, although these taxes have been persistently advocated as measures of relief to the sufferers from the rapacity of ground landlords, they do not afford a farthing's worth of relief to the sufferers, and that what is extracted from the ground landlords goes either into the pocket of the Treasury or may be used for some of these marvellous schemes for regenerating something or somebody at the opposite extremity, perhaps, of the United Kingdom.

The effect of these taxes is certainly not limited to the wealthier owners of land. Noble Lords opposite are great advocates, and rightly so, of a policy for improving the housing of the working classes, and we all support that policy in principle. But surely if that policy is really to be a success is it not desirable that transactions in land should be made as cheap and easy as I possible, and that the enterprise of those who desire to develop land for building should be encouraged, so far as you are able to encourage it? My complaint of this Bill is that it will have precisely the opposite effect. Every transaction in land will be rendered more complicated, and will be penalised by more onerous liabilities under this Bill. The family solicitor used to be regarded as the great obstructor in the way of free trade in land, but I honestly believe that the family solicitor will pale into insignificance by the side of the departmental complications and obstructions which will inevitably grow up if this measure becomes law. I can conceive no greater discouragement either to the man who wants to own a parcel of land for himself or to the man who wants to buy land with the object of opening it up and covering it with buildings than the clauses contained in this Bill. What has stood in the way hitherto of the free adaptation of the land for building, you may depend on it, has not been the want of land, but the want of confidence on the part of those whose capital is necessary to develop it. I think noble Lords opposite must have discovered by this time that this Bill has given a very rude shock to that confidence, and that at this moment the building trade is in a state of unusual stagnation owing to the alarm and uncertainty occasioned by this measure.

There is only one justification, so far as I can understand the matter, for these proposals, and that is a justification which noble Lords on that Bench opposite have not the courage to avow. These taxes are justifiable if you believe that land is national property, and that it should be the business of Parliament to nationalise the land of the United Kingdom. That is the view of the Chancellor of the Exchequer, for he has announced that the nationalisation of land must come by easy stages. Here is the first easy stage he presents to us. We tried the other day to elicit from the noble Earl opposite whether on that point he and the Chancellor of the Exchequer are at one, and I trust that when he contributes to the debate on a later day he will give us precise information on that point.

If I may sum up, we object to these taxes, first, because they are unproductive for present necessities; secondly, because they tax people on what they have not got; thirdly, because they are cumulative and tax the same people over and over again; fourthly, because they single out for specially severe treatment a class that does not merit such treatment; fifthly, because they fetter and obstruct the land market; and, sixthly, because they are based on a Socialistic fallacy, on which you are acting, but which you have not the courage to avow.

My Lords, it is not only trade in land which has suffered from the alarm created by the production of this Budget. All your taxes—your Land Taxes, your Liquor Taxes, your Death Duties—all of these are going, if this Bill becomes law, to drive the nation to meet its annual liabilities out of its capital, the consequence being a diminution of the sums which are available for useful investment, and the creation of a feeling of insecurity which will deter those who possess capital from using it within the limits of these islands. This is not an imaginary apprehension on my part. We shall hear, I daresay, in the course of this debate, noble Lords who can speak with special authority on this aspect of the question. I shall be surprised if we do not learn from them that the value of British securities has been shrinking, that British investors are turning their attention more and more away from this country, and more and more towards other countries, and that there is a general feeling of uneasiness and alarm which it would be difficult to exaggerate.

I have been supplied within the last few hours with a rather remarkable statement which I may lay before your Lordships. My correspondent has made a comparison between the public issues of the year 1908 and the public issues of the first ten months of 1909. In regard to foreign and colonial issues there has been no change to speak of. When you come to British issues you find that these, which stood at fifty-five and a half millions in 1908, show only twenty millions up to the 6th of the present month. There may be an explanation of these figures, but they seem to me alarming. I know that arguments of this kind do not greatly appeal to the noble Earl and his colleagues. One of them said the other day something of this kind—" After all, what is capital? Capital means land, means mines, and means mills. They cannot run away." Who is going to develop the land, who is going to work the mines, who is going to run the mills if you frighten capital out of the country? If the mines remain unworked and the mills remain idle and the land is not developed, who in it that will suffer? What becomes of your poor man's Budget? Will your schemes of afforestation and rural regeneration and so forth compensate the working men if they lose steady and regular employment. I trow not.

Now, my Lords, I desire to spend one moment in answering a question which I must assume that the noble Earl would have asked me if he had delivered that unspoken speech. I am sure he would ask how I should find the money which is wanted to meet the present necessities of the country. May I call attention to begin with to the fact that this great group of Land Taxes, which in our view is one of the worst features of the Budget, will not produce anything appreciable to meet present necessities. I do not think that, if we were sitting on the Government Bench, we should propose to spend two millions, at a time when it is difficult to make both ends meet, for the purpose of facilitating the collection of these taxes. I do not think we should defraud the on-licence-holders of the compensation to which you yourselves considered last year they were entitled. I do not think we should proclaim our indifference to the removal of capital at a time when above all others the attraction of capital seems to be necessary for the interests of the country.

But we make no secret of the fact that in our view this Budget is a confession that you have virtually exhausted the possibilities of a financial system based upon free imports. When we find such taxes as are included in this Bill, such direct and such indirect taxes, we ask ourselves whether the time has not come for a reconsideration of the bases of our financial system. I believe that many public men who have been from the first in theory and by conviction staunch Free Traders are beginning to realise that our single-handed struggle in favour of Free Trade can no longer be continued with any prospect of success. They see that our position of isolation becomes more marked than ever, that foreign countries are raising higher and higher the walls of their tariffs, and that even our own Colonies, which are struggling—pathetically struggling—to keep the door open for us, are beginning to discern the moment when it will no longer be possible to keep the door open. They see that unemployment is rife, and that business in many quarters is flagging.

And thus it comes to pass that throughout the country people are asking themselves whether we can any longer laugh out of court a financial system under which other countries have so greatly prospered, merely because we regard it as unorthodox from the point of view of the creed under which we ourselves have been brought up. People are asking themselves whether, after all, cheapness is everything. They are asking themselves whether His Majesty's Government, Free Traders though they are, are not continually, and perhaps rightly, introducing changes in the law which have the effect of increasing the difficulties of production and rendering it more difficult for our people to hold their own against their foreign competitors. And I think that many of them are saying to themselves that, even if higher prices were to result from a change in our system, higher prices might not be an unmixed evil if they were accompanied with greater regularity of employment and a freer circulation of capital. These questions have been freely asked for some time past, but they are asked more than ever now when the people of the country are confronted with this Bill. Do not let your Lordships suppose that I am asking this House to pronounce favourably or unfavourably upon this great issue. All we can say is that that idea is present to the minds of a large portion of the people, and the most thoughtful portion of the people of the country; and that being so, we do not feel that we have any right to saddle them with these new and monstrous burdens and to inflict upon them the portentous machinery of this Bill until we know that that is the line along which they wish to proceed.

My Lords, I am going to answer another question which I will assume for the sake of argument that the noble Earl would have asked. We shall be asked whether we have considered the consequences of rejecting this Budget. My Lords, we have considered them, and we are ready to face them. What are those consequences? I am told in the first place that there is to be a political deadlock. You will have a Government supported by a huge majority in one House of Parliament, with a minority in the other, and that Government deprived for the moment of the control of the purse. Obviously that would constitute a deadlock. But how long need it last? You hold the key in your own hands. You tell us constantly that you desire to put these issues to the test. Why blame us if we suggest you should do it as soon as possible? Is your Budget so perishable that it will not keep for six weeks?

Then, my Lords, there is a deadlock of another kind. There is a financial deadlock which is described to us in lurid colours. Revenue will cease to come in. There will be no money to pay the troops, or to pay old-age pensions, or to pay even the salaries of His Majesty's Ministers. There will be illegally collected taxes with regard to which proceedings may be instituted. The bonded warehouses will open their doors, the country will be flooded with duty-free tea, and the unfortunate persons who have taken their tea out of bond and paid duty upon it will be ruined. The whole thing is to culminate in a deficit of fifty millions—I think that is the accepted figure—and in chaos, irreparable chaos. My noble friend, Lord Welby, was invoked a few days ago, and he set out to make our flesh creep, I have read his paper, as I read everything over his signature, with close attention, but my flesh did not creep so very much by the time I had got to the end. Of course, you can have chaos if you want to have chaos, but if you don't want to have chaos I am pretty well convinced you need not have it. And I am rash enough to hazard a conjecture that the noble Earl has got—won't say in his pocket or up his sleeve or in his despatch box, but in somebody else's despatch box—a nice little scheme for tiding over any temporary difficulties which may arise. It seems to me very probable that if steps of this kind are to be taken successfully—and constitutionally—that the assistance of both parties will be required. I am here to say with full authority that should that assistance be desired we shall give it loyally and do our utmost to mitigate any inconvenience that may possibly be experienced. So far, how ever, as that part of the case is concerned, I for one very much prefer temporary dislocation—temporary chaos, if you like to call it so—to the permanent dislocation and permanent chaos which I honestly believe would arise out of the passage of this Bill.

There are yet other consequences which we are told to consider. We are told to think well of the consequences to this House. That is conveyed to us in various tones, sometimes full of solicitude, and sometimes minatory and violent. It is in effect intimated to us that as the penalty of rejecting this Bill we are to expect an attempt to deprive this House of its constitutional right of dealing with money Bills. My Lords, the Constitution, then, is to be fundamentally upset to punish us for doing what Lord Spencer in 1904 and Lord Ripon in 1906 told us we had an absolute and perfect right to do. I am not greatly alarmed by these threats. I recall to mind that, before this Budget was dreamt of, the same threats were held over our heads. We were told long before this Budget could even have been thought of by its authors that the question of the curtailment of the rights of the House of Lords was to be the dominant issue at the next election, and we have actually had before us the egregious scheme of the late Prime Minister for giving effect to that object. We are therefore justified in assuming that, whatever happens, this struggle has got to come. What I would venture to ask those noble Lords who may doubt whether we are wise in facing it now is this—Shall we stand better or shall we stand worse when the struggle comes if we shirk our responsibility now?

A great principle is at stake. That comes first. But, after all, even if you choose to set principle aside, what should we gain by refusing to act upon our undoubted rights in regard to this Bill? Depend upon it, my Lords, the people of this country will think worse and not better of us if we have not the courage of our opinions, and do not, as I conceive it to be our duty to do, appeal from you to them. Only one word more. I have been in this House more than forty years, I owe everything to its indulgence, and I say from the depth of my heart that it is my desire that you should do nothing unworthy of your high reputation or your great place in the Constitution of this country. But I believe that the worst and the most damaging thing that you could do would be that you should fail those who look to you as the guardians of their greatest constitutional right, the right to be consulted when fundamental political changes are demanded by the Government of the day; and, my Lords, depend upon it that by rejecting this Bill you will, on the one hand, insist that that right shall be respected; you will not usurp the function of granting aid and supplies to the Crown; you will not pronounce a final verdict upon this Bill, bad though you may believe it to be; but you will say that it is a Bill to which you have no right to give your indispensable consent until you have been assured by the people of the country that they desire it to pass into law.

Amendment moved— To leave out all the words after "That" for the purpose of inserting the following Resolution "This House is not justified in giving its consent to this Bill until it has been submitted to the judgment of the country."—(The Marquess of Lansdowne.)

THE LORD CHANCELLOR (LORD LOREBURN)

My Lords, except, I think, for one or two sentences at the commencement of his speech, the noble Marquess has said hardly anything of the extreme gravity, from the constitutional point of view, of the step which he advises your Lordships to take. A master of debate, no one would have been more competent than the noble Marquess to have expounded to us his views. A master of affairs, no one is more conversant with the history and traditions of the Houses of Parliament, which are not a matter for lawyers merely, but a matter also for statesmen. I will only say, before I proceed to address your Lordships on this subject, that I do not wish to paint any lurid consequences, and I do not wish to speak in the language either of passion or exaggeration, but plainly to lay before the House what is the real nature of this step which your Lordships are asked to take, how unprecedented it is when examined, how subversive of the traditions of Parliament, and how impossible in practice. I wish you to consider the nature of the step that is sought to be taken, the occasion on which it is sought, and the inevitable consequences that will flow from that.

Now, my Lords, the noble Marquess assumed that it was within the rights of this House, unquestionably and indubitably, to reject the Finance Bill of the year. If I am asked whether you can do it lawfully, according to law, I answer undeniably yes; and the best test of that is that a Court of law would not give effect to any tax which had been refused by the House of Lords and was not ultimately embodied in an Act of Parliament. But if I am asked whether this House can do it constitutionally, I say—in my opinion, no. And the difference between what can be done according to law and what can be done in accordance with the Constitution under which we live is notorious and fundamental. The law definitely fixes rules. What would happen if all the estates of the Realm were to carry out in freedom all the powers which the law entrusts to them? The Crown has enormous powers, and by the Constitution some of them for centuries have not been used. My Lords, it is not to the letter of the law itself that those who wish to govern this country as this country has been governed in the past must look. They must look also and even more to custom, usage, convention—call it whatever you please—which by inveterate practice had so modified the hard law itself that we are governed more by custom in this country in great matters than we are even by the law.

It has been suggested by the noble Marquess that in this case there was a violation of the old traditions of Parliament because there was "tacking." Does he not see himself that whenever he invokes the doctrine of "tacking," that in itself assumes the limitation of the powers of this House? Does the noble Marquess not perceive that by his very argument he admits the limitation to which he has never really alluded? What is "tacking"? More than 200 years ago this House laid down its doctrine upon that subject, and the Resolution then passed is still one of the Standing Orders of the House. It runs as follows— The annexing of any clause or clauses to a Bill of aid or supply, the matter of which is foreign to and different from the matter of the said Bill of aid or supply, is un-Parliamentary, and tends to the destruction of the Constitution of this Government. Those who framed that Resolution 200 years ago knew very well the difference between the law and the Constitution. What is there in this Bill that in the least degree interferes with the doctrine laid down in that Resolution? Is valuation foreign to and different from the subject-matter of the Bill? It is impossible to raise Land Taxes, you could not raise a shilling of them, except you have a valuation. It is the very basis and the very root of the whole of the Land Taxes which are laid down in this Bill. You may think it all wrong and unwise—I am not discussing that—but how can it be suggested that there is anything in the nature of "tacking" by reason of the presence of valuation clauses in the Bill when without those clauses the whole of the Land Taxes would of necessity fall to the ground?

The noble Marquess suggested that in some mysterious way there is the vice of "tacking" in this Bill, because last year this House rejected the Licensing Bill and here are new licensing clauses inserted in the Finance Bill of this year. These clauses are simply clauses increasing and varying existing taxes. Are we then precluded, under any doctrine of "tacking," from altering the incidence or increasing the burden of existing taxes merely because we unsuccessfully brought in a Licensing Bill last year? I am not surprised that the noble Marquess did not like to dwell upon the constitutional aspect of the subject. What, then, is this Bill? It is not an ordinary Bill. It is not a money Bill in the sense in which it is suggested that any money Bill has ever been thrown out by this House. Is it not familiar knowledge to all students of the Constitution that until the year 1860 there were constantly money Bills brought forward for this, that, and the other tax—a number of them in the course of the same year—and that they were often so mixed up with other matter that the money provision itself constituted a very small part of the measure?

Then in the year 1860, when this House threw out the Bill for the repeal of the Paper Duty, the House of Commons passed a Resolution asserting that they had themselves the power of keeping their own rights inviolate, and the next year they put all the money provisions of the year into one Bill. It was passed by your Lordships. It has been passed ever since by your Lordships. It is the Finance Bill of the year which contains the whole provision of supply of the year, and throwing out that is refusing supplies for the year. It is very open to question—Lord Monkswell, who was a great authority, raised in the House of Commons when he was a member of that House the serious question whether any pure money Bill, small or large, had ever been thrown out by this House. Certainly it never was before 1708. But I will assume, although I do not wholly assent, that it has been done on various occasions in the course of these small and unimportant Bills; but it has never been done—never—in regard to the finance of the year, and the claim which is put forward now is a claim for the right to refuse supplies. My Lords, how little notice the noble Marquess took of the rights belonging by Constitution to the House of Commons in regard to money Bills!

