SECOND NIGHT.

HC Deb 01 May 1873 vol 215 cc1300-91

Order read, for resuming Adjourned Debate on Amendment proposed to Question [28th April], "That the said Resolutions [reported 28th April] be now read a second time;" and Which Amendment was, To leave out from the word "That" to the end of the Question, in order to add the words "before deciding on the further reduction of indirect taxation, it is desirable that the House should be put in possession of the views of the Government with reference to the maintenance and the adjustment of direct taxation, both imperial and local,"—(Mr. William Henry Smith,)

—instead thereof.

Question again proposed, "That the words proposed to be left out stand part of the Question."

Debate resumed.

MR. STEPHEN CAVE

said, that the Chancellor of the Exchequer, in his reply to the hon. Member for Westminster (Mr. W. H. Smith), indulged in expressions for which nothing in his hon. Friend's moderate speech could account, except on the principle—if he might borrow an illustration once used in that House, possibly by the right hon. Gentleman himself—of the effect of a contact between carbonate of soda and tartaric acid. The right hon. Gentleman charged his hon. Friend, and hon. Gentlemen on that side of the House generally, with bringing forward this Motion solely with the view of creating embarrassment, and threw in their teeth that they would not accept the responsibility of success and turn out the Government. But that was tantamount to saying that, unless the Opposition had a permanent majority—in which case it would scarcely be an Opposition—it was to abandon the principal duty of an Opposition—the criticism of Government measures. The right hon. Gentleman might have known—did, in fact, know—that there were many Members of that House—aye, even on the front benches, though their Friends behind them did not always believe it—to whom anything they could have or hope for from mere party warfare was, even from a selfish point of view, of little moment compared with the well-being and tranquility of the country. He (Mr. Cave), was quite aware that this Motion ought to have been made earlier; that delay was most injurious to trade; that the important sugar interest was so much hampered during the interval between one rate of duties and another that many connected with it would prefer giving up even that interval which was conceded as a boon. But who was responsible for this delay? The Chancellor of the Exchequer took credit for self-denial in exposing himself to the criticisms of the Recess; but the time chosen for his statement was unfortunate for others besides himself. Still, though the Recess—even the eve of the Recess—was hardly the time for Parliamentary action, there were not wanting, as well in the desultory conversation which followed the Financial Statement as in the tone of the Press during the Recess, signs that some action of this kind was expected and would be taken. What was the position of affairs? The House decided last year by a large majority that no legislation would be satisfactory which did not provide for the relief of owners and occupiers from certain charges; yet when they complained that the right hon. Gentleman treated this vote with studied contempt, as if he were rather pleased than otherwise to pay off the House for defeating the Government, the right hon. Gentleman turned round with an air of injured innocence and declaring that the Legislation which did not provide relief from local taxation was satisfactory; bade the House give up its Resolution. Bills were to be brought in by the President of the Local Government Board. He had the greatest respect for the talents of that right hon. Gentleman, but ex nihilo nihil fit, and if the Government divested itself of an important portion of the taxes paid by the non-ratepayer it pro tanto diminished its power of transferring other taxes to the local Exchequers; and not all the talents of the right hon. Gentleman could convert mere adjustment into substantial relief. If a debtor spent all his money before calling a meeting of his creditors he might present a symmetrical balance sheet; but the result would scarcely be satisfactory to any one but the accountant. Relief was the word in the Resolution passed last year; and, to borrow the expression of the right hon. Gentleman, the House would be either saints or idiots if, in lieu of the gold of the Chancellor of the Exchequer, they were quietly to accept the inconvertible paper of the President of the Local Government Board. It seemed to him that the mode of dealing with local taxation ought, after the vote of last year, to have formed part of the Financial Statement. It stood first on the list for consideration. Not, however, that there might not be good reasons for deferring the actual relief. He ventured to think that if the right hon. Gentleman had said that the first thing to be got rid of and consigned to well-merited oblivion was that disgraceful penalty inflicted under an ex post facto law which few people could think of with common patience, and that a measure would be brought in during the Session to carry out the Resolution of the House by means which would be available next year, neither the agricultural nor any other interest would have objected. They would have yielded to an unhappy necessity. But what was done? Why, the Chancellor of the Exchequer acted as if no such Resolution had been passed at all, and cast about upon whom to bestow his favours and how to spend the money which was burning a hole in his pocket, as if relief of local taxation had never been heard of. He could not help thinking that by pursuing this course the right hon. Gentleman threw away a great opportunity and made a great mistake when he departed, for some reason or other, which certainly was not explained in his speech, from the principles laid down by him in 1870—principles which commanded the general assent of the thinking portion of the community; and yet the state of affairs, as disclosed in the Budget speech, might have convinced the Chancellor of the Exchequer that some course was expedient other than the reduction of indirect taxation. He knew that some would say, "other than the reduction of taxation, direct or indirect," and he should be prepared to go as far as that himself; but it must be remembered that the income tax had always been considered a temporary tax—something beyond the permanent revenue of the country, and one that could be moved up and down as occasion required, just as the right hon. Gentleman put on 2d. at a moment's notice in 1871, on the withdrawal of the match tax. Indirect taxation, on the other hand, was much more difficult of manipulation. Changes in it carried results far beyond the mere money payments involved; and when, as in the case of sugar, the proposed reduction could only be regarded as a prelude to total abolition, the ease became very serious indeed. Now, was there any necessity for making this breach in so important a component part of the revenue? If, indeed, the speech of the Chancellor of the Exchequer had revealed, in the strong language at his command, a state of distress caused to a frugal and industrious population by the high rate of duty on an important item of the necessaries of life, he should be ashamed to ask for relief at their expense, and the general opinion would have been—"If pinching there is to be, let us all bear it together." But what was evident from the Chancellor of the Exchequer's statement? Why, that the duty-paying necessaries of life were cheap enough, and that the income of the wage-earning classes, worked they never so irregularly or indifferently, was enough, speaking in general terms, with their present habits and wants, to give them a superfluity. He agreed with the hon. Member for Carlisle (Sir Wilfrid Lawson) that the way in which this superfluity had been expended revealed a state of things melancholy and dangerous; and though he did not concur in his proposed remedy, he could not but think that it was hardly a time to reduce the price of one of the cheapest articles of consumption in order to increase the superfluous income so spent, and to rely practically upon a larger revenue from spirits to recoup the loss on sugar; nor would he support this Motion if any question of policy were involved such as induced the House to acquiesce in details of which it did not approve for the purpose of carrying into effect the French Treaty. But no such motive would operate now; on the contrary, the House was asked to meddle with the sugar duties at a time when the state of our negotiations with Continental nations would have pointed to the expediency of leaving them alone. He was astonished at the remarks of the Chancellor of the Exchequer on this subject. When he talked of the great increase in the consumption of refined sugar since 1870, he must have forgotten that the real reason was the bounty on export both in Holland and France, especially the latter, which the Convention had failed to prevent, the drawback system being so worked that the price of duty-paid French sugar in London had been lower than the bonded price in Paris from causes which would have operated whether the duty here were doubled or abolished altogether. And when the Chancellor of the Exchequer informed the House that his object in reducing the duties was to sweep away the scale and establish refining in bond, he must have forgotten that he was debarred by the Convention from doing anything of the kind, and that for two years he would be compelled to maintain the costly and troublesome machinery for carrying out the system of classified duties which was right and proper and necessary when the duties were high, but which would now be resented by those who, under totally different circumstances, supported it. He had even heard it said by those engaged in the trade that the reduction of the malt duty, and consequent admission of sugar into breweries without the interference of the Excise, would have been a better way of dealing with this subject. He need say very little upon the general subject of direct and indirect taxation after the masterly speeches of the hon. Members for North Devon (Sir Stafford Northcote) and Finsbury (Mr. W. M. Torrens); but was it wise to attempt to draw a hard-and-fast-line between direct and indirect taxation, and to say that one class paid one kind and another class the other? Was it not better, as well as more accurate, to say that there was between all classes a mutual dependence—a solidarité, to use a naturalized word—which made these distinctions, as far as the incidence was concerned, more nominal than real? Had not remissions of certain assessed taxes, for instance, been advocated and effected from time to time in the interest, not of the employers but of the employed? However this might be, it was impossible that hon. Members should go on talking about the adjustment of direct and indirect taxation without bringing local rates, which are a form of direct taxation, into the question. In former days, when America and her institutions were more in favour with hon. Gentlemen opposite than now, we heard a great deal of the light taxation of that country; but those who went there soon discovered that, though taxation levied by the central authority was light, local taxes were heavy enough, and though many kinds of charges which were made locally there would come into the general estimates here, yet still there were many charges upon the rates here which we considered were for the general benefit, and ought to be transferred to the account of the general expenditure of the country. These he need not specify; but he mentioned them to show that these local rates, which were, as he had said, direct taxes, and were in great measure for the benefit of those who did not pay them, must be taken into account when we were striking the balance between direct and indirect taxation. It was said the other night that police expenses and those connected with the administration of justice were for the benefit of the holders of property, and that therefore property alone should pay. He granted that they were for the benefit of all descriptions of property, and that therefore the profit on the goods of the occupier of a warehouse ought to pay as well as the rent of the owner, and so with regard to all, or nearly all, other local rates which now fell, most unjustly, on the rental alone; but what he meant was that the wage-earning class, who escaped to a great extent rates as well as other direct taxes, were benefited by the maintenance of the peace and protection from violence, as they were by the lighting and paving in towns and roads and drains in the country. And when, by-the-by, they heard the rates in town and country contrasted they should remember that those in the towns were for value received, and that the direction of recent legislation towards extending to the country districts appliances now generally confined to the urban districts was likely to bring about a much closer approximation in the charges. He probably went farther than many hon. Gentlemen on his own side of the House in wishing sanitary legislation carried out; but still he could not help thinking that we were in danger of having extravagant outlay for experiments of doubtful utility forced upon us at the behest of the central authority, and under the direction of local authorities who were led into profusion by the ease with which they could obtain the command of money. The extravagance produced by rates in aid had been adduced as a reason why local rates should not be assisted out of the Consolidated Fund; and no doubt the recent case of St. George's, Hanover Square, and Westminster, and the circumstance that rates in Bethnal Green and other east-end parishes had not been reduced in proportion to the assistance received from the west-end of London deserved to be noted. But, then, the central authority insisted on increased expenditure, and the local authorities were just as lavish of their own rates, especially when they had powers of borrowing. They had heard of zealous Inspectors talking of main drains and connecting sewers in hamlets of a couple of dozen cottages; and they had historic mansions pulled down, at a cost of £500,000, to round off corners which offended the correct eye of sensitive architects. It was hard enough for the poor curate or the parish doctor to pay increased rates for the education of the children of colliers, who could, according to The Manchester Guardian, earn £6 a-week free of income tax, but whose abstinence from work doubled the price of one of the prime necessaries of life, and this was aggravated by the costly appliances insisted upon by the central authority—boarded floors for children who lived on brick and stone, and more cubic feet of air than they used to have in his time at Harrow; and now they were compelled to provide music masters for ploughboys, and were threatened by the Vice President of the Council with further advances in the same direction. The country was becoming very impatient under these burdens. That was not the time to go fully into these matters, nor to discuss the mode in which the complaints were to be met—whether by the transfer of house tax or assessed taxes, by the local taxation of personalty, or by aid from the Consolidated Fund. These questions must, however, be discussed. They were very urgent, and what the country wanted was that time should be given before it was too late for their profitable dis- cussion, and, in the words of the Resolution, that they should know, before it might be useless to know, the views of the Government on these questions. Do not let them be told of future surpluses. The sugar duties were evidently doomed, and then, on the Chancellor of the Exchequer's own showing, the income tax must go too. If, by the efforts of Protestant and Catholic Bishops and Archbishops, and the more powerful influence of electoral agency, especially when women's disabilities were removed, the Bill of the hon. Member for Carlisle (Sir Wilfrid Lawson) became the law of the land, the revenue from the Excise would be lost too. He, for one, could not think the future well-being of the country so assured that to-morrow would be as to-day, and even more abundant. It was impossible but that the prosperity of the country, which depended so much on cheap coal and. iron, mast be affected by the enormous increase in the price of both, and that capital would betake itself to the continent of Europe or America, where favourable geological formations were being developed, and labour seemed less disposed to wage a suicidal warfare with it. Till more unsteady than the southern gale Commerce on other shores displays her sail, And late the nation finds with fruitless skill Her former strength was but plethoric ill. The period of prosperity Budgets would then be gone by; and it was because he desired to see some just and lasting arrangement made while they had yet the power to make it, that he should support the Motion of his hon. Friend the Member for Westminster.