Every year all the estates of the realm combine to pay homage to the rights of the House of Commons in regard to money Bills. The Crown itself acknowledges their power. In the Speech from the Throne every year the request for supply is addressed only to the House of Commons—to "Gentlemen of the House of Commons," distinguished from your Lordships. The Estimates of the year, upon which, of course, all ways and means must be founded, are never submitted to this House. There are instances in which requests for Estimates, even for a copy of the Estimates, have been refused by the House of Commons. The preamble of the Act which each year grants supply records it to be the grant of the Commons. Every year, frequently, in this very House, the motion is made that privilege Amendments be agreed to—that is to say, Amendments which will prevent interference with the privileges of the House of Commons in matters of supply. But the most conspicuous and most significant of all the indications which are so familiar to us all is the practice in regard to money resolutions in the House of Commons. Money resolutions in Committee of Supply are passed without any authority from this House or without consulting it. From the day on which they pass they are acted upon as though they were law embodied in an Act of Parliament, and money is raised, taxes are levied, for the whole of the remainder of the session until the Act has passed into law by virtue merely of the resolutions of the House of Commons. That practice shows the very necessity under which we stand and, therefore, partly the secret of the origin of the practice of the Constitution. It shows the very necessity in which we stand that one Chamber and one Chamber alone shall have the power of the purse. You are obliged to act on the authority of one Chamber because otherwise, as soon as ever the existence of the tax was indicated, and the merchant knew that the tax would be imposed, all the stuff would be withdrawn from the warehouses and the tax would be fruitless. The business necessity is complete and is recognised annually by the practice and the resolutions of the House.

The noble Marquess seemed to treat these things very lightly. He seemed to think that a little chaos did not very much signify. Let me tell the noble Marquess what money is now to-day being raised by virtue of the resolutions of the House of Commons passed earlier in this year—the whole of the Income Tax, the whole of the Tea Duty, the new or additional taxes upon land, spirits, tobacco, licences, motors, death duties, and stamps. Your Lordships are not accustomed to deal with these things. There is no instance before, in the whole history of this House—there is no instance before of this House ever having confronted the problem of what is to be done in the event of Supply being stopped. The absence of precedent and the financial confusion which must follow from the step that is now about to be taken by this House are surely danger signals which must show that we are approaching constitutional shoals.

My Lords, I believe that the action you are asked to take is a direct invasion both of the prerogative of the Crown and of the privileges of the House of Commons. The power in this country is divided between King, Lords, and Commons. To the Crown belongs the supreme authority over all, checked by the doctrine of Ministerial responsibility, and by the power of the House of Commons to refuse Supplies. To the House of Commons belongs the control over the purse and therefore the control over Ministers of the Crown, checked by the power of the Royal prerogative of dissolution residing in the Crown. To the Lords belongs the supreme jurisdiction in the administration of justice—surely of itself a noble attribute—together with a full share in all legislation except finance. There is no check on this House, except the creation of Peers. Such is the ancient and famous balance of power known to our Constitution, the envy of other nations, which your Lordships are now being invited to overthrow. What must flow from this decision? If it be established that your Lordships can succeed in persuading the country—I will not say to condone—I will more courteously say to approve the step which is about to be taken, this House, for which elections have no terrors, consisting of men who have not been elected and need not fear that they will not be re-elected, will hold at mercy the House of Commons, and have the Government of the day in the hollow of its hand. If the House of Commons should displease your Lordships, however recently they may have come from the country, you will be able to remit them again to the tortures of the poll. If the Government displease you, all you have to do is to wait for the psychological moment, when some gust of dissatisfaction in regard to their conduct, some momentary displeasure, may be visible in the constituencies, and put an end to them if they happen to be of opinions hostile to your own. No wise man would desire that this House should possess such authority as that, and no man of spirit will submit to it.

My Lords, it is said, I know, that all this power will be used very rarely. The only thing the noble Marquess said about it was that he intimated that it would be very rare. That kind of plea is the prelude to every usurpation of power. Moderate and plausible to begin with, it will soon end in gathering into the hands of this House the reins of actual power. I have said that this is in my opinion unconstitutional. It is the first small commencement of an attempt which, if it succeeds, will transfer enormous power to this House and proportionately diminish the authority of the Crown and of the House of Commons. My Lords, it is a step towards constitutional revolution. Will your Lordships allow me now to examine the occasion upon which this encroachment is attempted? I will endeavour to deal separately with the purposes for which the money is wanted and the methods by which it is raised. The motives which have impelled the Government to propose this Budget are no secret. For twenty-five years there has been a constant succession of Reports and of Royal Commissions, Committees, and other more private inquiries in regard to the social conditions prevailing in this country. The microscope, so to speak, has been applied to our social conditions, and the result has been to show that there is a vast increase of wealth, visible in the Income Tax, in the Death Duties, in the inordinate and wasteful luxuries we see around us, tried by every test you please. It has been extended to a great majority of the people. The savings banks and the Post Office show great increases. Trade union funds show an enormous increase; the wages for skilled labour have risen steadily. These things furnish us with reason to congratulate ourselves upon the stability of the country and upon the immense resources that are available to us for the purpose of national improvement.

There is a dark side which has attracted notice for years, and especially within quite recent times. The agricultural population has alarmingly diminished, and wages have hardly risen for casual labour; rents have risen enormously; the Poor Law figures are distressingly high, and show signs of increase; the conditions of labour and sweating, especially among women, have been the subject of constant debates and criticism in this House and in the other; overcrowding is an evil dangerous to the very life of the nation; drunkenness is still the greatest curse of this country; crime and insanity have increased, and unemployment has assumed formidable dimensions; there is ground for thinking that a process of physical deterioration is being threatened among our people who have become an urban from being a rural population. I take no pleasure in recording these sad facts, and I do not pretend that His Majesty's Government or that any Government can rapidly cure these evils; perhaps they even cannot cure them altogether at any time. But I say, and we have felt, that it is the duty of every I Statesman to do his utmost to minimise these frightful evils, the extent of which is acknowledged by every one who has given any careful thought to the subject. We do not pretend to be more humane or wiser than other people. Humanity, patriotism, and a sense of safety and all the best motives of human action impel us to do our best for the purpose of remedying this state of things.

We have tried. Some things we have not been allowed to do by your Lordships' House. We were not allowed to pass a Licensing Bill, we were not allowed to pass a Small Holdings Bill for Scotland to save our country—my country—from being gradually depopulated in the rural districts. But there are things which we have done or which we have promised to do and hope to do. We have extended small holdings in England, we have made by statute some provision against sweating, we shall I hope pass a Bill to deal with housing, we have passed an Act for labour exchanges, and we have announced a system of contributory insurance against unemployment, and we hope we may do the same for sickness and disability. We have passed an Act providing for old-age pensions. These are objects outside the ordinary expenditure of the year and the necessity of selfdefence, these are the objects which have forced us to ask for the large taxes to which the noble Marquess referred. This Budget, except in so far as it provides for ordinary current expenditure, in so far as it exceeds the customary and usual taxes that have hitherto been levied, is intended to meet these purposes, and I do not believe any one of your Lordships will complain of any one of the purposes to which I have referred.

Is there anything wrong or predatory in the methods by which the taxes have been raised? It is very remarkable that the noble Marquess attacked every single one of the new taxes which are being imposed. There are some which are levied upon capital, there is a supertax on income. It is said they press too heavily upon wealthy men. I do not doubt that when taxes are imposed upon capital it is a bad thing; when they are imposed upon income it is a bad thing. I do not question for a moment that this tends or may tend to some extent to diminish employment. It is impossible to avoid that. The only alternative is to tax poverty. If you do not tax wealth you must tax poverty. If these taxes are not to be imposed upon income, if Death Duties are not to be imposed, taxation must fall upon the necessaries of life. That is a policy to which we in this Government are wholly opposed.

The noble Marquess has also criticised the new taxes imposed on land. It is impossible to enter into details about them on an occasion like this, nor did the noble Marquess himself do so. They are in this country novel and experimental taxes. It may well be that some of them may prove difficult in the working, may require amendment or alteration; that is so and must be so with all experimental and new taxes. But the principle of this taxation is not new in the Colonies; it is not new in Germany or in the United States. It has been approved in the House of Commons, and not this House of Commons merely. In the last House, a Conservative House, the principle of land values was approved by a majority which supported a Bill brought in for that purpose. It is perfectly true that that related to rating. I cannot see, however, how It can be dishonest and unfair to levy taxes on that principle and defensible to levy rates on that principle. I have the highest financial authority of the Conservative Party in support of this principle as applied to taxes. In 1894, when the famous Budget of that year was brought forward, Sir M. Hicks Beach, now Lord St. Aldwyn, speaking in the House of Commons said— Let the right hon. gentleman (Sir William Harcourt), if he thinks right, invent means of taxing the increased value of landed property in the neighbourhood of towns. In an endeavour of that kind I will support the right hon. gentleman as readily as anybody, because I think it would be fair. I know there is a great deal of the value of land in towns which at present escapes taxation of every sort, and I think, if it should be possible—I know it to be very difficult—it would be desirable to remedy that injustice. There are Conservative members in the House of Commons many of whom, I believe, supported this principle of taxing land values on their election at the last general election, and it has been supported by the highest economic authorities, apart from political opinions altogether. The tax is a very difficult tax to raise, I know; it is a very difficult tax to adjust; but until this Budget was brought in, although there were a good many individuals who objected to it, I think the principle itself was certainly approved by the whole of the Liberal Party and by a very large part of the Conservative Party as well.

The other taxes to which the noble Marquess referred were those relating to licences and the taxes on liquor. Those are increases of existing taxes, and no more suitable subject for taxation, in my mind, exists. These taxes upon liquor have been far too low for a very long period of time. Enormous fortunes have been accumulated by reason of this monopoly, by reason of the value which attaches to it, wholly created by the State. One thing shows how wise these new proposals were. There has been a very large diminution in the consumption of spirits since the time when these taxes were imposed by resolution by the House of Commons; not only so, but in many parts a large diminution in the cases of drunkenness and in the arrests and convictions for drunkenness. These are among the indirect but most valuable results of the taxes which the noble Marquess so strongly denounced.

I cannot dwell in detail upon it but will your Lordships allow me to point out one thing to which no reference was made by the noble Marquess the Leader of the Opposition? If this Budget is indefensible either in whole or in part, if the nation, who are, after all, a just-minded people, are disposed to condemn it, or if harshness or hardship in particular cases arises from it in the working, we have, it must be borne in mind, already gone four years of the six years which are the ordinary duration of a Parliament. In two years, without violating the Constitution, without taking any step such as you are advised to take by the noble Marquess, if the country is with you, you would be able either to repeal these taxes altogether or to modify them in such way as you think fit. Looking at the enormous character of the change that is sought to be effected in circumstances like those, I must say I am astonished that for so slight a cause this House should be prepared to commit themselves to so grave a new departure. The Bill is now no doubt doomed, because whenever any measure proposed by the Government is opposed by I the noble Marquess the Leader of the Opposition there can be only one conclusion.

The sense of the country is apparently to be taken upon this measure. No one will be so simple as to believe that the only question which the country will consider will be the question whether this Bill ought to pass into law. Other and graver questions will be raised. We have been in office for four years, In 1906 our whole time in the House of Commons was taken up by passing an Education Bill. It came to this House. It was wrecked, and the whole labour of that session was thrown away. The following year, 1907, was not a year of very great enterprise of a legislative character. In 1908 the whole time of the House of Commons was spent in passing the Licensing Bill, a measure the loss of which I regret more than I regret the loss of any other. It came up to this House. It was not alive when it came here. It had perished by the stiletto in Berkeley Square before it ever saw this House.

Now, again in 1909, after a session of unexampled labour, the House of Commons has presented to your Lordships the fruits of many, many months of arduous work in a domain entirely their own; and this House is going to destroy the Finance Bill of 1909 and to refuse Supplies. It is, in my opinion, impossible that any Liberal Government should ever again bear the heavy burden of office unless it is secured against a repetition of treatment such as our measures have had to undergo for the last four years. If we fail in the coming general election, assuming that His Majesty is pleased to dissolve Parliament, it will only be the beginning of a conflict which can end only in one way. If we succeed, I hope we shall not flinch from that which will have to follow. We have not produced this conflict. We have not provoked it, nor at any time desired it, but we are not afraid of it, and I hope that we shall none of us fail to do our duty in preserving the Constitution of our country.

THE EARL OF HALSBURY

My Lords, I am bound to say that to my mind the noble and learned Lord, after having propounded the question in regard to the Constitution, has run away from it and given us an obituary notice of the present Administration. He has told us that they were extremely diligent and extremely benevolent, and that they had promised a great many things. I should agree entirely with the noble and learned Lord as to their motives and as to the lavish nature of their promises, but after all, I should have expected from the noble and learned Lord what he was quite able to give, something in the nature of a description of what he meant by Constitution. More than once in the course of his speech the noble and learned Lord has said that we are violating the Constitution. I certainly did expect that some exposition of that utterance would have been given. What part of the Constitution are we violating? Shall I tell him what is against the Constitution? The practice of Parliament has been that when a Bill came up for a grant to the Crown, and anything in it was considered to be alien to it, it was considered to be unconstitutional to bring it up; and as late as, I think, 1807, when a Bill was brought up for the malt tax and containing tobacco duties as well, the then Chancellor, in vindication of the privileges of this House, moved that it be disagreed with and rejected, because it contained multifarious matter.

The precedent that the noble and learned Lord referred to, and which he called the invasion, or attempted invasion, of our rights was the precedent of 1861, when that ancient and antiquated view of our privileges commenced. What was then done was done with the deliberate intention of evading the power of the House of Lords to reject what was alien. I think there is something alien in this Bill which is before us, but instead of having one Bill upon which your Lordships' judgment is to be taken, there is a whole bundle of Bills which you are asked to take together. If you disagree with one of them, then, according to the noble and learned Lord, we come to the constitutional question. That is a contention which I hope your Lordships will absolutely reject. We have a right to determine what shall be brought up to us in the form of a Finance Bill, and if such a Bill contains multifarious matter we have a right to reject it. If you cannot take away any part of the absolutely simple finance, you must reject the whole, and those who have bundled all these Bills together, in all these different forms of legislation, into one Bill are themselves the persons who are responsible for bringing this difficulty before your Lordships. There may be some parts of this Bill which your Lordships might be glad to pass, but you cannot do it, because that would be making a precedent for a course which I think would be destructive of the privileges of this House.

There are in this Bill parts which are in-appropriate to it as a Finance Bill. I will take Clause 33. There you have got the question of appeal. His Majesty's present Administration have a passion for turning everything over to Commissioners. You have two sets of Commissioners. I believe the great difficulty of making Commissioners supreme is this—not so much in the possibility of corruption or impropriety or inefficiency on the part of the Commissioners themselves as in the fact that unless you have a decision of a Court of law you do not know by what jurisprudence the Commissioner is guided. In the ordinary Courts of law the great security of the subject is that in dealing with these matters the Judge is himself under the restrictions and must be acting according to the law, but a Commissioner may decide on any point he likes without the least reference to the ordinary system of law.

Those who remember the Act of Charles I abolishing the Star Chamber will find the Preamble of that Statute well worth reading. It begins with a recital of all the Statutes by which its authors would protect the liberty of the subject I and the rights of property, and it goes on to show that "it is contrary to the Constitution of this country that there should be any judgment pronounced upon any man's estate or upon any man's chattels except in the Courts and according to the common law." But I am bound to say that they go on with a threat which I should be sorry to see carried into effect to-day. They begin by saying that "any Lord Chancellor or Lord Treasurer, or any person of high station who acts contrary to the true intent and meaning of that Statute shall for the first offence be fined £100," for the second offence a much larger sum and for his third offence he "shall be disqualified from any future office." But the only reason I quote that Preamble is to show that those who are well qualified to form a judgment upon that which contains the elements of public liberty were very careful to show that there must be some system of law administered, and that you must abide by the ordinary Courts, and that you must not hand it over to any one person to administer without the cheek of a known system of jurisprudence. We all know, and no one knows better than the noble and learned Lord, the effect of what is called the rule-making power. In this Bill there are various provisions as to persons who are to be charged and so on, and there is the rule-making power to lay down the rules and conditions under which an appeal may be taken. Certainly the Reference Committees are persons to whom no one could object. They hold the chief practices and the highest offices in England, Ireland and Scotland. They are to make the rules which include, as I pointed out, the question of appeal. But observe what is done. They are to make the rules subject to the consent of the Treasury. That is the ultimate and the highest authority to whom I think no such power could reasonably have been committed.

The noble and learned Lord has, as it were, given a sketch of the different things which the present Government have done or might have done. Now, my Lords, does he or does he not admit, as it has been admitted over and over again by others, that your Lordships have the right to reject the Bill? If he does, then we get rid of what is called the constitutional objection. I heard in middle life a very great authority in the Liberal Party say that everybody talked about a thing being unconstitutional when they had nothing else to say about it. I think, however, there is such a thing as acting otherwise than in the light and in the spirit of the Constitution, although you may not be doing what is actually in disobedience to law. But what is there unconstitutional here? What is it we propose here? We propose that you should not pass the Bill until it has been submitted to the country and until we know whether the people agree to it or not. Is that unconstitutional? I should think it is one of those things which people would recognise at once as being the fitting and proper thing to do, if there was, as I think there is here in the proposed legislation, a gross departure from the ordinary course of legislation.

I do not propose to go through the different parts of the Bill and the systems of taxation involved in it; but there is one mode in which we may look at the Bill in order to sec what its real object and purpose is according to some of its authors. I will admit at once that my noble and learned friend himself is actuated by all the good motive which he has ascribed to his colleagues; but may we not look at what has been said by my noble and learned friend's colleagues in order to form some opinion of what the real object of this legislation is? I do not care about the particular words or about the bad language which I have read; but I remember having read that in cultured Athens there once existed two altars. One was to Impudence and the other was to Insult; and I could not help thinking whether some of the speeches delivered on this subject might not have formed appropriate offerings on these two altars. Apart from the language, however, it is important to consider what is the object of the Minister who proposes such a scheme of legislation as this, in which all these things are to be put together, and according to which your Lordships are to take all of them or none of them. A right hon. friend of mine, a very distinguished lawyer who is now, I think, something in the nature of a soldier, a miles gloriosus, has told us that we must remember that no quarter is to be given; and other speakers, less elegant in their phraseology, have told us that it is time to make these Dukes pay. That is, I suppose, taking the Dukes as representative of your Lordships' House. It was further pointed out by others that they have got a great deal of money and there are a great many other people who have not got any money. What does that mean? If one were dealing with a question of this kind in a crowd I do not know that any one would care very much about it; but conceive a Minister of the Crown who is proposing a most important Bill, or, as my noble and learned friend said, inadvertently, Bills, comprehending so much as they do, and using this language for the purpose apparently of setting the poor against the rich, for the purpose, at all events, of making a sort of attack on those who are very well off and inciting the people to aid and assist him in making the rich men pay, to use his own phrase. Is that the language to be used by an English Statesman speaking of such an important question, as my noble and learned friend described it, as the accounts of the year?

May I say that this is a new departure? I do not think that in the whole course of English history one can find any Statesman actually a Minister of the Crown going from place to place denouncing the rich and telling the other classes what they are to get by the Bill which he is sending up to the House of Lords. I do not know whether my noble and learned friend will approve that, but I regret to say I see that some of his colleagues have done, and say that Ministers are entirely harmonious, that they have confidence in each other, and that they are desirous to aid their colleagues in all they have done. I do not know, but it may be that they do not refer to their language, but only to their unity on the Bill or Bills in which they are concerned. Now, part of my noble and learned friend's speech I submit with the utmost respect, was something in the nature of electioneering. He said "We have done so many things, and we have only two more years before you have an opportunity of coming in if the country is dissatisfied with us." What is the meaning of that? Are we to acquiesce in what we believe to be mischievous, unprecedented and unjust, and give them two more years, and then at the end of that time, after we have allowed the principle to be established and the mischief to be done and not till then, to turn them out?

My noble and learned friend also said they would tell the people that your Lordships have thrown out this, that, and the other measure, and that the Government will certainly not submit to take office unless they are secured against the repetition of our conduct. It is the oddest persuasive observations by an orator that I have ever heard. It amounts to this—" You, the House of Lords, behave very badly, and I will not belong to you again; I will not come to preside over you, and I will not be a Minister again until your power is taken away; we are not going to stand this kind of action." I doubt whether any deliberative Assembly has ever been addressed before in such language. We did reject the Education Bill in the sense that we made it better, though the noble and learned Lord said that we wrecked it. We refused to acquiesce in the Licensing Bill, and I am glad that we did.

But it is pleaded that your Lordships should waive your right so as to enable the Government of the future to have the power of the purse, the House of Lords to have no authority at all. This may be right or it may be wrong; but whose is the revolution, who is it that wants to change the Constitution? We have acted within our right, and we have acted constitutionally as well as legally; but if the noble and learned Lord is listened to, if you dare to do this thing, you shall, he says, have your power taken from you, or the noble Lord and his colleagues will never consent to be Ministers again—or, at any rate, some of them. I confess I should not be absolutely disappointed at such a catastrophe. But, my Lords, speaking seriously, I ask whether this is the mode in which your Lordships should be addressed, or in which a deliberative Assembly should be tutored and threatened, though certainly in more elegant and polished language than they are threatened elsewhere. It seems to me that the noble and learned Lord absolutely abandoned the question which I had anticipated I should have had the pleasure of arguing with him. All he said was that our action is unconstitutional. Why? How? In what respect? There has not been one word said on this aspect of the subject. That is not the mode which the noble and learned Lord in a Court of law, or when he is presiding, as he does with great skill and wisdom, over our legal deliberations here would submit to for a moment. If some of those who address him were to say "Such and such a thing is the law," and there is an end of it, he would not submit to that kind of argument. But really this is all that he has done in respect of this measure.

I do not often disagree with the noble and learned Lord, but I do disagree with him now, and I say that the action of the Government is unconstitutional. I think also that we have acted quite in the light of the Constitution. During the long course of the discussions in the House of Commons and in the House of Lords no one has ventured to question that the Lords have always the power of rejecting any Bill whatsoever. That is the value of a Second Chamber, and this value, in the opinion of many persons, is very great. The noble and learned Lord's suggestion apparently is that we should in future have but one Chamber, because I observe that there is a process of arguing to the effect that, as it is the right of the Commons to have the power of the purse it can do everything and can bring in any kind of legislation. Take the most ordinary case. I will take one which perhaps will commend itself to the noble and learned Lord—the Disendowment of the Church. Could they bring that into a Budget Bill? They could do it very easily. I could mention very many modes in which that could be done. And take another case. Take bimetallism. Some people are very fond of the subject. I suppose it would be admitted generally that you could not have such a Bill as that altering the whole law of the currency of the country, unless both Lords and Commons agreed—I mean Constitutionally. But if you put bimetallism in this form, you could make some of your taxes and require that they should be paid in silver; and there you have got bimetallism directly. The truth is there is not one subject of legislation which you can imagine that you could not, by a very little ingenuity, bring into this question of its being a simple Money Bill. And if you can do that, and if you can make these precedents which the noble and learned Lord appears to admit only began in 1860, if you can bring all sorts of matters into a Money Bill, I do not know what is the use of this Chamber.

We have heard a great deal upon this question. It is said that the House of Lords is always in the way. The noble and learned Lord on the Woolsack appears to have picked up from the lighter literature on this subject the view that whatever is propounded by a Conservative Government is passed by this House but that, when it is a Government of the other side, nothing is passed, and your Lordships are described as an appanage of the Carlton Club. That is absolutely untrue. We have passed a great many things that have been suggested by the other side, and it should always be borne in mind that, until these new-fangled ideas of Constitutionalism appeared and until the great Liberal Party was shattered by Home Rule, this House was much more evenly divided than it is at this moment.

And, finally, we are told by my right hon. and military friend that we are to receive no quarter. I suppose there is no one thing which is more degrading to any Assembly than the suggestion that the consequences to themselves or to their order is to affect their conduct, or to be told that "If you do not do this, that, or the other, or venture to question what is done by the other House, we will abolish you," because that is practically what it amounts to. The noble and learned Lord says he will not stand our continued conduct, and that we must act in the manner in which he described. One thing at all events I will say—that, if I was to be supposed to be actuated one way or the other because I was threatened with extinction and made to suppose that I would be deprived of all privileges, I would not value a seat in a House which would yield to such a paltry apprehension.

THE LORD BISHOP OF BRISTOL

My Lords, there are just a few minutes before the adjournment for dinner. I have been told that a Bishop should not take part in this debate, because the question is one of mere party strife. If it were, I should certainly not think of taking any part in it. But it is very much more than that. We are told that the fortunes of this House, and the fortunes of the nation and of the people depend upon the issue. If that be so, there is no body of men in this House more called upon to take part in a debate of this kind—if the fortunes of the House depend upon the issue of this debate—than the occupants of the Episcopal Benches. For we are the only representatives of the ancient constitutional method of entry into this House, namely, that of careful selection on the part of the Sovereign and of all the people to a certain office which office involves a seat in the House of Lords. Careful selection by the King goes on still, and by all the people, because the appointed representative of all the people is the Prime Minister. We, therefore, are the only body which keep up the ancient practice. Further than that, we represent a very much older tenure than that of the oldest physical hereditary Peer in this House. The earliest tenure that I can trace of physical heredity is 754 years old, and admirably that Earldom is filled to-day. But there are three persons actually sitting on these Benches now whose tenure is 550 years older than that, and there are no fewer than ten other members on these Benches whose tenure is from 450 to 550 years older than the oldest of the physical hereditary Peers, we having a spiritual heredity. I maintain, therefore, that if there is any question of the honour of this House, from these Benches at least some words should come in support of the honour of this House.

In my judgment, in cases of great complexity, the simpler the issue you can raise, the better. The issue before us this evening is a very simple one in itself, though the consequences may be tremendous. I have heard all sorts of suggestions made as to how this contest could be evaded. My Lords, I am not in favour of evasion. I am in favour of something direct, and therefore I am in favour of the proposal of the noble Marquess opposite. I am bound to add this, that when I came into this House, I had no conception I should have to say what I am going to say, namely, that if your Lordships' House give way to the threat from the noble and learned Lord who presides over our deliberations, you will deserve to be put an end to. When that threat is made, I am bound to stand up and say that for the honour of this House, I sincerely trust that it will affect no single member of the House otherwise than to drive him to vote with the noble Marquess.

But the members of these Benches have a much more important part to play than anything of that kind. All of your Lordships know a great deal about the condition of the poorest classes in society, from what you call the lowest to what may be called the highest in the social scale. As a matter of fact it is not the business of anyone of your Lordships, except those of us here on these Benches, to know, and to know intimately, not the conditions only, but the persons of all classes in the social scale in our respective dioceses; and I claim that there are no men sitting in this House who know so completely from one end of the social scale to the other, the conditions, the needs, the wants and the demands of every class of the community as we do. We are obliged to know, especially those of us who represent a great city, as I do, the terrible conditions of the very poor. We are obliged to know the great want of employment that affects men who can do excellent work. We are obliged to know the conditions of the artisan, of the shopkeeper, and of the professional classes, and even higher than that. Many of us have to know the condition of very great capitalists who perhaps farm a little for their own amusement but who have the whole of their income to spend; and we know, and know intimately, some large landowners who, far from having the whole of their income to spend, have a very narrow margin indeed. All this we have to know intimately as our official business; and although the noble and learned Lord took credit to the Government for having passed certain ameliorating measures, I suppose it was this House that passed them. And it always will be so—when direct measures for the benefit of the very poor are brought forward, this House will give them no niggardly support. But look at the proposals of this Bill. I cannot conceive how the conditions of the very poor in my own large city, for instance, will be amended at all, nor indeed how the position of the working classes who actually now get wages will be improved.

I may have heard the noble and learned Lord wrongly, but I thought he said it was quite possible that under some of these proposals affecting capital there might be a little less work here and there; but quite apart from that, my Lords, I do not see how this Bill is to produce a change that we, at any rate, demand, that legislation connected with the poor shall produce some direct and simple improvement in their position. I see nothing at all if the ultimate event comes about, that is, the ultimate result of these proposals now brought before us, but this: a dull monotonous level of poverty without any redeeming points at all. We all of us know the familiar joke with regard to persons on a certain island who had to employ one another. They had no money to pay each other, and the old joke was that they could only live by taking in each other's washing. But, my Lords, there is another and a very serious point. Some twenty of us on these Benches have the privilege of reading prayers in your Lordships' House, and the culminating point in the special prayer for Parliament which so many of your Lordships heard this evening is this: the result of your deliberations is to be "the uniting and knitting together of the hearts of all persons and estates within the realm in true Christian love and charity one towards the other."

That is to be the culminating effect of the deliberations and the legislation of this House. Some of us are accustomed, when we are considering a proposal, to ask ourselves what is the exact argument which the author of the proposal thinks most cognate to it, and thinks best as a means of urging it upon the attention of the people. Now, my Lords, we know who is the official author of this Bill. Not to say a word about his Parliamentary utterances, I only ask your Lordships to consider his speeches out of Parliament, and particularly one delivered near my old I charge when I was in Stepney—made in certain language and with evident motive. If the intention of this Bill is to be judged, as I maintain it may fairly be judged, by the expressions of its author in pressing it upon public attention, well, there is nothing in the world for this House to do but to pass the Amendment of the noble Marquess. On the whole survey of the matter, while earnestly desirous to do everything I possibly can for the amelioration of the conditions of the poor and the working classes, I am quite clear myself—may be very wrong—that my vote shall be given for making it as sure as we can make it, that those whom the Amendment trusts, whom those who are against it will not trust—namely, the people of this country—shall have the chance to express their opinions distinctly for or against these proposals.

LORD SHEFFIELD

My Lords, I was not quite able to follow the argument of the right rev. Prelate, though I followed his conclusion that he meant to vote for throwing out the Budget. The right rev. Prelate not only claimed an antiquated tenure, but said he descended from a spiritual tenure, and not from an earthly one. He also made the declaration that he and his brother Prelates knew more about the conditions of all classes of the community, cared more about them, and generally had a more earnest desire to benefit them than anyone else. It seems disrespectful to put anything like a note of interrogation to any of his statements.

THE LORD BISHOP OF BRISTOL

I said many of your Lordships knew all about it, but that it was our official business, and our official business only, to know these things.

LORD SHEFFIELD

If the right rev. Prelate meant that it was his duty to know these things, but did not, that alters the position. However, I will only say on this point, that if I could examine the history of the right rev. Bench and note their attitude towards the innumerable cases of progressive legislation urged upon Parliament during the last 100 years—if they knew all this, they dissembled their love very successfully. I am glad, however, that there is a desire to act upon the words in the prayer spoken of by the right rev. Prelate, and to work for the whole nation. I only wish the right rev. Prelate would remember some other weighty and valuable words in that prayer—" to put aside all partial affection."

I think if there is one thing we need more than another, it is that we should clear ourselves from association with class, from professions, from all those things that prevent us from having that high light which is so important if we want to deal with intellectual and social problems. And I cannot help thinking that the right rev. Prelate did not seem to bring quite that high light into the matter in considering how he proposed to ameliorate the condition of the poor which he said, from his knowledge of Bristol and Stepney, it was his desire to do. We have had to-night from all three speakers who have spoken from the Opposition side, a great deal of abuse of the Chancellor of the Exchequer. We know it is a good maxim "when you have no case, abuse the plaintiff's attorney." And it seems to me that that is very much the way this Budget is being treated. I think anyone would be very sorry to have to defend all the speeches of his friends or political associates at any time. We could get plenty of stones to throw at each other, and I expect we shall have an ample supply of these missiles furnished to us from both sides in a very short time.

After all, however, the question for us to consider is the Budget and its alternative. As the right rev. Prelate declared his intention of supporting the Amendment of the noble Marquess the Leader of the Opposition, I suppose I may take it that he considers the best remedy for the suffering and misery that he sees in the crowded streets of the city where his See is placed, is in this Tariff Reform which is indicated in the speech of the noble Marquess the Leader of the Opposition. I do not wish to discuss the question of the details of the Budget, or of the alternative scheme, but I would invite the right rev. Prelate to go down to Bristol and address a crowded meeting of those persons in whom he takes a great interest, and ask them whether they would rather have their bread and other articles of food taxed, or whether they would prefer that some of the surrounding land should pay some contribution to the burdens of the State. I think it might be an interesting discussion. But I wish to say, my Lords, that I consider any discussion of the details of the Budget entirely irrelevant to the issue before us.