MR. BAXTER

said, he had listened with the greatest attention to this somewhat remarkable debate, and he must confess that the perplexity he felt on hearing the Amendment which was moved by the hon. Member for Westminster (Mr. W. H. Smith) had not been at all removed by the explanation of its intention and policy which had been given by hon. and right hon. Gentlemen who had spoken from the other side of the House, or by the turn the debate had taken. Certainly, the difficulty had not been removed by the speech they had just heard delivered. It was generally believed—at all events, on that side of the House—that the hon. Member for Westminster had been inspired by the front Opposition bench, and that the Amendment which was being discussed was a carefully-devised project of their ingenuity and skill. However that might be, it was very certain that, though they might have taken counsel with regard to the Motion, they had not taken counsel with regard to the arguments with which the Motion should be supported, or with regard to the financial position of the country, or the financial plan of the Government. For what had occurred? The first speaker on the front Opposition bench (Sir Stafford Northcote) stated that the hon. Gentleman the Member for Westminster had so many things on his mind that he had not had time to master the financial proposals of the Government; and therefore had fallen into a serious error. That was a very fair and candid admission on the part of the right hon. Gentleman; but his candour did not stop there, for he went on to say that, in his mind, there was nothing in the state of the country which made it very doubtful that the Chancellor of the Exchequer would be able to pay not only the half, but the whole of the Alabama Indemnity within the present year. [Sir STAFFORD NORTHCOTE: Out of balances?] No doubt out of balances; but the announcement that the state of the balances would be such as to enable the Government to pay the second moiety or Indemnity within the present year horrified the hon. Member for North Hants (Mr. Sclater-Booth) sitting beside the right hon. Gentleman, who altogether repudiated the statement of his right hon. Friend. The hon. Gentleman had carefully prepared a speech to an exactly opposite effect, and it became a subject of general remark in the House and in the lobbies that every speech from the opposite side only added to the bewilderment which prevailed as to what the financial policy of the party opposite really was. Even the speech, to which they had just listened made confusion worse confounded, for the greater part of it had been taken up with a denunciation of the system of extending Imperial management to local affairs; but he thought the remarks of the right hon. Gentleman on that point would be replied to by the right hon. Member for North Staffordshire (Sir Charles Adderley). The right hon. Gentleman had said, however, that the Government would have to show very good reason for deferring their propositions upon local taxation until the present moment. Upon that point he quite agreed with the right hon. Gentleman, and he believed that the Government would be able to show very good reasons for not running blindfolded into the arena. There was no question before the country so complicated and so difficult as that of local taxation, and his belief was that no party in the State was at the present hour in a position to legislate finally upon it. The hon. Baronet the Member for South Devon (Sir Massey Lopes) had complained that the Government had ignored the wishes and opinions of that House, and that sentiment had been re-echoed by other Gentlemen opposite. But, with all respect, he did not think that was so. The Government had shown their consideration for and appreciation of the Vote passed by a very large majority of the House of Commons, by giving an unusual amount of care and time to the preparation of Bills on the subject, and as soon as the present debate was over, on the very next Government night his right hon. Friend the President of the Local Government Board would ask leave to bring in and explain the provisions of no less than three measures, and would also move for a Committee on a kindred branch of the subject. He maintained that that in itself showed that the vote of the House of Commons had not been without effect. He did not, however, believe that there was the slightest chance of legislation arriving at such a stage as would warrant the Government in laying aside for any such purpose part of the surplus of the year. If that was so, it was very difficult to defend the Amendment. It would not do to take hasty action on the subject of local taxation, and he was quite sure the country would not take it for granted that the landed property of this country was too heavily taxed. Every one of the points brought forward by the hon. Gentleman the Member for Brighton (Mr. Fawcett) must be carefully considered and however unpalatable some of the doctrines then enunciated might be in some quarters, he felt convinced that further debate would only serve to confirm their truth. The hon. Gentleman the Member for Westminster had stated that the intention of his right hon. Friend the Chancellor of the Exchequer was to pay the second half of the Alabama Indemnity out of the surplus of next year. What his right hon. Friend, however, proposed to do was to take power to issue Exchequer Bonds in case they were required; but he fully believed the Government would be able to pay the whole amount during the present year. But probably it was in the minds of others besides the hon. Member for Westminster, that in case the finances were not in such a condition as to allow of the Indemnity being paid this year, we should be encroaching upon the surplus of the year following, and upon that point a rather remarkable statement had appeared in the leading journal. Referring to this matter, The Times said— Exchequer Bills issued to cover casual deficiencies are redeemed out of casual surpluses, and a Chancellor of the Exchequer is not bound to provide an income for their redemption; but Exchequer Bonds, from the time when they were first issued by Mr. Gladstone, 20 years ago, down to their issue by Mr. Hunt during the Abyssinian War, have always been issued under an express agreement to provide revenue for their redemption in a subsequent year. That statement was not correct. He had been struck with the statement, and had looked carefully into the matter. With the exception of £1,000,000 of Exchequer Bonds issued by the right hon. Gentleman the Member for Northamptonshire (Mr. Hunt), Exchequer Bonds had never been issued under an express agreement to provide revenue for their redemption. The statement made by his right hon. Friend the Chancellor of the Exchequer was correct. Exchequer Bonds had been repaid out of excess of repayments over advances, or out of the Sinking Fund, or they had been renewed. If that were so, the whole superstructure of the hon. Member for Westminster which rested upon this statement fell to the ground. For his own part, he believed that his right hon. Friend would find not only that his revenue would come up to the estimate which he had made of it, but that he would be able to pay the second part of the Indemnity in the course of the year ending the 31st of March, 1874. There certainly was nothing in the state of the country or in their prospects which warranted the gloomy predictions which had been made. For the proposals made by his right hon. Friend he was in no way responsible, for he knew nothing about them until they were announced in that House; but as a Member of Parliament, and as a merchant, he believed they were wise, and the best proposals that could be adopted at the present moment, and that—altogether apart from the Motion before the House—they had been accepted as entirely satisfactory by the country. The right hon. Gentleman the Member for North Devon (Sir Stafford Northcote) was a great financial authority, and enjoyed a considerable reputation in that House, and he was surprised, therefore, at certain remarks which had fallen from the right hon. Gentleman with regard to the income tax. The right hon. Gentleman referred to a meeting which was held in the City of London, and alluding to the speech made by his right hon. Friend the Member for Tiverton (Mr. Massey) he called upon the Government to put a stop to this agitation by a specific declaration with regard to the income tax. But he thought that the House would agree with him that it was not in the power of any Minister, however sagacious, however far-sighted, and however much he might enjoy the confidence of his countrymen, to put a stop to such agitation by any mere dictum of his own. On the contrary, he believed that a Minister who adopted such a course would only be lending to such agitation greater strength and force. In any case, however, it would be very impolitic for a Minister to make such a declaration. For his own part, he had a horror of prospective finance, and thought that "sufficient to the day was the evil thereof." Three years ago his right hon. Friend the Chancellor of the Exchequer, though he did not make any specific declaration, let drop a remark which led to the inference that the sugar duties would not be again touched, and in the same breath his right hon. Friend had been twitted for his inconsistency, and asked to distinctly lay down his proposals for some years to come. He could not make out what the financial policy of the right hon. Member for North Devon would be. He began by saying he would offer no opinion whether the income tax should be repealed or reduced; but if his concluding sentences meant anything they meant that an additional penny of the tax should be taken off in preference to the reduction of the sugar duty. The right hon. Baronet had asked whether the Govern- ment always meant to reduce indirect in proportion to direct taxation. Now, his answer was that no such policy had been definitely laid down; but it was a policy to be acted on to a safe extent whenever the surplus allowed both to be dealt with. The right hon. Baronet had asked why the Government refused to touch the malt tax? Well, he was not aware that they had declared that any tax was absolutely sacred, and could not, whatever our financial position, be reduced or repealed. He did not know whether any agreement existed on the other side on the question; but probably the right hon. Baronet agreed with the right hon. Gentleman who had just spoken, who apparently objected to any reduction of indirect taxation. He had listened, not only with surprise, but with some pain, to the remark of the latter respecting the consumption of spirits. In dealing with the financial position of the country it was no part of one's duty to allude to the manner in which those taxes accrued, and because a portion of the working or middle classes had been drinking more intoxicating liquors—more beer and wine, recollect, as well as spirits—this was no reason for telling them they had conducted themselves so badly that the House did not mean to remit any indirect taxation affecting those classes of the community. As to the objection of the hon. Gentleman opposite (Mr. Sclater-Booth) to the Chancellor of the Exchequer again, after three years, reducing the sugar duty, he could not understand why a financial operation of three years ago, if it had succeeded and had proved a boon to the public, should not be repeated; nor, indeed, why, if the finances allowed, a duty reduced one year should not be repealed the next. The hon. Gentleman described the proposal as a repetition of the course pursued by the Prime Minister when Chancellor of the Exchequer, in reducing the tea duty to the long-desired 1s., and in afterwards reducing it to 6d., when his obvious duty was to deal with the malt tax. Why, however, if the Opposition deemed this an obvious duty, did they not run malt against tea?

MR. SCLATER-BOOTH

explained that his complaint was that both the Prime Minister and the Chancellor of the Exchequer, after announcing their intention to go no further, proposed a fur- ther reduction, the effect in both cases being that the malt duty could not be dealt with.

MR. BAXTER

said, he had understood the hon. Gentleman to say that the Government had reduced the tea and sugar duties in order to prevent the House from dealing with the malt tax, and his reply was, why did not the Opposition, as the "farmers' friends," run malt against tea? The hon. Gentleman had complained that for several years the Estimates of the Government had been considerably in excess of the expenditure. This applied principally to the Civil Service Estimates. Now, no one could know better than the hon. Gentleman that of late years a number of items had swelled those Estimates of so problematical a character that the most far-sighted person could not foresee what the expenditure would be. The hon. Gentleman had himself mentioned one of them—Public Education. Now, had the Government erred on the incautious instead of the cautious side, the hon. Gentleman would have been the first to call them to account. It was, of course, desirable that the Estimates should more closely approximate to the expenditure, and he thought that that, with the aid of the Public Accounts Committee, might, to some extent, be done; but the very fact that the expenditure had been so much below the estimate showed a careful and economical management of the expenditure by the Government, and after all the money was not thereby lost, for what the country paid in excess it got back very shortly afterwards. He would only add that much as he admired the Budget he did not in the least regard it as having the air of finality, but rather as a step, or series of steps, in the right direction; and he looked forward with hope, and not only with hope, but with confidence, to further reduction in the expenditure of the country, and, consequently, to further reductions in the burdens of the people.