The noble Marquess the Leader of the Opposition made a most interesting speech, one which had many points in it, and I think had some true points in it. You cannot have a large and comprehensive financial scheme that has not some new proposals in it which probably twelve months' experience would show might be altered in detail. But it seems to me that the speech, or at any rate, the heads of the speech would have been more weighty if it had been delivered in Committee in the House of Commons. They were criticisms of particular parts of the Budget, and by admission to-day, outside the scope of your Lordships' House. May I turn for one moment to the Earl of Halsbury who spoke last but one? Of course, nobody disputes that there is a legal right to throw out this Bill. The noble and learned Lord on the Woolsack admitted it practically, but I was very glad to hear the noble and learned Earl admit that he did not wish to join with that class of person who took that objection because he had nothing else to say. The noble Earl distinctly admitted that there was such a thing as usage and practice. It may not be inscribed in the Statute Book, but it may and ought to have great weight with this House. May I remind the House of the words of Tennyson: "Freedom broadening slowly down from precedent to precedent." That is not law, but it is far more weighty than law.

In some respects we know the law of our Constitution remained unchanged from the times of the Plantagenets. Does anyone suppose that you can go to the text of old musty Statutes, and not look at the informing spirit which from generation to generation embodies the substance while preserving the form? That is one of the things which interests foreigners most when they come to this country. They come to England and see the old hermit crab-like shell inhabited by a completely new organism. We live in our old mediæval garments, and they seem to stretch until they fit; but if you want to turn them into a suit of real armour, you will find your movements greatly hampered, and you must adapt your ideas to the real purpose and spirit of this generation. The right rev. Prelate gave us a noble declaration of courage and earnestness in not yielding to threats, and he told us how that would determine him to vote for the Amendment of the noble Marquess. But I rather think the right rev. Prelate had come down determined to vote for the Amendment before ever he heard any threats. It is no use our being humbugs in any way. When this Amendment was put down, everybody knew that the question of the Finance Bill was at once taken beyond the region of this House. It was taken into the arena of politics before the nation. I am not going to trouble myself with the details of the Constitution, but I certainly think it is the Crown, and not the House of Lords, that has the right to determine upon a dissolution. But when you appeal to Cæsar you must abide by the decision of Cæsar. You cannot limit Cæsar in the way in which he will deal with the case. It would be childish for us to pretend that we do not know that the issue which will go to the country will not be the issue whether this Budget shall or shall not pass. It is also childish to say you are being threatened. The issue that is going to the country is, what shall be the future relations of the House of Lords to the representatives of the people? We know perfectly well that that is the issue which will be fought out. Will anyone in this House say that in the distribution of power and responsibility in this country the House of Commons has not been hitherto the predominant partner? No one pretends to say that the House of Lords has any constitutional claim to be treated as the equal in importance in the State with the House of Commons. How are the relations between the two Houses to be preserved? They are to be preserved with a good deal of jarring and friction; but still, the two Houses have jogged on from time to time. Of course, before the Reform Bill they jogged along, because the House of Lords was then practically predominant in the House of Commons. They looked after that, either by means of the rotten boroughs or through the great landowners. It takes thirty years or more—it takes a full generation—before a great constitutional change works out in the minds of the people so as to have its full weight in Parliament; but we have been moving now for two generations since the Reform Bill when Mr. Disraeli gave us household suffrage in the boroughs, and the people are coming more into their rights. I do not know whether you would call it their rights, but they are coming more into their dominion. The great masses of the people and the electorate are and will be supreme. Now, it is important that there should be some moderating power behind the supreme popular power which can in a way exercise some kind of check, but the only security for that kind of check is that this secondary power will bear in mind its own inferiority. If they will use what power they have with great tact and discretion, a Constitution which theoretically invites all sorts of complexities will go on; but if you are not content with having a Constitution as a series of understandings and forbearance and adjustments to the time—if, instead of that, you determine to force the stronger party to set forth clearly what those rights are to be, you will have on the Statute Book some restrictions which have hitherto depended upon your own tact. When Lord Halsbury repudiated the idea of any connection between the Tory Party and the Carlton Club he said, "Look what Liberal measures we have passed which the Tories dislike." That is perfectly true. My impression is that this House will always pass any Liberal measure when the active Conservative Members of the House of Commons tell them that the time has come to give way, and that they cannot afford, having regard to the constituencies, to fight any more. That is the measure of the Liberalism of this House. They give way when the Tory Party in the House of Commons think it is time to give way. If the Tory Leaders in the House of Commons say, "Fight a little longer," they fight a little longer; but this time they have carried it a little too far. And my impression is, that if this dissolution does come, the people of this country will give you an answer not only about the Budget but about one or two other questions which might very well have been left sleeping.

LORD WILLOUGHBY DE BROKE

My Lords, I do not propose to trouble the House with any reference to my own affairs with regard to the Budget. I believe it is not considered, nor has it been considered during the platform campaign, that it is good form for anybody under the rank of a Marquess to talk about his own affairs. I belong to that equally struggling but still more deserving class of the Barons. But let me tell your Lordships that the ancient Manchester school, and the modern descendants of the Manchester school of the Gladstone and Harcourt administrations, have produced in me a complete object lesson of the wealthy class that they have tried to destroy in this country without any assistance from this Budget at all. I welcome this Amendment from every possible point of view—not only from the legal point of view which, for my part, I do not know very much about—but from the constitutional and also from the point of view with regard to our moral obligations towards the electors of this country.

I may say that I have not formed this decision from reading either the Observer or the National Review; but I have been to a great many meetings in all parts of England with regard to this Budget, and the experience that I have had there, and the other means that I have conscientiously endeavoured to take to discover the feelings of the people with regard to the Budget, lead me to the sincere and honest conviction that the vast majority of the thinking people in this country look to the House of Lords to save them from the tyranny of that small knot of Cabinet Ministers who have managed somehow to gain the mastery over their colleagues, and to get the control for the time being of the House of Commons. For every reason, therefore, I desire, with a perfectly clear conscience to support the Amendment of the noble Marquess.

In considering a question like this, tactical considerations are, to my mind, entirely out of place. I have not the slightest doubt that the noble Marquess has received all sorts of views, from the wild threats of the street corner agitator, to the more sober counsels and the gloomy forebodings of those friends of the Constitution whose desire to preserve that Constitution sometimes, I think, competes favourably, and sometimes unfavourably, with their desire to preserve the Cobdenite tradition. But if there is one argument brought before us as a reason why we should not accept this Amendment, and which, to my mind, is more immoral than any other, it is what you have heard in private conversation:—" Oh! give the Radicals a little more rope, and they are sure to hang themselves." That is a consummation which I should look upon with the most unmitigated satisfaction, but, at the same time, I do think that the people of this country, while this process was going on, would be submitted to something very terrible indeed, from which they look to the House of Lords to save them. But if you do wish to consider this from the point of view of tactics, there is not the slightest doubt that the worst tactics which your Lordships could possibly be guilty of would be to run away just at this particular moment. The worst tactics that your Lordships could be guilty of would be to accept the Budget.

The Radical Party, during all the summer and ever since this discussion began, have been trying to force the House of Lords into a position that we used to be in at school in which tactical considerations were entirely dishonourable or out of place—the position of replying to the question:—" Will you fight or take a licking? "I do not think that those who took the undignified course of putting up their hands and taking a licking ever made a single friend or converted a single enemy to their side. Supposing your Lordships take a licking over the Budget, and say that you are frightened by all these threats, and that you will pass the Budget, we shall be simply driven first from one untenable position to another which will be much more untenable, and from which, after the first retreat, it will be absolutely a fortiori more and more impossible to recover the ground that we have lost. It has been suggested that if the House of Lords is amenable to what the Radical Party want it to do, they perhaps will not look at us so hardly in the future. I think we ought to consider what happened to the soldier in, I believe, the South African war, when he begged a man on the other side to spare his life, and he would give him all his money. The other man took the money away from this unfortunate man, who was on the ground, and then he shot him. That is exactly what will happen to us. We shall not receive any more lenient treatment from the Radical Party, and those who wish to abolish the House of Lords will not change their attitude in the future, however amenable we may be at the present moment.

Supposing that this House does accept the Budget, we shall have both Houses of Parliament definitely committed to a policy of Socialism, and nothing else but Socialism; and there will be a perfectly legitimate and natural demand for the abolition of the House of Lords both by its former friends and by its enemies. Now, we have heard a great deal about the constitutional argument to-night. I should like to have heard more. It has never been properly explained to me—and I do not suppose it ever will be—but it has never been satisfactorily shown to me that it is really unconstitutional for the House of Lords to pass the Amendment proposed by the noble Marquess. I was always given to understand in the very imperfect legal knowledge which I managed to imbibe at Oxford, that there is no written Constitution about the matter at all, and that in times of stress and emergency and difficulty the people of this country did not turn to black-letter authorities, or works on Constitutional Law, any more than when a huntsman has lost his fox in the middle of a field, he takes a book out of his pocket to see whether he should cast "up wind" or cast "down wind."

The people of this country will judge this matter on the ground of common sense and on the ground of practical utility, and though I have a very great respect for the Constitution, I do not believe the average elector cares the least bit about the Constitution, provided he gets what he wants. He very rightly recognises that the Constitution of this country was made for England, and not England for the Constitution. But do you not think it is a very strange argument to lie in the mouths of noble Lords opposite and their friends; this newly-found respect for the Constitution of this country? All these arrangements with regard to conventions and precedents were perfectly good and right and ought to have been respected, so long as both great parties in the State played the game according to the recognised rules. But when those rules are deliberately broken by noble Lords opposite, then the time comes when the rules of the same may have to be slightly altered.

We have already heard from the noble Marquess, to whose speech, if he will allow say to say so without impertinence, I desire to pay my most respectful tribute of admiration, how other Bills have been incorporated in the Bill which is now called the Finance Bill. But Radical Cabinet Ministers have made no secret about it. They always said they would incorporate in a Finance Bill those measures which the House of Lords did not pass in a form which was acceptable to themselves. The prophecy that they would put "swinging taxation"—I do not know what it means, although I think we are beginning to learn—on the brewers, was the only prophecy which Mr. Ure has ever made which had the slightest semblance of truth. It is the one thing in which he has some amount of claim to a certain amount of accuracy. The Prime Minister also told us that if he did not get his own way in the House of Lords with regard to this and other measures, that "the resources of civilisation" were not yet exhausted. We are now getting in the House of Lords, and we shall get it all through this debate from noble Lords opposite, at any rate a bowdlerised version of this Budget. But behind all this there lies the intention to set up a Single Chamber Government in this country, and that is just exactly what I honestly believe the electors in this country are at last beginning to realise.

We have also been told something about the chaos that is going to result supposing we do not pass the Budget. I do not think I shall be much beside the mark if I suggest that the blood of this Budget will have to be on the heads of its authors. They have introduced the Budget. They have caused all the trouble. If they had considered it in the likelihood of its being passed, they would have foreseen they would have had a very great deal of difficulty in getting both Houses of Parliament and the electors in this country to approve of it. If the Budget is killed, as I honestly believe it will be by the people, then the chaos that results will be due to to its authors, and they will have no one to blame except themselves for it. They have not backed up this Budget either in the country or in the House of Commons like men who have confidence in it.

I should very much like to know what the Treasury officials thought of this Budget before it saw the light of day, and whether they found themselves in accord with the proposals which the Chancellor of the Exchequer tried to get them to translate into an Act of Parliament. But there is no doubt that no sooner did this Budget sec the light of day than it was forthwith condemned by the whole expert opinion of this country. It was condemned by financial opinion, practically by the vast mass of commercial and professional opinion, by auctioneers, agents, land surveyors and nearly all of the professional classes, as being utterly unworkable and quite impracticable. But not only that. They have taken into their hands in the House of Commons every single sort of weapon that they could find or forge in order to pass this Budget through that House. The exaggerated use of the closure has been repeated so often that I will not labour that point. But there is another point which is straining the Constitution, and that is the handing over in the House of Commons to an official whom they have appointed Chairman of Committees the power of selecting what Amendments should be argued or not. That is an arbitrary method of managing the House of Commons, and to say that a House of Commons managed in this way represents the settled will of the people is utterly beside the mark, and will not hold water for a single moment.

We have also got Mr. Lloyd-George's speeches and the speeches of Mr. Winston Churchill in the country. I should very much like to know, and I do hope that the noble Earl opposite will give us an answer before this debate is over—" Does he or does he not approve of that style of oratory of which his colleagues have been guilty?" That is what we really must know before this debate is over. I, for one, cannot believe it for a single moment—I cannot associate in my own mind the distinguished and courteous manner of the noble Earl with the utterances of his colleagues on the public platform. I do not believe for a moment that he approves that sort of thing. I do not like to think that the noble Earl is like the Lord Scamperdale, who was perpetually regretting that because he was a Lord he could not swear or use coarse language, and he had to keep his "Jack Spraggon" to do the dirty work for him! I sincerely hope that the noble Earl will dissociate himself from his "Jack Spraggon." But although Mr. Lloyd-George is still entirely separated from the very courteous demeanour we are accustomed to from the noble Earl opposite, I am rather sorry to see that he has got something like a promising pupil in the noble Lord the Under-Secretary of State for War who went down to a public meeting somewhere or other last Wednesday and said that this Amendment was cant. That is, if the noble Lord was rightly reported. I do not think anybody who heard the statesmanlike speech of the noble Marquess to-night will say that he was speaking in terms of what we are accustomed to call "cant." But the noble Lord was also reported to have gone on to say that if the Budget was rejected by the House of Lords it would be because the Dukes did not like it.

LORD LUCAS

I did not say that.

LORD WILLOUGHBY DE BROKE

I am delighted to hear that the noble Lord did not assent to all this clap-trap about the Dukes. I am not at all surprised, because I never really believed him guilty of such a thing, or that he would associate himself with this calumny which is being spread against the Lords that they are going to reject this Budget on account of self interest.

We have been told by several people, by the enemies of the House of Lords on the one side, by friends of the Budget and by some of the people who are a little faint-hearted from time to time on our own side, that the Budget is very popular in the country. I am not at all so sure about that; but there is one thing that will decide it, and that is a reference to the people of this country. If noble Lords opposite think the Budget is popular in the country time will show, and they will be returned at the next General Election. There is not the sightest doubt that, at a certain time during the discussion of the Land Clauses and the way they were produced before the country—I suppose with the more ignorant of the population, whose cupidity was easily played upon owing to straitened circumstances—they were to a certain extent popular. It is very easy. It is a very well known device—and it has been done hundreds of times ever since there was a Radical Party in this country, which is a good many hundred years ago—to raise a cry against the landowners. It is a part of the tactics which the Radical Party always indulge in. It is very easy to play to the passions of the mob; but the injustice of the unearned increment has already been very ably pointed out by the noble Marquess. Let me tell noble Lords opposite that the working classes of this country are beginning to realise what all this means about unearned increment.

The Government cannot remain in office except by the consent of the Socialists and the extreme Radicals; and this proposal about the unearned increment they believe, will, in a very short time, be applied to all forms of property. All this sort of thing is bound eventually to filter down to the working classes of this country. The form of taxation recommended by the Radical Party will very soon resolve itself into this sort of thing with regard to unearned increment. When any citizen happens, in vulgar parlance, to "make a bit" by his own energy or thrift or good luck, the Chancellor of the Exchequer will step in, and having labelled him a "black-mailer" or a "swindler" he will not put an end to the transaction, but the Chancellor of the Exchequer will then go shares in the plunder. Yes, but what for? To provide a revenue for Old Age Pensions or something of that sort would be the reply. But I think you will find it will eventually be applied to advancing the schemes of this or that body, whether Socialists or somebody else, probably equally as bad, whom it may be desirable to placate in order to keep the Government in office as long as they possibly can. There is no doubt that the working men of this country are beginning to have a very uncomfortable feeling that the rhetoric of Mr. Lloyd-George and the vulgarity of the President of the Board of Trade will not fill many empty stomachs or replenish many bare cupboards during the coming winter. And they will not see the advantage of paying a whole horde of officials to pry into the public life of everybody in this country, and who will be paid from money taken from the beer and the spirits and the tobacco consumed by the working men. I may mention that the taxation on champagne is not increased at all. The luxuries of the rich men contribute hardly anything towards the taxation of this country.

I will not go into the details of the Budget at any great length, but, for my part, I find fault with the Budget as a financial proposal more than any thing else because it leaves untouched so many rich people who deserve to be taxed, and whom I admit it is very difficult to get at. There is a growing class of rich people in this country who have a position of freedom with a lack of responsibility that is unknown I should think to the inhabitants of any other country, and they are the people whom I, for one, should like to get hold of. They have been created and flourish under a system of free imports, and it is only by taxing the luxuries of these people that you will get at them at all. I do not wish to single out any particular class for attack, or else I may be accused of adopting the tactics of noble Lords opposite; but they are a class not particulaly productive considering the small amount of interest they take in public life; and if they could be got at in the interests of the taxpayer, I would heartily support any clause of that kind. They can easily import a great many of their luxuries from abroad. It has been estimated, although I am not going to give a lecture about Tariff Reform, that £28,000,000 worth of luxuries come into this country for use, absolutely free, which these people enjoy.

We are told that there will be chaos supposing this Bill is not passed into law. Well, I have already suggested that the House of Lords will not be responsible for that chaos; but I should think that the Budget itself has already produced a good deal of chaos. Capital has gone out of the country already, and as a direct result of this Budget a very great number of working people have already been thrown out of work; but it is practically impossible to measure the chaos that would result from the acceptance of this Budget. The whole of the civilised world, "all nations, peoples and languages," who are at all interested in the question of free institutions, and the unity of this kingdom and the well-being of the British Empire, are looking at these proceedings with very anxious eyes indeed to see who gets the best of it; and if the House of Lords does accept the Budget in the way we are asked to do, a blow and a shock will be delivered against national and Imperial security from which the country will perhaps never recover. This is the main reason why I unhesitatingly vote for the Amendment of the noble Marquess, because, in the language of Lord Rosebery in the letter he sent to The Times when the Budget was first introduced, it is "a revolution." It is nothing else.

It is not the slightest use for noble Lords opposite to deny, as we shall hear in this debate, that they have surrendered, they and their Cabinet, to the forces of revolution and to the forces of Socialism. Where do they get the driving force from for their Budget? Where do they get the support which enables them to carry it on at all? They get it from the extreme men and from nobody else but the extreme men. They certainly do not get it from Lord Joicey and Sir Robert Perks and those pillars of the Liberal Party who have so to speak "arrived." And I do not think they get a very great deal of real support from those other old pillars of the Liberal Party who have not yet "arrived" but who expect to get some of those good things which ultimately come to all good Radicals, and who, in the meantime, are obliged to go about giving good words with their mouths, and curses in their hearts for the Budget, and a sincere hope that the House of Lords will have nothing to do with the Bill that is before Parliament at the present moment. It is not the Conservative Party who say that this Bill is an instalment of Socialism. We take it from the Socialists themselves. They must know their own article when they see it, and we have been assured both at home and abroad that in this Bill they recognise their pet doctrines and propaganda in a form which exceeds their wildest expectations. Therefore, it is not our description of the Bill when we say that this is a Socialistic measure; and Socialism was not one of the things which appeared in the electioneering addresses of Cabinet Ministers and Radical candidates for Parliament at the last General Election !

In the speeches of noble Lords opposite we shall not hear very much about the extreme character of these proposals. Mr. Asquith, the Prime Minister, went down to Birmingham with the express idea, as I understood it, of making a speech which would enable respectable people, of whom we have just had a definition from the Earl of Halsbury, as being those who have not been convicted of felony, to accept this Budget. The idea of that speech, as I understood it, was to persuade respectable people to accept the Budget; but it was impossible for the Prime Minister to keep out the purely Socialistic doctrine from that speech. Having been called upon to speak a little earlier in the debate than I had anticipated, I have not got the exact quotation with me, but this is a fairly accurate translation of what the Prime Minister said: "That there were certain sums of money which would be far more fruitfully and much better employed if they were taken away from the individual and given over to the State and spent on things which might be thought for the good of the State." If that is not Socialism, I really do not know what is.

Then we are told that we are violating and over-riding the will of the people. All this talk about the voice of the people is cant. It is real cant of the purest description. It is an utterly meaningless phrase, and is merely part of the stock-in-trade of the agitator and of the demagogue. The will of the people is not expressed on this subject at this moment in the House of Commons. Representative government in this country is at an absurd discount, and the talk about representative government and free institutions has now resulted in this sort of thing: that we are the only Government in the whole of the civilised world that is not being dominated and controlled by a small section of Socialists. With regard to the will of the people, I, for one, have not the slightest anxiety about referring this Budget to the people.

What most moderate men are asking us to do is to save them from being jockeyed and bullied and bluffed by the Chancellor of the Exchequer and the President of the Board of Trade into accepting a Budget and a policy for which there was not the slightest mandate at the last General Election. If you Lordships embrace this policy, then I can only say, ' Heaven help England. "The late Mr. Bromley-Davenport wrote an extremely amusing parody upon" Locksley Hall" which has been described by a ripe critic of literature as one of the finest things in the English language. I hope it will not be considered out of place if I quote something from it. He was endeavouring to foreshadow, with Tennyson, the state of the country at some future date, when he wrote these lines— For I looked into its pages, and I read the Book of Fate, And saw Foxhunting abolished by an order from the State; Saw the landlords yield their acres alter centuries of wrongs, Cotton lords turn country gentlemen in patriotic throngs. Queen, religion, State abandoned, and the flags of party furled In the Government of Cobden and the dotage of the world. Then shall exiled common sense espouse some other country's cause, And the Rogues shall thrive in England, bonneting the slumbering laws.

[The sitting was suspended at eight o'clock and resumed at nine o'clock.]

THE DUKE OF NORFOLK

My Lords, I feel some embarrassment in addressing the House owing to the present state of the Benches. But perhaps you will bear with me if I keep things going until there is a larger attendance and some more gifted orator to follow me—I trust from the other side. We have not heard much from that quarter. As one of the rank and file of the House I am anxious to explain why, in spite of the sonorous caution which we had to-night from the noble and learned Lord on the Woolsack, I still feel it my bounden duty—although at the moment I am shrivelled up and pulverised by that address—to support the Amendment of the noble Marquess on the Front Bench of this side of the House. The noble and learned Lord warned us in stirring language that the action which it is proposed to take is unconstitutional. The noble and learned Earl, Lord Halsbury, who has previously filled the office of Lord Chancellor, assured us that it was constitutional, and the noble Lord who spoke immediately preceding the dinner hour urged us to take no heed of cither because the people of this country do not care any tiling at all whether the action is constitutional or not. I presume the noble Lord intended that as somewhat rhetorical, for I am quite sure he agrees with me that, whatever the people of the country may feel about constitutional procedure, it does behove every member of this House to have a jealous regard to what is in the true interests of the Constitution. And I venture to believe that those who support the Amendment now before the House are acting more truly in the spirit of the Constitution than those who wish this Bill to pass without the people of the country having any opportunity of expressing their opinion upon it.

The Lord Chancellor drew, or attempted to draw, a very fine distinction between what was legally possible for this House and what was possible from the constitutional point of view. He pointed out that law was one thing and the practice and the Constitution another. It seems to me he drew that distinction so finely that it is quite justifiable for us to consider to what extent we are bound to go into technicalities and constitutional procedure, or to what extent we ought rather to follow the course which we believe is the most constitutional from the point of view of the duties which this House has to discharge towards the Constitution of the country. And though dialectic arguments are used to show, or attempt to show, that within the four corners of this Bill there is nothing outside the ordinary contents of a Bill for providing the Supply for the year, if those efforts are made, it does seem to me that if we are to play our part of a Second Chamber—if we are to justify the trust placed in us by those who look to us to discharge that duty—if we are to safeguard from dangers the country we have to serve, we have to consider not so much nice and subtle distinctions as to whether this clause or that clause does or does not go beyond the ordinary action of a Finance Bill, but we have to consider also the spirit in which those clauses are framed, the declarations of those who promote the Bill, and to ask ourselves honestly, apart from all subtle distinctions, whether there is or is not lurking in the background behind this Bill, and contained more or less in its provisions, a danger to the country which, whether it may prove to be beneficial or not, is a real danger. Is it dangerous and disastrous, or on the contrary may it prove to be a boon? Whichever it is to be, at all events it is a question which the country ought to have the opportunity of deciding. I am bound to say, from the point of view of tactics, I should be sorry indeed to make a prophecy or form an opinion.

The noble and learned Lord on the Woolsack held out to us a terrible picture of what was to come. We should be robbed of our powers or we should have the pain of seeing the Benches opposite entirely denuded of opponents at our debates. The noble Marquess who spoke first to-night said he had been forty years in this House. I am sorry to say I think I can run neck and neck with him in that respect. I think he will bear me out in saying that no great debate has taken place in this House in which we have differed on any great question of principle, but we have been assured the doom of the House of Lords is sealed at last. It has been the regular peroration of every speech, and I fully expected the noble Earl who leads the House when he moved the Second Reading of the Bill to-night would wind up in that accustomed form. I am quite sure when we have the gratification of listening to him later in the debate he will close his remarks with a peroration of that description. I do not pretend, when I say that, to convey that I quite ignore the warning of the noble and learned Lord. I believe, if the reason, commonsense and intelligence of the people of this country were allowed to prevail, they would clearly see that in giving them the opportunity of expressing their opinion on this measure the House of Lords is doing a democratic act and an act which ought to merit their regard. But when I look back to the speeches which we have read during the last three months, and if I am to believe that that is to be the type of oratory which is to be let loose on the country for the next two months, I feel that the people of this country are to be exposed to a very severe test indeed. I do not wish to use any word that may sound unseemly in your Lordships' House, but if there is to be prejudice or inaccuracy—I have no doubt noble Lords opposite will apply any stronger term that occurs to them as being in my mind though I should not like to sully the debate by the allusion—if the country is to be exposed to any campaign of that sort I own we must face the fact that we have a serious and anxious problem before us.

I said at the beginning why, as one of the rank and file of the House, I felt bound to support the Amendment. I do feel that it is our duty to face that fact and do what we believe to be in the best interests of the country and the great principles we have to serve. The noble and learned Lord's caution amounted to this: "If your Lordships will go to sleep and keep quiet the country would not trouble about you but would go on its way." That may be wise as from the point of view of self-preservation, but we have to remember that slumber is not part of the constitutional work which this House is called upon to perform. And, if we are to have any abridgement of our powers, if we are to meet the doom which has been foretold, I, for one, would far rather it was forced upon us than that it came upon us by our own action in deserting our posts and betraying our trusts and enabling those who are opposed to us, not to convince the people, as I gather from what we have heard they are intending to convince them, that the House of Lords is an obstruction to the path of progress, but to make out that we ourselves had given up the position we ought to defend. It does seem to me that it is hardly creditable to the people of this country to suppose that they will be really lashed into indignation by the fact that this House has for six weeks, perhaps even two months, delayed the passing of this measure in order that the people may express their opinion upon it. If they want it, they can then have it; if they do not want it, it will be a proof that we have done well to let them have the opportunity of expressing their opinion. If I may make such a request, I beg the noble Lords opposite to express with full sincerity and earnestness the views they hold, and I do hope they will in justice to the great House to which they belong, at least take care that the issue is put properly and clearly before the people. I do not think they will feel that I am saying anything wrong or unfair if I remind them that there are many in this country who will probably be not overcautious to bring that result about. Whatever they may say about the Finance Bill, and whatever they may say about the House of Lords, I hope we trust to them to take care that the people of the country understand that all we have done this week is to make it clear that this Bill has not become law because we see in it what we believe to be inherent dangers and that we want the people to express their opinion upon it. Every man who gives a vote at this election—if an election is to come—should understand it is to the House of Lords he owes the opportune and privilege of giving his vote, and to the House of Lords alone he will owe that privilege. I hope I am not appealing in vain to noble Lords opposite. If this is to be a great fight, as we are told, and fought out in all the anxious problems surrounding it, I hope noble Lords on both sides of the House, whatever the issue may be, will see that the battle is fought fairly as between honourable men.

LORD WELBY

My Lords, the noble Duke has dwelt very much upon the subtle arguments of the Lord Chancellor. I venture to think the question for noble Lords opposite is not so much the subtlety of argument, but the question of the spirit and the custom and tradition of the Constitution. And looking at it from that point of view I cannot help thinking that the noble Lords opposite are probably entering upon a somewhat dangerous course as regards the reputation and position of the House of Lords; and from that point of view I cannot but feel very considerable regret at the line taken by the noble Lord opposite. But there are two questions at issue now apart from the special merits or demerits of the Budget. The first is, of course, the constitutional question which has already been brought forward on various occasions to-night—the constitutional question whether in the words of a not very revolutionary Minister, Lord Palmerston, the Commons are to have the direction of the matter, the manner, the measure and the time of taxation. There are so many noble Lords much more qualified than I am to offer an opinion upon that question that I will not trouble your Lordships by dwelling upon it. But I will ask your Lordships to allow me a short time to examine somewhat closely the financial position which the Amendment of the noble Marquess will create. There is no doubt whatever about this, that the action of the noble Marquess practically tends to destroy that equilibrium in our finance which is essential to sound and orderly financial administration. The Amendment refuses not only all new taxation but it refuses to renew the Income Tax and the Tea Duties, and it refuses to reduce the Sinking Fund. The refusal of those important points in the Budget, the points which are absolutely necessary to provide ways and means at all adequate to meet the necessities of the time, makes the financial situation extremely difficult. I have observed that The Times speaks of that difficulty as somewhat laughable. I cannot help thinking that so powerful an authority as The Times has shown a certain levity in so dealing with this question. One thing I feel certain of, and that is that the common sense of the nation will repudiate such a view as that, and will at all events admit that the situation is grave.

On another point also I am quite certain, that all the Chancellors of the Exchequer whom I have served under, from Sir George Cornewall Lewis down to Sir William Harcourt, Conservative and Liberal alike, would have viewed this situation with the utmost apprehension and anxiety. The noble Marquess opposite appeared to think some words of mine had painted the situation in a somewhat lurid light. I am sorry to say it is many years since I first met the noble Marquess in public life. He was serving with Mr. Lowe, and I feel sure that at that time both he and I, in common with our chief, would have felt such a situation as the present full of danger for the future and one which could not fail to excite the greatest anxiety. Will you allow me to enter a little more fully upon the figures of the situation, in order that, if possible, I may make my contention clear? The expenditure of the year is practically £164,819,000. That expenditure includes the Sinking Fund because as I have said the Amendment of the noble Marquess prevents the reduction of the Sinking Fund. It now is in full course and the last Exchequer accounts published show that up to date the expenditure is very largely in excess of the expenditure of last year at the same date. And anybody with Treasury experience knows when once the programme of the year is settled, when once the Services are being carried out as arranged, economy or saving of any note is impracticable. Therefore, I feel sure your Lordships may rely upon the fact that the expenditure of the year will be very little short of the sum I have named, especially as we have not yet got the ordinary Supplementary Estimates of March, which will rather tend to increase, certainly not to diminish, the sum that I have named.

When we come to revenue we are thrown back, by the Amendment of the noble Marquess, upon the taxation in force on the 31st of March last. That taxation would have raised a revenue of £148,390,000 but since that time, on the 5th of April, the Income Tax expired and on the 1st of July the Tea Duties expired. If you take away from the revenue of £148,000,000 the produce of those two Duties, £33,400,000, it leaves you with an income for the current year of £114,990,000. I will add something for increase upon the ordinary income of the year: say it would probably add a million. That makes £115,990,000. You are thus face to face with this result, that you will have an income of £116,000,000 and an expenditure of £165,000,000. The difference between these two sums implies a very grave deficit—a deficit the like of which, I suppose, we shall never find a parallel for in time of peace. It is almost as large as the deficit that occurred in the two years expenditure on the South African war, and as far as peace is concerned I think I may say never has a peace deficit amounted to more than about £3,000,000. The Budget which the House of Lords hands back to the Commons consists of the figures I have named, and I do not think they can be modified to any extent. Different authorities have made their calculations independently of each other and it is worthy of note that all the calculations approach very closely to that sum. There may of course be a difference of a few hundred thousand pounds, but nothing to affect materially the position I have placed before your Lordships.