MR. LIDDELL

said, the inference which he drew from the circumstances under which the House found itself that evening, was that it was an extremely inconvenient practice to permit the Chancellor of the Exchequer to introduce his financial scheme for the year on the eve of a Recess. It tended to tie the hands of the House in dealing with that scheme as a whole; for if they now rejected the reduction in the sugar duty that important industry would have just ground of complaint. He hoped, therefore, the practice would not be repeated. They had been told a good deal about this being a Vote of Censure, but really the House was weary of this cuckoo cry, and he hoped that no one would be deterred from expressing his opinion on the question because of it. They had been charged on his side of the House with being selfish and greedy; selfish because they objected to remissions of indirect taxation, and greedy because they clutched at remission of direct taxation. He denied the justice of that imputation; and, for his own part, he was prepared to object to the Budget as a whole as a popularity-seeking and time-serving scheme of finance. In the heyday of prosperity it called on the nation for no extra efforts for the reduction of the Debt, and it abandoned sources of revenue which, if retained, would have assisted in making that reduction. He was convinced, unpopular as the doctrine was, that an honourable nation, like an honourable individual, was bound to make every effort to pay off debt when it had the money in its pocket. Could the most sanguine expect that we should ever be in a better position to effect that great object? He had been glad to hear his right hon. Friend (Mr. Baxter), whose financial skill the House admired, almost assure them that the Alabama Claims would be paid within the year; but this would have become a certainty had the taxes been kept up to their present amount. The pecuniary amount of the Alabama Claims to a wealthy nation like this was a mere bagatelle; but the moral weight of the obligation was very heavy. That moral weight consisted of the irritation in the national mind connected with many of the circumstances of that Reference and Award; and therefore it would be wise and sound policy to wipe off the obligation and all its unpleasant reminiscences as soon as possible. Knowing that the Estimates of the revenue were framed, not by the Chancellor of the Exchequer, but by the most practised and competent authorities in the country, he said, with submission, that he could have wished that those Estimates had been less sanguine. The right hon. Gentleman who spoke last expressed his confidence that the prosperity of trade would remain at its present point. He, however, had great doubts about that, and if the right hon. Gentleman had been where he himself had been that morning he would have seen that there were significant symptoms of a reaction in many important departments of industry, apart altogether from the not very favourable prospects of agriculture this year. He now came to the Amendment of his hon. Friend the Member for Westminster (Mr. W. H. Smith.) With great deference to his hon. Friend, whose speech he thought very able, he must confess he did not like his Amendment; because he thought it was unwise, in writing or speaking, to say a thing which was not only liable to misconstruction, but which even some eminent classical scholars were found ready to misconstrue. He owned that he was astonished at the amount of misconstruction which undoubtedly had been put on the Amendment, considering the quarter from which that misconstruction first proceeded. On that ground he disapproved the Amendment; but he said it was open to misconstruction because it dealt with the remission of indirect taxation alone. He was surprised to hear the Chancellor of the Exchequer deliberately tell them that direct taxation was paid by the rich, and indirect by the poor; because in that ingenious but not very accurate classification a great fallacy lay. He asked any candid person whether the working man, in whose full participation in the prosperity of the country he rejoiced, and whose wages had increased in the last few years 20, 30, 40, 50, aye 60 per cent and upwards, as could be proved by satisfactory evidence, was not in a better position to pay his small quota to the revenue from his luxuries than the man with a fixed and inelastic income, the purchasing power of which had been reduced, at a very moderate computation, from 5 to 10 per cent by the present scale of prices. With regard to local taxation, the Government would have acted more wisely and have satisfied the country if they had explained what were their present views on that subject before asking the House to accede to the Budget. His main objection to their financial scheme was that they parted with revenue which would prove irrecoverable before the House knew how far they intended to carry the principle of applying Imperial revenue to local purposes. He should also have liked to know something more about their sanitary legislation, which he apprehended would turn out to be very expensive. A panic appeared to prevail on the other side of the House in regard to any claim made with respect to local taxation from his side; and he was surprised to find that the hon. Member for Brighton (Mr. Fawcett), whose opinions on that and other subjects invariably commanded respect, seemed to share in that alarm, for which there was no real foundation. That hon. Member said demands were made for indiscriminate grants of public money to be applied without control in aid of local expenditure. Now, he had never heard any such demand from any advocate of the reform of local taxation on his side of the House; and, speaking for himself, if it were made he would oppose it. He believed that his hon. Friend (Mr. W. H. Smith) and also the hon. Baronet (Sir Massey Lopes) would not sanction it. The cry which came from the localities affected was that Parliament was raising rates for Imperial purposes; and he said that this Parliament had been very extravagant in that matter of rates. The Education Act was a very extravagant and expensive Act, and they did not know to what length expenditure was likely to go in carrying out that Act. That cry did not come from the counties, or the places occupied or owned by wealthy proprietors, but from the small ratepayers in their large cities, on which class, and not on the rich, the pressure of local taxation really fell. The Chancellor of the Exchequer, in his ingenious but inaccurate classification, ignored that great fact. The real relief to local taxation was not to be found in driblets from the Imperial Exchequer, but in uniformity of assessments, in the abolition of exemption, in economic and concentrated administration. He was not saying a word against the great principle adopted by the House last year by a very unusual majority—namely, that expenditure incurred for national objects should be paid for out of national funds. He did not think, he might add, that the Amendment was a wise one, and he hoped, therefore, his hon. Friend the Member for Westminster would not press it, inasmuch as it was not well that a false impression should be created in the country. He was, at the same time, of opinion that the Amendment had done good service, as it had enabled those who did not take a party view of finance—which of all questions ought to be kept aloof from considerations of party—to discuss the subject on its merits, and to sweep away the cobwebs and dust by which it had been surrounded.

MR. MASSEY,

in opposing the Amendment, said that whatever were the merits or demerits of the Budget it was at all events extremely simple, proposing as it did that a surplus which was very considerable should be divided equally between direct and indirect taxation. If the hon. Member for Westminster (Mr. W. H. Smith) disapproved that arrangement it was perfectly competent to him to challenge it when it was made; but he was now clearly out of time, inasmuch as he had sanctioned a most important part of the scheme—that involving the remission of the income tax. If after that remission the House were to declare that it was not right to remit indirect taxation, the consequence would be that the Budget must be reconsidered on the principle advocated by the hon. Gentleman, and that a bad effect in the country would thus be produced. As to what was to be the nature of the Budget of next year, of course the Chancellor of the Exchequer could not say, and he therefore could not undertake to meet the hon. Gentleman's views. The hon. Gentleman had alluded to a letter which had been written by the Prime Minister to the Chairman of the Metropolitan Board of Works, and to a somewhat similar statement which he had made to a deputation which waited on him with respect to the income tax. To his mind the language used by the right hon. Gentleman on the subject was ambiguous, and wishing to see the income tax abolished, he did not derive from it very much consolation. If he had done so the impression would have been entirely counteracted by what had fallen from the Chancellor of the Exchequer, who evidently had not fixed upon any early day for doing away with the tax. But to descend from these two right hon. Gentlemen to so humble an individual as himself, the House would perhaps permit him to say a few words in reference to some remarks which had been made by the right hon. Member for North Devon (Sir Stafford Northcote) and others on a speech which he had made on the subject of the tax at a public meeting. He was very much surprised to find that speech adverted to in the House of Commons as a matter of importance, and he should be very sorry indeed to consider himself as having been in any way responsible for the Amendment. The Government certainly were not responsible for anything that he might have said on that occasion, for no hon. Member had, perhaps, less communication with them than himself, and he had no doubt that if he had consulted them as to what he had thought fit to say at the Mansion House meeting, their wish would have been to dissuade him from taking any such course as he had done. But be that as it might, to the sentiments which he then expressed he still adhered. The income tax had been resorted to by great Ministers such as Pitt, Sir Robert Peel, and his right hon. Friend below him to accomplish great objects, and was not meant to be permanent. Those objects had been attained, and the country was prosperous. It was therefore, in his opinion, not unreasonable that the abolition of the tax should be looked for. He did not mean to say that the tax should be remitted rashly; but there was, at all events, considerable reason in the agitation which had been got up on the subject. They had been told that the Chancellor of the Exchequer had repealed £9,000,000 of taxation and had not diminished public revenue, and these were considerations which were entitled to great weight. They might fairly expect an expression of opinion on the part of the Government this year which would bind them to definite views either as regarded the discontinuance of the tax or a change in the present incidence of it. He did not wish to denounce the principle of the income tax, which pervaded the greater part of our system of direct taxation, and was to be found in the probate and succession duties, in the house tax, and in the licence duties; but the specific form of the income tax was one which had not been recognized as part of the permanent fiscal system of this country. There were anomalies, such as the assessment of an annuity on the same scale as fixed capital, and of professional men and clerks on the same scale as annuitants, and the offensive and demoralizing in- quisition by which the tax was extorted from the trader, and it was said these grievances could not be redressed. That statement was the strongest condemnation of the tax. When it was made persons were justified in saying—"You should tax your ingenuity to devise other means, less objectionable and more fair, to obtain from us our share of the public burdens." No reasonable opponent of the income tax expected that any great inroad upon it would be made this year; but he hoped the Government would announce their intention of dealing with it otherwise than as an ordinary instrument of taxation, and of trusting to the public spirit of the country, which was never invoked in vain, in case of an emergency.