But if that is the case, what is the actual situation? Your Lordships hand back that Budget to the Commons. You are from that moment quite powerless. The House of Lords cannot reduce the expenditure by a penny. You cannot add a penny to the taxation, and therefore as far as you are concerned you must face the deficit, subject always to what the noble Duke placed before us, namely, a General Election taking place. You may have a new House of Commons in February and perhaps they may give you a Budget more in accordance with the wishes of noble Lords opposite. But that does not touch the question of the gravity of the financial situation very closely. The fact of a new House of Commons meeting in February leaves only a few weeks in which to undertake the grave task of a total re-constitution of our financial system. Any measures which are taken can only be ad interim measures. In the meantime, though the noble Marquess made light of it, the tea will be brought in free of duty, thereby affecting not only the revenue of this year but next year. Anybody who has been at all familiar with the collection of taxes knows that when the machinery of collection is out of gear it means a very long delay in realisation of revenue. The consequence is that even if a House of Commons is returned in accordance with the opinions which prevail opposite, the modification they can make in the current year will be comparatively small. There can be a reduction of the deficit of which I have spoken. For instance, the new House can reduce the Sinking Fund; but it is not a very material alteration in the deficit. That deficit has to be met from week to week and month to month but the expenditure progresses. The Appropriation Act gives the Treasury power to borrow that money, but it attaches to it the condition that the money so borrowed must be repaid in the following quarter. That very much encumbers the power of the Treasury in the matter. The borrowed money must be drawn from the money market, and I need hardly say the deficit, whether it be twenty-five, thirty-five or forty-five millions is a heavy strain on the money market at any time. That is the position in which you stand.

But I think the noble Marquess made I somewhat of an appeal to the present House of Commons that they might remedy the situation. Well, you are going this week to war with the House of Commons. Can it be fairly anticipated that that House will come to the rescue? Is it not more probable that any measures which they propose for averting the very great evil of such a deficit will be hardly more in accordance with your Lordships' views than those which you are now proceeding to reject? I venture to put it to your Lordships, therefore, that it is very improbable that any measures passed by the present House of Commons will be such as your Lordships will desire, and you may even find yourselves in the position of having to accept such measures as I speak of, or having to face the deficit of that immense amount I quoted. I don't know what your Lordships think but I do not believe that this country is fond of deficits, especially deficits in time of peace, and perhaps it may be deserving of consideration whether an appeal to the country in face of such a deficit would really put your Lordships in a favourable position for maintaining the questionable right of your interference with the finance as laid down by the House of Commons. I am a very old public servant, and one lesson I learned more than fifty years ago when in the Treasury. It was the continuous policy that guided both Conservative and Liberal Governments—a continuous policy at all events in time of peace—that the ways and means of the year, the taxation of the year, should cover the expenditure. That has been a canon of our finance which has never been departed from, I am afraid I must say until the present occasion. I believe that that has established the English Treasury in the position of supremacy which it certainly holds among all the financial departments of the world. I cannot but feel very great regret that so sound a principle of financial government such as that which I have described should be now set aside and that in the full time of peace the House of Lords should adopt a policy that lands us in a very great deficit.

Nor does the difficulty end with this year. Next year, we know already, the expenditure will be very heavy. It will be difficult to make the proposed taxation meet the demands of next year. It is hardly possible to suppose that extra taxation can be also added to cover the deficit which is handed aver from this year to the next. That would involve such a very large amount of taxation that I think scarcely any Government would face it. Your Lordships could be able, without taking so strong a measure as that which you are contemplating, to obtain in the ordinary course of the Parliamentary elections and within a year or two the verdict of the country upon the Budget. If the Budget is unpopular there is no doubt what the verdict will be, and you will then be placed in the position which you are now going to force upon the country. I am afraid the House and the noble Lords opposite have forgotten that most striking letter which the great Duke of Wellington wrote to Lord Derby at the time when he was resigning the leadership of this House on the question of the repeal of the Corn Laws. I will ask the House to allow me to read one extract from that letter which I think is full of wisdom and which applies to all time. The great Duke wrote: "For many years I have endeavoured to manage the House of Lords upon the principles upon which I conceive that the institution exists in the Constitution of the country, that of Conservatism. I have invariably objected to all violent and extreme measures and I have always used my personal influence to prevent the mischief of anything like a difference or division between the two Houses. On the question now before the House (that was the repeal of the Corn Laws) I propose to endeavour to induce them to avoid involving the country in the constitutional difficulties of a difference of opinion between the two Houses on a question on which it has been frequently asserted that their Lordships had a personal interest, which assertion, however false as affecting each of them personally, could not be denied as affecting the proprietors of land in general." I venture to think that those words coming from so high an authority convey a wisdom which I am afraid at the present moment does not find very great favour with noble Lords opposite.

LORD REVELSTOKE

My Lords, it is with extreme diffidence that I rise to address your Lordships, and this is not only the diffidence of a speaker who addresses your Lordships for the first time, and to whom a large measure of indulgence is invariably accorded, but to it is added the consciousness that I am venturing on a subject of extraordinary importance to the people of this country, and in its nature extremely difficult to handle. It has been my lot to have been brought up in the midst of financial and commercial operations, in the conduct and consideration of which I have endeavoured to follow the traditions and to be guided by the experience of many generations of financiers in my own family, whose success in life has been due to their intimate connection with banking and commerce, and whose prosperity, or the reverse, has for many years been bound up with the financial position of the City of London, the home and centre of that great system of "credit" upon which so much depends. It is with the hope that even my comparatively short practical experience of these matters may not be without interest to your Lordships that I venture to rise to-day. Others far more competent than I will no doubt be dealing with various general features and specific clauses of this Bill. I shall therefore confine myself to dealing briefly, and I hope practically, with some of the reasons why, in the opinion of very many, the present measure constitutes a menace to the financial interests of this country.

As your Lordships may be aware, the Finance Bill now before us has been the occasion of considerable disturbance in financial circles, and has formed the subject of a memorial of protest to the Prime Minister from business men and merchants in the City of London—a memorial of a non-political character, and containing numerous and distinguished signatures. In that document the suggestion has been conveyed that this Bill penalises capital; impairs, or tends to impair, national prosperity and public confidence; and threatens to undermine credit. As one, therefore, who, by the necessity of his calling, is compelled to be in daily touch with the quarter whence criticisms of the character I have described chiefly emanate, I recognise that I owe to your Lordships something more definite than vague assertions as to the financial injury likely to be inflicted by these proposals of His Majesty's Government, and I feel that it should be my task, as a business man, to endeavour to summarise the objections of business men, and to explain why this Bill is regarded so gravely in quarters which are at least competent to judge, and which, I believe, are for the most part disinterested and impartial in their criticisms.

Here is a Budget which, designed to meet expenditure for great social reforms, places an accumulated burden of higher Income Tax, Super-tax, Death Duties, Land Tax, Stamp Duties, all on one particular class. And surely, my Lords, in this matter of heaping taxation upon the few, a double error is committed. Not only is there a penalising of capital, with its consequent ill-effects upon the whole community; but the force of public opinion—the greatest, if not the only check upon extravagant expenditure—is weakened, and it is weakened at the moment when it is most urgently required. The official figures published by the Exchequer immediately before the present Budget show the extent to which direct taxation is superseding indirect taxation, in which the whole community shares. From these figures it appears that during the past ten years, out of an increased tax revenue of £17,000,000, the direct taxpayer contributed no less than £13,500,000, or say eighty per cent. In the matter of the high Death Duties we are confessedly living upon capital. The high Income Tax strains our emergency reserves. What would be the position to-morrow if, in some international conflict—of which happily there is no sign—the Exchequer had to issue large additional sums, with Consols under eighty-three? Why, although, as many of your Lordships know only too well, the requirements of Ireland for further funds in connection with the Land Purchase Scheme are urgent, the Government have not dared to make a public issue even of £5,000,000 since July 1908. Any Budget which may be considered financially unsound must of necessity have an immediate effect upon the City of London, which daily—I may say hourly—in various ways, and mainly through its quotations of public securities, focusses the judgment of experts, which usually becomes finally the judgment of the entire people, concerning the welfare of the country. If the business affairs of a public company are known to be unsoundly handled, and if retrogression in these affairs is even suspected, the Stock Exchange does not await the announcement of bankruptcy before lowering the value of its stocks. It endeavours to appraise the position then and there by a readjustment of prices. Precisely similar is it, my Lords, with the credit of this country, and all the securities in any way affected by that credit.

In the criticisms which have been uttered in financial quarters concerning the trend of our national finances and in the appalling depreciation which has occurred in British stocks, the present Government, to judge from its attitude towards such criticisms and protests, would seem to see some deep-laid schemes of biased and unscrupulous financiers. My Lords, as one in daily touch with these financial quarters, I have to-night to affirm that much—not all—of the unparalleled depreciation in British credit and British stocks is but the result expressed by the financial barometer of the unsettlement occasioned by a growing lack of confidence as to property of all kinds held in this country; and when I hear or read some of the speeches made, or I might almost more properly say the invective uttered, by responsible Ministers concerning the attitude of the City of London towards the Government's financial proposals, I am reminded of nothing so much as of the mariner who is credited with having destroyed his weather glass because it had the temerity to give warning of a storm.

It has been said, and said many times within recent months, that capital is leaving this country to a very serious extent, and I have to testify, from my own practical knowledge, that this is true. One is anxious, however, that this matter of the export of British capital should be fairly stated and should be clearly understood. It must not, of course, be supposed that a very considerable investment of English money in foreign securities necessarily betokens an unsatisfactory condition at home, whereas the very reverse is frequently the case, the circumstances often indicating prosperity at home as already revealed in overflowing deposits at the banks, and with English stocks forced up to such a high level that other sources of investments have to be sought. As a mutter of fact, my Lords, British securities are to-day abnormally low, and therefore yield themselves a higher rate of interest than has been customary. It seems to me that the vital error is committed of failing to distinguish between British capital being attracted abroad and being driven abroad. There has never, I think, been a period in our financial history when it has been more necessary to make this distinction. There are, and there have been for some years past, great natural forces at work, among which must be included the great commercial activity of other countries, such as the United States and Germany, which make for increasing demands both on the liquid and permanent capital of this country, and while I should certainly be the last man the decry the activities of other countries, still less the demands made upon bankers in the City of London, I am bound to recognise that, if what I will define as the great drawing power of foreign countries is to be supplemented by a great driving force from home, arising from lack of confidence in the English Government, in English securities, and in English enterprises, the position of affairs is undoubtedly grave. The legitimate flow of capital abroad becomes an exodus; something more than a surplus is exported, and abnormally high bank rates, with their penalising effect upon trade, will have to be imposed. The prolonged depreciation in British securities, accompanied as it has been by steadiness or actual appreciation in foreign and American securities, has been too pronounced and too sustained to be entirely accounted for by the ordinary working of economic forces.

A recognised index of public securities published monthly by the Bankers' Magazine shows that during the past three years there has been a net depreciation in the capital value of 387 stocks of over 110 millions sterling. British Funds depreciated by no less than 50 millions, or a fall or 6.3 per cent. as compared with three years ago, and in English railways there was a decline of 62 millions sterling, or 10½ per cent. I would draw your Lordships' attention to the fact that the total depreciation of 110 millions already referred to was a net depreciation, for daring this same period Foreign Government stocks rose by over 16 millions sterling and American railroads by 21 millions. Since the Budget was produced all leading British stocks have further receded. Four years ago Consols stood at 89⅜ and London and North Western Railway stock at 161. To-day Consols are quoted at 82⅝, and London and North Western Stock at 129¼. Is it surprising that in view of such figures experts should be asking and the public should be wondering what are the influences operating? This is no sudden and unreasoning panic, I can hear the public say. This is no breakdown of an hysterical speculation. This is a steady and hopeless depreciation of the securities in which the most conservative of us have been brought up to pin our faith.

My Lords, the tendencies to which lately expression has been given by Ministers have undermined confidence in British stocks to a degree never yet witnessed by this generation. British stocks have been thrown over in wholesale fashion for foreign securities and new foreign loans; British savings are fleeing from a threatened area to quarters where capital is more warmly welcomed. In almost every deceased estate which has come before my notice, within the past few years the best class of British stocks have been sold almost as a matter of course, and the proceeds have been invested abroad. There is actual evasion—and more evasion in prospect—on the part of the Income Tax payer, who has hitherto been the most honest, the most docile and tractable of beings. The Income Tax payer has come to the conclusion that he is being harshly and unjustly treated. It is no exaggeration to say that every investor and every broker who comes to me seeking advice as to investment prefaces his conversation by the statement: "I want something abroad." From expert financial quarters sober criticisms were offered at an early stage of the discussion on the Finance Bill, and the fact that they were met not by answering argument, but by invective, has produced an effect upon credit and confidence which it will require years of sound and sober legislation to remove. We have had speech after speech from our legislators of which the purpose has been to set class against class and to represent the interests of capital as antagonistic to the welfare of the people.

This is a new doctrine to be preached by a British Administration. It misrepresents the position of capital as it is understood by all impartial observers removed from the clamour of party politics. It ignores the extent to which the prosperity of this nation has been due to its great capital resources, its heritage of financial supremacy, its unshaken credit. The extreme difficulty of adequately conveying to the originators of this Bill a sense of the harm which it has already occasioned, and is likely to still further occasion, lies largely in the very fact that it seems well nigh impossible to bring home to those responsible a real sense of what is invoved in "unshaken credit." As I have read the speeches of the Chancellor of the Exchequer, I can almost hear him ask, like another person better known in history, and like him, without waiting for an answer, not "What is truth?", but "What is credit?" My Lords, I can give him that answer—I can give him the answer he would receive from the sober community among whom I have passed my days. They would tell him—and they are men whose occupations do not lead them to make speeches, but who have read, and read with dismay, the reckless and unconsidered utterances of even the most responsible members of His Majesty's Government. Those of whom I speak, my Lords, are men whose experience and character, whose probity and judgment, have contributed not a little to make this England of ours what she has been—and what she should remain—the Bank and the workshop of the world. They would tell him, My Lords, that they define "credit" as "confidence." Confidence in financial prudence, confidence in ability to pay, confidence in financial equity and stability, confidence in the sanctity of property. Can we say, my Lords, that our confidence in any of these would not be shaken by the passing of the measure which is now before your Lordships' House?

THE LORD BISHOP OF BIRMINGHAM

My Lords, I do not propose to venture to say a word, in a House where there are so many experts, on the subject of the great and grave constitutional question, with regard to which so many of your Lordships who have a much better right to speak than I have already addressed you, but I suppose there is no one who would not give the most cordial assent to the proposition of the noble Marquess who leads the Opposition if he really concurred in the view that the Finance Bill which your Lordships are proposing to refer to the judgment of the country is revolutionary and oppressive. Unless the Bill is a revolutionary and oppressive one this House could not be justified in taking the exceptional step which it proposes to take. It is because I believe that the Government Budget is neither revolutionary nor oppressive that I venture to address your Lordships.

I am not proposing to say anything about the suggested alternative method of raising money by what is called Tariff Reform, because I suppose that even those who are the most sanguine believers in the power of Tariff Reform to restore British industries and to open out untold, but at present unknown, sources of national wealth, would recognise that it could not be this year, or next year, or the year after that so momentous a change could have the effect which is hoped from it, and meanwhile the money for our great national expenditure has to be raised. My Lords, that is the point on which I desire to say a few words. I look at society as one who is interested, perhaps, especially in its less fortunate members, but we all know that what in a general phrase we call the social question is really the dominant question of our time, and when from any reasonable point of view you approach the great social question you are confronted with the requirement for an enormously increased national expenditure. About that I presume there would not be much difference of opinion. But might I ask your Lordships to consider only one or two directions in which this greatly increased national expenditure is to be required of us? The most rev. Primate the other day introduced to your Lordships' notice, or rather developed before this House, the great subject of the requirements made upon us by the Reports upon the Poor I Law Administration of our country. He pointed out how grave the indictment of our present system was in both the Reports of the Commission, and how immense and insistent are the calls made upon us for action.