MR. HUNT

confessed he was greatly surprised at the speech of the right hon. Gentleman who had just sat down, considering his peculiar antecedents and the important position which he had so lately occupied. The right hon. Gentleman had very recently occupied the important position of Finance Minister of India, and this very question of the income tax formed the chief point of discussion in India during his financial administration in that country. Coming back to this country hot from the consideration of the income tax in India, he availed himself of the first opportunity afforded him of regaining a seat in that House; he addressed a meeting in South Devon in a speech declaring himself favourable to the total abolition of the income tax. Some people, however, might say that that was, after all, but an electioneering speech, made in the excitement of the moment and for the purpose of gaining one object; and they knew that many things were often said by candidates under such circumstances which they afterwards wished to be entirely forgotten. But the right hon. Gentleman subsequently, and after his election, took a leading part in a political meeting at Guildhall, where he had no such plea to urge, and where he spoke with cool deliberation. And in that address the right hon. Gentleman declared himself favourable to the abolition of the income tax—an event which he said he thought would soon be accomplished. It was naturally inferred that the views he had then advanced would be advocated by him on his re-entrance into Parliament; and it was therefore astonishing to hear him say that he saw no prospect of the abolition of the income tax, and only looked forward to it at some future time. It did not lie in the mouth of the right hon. Gentleman to say that the hon. Member for Westminster (Mr. W. H. Smith) had mistimed his Motion, and ought not to have waited until the House had agreed to remit a penny of the income tax, for if he opposed the remission of a penny now how could he expect remissions in the future? The hon. Member for Northumberland (Mr. Liddell) was certainly quite free to vote for the Motion of the hon. Member for Westminster, because he avowed he was not misled by the fallacious misconstruction put upon it by the Chancellor of the Exchequer; and as to the payment of the Alabama Claim out of revenue, which would have been a sound measure, it could be proposed, after the adoption of this Amendment, on coming to the Customs and Inland Revenue Bill, because the financial measures of the Government were yet in a inchoate state, and the remission of a penny of income tax could yet be opposed. As to the speech of the Chancellor of the Exchequer, he was greatly surprised at the spirit which animated his observations. The right hon. Gentleman had evinced an unfairness of inference and a recklessness of assertion which he (Mr. Hunt) never remembered any Gentleman in that House having been guilty of before—especially one occupying the responsible position of Chancellor of the Exchequer. The whole object of the right hon. Gentleman seemed to be to set class against class in this country. If the observations which the right hon. Gentleman addressed to the House with regard to the question of the remission of taxation, as it affected the rich and the poor, had come from some Tribune of the People, sitting below the gangway they might have passed without notice; but, coming from a Minister of the Crown who was the guardian of the public purse, he thought they were deeply to be lamented. However, they would not have the effect the right hon. Gentleman intended, because the working classes did not look upon the right hon. Gentleman as their champion; they had read the newspapers and had tenacious memories, and they had not forgotten the speeches of the right hon. Gentleman in 1866. Some of the re- marks then made by the right hon. Gentleman had made such an impression that the right hon. Member for Birmingham (Mr. John Bright) proposed to have them posted up in every workshop in the country. He thought it would require a great deal of the right hon. Gentleman's sugar to get rid of the nauseous flavour of those speeches. The right hon. Gentleman's charge against his hon. Friend the Member for Westminster and those who supported the Motion on that side of the House was substantially this—"Oh yes, you were willing enough to have a penny taken off the income tax; but when it came to the question of remitting the taxation which the poor man paid you cried 'halt', and would not go so far as that." His right hon. Friend the Member for North Devon (Sir Stafford Northcote) had dealt with the question of income tax, and had shown that the remission of a penny would not relieve those whom it most pinched—namely, those who just came within the range where income tax was payable. Therefore, he need not allude further to the subject. But in regard to the sugar duty, the right hon. Gentleman had spoken as if the poor would derive the greatest benefit from the proposed remission. This he altogether denied. There was an interesting work by Professor Leone Levi which gave statistics respecting the pressure of taxation on the working classes. Professor Levi had addressed printed inquiries to working men in different parts of the country, asking for information as to their consumption of articles of food and drink, and their expenditure on clothes, rent, &c. By these means he had been able to ascertain the truth approximately, and the result of his inquiries was that half the sugar duty was paid by the working classes and the other half by the upper and middle classes. Therefore, the right hon. Gentleman's Budget, regarded in this view, was as to three-fourths in favour of the middle classes, and only as to one-fourth in favour of the working classes. Of course, he was taking Professor Levi's figures, and arguing on the right hon. Gentleman's own assumption that the reduction of the income tax was in favour of the rich. There had been a good deal of discussion as to whether the consumer got all the benefit of the remission of the tax upon sugar. The other day he ventured to dispute the assertion that the consumer would get the benefit; but the right hon. Member for North Devon did not quite assent to his proposition. He thought, however, that the difference between himself and his right hon. Friend might be reconciled. No doubt consumers who bought sugar in large quantities would derive a great benefit from the remission, but not so those who purchased it in small quantities, because there was no coin of the realm small enough to represent the reduction which would be effected in the fractional part of a pound. Poor people like those among whom he lived in the country bought their sugar by ounces, and not by pounds. The result would be that those who purchased sugar by the cwt., like the Chancellor of the Exchequer, would derive a benefit, but the poor would not; and their share of the reduction would go into the pockets of the trader or the refiner. This question might also be regarded from another point of view. If the right hon. Gentleman were desirous to benefit the poor by the remission of indirect taxation why did he choose the article of sugar? The right hon. Gentleman had stated that he was guided in his selection between luxuries and necessaries. As between malt and sugar it might be disputed which was a necessary and which a luxury to the working classes; but he felt quite sure that if he asked the working men in Northamptonshire their opinion on the subject every hand would be held up in favour of the remission of the duty on beer in preference to the remission of the duty on sugar. The right hon Gentleman drew a distinction between direct and indirect taxation; but did he mean to say that the beer drinker did not pay the malt duty? [The CHANCELLOR of the EXCHEQUER said he no doubt did indirectly.] He (Mr. Hunt) thought the right hon. Gentleman would admit that. In regard to the proportion of the malt duty and sugar duty which was paid by the working classes, he might mention that, according to Professor Leone Levi's statistics, out of every pound paid as taxes by the working classes 3s. went to the malt and 1s. to the sugar duty; whereas the middle and upper classes paid on malt 9d., and on tea and sugar together 1s. Therefore, if those statistics were trustworthy, the reduction of the duty on malt would assist the poor much more in relation to the rich than a reduction of the duty on sugar. If the right hon. Gentleman had reduced the duty on malt by one-fourth as regarded the revenue it would have nearly amounted to the same thing as the present proposed reduction of the sugar duty, and yet the relief afforded to the working classes would have been nine compared with six as regarded sugar. The right hon. Gentleman very unfairly charged the Opposition with objecting to the remission of the sugar duty because he said it affected the poor man and not the rich man. He had shown, however, that the rich man derived greater benefit than the poor man from the reduction of the sugar duty. Theoretically they both received the same benefit; but practically, in consequence of the difficulty of dividing a farthing between the ounces of which a pound was composed, the rich man got by far the larger share of the advantage. The objection he raised to the remission the other day was that the Government were frittering away this tax and reducing it to so small an amount that it would be scarcely possible to maintain it in the future; and, indeed, he thought the right hon. Gentleman's own arguments told in favour of the total abolition of the duty. Now if the sugar duty were abolished what source of revenue would be left P The right hon. Gentleman the Member for Tiverton (Mr. Massey) proposed to abolish the income tax at no distant date; but this remission of one-half of the sugar duty would make that object very difficult of attainment. Then he hoped, in the interests of morality, that henceforth the spirit duty would not produce as much as it had done in recent years. What, then, would be left for the taxation of the country to rest upon? This was a very serious consideration, and the Chancellor of the Exchequer might have given the Opposition credit for looking beyond the present year, instead of acting on the maxim which appeared to have been adopted by the right hon. Gentleman the Secretary to the Treasury—"Sufficient unto the day is the evil thereof." In recent years there had been no popular outcry in favour of a remission of the sugar duty. On the other hand, the outcry against the income tax had not only been intense and widespread, but during the last few months it had assumed larger proportions than it had ever done in recent times. Therefore, he could quite understand the right hon. Gentleman turning his eyes to the income tax, though he was unable to comprehend why, having regard to the interests of the consumer, he should propose a remission of the sugar duty. There was, no doubt, great inconvenience to the trade in the classification of sugars, and the duties thereon; but there was no particular reason for interfering with it as regarded the consumers—the rich and the poor—with a view to their reduction. Again, the doors of Downing Street were besieged year after year by persons who objected to the malt duty, and if any taxation affecting the general consumption of the country were to be considered, he maintained that malt had far higher claims than sugar. Besides, the House of Commons declared last Session, by a majority of 100, that relief should be given to local taxation. The right hon. Gentleman had remarked that the Government were preparing to deal with this subject; but how long had the Government been preparing to deal with it? Two years ago they were not merely preparing, but actually prepared to deal with it in the shape of a Bill which was laid upon the Table, and they had a definite proposal in regard to the finances of the year. If two years ago they had a prepared scheme—a scheme which was complete and to which the Cabinet had assented, a scheme which proposed to surrender £1,200,000 to aid the local revenue—he wanted to know with what face they could come down to that House and say that they were preparing a scheme, when two years ago they had one which was cut and dried. What had they done with that scheme? Why was it not proposed in 1872? Why was it not brought forward at the commencement of the present Session? Did anyone believe that they would have now received the promise of even an incomplete scheme but for the Motion of which the hon. Member for South Devon (Sir Massey Lopes) had given Notice. The fact was that the Government had been driven to give the Notice they had done of the introduction on the next Government night of the three Bills in the charge of the President of the Local Government Board. The right hon. Gentleman had told them the other night that they were not satis- fied with the authorities who administered the the local revenues. But they were not satisfied with those authorities when they came into office. As matters now stood, it would be impossible for the right hon. Gentleman to give any substantial relief to local burdens this year, or, as he intended being his own successor, next year either. His complaint was that the proposal of the right hon. Gentleman would have the effect of eating up the surplus of next year. The right hon. Gentleman now denied that the Exchequer Bonds were to be paid out of the taxation of next year; but the point when referred to in the right hon. Gentleman's speech on the Budget was certainly put in a very hazy and vague manner, inasmuch as the impression was left not only upon his own mind but upon the minds of many others that these bonds were to be provided for out of the revenue of next year. As he now understood the proposal of the right hon. Gentleman it was that the whole of the Alabama Indemnity was to be paid during the year, and that the Exchequer Bonds which were to cover one-half of the amount would be defrayed out of balances in the Exchequer as they might arise. The proposal was, in his opinion, therefore, an extremely vicious one, for it amounted to this—that the right hon. Gentleman intended to make no provision for the payment of the liabilities we were incurring, but to leave that payment to the contingencies of the future. The right hon. Gentleman the Secretary to the Treasury had stated that there was only one instance in which the payment of Exchequer Bonds at the time of their issue was specifically provided for out of taxation. But the first Exchequer Bonds issued in 1854 were issued with the condition that they should be paid off at the end of four years. It was perfectly true that if there was wherewithal in the Exchequer to pay off these bonds, it would not be necessary for that purpose to come upon the revenue of the year; but were they right in reckoning that they would always have a sufficient surplus to cover them? If they trusted to the balances they were trusting to a prosperous revenue, to those happy circumstances which had attended the career of the right hon. Gentleman in his present office; but those circumstances could not be relied upon. The right hon. Gentleman the First Minister of the Crown had described the revenue as having gone up by leaps and bounds; but that which went up by leaps and bounds might go down by leaps and bounds. When, therefore, he had upon a former occasion described the Budget as happy-go-lucky, he had never thought that the phrase would so soon receive confirmation as it had done that evening in the speech of the right hon. Gentleman the Secretary to the Treasury, who had announced that "sufficient to the day was the evil thereof." Now, it was well to understand exactly what the proposal of the right hon. Gentleman the Chancellor of the Exchequer really was. The effect of the reductions, and his proposals with regard to the Alabama Indemnity would be, according to the right hon. Gentleman's statement at the introduction of the Budget, to leave a working surplus of £291,000. In answer to some observations of his the right hon. Gentleman subsequently gave the details. These details in their result showed a discrepancy of about £20,000 compared with the statement, and though the sum was not a large one, accuracy; as he thought, was a desirable quality in a Chancellor of the Exchequer. The right hon. Gentleman expected to be in the happy position next year of being £1,600,000 to the good. Supposing, however, that the revenue continued in its present flourishing state, and that the whole of the Alabama Indemnity were defrayed without encroaching upon the taxation of the country, he doubted very much whether the right hon. Gentleman would have a surplus of £1,600,000 to deal with; for in his calculation, with respect to both the income tax and the sugar duty, he apparently lost sight of the fact that the revenue would be affected by these changes for three months of the financial year. [The CHANCELLOR of the EXCHEQUER said, that his calculations allowed for this circumstance.] Perhaps so, in the right hon. Gentleman's mind, but he had not given the House that information. Then, again, it was certain that there would be an increase in the Estimates relating to public buildings. The House had been told the other evening that it was intended to proceed seriously with the building of the Law Courts, and there were other buildings which next year were to be pushed on more rapidly than hitherto, so that altogether the Estimates in this respect could scarcely be less than £250,000 above the last year's expenditure. If, therefore, the income remained at the point it was at present, at least half the surplus might be absorbed. These considerations, therefore, fully justified those who did not take the sanguine view of these matters adopted by the Chancellor of the Exchequer. It was these considerations which led them to discriminate between reduction of income tax and reduction of the sugar duty. The pressure of the income tax was generally felt, the remission of the sugar duty had not, he believed, been asked for by a single taxpayer, and the supposed hardship which it inflicted was the production of the brain of the right hon. Gentleman himself.