Now, my Lords, to take only one subject, the subject of unemployment, what are the remedies that almost all our most careful observers of society tell us that we must undertake and undertake speedily on this intricate subject? In order to check the continual outflow of our youth into the casual labour market to form the material of the unemployed and then of the unemployable, there is the requirement that we should raise the school age, the age of compulsory attendance, and that with a new system of half-timers we should then have compulsory attendence at evening continuation schools. That will cost money; they must be instituted locally. Again, there is a great necessity that we should have for what are called the unemployable—people who are work-shy—detention colonies. Then for those who are out of employment without any fault of their own it is necessary that we should have industrial colonies. Again, we have been promised assurance against unemployment. Once again, we have been continually warned against and have felt the extraordinary loss of human life through the employment of mothers in factories, and we need, and need at once, greater assistance for mothers, especially widows. Once again we are faced with the immediate necessity for action with regard to the feeble minded as to their detention and segregation in order to prevent the propagation of a species that ought not to be propagated. Besides all these things my Lords, we know that the limitation with regard to Old Age Pensions in the case of those who receive Poor Law relief lapses automatically in 1911. That means a great further increase in the demand on the national finances for Old Age Pensions; and we are further warned of the necessity for some contributory system which shall supplement the present system.

Then again, the greatest of our economists has told us about the peremptory necessity for the provision of further money for open spaces, and I have reason to believe that there is not likely to be any relaxation of the demand either for the Army or for the Navy. Now, my Lords, all these are not things which admit of being deferred to a more or less remote future. They are urgent. They are things that almost all sober-minded observers of our society realise are urgent and agree that the dealing with them means a vast increase of our public expenditure. I think it means that we should revise the kind of expectation with which we of our generation were brought up with regard to the relationship of private and public expenditure and of the kind of demands which are to be made on people's incomes for public expenditure. My Lords, when we were at school and learnt Horace there were the words that we remember, in which Horace described the ideal of Rome in the noble days of old when people expected a narrow private and a large public expenditure —Privatus illis census erat brevis, commune magnum—what was private was small, what was common was great. I prefer to look for my ideal in the future and not in the past, and I am quite sure that if we are to look forward to a gradual improvement in our existing social conditions it must be through an immense increase of public expenditure on matters beneficial to the present state of society. The noble Lord who has just sat down, Lord Revel-stoke, spoke of that sober company of capitalists among whom he had been brought up, and of the distress and anxiety with which they viewed the present situation. But, my Lords, we must not forget that there are also other sober classes of society. I think it is quite impossible to consider the state of mind of the vast body of the workers without realising that there settles down upon almost all of them at a miserably early stage of their lives a sense of depression and hopelessness that they have not any real prospect of bettering their position, and as if they had got into a rut along which they would have to move all the rest of their lives until they die. If any kind of depression is to settle down upon the upper strata of society, if they are to contemplate less buoyant times for themselves, I think it is true that the industrial condition of the country would on the whole not be worse but would be better if simultaneously there were to settle down on the great body of the working classes the sense that their country was going to be a better place for them to live in in the future than it has been in the past.

It is impossible to live in one of our great cities without becoming conscious of the fact that for the great body of the workers our country is not a good place to live in at the present moment. As I have shown your Lordships, there is a great, vast, and growing demand for money for public expenditure. How is that money which is required to be obtained? The question is whether in this Budget there is an unjust and oppressive treatment of particular classes, especially of the landed classes and of those who are engaged in the liquor trade. I do not know whether that is the case. With regard to the matter which has been, I suppose, most commented on of all the land taxes—that is, the tax upon the unearned increment on land in and about towns—those of us who have been taught the political economy of John Stuart Mill have been expecting to see this tax in England for a great many years. I wonder if your Lordships have all seen a notice which appeared in the newspapers last week. I happened to read it in a newspaper of a Conservative or Unionist colour, and it did not appear to me that it was as much noticed as might have been expected from the important information it conveyed. It is headed "Unearned Increment," and from the report it appears with regard to the great city of Berlin—I now read the words— Faced with the urgent necessity of tapping new sources of taxation, the Executive officials of the Berlin municipality have decided that the Imperial capital must follow the lead of other German cities, and resort to the taxation of unearned increment. The City Fathers have taken as their exemplar the town of Hamburg, and the scheme submitted to the Municipal Council is based upon the increment Value Tax in force in the great North Sea Port. Your Lordships know, of course, that in the great cities in Germany they have a power of taxation of their own in this respect, and within the last seven years this is the thirteenth or the fourteenth of the great German cities which have resorted to this tax on unearned increment, and for my own part I must say that I can conceive no kind of tax which is more just or more necessary.

Again, dealing with the increased taxes upon licences, we cannot conceal from ourselves that an increased taxation upon licences has been threatened for a great number of years. For my own part, I never have been able to doubt that there was any matter on which the country was more gratuitously giving away what it ought not to give away without adequate return to itself than in the matter of the cheapness of licences. Even if it were the case that there would be an undue pressure placed on certain interests by the Budget, I should still think that a future Government, more favourably considered by the majority of your Lordships' House than the present Government, might reasonably rectify that undue pressure on one or two interests by raising the pressure on other interests to the same level, because I am certain that it is only by raising the pressure on all classes of the community that we shall be able to obtain the increased amount of money that we shall require for our national expenditure. It was said in the course of this debate before dinner that the Budget is Socialism. Of course you can use the terms Conservatism, Liberalism and Socialism in such a way as to make them apply to almost anything you like. Socialism is a term which I think it is best to employ as a quite distinctive term representing a quite distinctive view, and a view which no doubt is gaining in its hold especially on the working classes throughout Europe. I do not hold with the Socialistic theory myself, but I know what it means. It means the abolition of private capital, not private property, and the socialisation of the sources and instruments of production and distribution. In the sense in which Collectivists use the word Socialism, this Budget is not in any way Socialistic. It does not propose in any kind of way or point to the transfer to the community of the sources and instruments of production and distribution, although it might be said that it moves towards it. I venture to think that the most reactionary Budget, the Budget which moves most sharply in the opposite direction, would be the Budget which would be most likely to lead rapidly to Socialism by stirring up the already moving minds of the people to rebellion and revolt against the injustice of our present industrial conditions.

More than that, my Lords, this Budget does not go to the point to which so many German economists are pressing, of using taxation as a means of altogether redistributing the proceeds of industry. There are many of us who believe that in the past epoch there has been a gross inequality and injustice in the distribution of the proceeds of industry as between capital and labour, that capital has had too much and labour too little, and there is a school, of German economists especially, who say that taxation is the true means of redistributing the proceeds of industry in a more just and equitable manner by taxing the rich, for public works particularly, for the benefit of the poor. I should entirely assent to that proposition for my own part, but it does not seem to me that the Budget goes as far as that. It does not seem to me to do more than attempt to equalise the pressure of public burdens as between one class and another The question of the exact relative pressure of rates and taxes upon rich and poor involves some calculations which are complex and are very difficult, because at first sight one might say that the pressure of the rates upon the artisan is enormously greater than the pressure of the rates upon the wealthy man. But you have to take into account how much of that rate actually comes back to him. For example, the education rate may be regarded as what he himself pays for the education of his own children. So no doubt the matter is a complicated one, and I do not wish to conceal the complications of rating. But it does seem to me in practical experience that when one takes oneself, or any one of the well-to-do classes, and compares the pressure of the burden of taxation and rating upon oneself with the pressure of that burden upon an artisan who, out of his wages of 30s. a week, has to pay perhaps 1s. 8d. in rates, indirectly, of course, as part of the 6s. or 7s. rent which he pays for his house, and when side by side with that you have the fact that he pays indirectly upon those special comforts or necessities of life such as his sugar and his tea, and upon his luxuries such as his beer, his spirits, and his tobacco, and that he is going to pay more for his beer and his spirits and his tobacco—right luxuries or wrong luxuries as they may be, but in fact his luxuries—through this Budget, I do not believe that the Budget can be said to do more than to move some way towards the equalisation of the burden of taxation upon the rich and upon the poor.

My Lords, I come back to the main point which I desire to press upon this House, if I might be allowed to do it. It is that we are to expect a great and continual increase in the amount of public expenditure, and that with regard to this we cannot wait for any prospective and uncertain produce of Tariff Reform. At any rate, if there is to be such produce from Tariff Reform, then it will be time enough when that produce is realised and is with us to use it for the rectifying or alleviating of taxation in other directions. Meanwhile, we have to provide for this year and next year and the year after that, and these great social requirements cannot wait, there is great urgency for them. Therefore, my Lords, in view of this increased necessity for public expenditure I desire to contend and to bear witness that it seems to me that this Budget is not more than an attempt to go in the right direction in meeting this increased demand for national expenditure, and that it lays the burden as far as human wits can devise equally and fairly and equitably upon all classes. There is amongst us, not very highly developed, a revolutionary spirit in the country, and I cannot feel that it is only that small revolutionary spirit that will rejoice if your Lordships accept the Amendment of the noble Marquess. We have heard the story of the mariner who destroyed his barometer because he was angry with it for prognosticating stormy weather. I could not help feeling when I heard that story that it admitted of an application in more directions than one. I certainly have been enormously struck, going about among men, with the number of persons whose Unionist or Conservative principles are certainly not to be disputed, who are greatly dismayed at the proposal they find in the papers supported by the majority of your Lordships' House. We have already heard it said that the method of progress in England was by slowly broadening out from precedent to precedent. It seems to me that this Budget is only one more example of the broadening out from precedent to precedent such as the one set by the institution of the scale of Death Duties years ago by Sir William Harcourt. The Budget is only one more instance of the gradual growth towards a more proper distribution of the constantly-increasing burdens of public expenditure, broadening out from precedent to precedent, and I cannot but feel that your Lordships will indeed not be acting wisely if you treat this Budget as if it could be accused of containing either revolutionary or unjust principles.

VISCOUNT HALIFAX

My Lords, I have only three things to say. The first is that if I could believe that this Budget would do anything to relieve the poverty of the poor, or to remedy the great inequalities of wealth, if I thought it would help unemployment and the crying evils that arise from overcrowding and the social state of our great towns, I should be the first to vote for it. It is because, so far as I am able to understand the matter, I am convinced that far from remedying those evils it will only aggravate them, that I support with all my heart the Amendment of the noble Marquess. The second thing I wish to say is that I think the country would never forgive your Lordships' House, and rightly so, if, in view of the great interests which are at stake, interests which affect not one class but all classes of the community, your Lordships from any fear of the consequences to yourselves refused to give the country the opportunity of deciding upon these issues What will be the position of your Lordships' House if this Budget is passed unchallenged by your Lordships, and the seeds of evil which it contains develop and produce their unhappy fruit? What answer will your Lordships make to the country if the country says to this House, as assuredly it would say, "You, as the Second Chamber, had the opportunity of giving us the chance of considering this matter for ourselves, and from some selfish consideration, from some unworthy fear, you have abdicated your duty and left what you thought and knew to be a measure fraught with evil to this country to pass unchallenged." My Lords, I am convinced, in the face of such an accusation as that, there is nothing else that could be said, except that a Chamber which had so abdicated its duty was one which was not worthy of its position. My last word is this. I am certain that this House can run no greater danger than to act in such a way as would forfeit its own self-respect and the respect of those who throughout the length and breadth of the country—and they will be found in all classes—look to this House to defend them from hasty and ill-considered legislation, and to your Lordships, when the occasion is forced upon you, to give them a straight and courageous lead.

LORD RIBBLESDALE

My Lords, I should like to address a few words to the House on this vexed question, speaking, to borrow an expression of the noble Duke's opposite, as one of the rank and file of your Lordships' House. Perhaps it is only fair to add that I also speak as an unrelenting Free Trader. I will begin by trying to state my main position as regards the business before us to-night as concisely as the noble Viscount opposite, though perhaps I shall state that position in a less heroic mould than he has chosen. I dissent altogether from Lord Lansdowne's Amendment in that it forces a Dissolution by reason of your Lordships' refusal to grant Supplies. I am sure we all must have admired the way in which the noble Marquess struggled with a very bad cold, but I do not think anybody missed a word of what he said. He told us that the extinction of this measure was not desired. Well, my Lords, it may not be desired, but surely its extinction is involved and intended in the Amendment we are considering to-night. I know very well that the action which the noble Marquess and his friends are recommending to your Lordships is pavilioned by every splendour and girded with every phrase known to leader writers on party questions and to protest speakers on party platforms and a good deal of eloquent advocacy of this sort has played some part in this debate. Some of it fell just now from the noble Marquess opposite, but it has not blinded my political vision, and I do not know that it has altogether blinded that of the noble Marquess himself, or that he is really very much consoled by the assurances he has received in this purple and gold language from his supporters in The Times and other newspapers, and I still believe that the noble Marquess is a Whig just as I also believe that Mr. Balfour is at heart a Free Trader.

Be that as it may, when I hear these sonorous phrases used by noble Lords opposite about the democratic and constitutional principles which animate them and which dignify the Amendment and decorate the action which your Lordships are proposing to take, I really am inclined to rub my eyes and wonder where we have all got to. I think it was one of Coleridge's friends, who, when Coleridge took to dissertations and written arguments on theology, declared that it must be "only his fun," and I think when I begin to see this very crude proposal dressed up in this elaborate language that it can be "only the fun" of the people who put this sort of thing forward. On the other hand, I recognise that given a certain degree of novelty in any legislative proposal, whether financial or otherwise, an appeal to the commons of England is a very captivating bait to hold out. The question is whether the point of novelty at which it is right for the House of Lords to do that sort of thing has been reached in this present Budget, and whether this advice is being given and this object is being achieved in the most expedient and proper way. I do not know that this summary of mine amounts to much. It is rather like the battle between the Lord Chancellor and the ex-Lord Chancellor. The noble Marquess and his friends say that it is being done in the proper way. I say and I believe most noble Lords on this side say, that it is not being done in the proper way. So there we are! But putting that on one side, I cannot bring myself to see or even imagine the moral disintegration which under the Budget provisions is impending in the dismal vision of Ezekiel which the noble Earl on the Cross Benches unfolded when he addressed a company of commercial gentlemen in Glasgow, and which its passage into law would involve. Granting, as I believe everybody does, that in all large measures of taxation there will be cases of hardship and of inconvenience and of cumbersome administration, or even inquisitorial administration—and a great deal that is disagreeable and repugnant to most Englishmen is to be found in this Budget—yet seeing the great and urgent need of the large sum of money which is required for public expenditure, are we not all rather losing our sense of proportion and of perspective in objecting to the Budget as a financial arrangement for meeting what are not denied to be those very urgent needs and requirements? Is the Budget, after all, so very much out of hang and out of keeping with those needs?

We all know that there is a very great deal of money wanted and that there is a very large deficit; and not only that, the Bishop of Birmingham has referred to the Poor Law Report and to the need of money in that direction. I also remember that although all this money is wanted, and admittedly wanted, for these purposes, yet noble Lords opposite and their friends in the country and a great many people the friends of those who sit on this side of the House are urging the Government to spend even more money on our public services. Therefore, my Lords, I think it comes with rather a bad grace from that side of the House, who are always urging us to spend more money, to take this course of checking Supplies. The Bishop of Birmingham referred to the alternative. He said he did not think that Tariff Reform could be engineered sufficiently quickly to help us very much if that is to be the alternative. My Lords, I am quite of that opinion. I am not such an out-and-out believer in representation as some people, and I think if we could give Lord Milner and Lord Cromer and Lord Faber and Lord Revelstoke—who I am sure we can congratulate on the very able speech he made to-night—and others of that kidney, which we are not, of course, able to do, a free hand to develop a scientific Tariff Reform they no doubt might with time and care collect money which would meet our needs. But granting that there is this great reservoir of money, which I very much doubt, ready to flow in to us from the foreigner, no one will pretend that the pipes and the mains of this reservoir, as it were, are at present laid on to our national needs. I do not believe that even Lord Ridley himself would pretend that for one moment.

My Lords, we have all been very much upset—I have myself—by the speeches of the Chancellor of the Exchequer, but I have been able to get over them, and I have no doubt noble Lords opposite have also. But there is one thing I will say for Mr. Lloyd-George, and that is that he has stuck to his form throughout. If you take Limehouse as his Ossa, he backed it up with Pelion in the shape of Newcastle. I rather respect him for that, because there is no sort of doubt that, if any speaker starts on a half-pantaloon and half-highwayman style it is almost too much to ask him, all of a sudden, to turn round and revert to the manner of our classical models, such as the late Mr. Gladstone, the late Lord Goschen, and the present Lord St. Aldwyn. But whatever may have been the infelicity of the style which has recommended the Budget, I am bound to say that the first attacks on it were some-what infelicitous too and it is an infelicity which we have all, somehow or another, learned to connect with the word "Duke." Personally I think Dukes are charming people, but I am bound to say that I have read a good many speeches of Dukes from time to time, and they have stuck to their form too. Their speeches remind me of Tennyson's line, "Tears, Idle Tears," and I cannot help thinking that no one will be very seriously affected by the sobs of quite well-to-do folk.