MR. WHITE

said, he had never heard arguments more completely refuted by anyone than were those with which the Member for Westminster had sought to support his Motion by the Chancellor of the Exchequer. The right hon. Gentleman had, he might say, discharged a blunderbuss which blew the brains out of that Resolution. He regretted to hear the speech in which the hon. Member for North Hants (Mr. Sclater-Booth), an ex-Secretary of the Treasury, too, had supported the Resolution, because the line he had taken was one calculated to set a bad example to the House, and should not, certainly, meet with the approval of the right hon. Gentleman the Leader of the Opposition. On one occasion, he (Mr. White) had ventured to say that the right hon. Gentleman the Chancellor of the Exchequer systematically in his Estimates underrated the revenue he would receive, and he was then taken to task by the right hon. Gentleman the Member for Buckinghamshire, who seemed to think that it was the height of Parliamentary impertinence for any hon. Member, and especially so in one who had not been in office, to question the calculations and estimates of accruing income annually submitted by the Chancellor of the Exchequer. But, during the present debate, they had seen the Chancellor of the Exchequer's calculations reviewed, criticized, denounced, and condemned by right hon. and hon. Gentlemen, of great official experience, now sitting on the front bench opposite. Against such a course he might be allowed to quote an authority which they at least would not question—namely, that of their right hon. Leader (Mr. Disraeli)— I must," said the right hon. Gentleman, "protest against the habit that is growing up of doubting the Estimates of the Chancellor of the Exchequer. What is the use of a Financial Statement by so important an officer as the Chancellor of the Exchequer, if when he gives us certain results of his own and his colleagues' mature deliberations, we are to say such and such is not the case, your Estimates are all wrong? The right hon. Gentleman went on to say— Such a course would, as it appears to me, leave the House open to every financial freak which can occur to any hon. Member. Such being the opinion of the right hon. Gentleman, it seemed incredibly inconsistent that the Resolution of the hon. Member for Westminster had been brought forward with his express sanction and authority, as it undoubtedly had been. When listening to the bland, but not persuasive, tones of the hon. Mover of this Resolution, he might exclaim, "the voice is the voice of Jacob," but, glancing at the astute terms of his Motion, he might truly add, "but the hands are the hands of Esau." He ventured to affirm that the Resolution was wholly unworthy of any great historical party. In the whole course of his political experience, he had never known the Conservative party behave in a manner so ineffably mean. They were not acting in that honest outspoken spirit of Parliamentary opposition which became hon. Gentlemen. What had they done? Whilst they had a perfect right to question the policy of the Budget in its entirety, they had not adopted that course; but assented to the reduction of the income tax, which benefited themselves—the rich—and then stealthily endeavoured to cancel that portion of the plan of the Government that remitted indirect taxation, which affected the poor. Hon. Members opposite alleged that the reduction of the sugar duty was an irretrievable remission and a disastrous policy, it being indirect taxation—and yet they were all clamorous for the reduction of the malt duty. What was the malt duty but indirect taxation? He hoped he might live to see the day when, by a more thrifty system of government, and owing to increased prosperity of the country, the malt tax might be safely abolished. But it was £7,000,000 of indirect taxation, and yet country gentlemen were strongly in favour of its remission, while they had the greatest possible objection to a reduction of the duty on sugar. For his part, he believed that the people of the country would come to the right conclusion on reading the Resolution—namely, that the great Conservative party now thought they had made a mistake in extending the franchise, and did now, as formerly, profoundly distrust those who had been admitted to political privileges through the medium of household suffrage. He could affirm that there was no "ignorant impatience of taxation" among the working classes. They had no desire to be relieved from a just taxation by unjust taxation on others. Let hon. Members opposite look across the Atlantic, and they will there see a kindred people—with the sovereignty of universal suffrage—and yet in their country's need cheerfully submitting to a burden of taxation unparalleled in the history of the world. The right hon. Gentleman the Member for Northamptonshire (Mr. Hunt) had quoted from a recent pamphlet by Professor Leone Levi, and accepted the conclusion at which he had arrived with respect to the proportion of taxation which was now borne by the working classes. With great respect to the Professor, he (Mr. White) having given much attention to the subject, could not, in many instances, assent to the correctness of his conclusions. The right hon. Gentleman however, if he had referred to another part of the pamphlet would have found the Professor stating that, in Prussia, 25 per cent of the revenue was drawn from direct, and 11 per cent from indirect, taxation; that in Russia, 25 per cent was from direct, and 49 per cent from indirect, taxation; while in Great Britain they had but 15 per cent of the revenue drawn from direct, and 72 per cent from indirect, taxation, with 13 per cent from the Post Office, Telegraph Service, and other sources. Did the hon. Gentleman (Mr. Hunt) observe that the Professor, having drawn a comparison between direct and indirect taxation in different countries, went on to remark— I need not say that, whatever be the reasons in favour of indirect taxation, and I confess they are very cogent, indirect taxes are certainly more injurious to the community, as interfering with commerce and manufactures, as restricting the progress of wealth, and as augmenting un- necessarily the cost of the food of the labouring classes. Many years ago, he (Mr. White) moved for and obtained the Official Returns of Taxation throughout Europe. They incontestably proved that the direct taxation of Great Britain was, as it was now, very much less than in any other country. Yet, because the Chancellor of the Exchequer had thought fit to equitably divide remission of burdens between direct and indirect taxation, undeserved censure had been heaped upon him. He had been wont to remark that the Chancellor of the Exchequer had under-estimated the revenue, and the result had always exceeded his (Mr. White's) more sanguine estimate. He felt confident that the right hon. Gentleman's estimate, based, of course, as heretofore, on the judgment of the permanent Revenue Officers, would not prove excessive. He (Mr. White) was confirmed in this conviction by looking at the continuous growth of the Excise for the last five years. In the Financial year ending 31st of March, 1869, the Excise yielded £20,462,000; in 1870, £21,763,000; in 1871, £22,788,000; in 1872, £23,326,000; and in 1873 it yielded £25,785,000. The estimated income for the present year was only £8,230 more than last year, although the annual normal growth—spontaneous increment—of the revenue was from £1,300,000 to £1,500,000. Supplementary estimates were apprehended by the right hon. Gentleman (Mr. Hunt), but those had occurred before, and yet the actual expenditure in 1872 was £942,980 under the estimated expenditure, and in 1873, £599,000 below it. The estimated income for 1873–4 was £76,617,000, and the actual income for 1872–3 was £76,608,770, or £1,900,456 more than 1871–2, although taxation to the amount of £3,200,000 had been remitted. He need say no more to show that the Chancellor of the Exchequer's estimate of the accruing revenue would be more than realized. The right hon. Gentleman (Mr. Hunt) had spoken disparagingly of sugar as an article of consumption by the poorer classes, but according to an eminent Conservative statistician, Mr. Dudley Baxter, the cotters of Connemara, too poor to eat meat, were great consumers of it, eating it on their bread and in their stir-about in large quantities as often as they could get it, while the highly-rented and underpaid poor in the east-end of London depended almost as much upon it. After expressing his satisfaction at the settlement of the Alabama difficulty, the hon. Gentleman referred to his share in the endeavour to induce the Government to pay the whole of the Indemnity out of the Exchequer balances. His reason was that, on the average, during each of the last four years, £2,500,000, say £10,000,000 of unnecessary taxation had been imposed on the taxpayers, and that amount appropriated to the Sinking Fund; the balances also increasing from £7,000,000 in 1871 to £9,000,000 in 1872, and nearly £12,000,000 in the present year, though the Prime Minister, in 1864, spoke of £7,000,000 as ample, and in 1870 the Chancellor of the Exchequer told the House that a balance of £,8,606,000 "was rather larger than we should wish to see." He believed that, under the Act of 1866, which regulated the Receipt, Custody, and Issue of Public Moneys, the Chancellor of the Exchequer would have been warranted in paying the whole amount of the Geneva Award out of his redundant balance, our liability to the United States being a national debt in the strictest sense of the word. He did not complain of the Government—looking at the temper of the House—not adopting his recommendations in their entirety, but seeing the country had been mulcted during the last four years of quite £10,000,000 in excess of the requirements of the public service, he did think the whole of the Alabama penalty ought to have been put to the capital account, and taxation to the extent of £4,500,000 now remitted. The hon. Member for Westminster (Mr. W. H. Smith) should have consulted the Conservative working man, of whom he was so great a patron, before moving his Resolution, and he would have learnt that indirect taxation pressed heavily on the wage-earning classes. He might have told him, on the authority of the Commissioners of the Inland Revenue, that the Chancellor of the Exchequer now gets a ½d. out of every quart of beer, and 3d. out of every quartern of spirits he might drink. Moreover, that out of every 3d. spent on tea by the poorer classes, quite 1d. is duty, or increased cost owing to the duty. That whilst he, the Conservative working man, paid a duty of 500 per cent on his pipe of shag tobacco, the hon. Member paid only 12½ per cent on his regalia cigar. He might have also added, on the authority of the Prime Minister, that out of every 5s. now spent by the working classes on spirits, 4s. found its way into the Exchequer. Illustrative of the pressure of indirect taxation upon the lower class of income taxpayers, a class which especially required relief, he (Mr. White) found, as the result of his calculation, that a man with £150 a-year and a wife and three children paid to the revenue on the tea and sugar that he used, a sum equivalent to an income tax of 8d. in the pound, while the bachelor with £1,500 a-year only paid ¼d. in the pound. It would be, perhaps, a social calamity to abolish the property tax, if they ever succeeded in getting rid of the obnoxious income tax, for he ventured to think that they required to have some tax that fell upon the rich, and from which the wage-earning classes were exempt, in order to prevent much bitterness from prevailing among those classes in consequence of the unjust incidence of our indirect taxation. Let them never again have any mention of the "untaxed working man," seeing that £41,000,000 of the Imperial revenue are now derived from six articles mainly used by him—namely, tea, sugar, coffee, spirits, malt, and tobacco. It was demonstrable that that portion of the population exempted from the operation of the income tax still did contribute, in proportion to its means, a much larger amount than was contributed by the other and richer sections of society. The Customs duties now yielded £21,000,000, but there was no article of luxury charged at the Custom House. Wine, worth £2 10s. a gallon, paid no more duty than wine costing 1s. a gallon. Our present Customs duties were now levied mainly on the physical necessities—for they have become such—or on the physical enjoyments of the poorer classes. For a long time we had abandoned the Customs duties, formerly paid by the rich, and have been extracting a vast revenue from articles consumed by the middle and lower classes. He (Mr. White) had ever held that, in a rich country like England, our fiscal system not only should be professedly fair, but ought to be absolutely and conspicuously just. It ought not to be forgotten that it was the rich alone that now imposed the taxes which the poor paid. Hence there ought to be some large unmistakeable tax on realized property—a tax which especially taxed rich people—and which no one can overlook. Otherwise, he (Mr. White) thought—with the existing inequitable incidence of our indirect taxation there would be—he might say there ought to be—much bitterness and discontent. The condition of our people had not essentially altered since the Prime Minister told the House that, of the £41,000,000 of Customs and Excise duties, quite three-fourths were raised from consumers so poor that the great majority of them were compelled to expend all their earnings in obtaining the barest necessaries of life. Was it, then, too much to say that property paid too little and poverty too much, when we call to mind that, out of the total revenue of the past year—namely, £76,608,770, fully £50,000,000 were raised from Customs, Excise, and other imposts bearing upon the trade, industry, and subsistence of the people? The late Sir George Lewis, when Chancellor of the Exchequer, laid on the Table an interesting Report showing that the working classes spent one-eighth of their earnings on tea and sugar. If the present Government would institute some authoritative investigation into the present incidence of taxation—he (Mr. White) having vainly tried to obtain a Select Committee to inquire into it some years ago—whereby we should accurately know the respective amounts of taxation falling on the working and other classes, such official information would prevent the perpetual perpetration of ludicrous errors and discrepancies by hon. and by right hon. Gentlemen, and would prove extremely useful in guiding their future deliberations. In dilating on the prosperity of the country, hon. Gentlemen appeared to have the operatives in the coal and iron trades too exclusively in their minds. Although more alcoholic liquor was consumed by the people, there was much less drunkenness now than formerly. They had, it was true, an enormous and an annually augmenting accumulation of wealth; but in its distribution, had any country shown such startling inequalities of conditions as our own at the present time? The Poor Law Return issued that day showed that, in the fourth week of last February, there were 865,606 paupers in England and Wales, or 1 in every 26 of the population. Had they not also millions constantly on the very brink of pauperism? They had boundless opulence and extravagant luxury side by side with squalid, grovelling, seething poverty. For instance, a Petition just presented from the Scottish Chamber of Agriculture stated that nearly one-third of the population of Scotland—that was, 1,130,000—lived In houses of one room, without separate apartments, by day or night, for male or female, and large numbers of these houses are otherwise in the most miserable condition. These things proved that the gorgeous picture of British prosperity was set in a very dark and sombre frame; and he was somewhat in the position of the slave in ancient times placed by the side of the conqueror in his triumphal car to whisper that he was mortal. In conclusion, he would say, with regard to the financial proposals of the Government, in the words of the Wise Man—"There is that scattereth and yet increaseth;" and with respect to the Resolution of the hon. Member for Westminster—"There is that with holdeth more than is meet, but it tendeth to poverty."