Now I pass from the speeches of the Chancellor of the Exchequer and of the Dukes to one or two provisions of the Budget. I noticed that at Glasgow Lord Rosebery absolved himself from going into any details out of constitutional deference to his holding a Peerage. I shall follow his example, and the little I have to say about Budget provisions I shall treat very generally. The Bishop of Birmingham just now quoted Horace. I had the honour of being in the same house at Harrow with the Bishop of Birmingham, and I must give him a bit of Horace back. Lord Lansdowne in his speech drew rather a gloomy picture of the future of all landowners owing to the spirit which the noble Marquess imagines animates Liberal policy towards that particular class. Our old friend Beatus ille qui procul negotiis, who lives on and looks after his land is to have a bad time of it. I am bound to say that Mr. Lloyd-George has done something for us. Noble Lords opposite and their Party in the other House, claim, I believe, to represent especially those interested in land; but, after all, it is only through Mr. Lloyd-George that it has at last been recognised that for the purposes of Income Tax we are to come under Schedule D. [Cries of "No."] Well, not in words but in effect, and people who keep their estate accounts so carefully as Lord Hindlip, who actually recently invited a hostile investigation into them, will find themselves in a better position than they were before. [Laughter.] I honestly believe that; it is not a laughing matter. Then we have also had the Development Bill, an amiable and cherishing measure not of first class importance, but intended, I believe, to help the poor country gentleman. I am sorry that the Death Duties are to be increased, and there I associate myself most cordially with what the noble Marquess, Lord Lansdowne, has said, and with what has fallen from other noble Lords. I do not know whether the steepening of the Death Duties has been put on as a sort of guard in case these contemplated taxes do not flow in with the fertility which is expected of them, but anyhow this is a serious matter. Lord Revelstoke took a gloomy view of the finance under a Liberal Government. His view reminds me of the Tory foxhunter who said that there had been no fine weather since the Stuarts left. But I sometimes go into the City, and the other day I was told by the leading partner of a very large firm of accountants that 225 millions had been, altogether absorbed in Death Duties and that that had reduced the national income by £6,750,000 a year. Some of that, of course, must be capital withdrawn from activity in productive enterprises, and I think that all Lord Revelstoke said about this was well founded. Steepened Death Duties, once in force, are not likely to be remitted whichever Party is in office. All Governments are extravagant and they like lots of money with which to be extravagant. Take for instance the Chancellor of the Exchequer's peroration to his speech the other night with regard to his own Bill. I confess I did not find that peroration very reassuring. The right hon. gentleman said that his Budget was to wage an implacable war at other people's expense for all kinds of undefined social objects. That is what the Bishop of Birmingham was so pleased with. I still hope something will be done in future to try and bring our Budgets back to the test set up by Mr. Gladstone that the budgeting for the year ought to belong to the year only, that Parliament should know what we are going to spend the money upon, and that it should not be spent upon all kinds of ulterior social objects however desirable or very possibly necessary. Of course I see this Budget has been very I much blamed because of the selection of one class of property for taxation. I followed the debates carefully in the House of Commons and that always seems to be the frontal attack on the Budget from which every sort of misadventure is to flow, to create unemployment, insecurity, disaster I to the family, and goodness knows what. But surely in private affairs we all do differentiate between classes of property. No one would say that a man who owned growing timber or wooden ships, or a valuable brood mare, or a diamond would look upon them as all being exactly the same property when he came to deal with them. Then why in the world should we apply a different reasoning to public affairs from what we all should in our private affairs? I am afraid that directly you get away from direct sources of taxation such as the Income Tax into these very ingenious sources of taxation (whether this kind of Budget is good or not I do not stop to inquire) these differentiations are inevitable. My Lords, there are other points in this Budget, which I quite agree is of a "multifarious" character; they will, no doubt, be commented on by other speakers and I will leave them in order to put before the House one or two considerations apart from party politics. Let us imagine that the floor of this House no longer divides us. Let us imagine that we are merely a number of educated men of business, considering business arrangements and discussing them by the light of our existing needs and conditions. Looking at it in that way, is this such a very bad Budget? I know that some people say it is Socialistic and we have heard a good deal from the Bishop of Birmingham as to the definition of Socialism. I confess I have not been able to discover anything Socialistic in it, though I agree that Socialism is a disagreeable word and speaks with a diversity of tongues, all of which are apt to be uncomfortable and alarming. I do not see in the Budget anything like the redistribution of wealth or the nationalisation of all the raw material of production which I believe was the broad definition of the Socialist fiscal policy which was laid down in a memorandum by Mr. Snowden just before the Socialist Conference at Portsmouth about a year ago. It is for this reason, and because as I said at the beginning of my speech I dissent from the House of Lords forcing a Dissolution upon this or any Government upon the question of Supply—I do not for a moment question your constitutional and technical rights to do it, although I do question the constitutional expediency and the constitutional propriety of this course—that if this debate comes to a Division my vote will be at the service of His Majesty's Government.

THE EARL OF DUNMORE

My Lords, I think I may be excused for saying a few words on a Budget which so seriously affects every trade and every industry in the country. Up to the present, however strong a partisan the Chancellor of the Exchequer may have been, he has put aside political feeling when dealing with the Budget and only had regard to the raising of the necessary revenue upon just and equitable lines. But upon what grounds Mr. Lloyd-George has based the justice and financial wisdom of many of his taxes it is very difficult to ascertain. For although he has informed us that there never was a Budget so well and so carefully considered by the Cabinet as this Budget, yet nevertheless it has undergone so many changes in its passage through the House of Commons that really in many respects it bears but little resemblance to its first edition. These changes have not been mere, changes of details, but changes of considerable magnitude and principle.

Let us take the tax on ungotten minerals. The object of that tax was to force landowners to develop the minerals beneath their land. That has gone, and its place has been taken by a tax on mining royalties. Now it is not the man who refuses to develop his minerals who is taxed; it is the man who develops his minerals, the man who encourages industry and employment. If the people approve of the principle of a tax on ungotten minerals, how can they approve of a tax which is utterly opposed in principle, and which will eventually produce an entirely different result? The Government's justification for this tax on mineral royalties is that the receiver of the royalties sits idly by and does nothing to earn his income. But in that case, why do they tax the mine-owner who develops his minerals? He does not sit idly by and do nothing. He puts his energy, his capital, and his enterprise into his business. In his case no mining royalty exists, but the Government, not to be done out of their money, actually proceed to create a fictitious royalty on which they base their tax. It really does seem an extraordinary step for ths Government to take, while attacking the system of mining royalties, now instead of doing away with them they extend that system to those mines where no royalty previously existed. Besides if the Government wish to tax those whom they consider to be enjoying incomes for which they do no work, surely there are other forms of income which come tinder the same category.

For instance, take stocks and shares. The shareholder draws his dividends and enjoys an income from his shares for which he does no work. His stocks may increase in value, but the Government do not tax that increment, neither do they put a special tax on the income he receives from his dividends. On what grounds do the Government draw this distinction between incomes derived from stocks and shares and incomes derived from minerals? There is no difference between the two. The Socialists are far more logical; they approve of the tax on mining royalties and on the increment of land, because such taxes are the first step towards their general proposal to-tax increment on all kinds of property. They see no difference between an increment in land and increment in stocks and shares; indeed, one awaits with considerable interest some Government speaker who will conclusively prove that there is between these two forms of increment so much difference as to make it just to tax the one and not the other. The principle is quite a new one in our finance, and it involves possibilities of considerable extention in the future. Indeed, in the House of Commons Mr. Chiozza Money asked the Chancellor of the Exchequer whether he would consider the advisability of extending increment duty to other forms of property besides land and minerals. Mr. Hobhouse, answering for Mr. Lloyd-George, stated that the proposals had been placed before the Chancellor of the Exchequer for his consideration; and yet the Government maintain that the first step on this path shall be taken without any attempt being made to obtain the expressed opinion of the country.

Then, my Lords, this tax operates in Scotland in a very different manner from what it does in England. This tax on mineral royalties was originally based on the assumption that royalty owners contributed nothing towards local burdens. Perhaps your Lordships will permit me to quote the Chancellor of the Exchequer's own words on this subject from his Newcastle speech. Talking of the mineral owners, he said— They charge for the minerals; they charge for the surface whenever land is wanted for waterworks, and they charge heavy prices for it. Railways have to pay; and between all these charges industry is burdened and the landlords do not contribute one penny towards the heavy and growing rates of the district. Now, my Lords, what is the truth as to this contribution. There is a very large mining industry in Scotland of sufficient importance I should have thought for Mr. Lloyd-George to have ascertained the different conditions appertaining to it. The mineral owners in Scotland are subject to local rates. They already pay their full contribution towards the local burdens, it would not be merely a hardship it would be a gross injustice if they were made to pay the same proportion of their income from royalties as their English neighbours who are not called upon to contribute anything directly to local taxation.

An Amendment was moved in the House of Commons to remedy this, but Mr. Lloyd-George declined to accept it. He said— It would be a very serious principle for the Government in establishing a new tax to take into account the rates paid by the property taxed. But, my Lords, it was on the erroneous assumption that these people paid no rates that Mr. Lloyd-George proposed this tax, yet now he turns round and says he cannot take into account the rates paid by the property taxed. As a Scottish Peer, I think Scotland is entitled to an answer on this point of unequal taxation, and I beg to ask the Government to give me that answer in this House. On financial grounds it is difficult to justify this tax as it is a tax not on income but on capital. The life of these mines is limited. Out of the income which the owner receives he has to provide a sinking fund. Therefore, the nominal income derived from royalties is a very different one from that which a man enjoys who has his capital invested in Consols. I can quote one instance out of probably many similar instances, of a mine with an extremely short life, whose capital value is under £20,000, the royalties of which constitute over three-fourths of the owner's income, and yet if the Budget proposals were put into operation that man would have to pay local rates, Income Tax, this new Mineral Tax, Super Tax, and the insurance premiums to meet the Death Duties. Surely it is quite evident that the cumulative effect of these taxes would be to deprive that man of a very large part of his capital. But the most serious objection to this tax is that sooner or later, when the old agreements fall in and new agreements are made, the tax will be transferred to the consumer. That this has been recognised by the Chancellor of the Exchequer is quite evident, otherwise why did he exempt from the new duty such articles as clay and lime? They were exempted, because to tax them would be to penalise the production of the articles of which they form the raw material. The same therefore must be true of our steel trade and all industries dependent on coal and iron.

Then, my Lords, anyone who studies the speeches that have been made in the country in defence of this Budget, will find that nearly all the time and nearly all the discussions have been given to land taxes, although these are negligible as regards realising the revenue necessary to meet the deficit. But, when we look to the financial side of the Budget, we see, to begin with that Mr. Lloyd-George has utterly failed to find all the money required to meet the deficit from the revenue. He has been compelled to fall back upon the Sinking Fund. To the extent of £3,500,000 he raids that Fund, and yet the Government want us to believe that their Free Trade finance has not failed! Already many financiers whose politics are those of the Government have expressed strong disapproval of Mr. Lloyd-George's heavy taxes on capital.

I think the opinions expressed by Sir Felix Schuster in the Nineteenth Century deserve consideration although the Government ignore them. Referring to the Death Duties he said— I cannot but come to the conclusion that if the proposed scale of Death Duties is carried through, it will lead to a gradual but steady diminution of capital. … The disturbance to trade caused by the withdrawal of such a large proportion of working capital must not be overlooked … It is no light matter for a business or factory with a capital of say £500,000 to suddenly submit to a loss of £65,000. … A reduction of trade and employment must inevitably follow …. Now, my Lords, this is a very serious indictment. At a time when competition of every kind grows keener and unemployment daily becomes a graver problem, we are not only asked to tax coal and iron, the raw materials of our industries, but we are to pay the current expenses of the State out of the capital on which our industries depend for their existence and expansion.

If we examine the leading States of Europe, France, Germany, Italy, nowhere do we find a precedent for such heavy taxation of capital, taxation which directly penalises thrift and industry and places a premium on idleness and extravagance. But there are other precedents and other methods of taxation which we consider will provide a better way of meeting the financial necessities of the country. Surely the country ought to be allowed to have a voice in its future when such men as Sir Felix Schuster, Lord Joicey and Sir Robert Perks, to name only a few of the Government side, express feelings of grave apprehension as to the country's welfare. If the Budget proposals are to be put into operation, surely it is not too much to ask that their opinions shall be compared with the Government's opinions and the verdict of the country be obtained.

LORD LEITH OF FYVIE

My Lords, I wish to confirm what has been said by my noble friend who last addressed the House as to the policy of the Government. In my view the proposals relating to the taxation of minerals are most extraordinary because of their inconsistency. They are inconsistent not only with regard to the very hard working community of quarry owners and workers among themselves, but there is the further inconsistency that the granite quarry workers (lessees) have to pay rates in Scotland, whereas in England they do not have to pay rates; whether or not the quarries in Scotland are worked they have to pay. There is also the inconsistency that granite is classed as a mineral, while limestone and clay are free; as a matter of fact, limestone has far more the direct character of a mineral, because it is used with other minerals as a flux, and clay again produces a mineral as alumina. Then with regard to capital it has been stated that the present policy of the Government is driving capital out of the country. I can speak from personal knowledge as to the very large accumulations of capital which have been sent out from this country to New York not only quick capital for investment but also capital in bulk in the shape of securities for safe-keeping. That necessitates an enormous reduction in the banking business of this country, and it also necessitates a very large increase in the business of the trust companies and banks in America to prepare for that work. In August and September the trust companies and banks had to form special departments to cope with this rush of securities and money sent to them from this country. The amount of quick capital and securities can be ascertained by referring to the records of stocks, shares, bonds, &c., which have been sent across the Atlantic during the last few months. The right rev. Prelate, the Bishop of Birmingham, seemed to be very much afraid of the time it would take to obtain any prosperity from Tariff Reform. Why cannot we take a little benefit from the experience of the world? The world has been working for twenty years steadily on what we now call Tariff Reform. I say so because the Bismarck Act has shown us twenty years of actual fruition, and in America the principle has been working steadily for thirteen years. What we want in this country is prosperity, and, given that, we shall be able to overcome the difficulties of unemployment. Tariff Reform would give employment undoubtedly. By the adoption of this policy, which is that of the whole world, except our country, confidence will spring into life in every direction; capital will be produced and put into machinery; industry, and labour will be employed. We do not need to be pioneers, or to try experiments; the world has shown the way and we are behind the age in doubting the experience of the world.

The Government moreover are extraordinarily inconsistent in regard to their proposals as to the so-called unearned increment. Apart from the question of minerals, how does it apply to by-products, such as pig iron which has gone through one process before leaving this country? We are shipping out of this country enormous quantities of pig iron which ought to be finished here and not in Germany, and is sent back to us in a finished state. Let us next come to agriculture. Every agricultural product that is not finished contains unearned increment. We consume eggs. Look at the extraordinary multiplication of unearned increment produced by an egg. And so it goes on. The inconsistency of so-called unearned increment, carried out by scientific figures, is an absurdity.

Another subject I have very much at heart is the Navy. It is to this we look to save our food supply, and I ask "Has the Government in this respect done the duty we require of it?" I say "No." It has not provided the protection we require and it has starved our manufacturers in the past. We were told by the Prime Minister, the First Lord of the Admiralty, and by other Lords of the Admiralty that they had to acknowledge that they had been misled; and at that time it looked as if they would have been conservative enough to supply from this Budget sufficient ships ready for our use. It will be found, not to-day, nor to-morrow, but within a reasonable time that the Sea Lords have all along demanded eight Dreadnoughts and all that went with them to secure the welfare of the country. We have to look at the battleship as the highest development, with its cruisers and destroyers round it, and with harbours and docks necessary for it, and in addition we have the increased personnel required for all this valuable machinery. This Budget does not provide for these, and I shall with the greatest pleasure vote against it for that reason if not for any other.

Moved, That the debate be now adjourned.—(The Earl of Cromer.)

On Question, Motion agreed to.

Debate adjourned accordingly till to-morrow.