SIR GEORGE JENKINSON

said, he believed that few people either in or out of the House would endorse what the hon. Gentleman who spoke last said about the Alabama Award. The Attorney General had told his constituents at Exeter that he could not think of that subject without his blood tingling, and his palms itching, and the Chancellor of the Exchequer at Glasgow intimated that we were paying the Indemnity only to keep the Americans in good humour. Moreover, the Americans were now boasting that they had obtained from us one-third more money than the actual amount of the Claims; and. General Butler was bringing in a Bill in the American Legislature to appropriate the surplus for the benefit of the State. Therefore, when the people at Brighton read what their Member had said, he doubted if they would endorse his sentiments on this subject. He could not support the Motion of the hon. Member for Westminster (Mr. W. H. Smith) for three or four reasons. The Resolution stated so broadly that all remission of indirect taxation should cease that he could not help thinking that this question of indirect taxation embraced a much larger area than that at which the Resolution pointed. The right hon. Member for North Northamptonshire (Mr. Hunt) had spoken about the malt tax. He (Sir George Jenkinson), however, believed that the malt tax pressed far more injuriously on the lower classes of the country than the sugar duties, and for that reason he felt the greatest unwillingness to hamper himself for all future time by any vote indicating that he thought the malt tax ought not to be repealed before anything else. Another reason why he could not support the Resolution was, that if the sugar duties were meant they ought to have been stated, and that the broad terms of indirect taxation should not have been employed. Moreover, if hon. Gentlemen on his side intended to have moved against the Budget, they should have done it at a different stage and in a different manner. Although the Chancellor of the Exchequer had used unjustifiable language towards the Opposition, yet he agreed with the hon. Member for Northumberland (Mr. Liddell) that the Resolution would lead to misconstruction in the country, which might suppose they were running the question of local taxation against the sugar duties only. The question of local taxation—one of the greatest questions now before the public—ought not to be raised in that way, by what appeared to be only a side issue, more especially as the House had decided by a majority of 100 last Session that the subject should be entertained and the hardships of the present system redressed. He, therefore, joined in the appeal made to the hon. Member for Westminster not to press his Resolution to a Division, because he should feel the greatest possible difficulty in voting with him. His side of the House had been asked what was their financial policy; but they might fairly retort by asking the Chancellor of the Exchequer what was his financial policy, seeing that the right hon. Gentleman had been saying and doing so many different things in so very short a time. His policy had been vacillating and uncertain in the highest degree. The right hon. Gentleman told a deputation who waited on him in regard to the malt tax that they had made a mistake in going to him, for he would have no surplus; adding that the tenants were put forward to fight the landlords' battle, and that they had no grievance unless they were owners. Three days after telling the malt tax deputation he had no surplus, the Chancellor of the Exchequer received a deputation of hotel-keepers, and he at once conceded the remission of £30,000 of taxation which they claimed. He mentioned this to show how differently the right hon. Gentleman treated an admitted claim of the agriculturists and one of the licensed victuallers. Not long afterwards the right hon. Gentleman announced that he had at his disposal £3,146,000. Was it, then, justifiable in him to tell the malt tax deputation that he would have no surplus? As to the sugar duties, three years ago the right hon. Gentleman said he would make a good sweeping change and then let sugar have rest, and also that he had gone as far as he intended and was not prepared for any further reduction of sugar duties. Now, he had made a further reduction, which pointed to ultimate remission. Why was not malt to have a turn in the remission of taxation? Because the Motion of the hon. Member for Westminster would shut the door against a reduction of malt duty he could not vote for it, and would join in the appeal which had been made to the hon. Member not to press the Motion to a Division. The local taxation question ought to be dealt with without further loss of time; but how was it we were now told by a Member of the Government they were not prepared to deal with it when they brought in a Bill two years ago, and were to have submitted their proposals that very evening? He had looked for the relief of local taxation to assessed licences locally collected, and, as Government had proposed to spare the house tax, which would chiefly benefit the towns, he proposed, as a fair balance, that the land tax should be given up with the house tax. Licences for public-houses, guns, and game brought in £1,507,550, and he would remark that these three items much concerned the duties and multiplication of the police. At present the Government paid a proportion of the cost of the police, and if they would commute the present allowance and give that sum, with certain other sums in addition, he thought a fair compromise would be effected, which would not result in much loss to the Imperial Exchequer. Licences on horses and carriages amounted to £840,835, and licences on dogs to £289,756. The whole of these licences amounted to £4,263,120. He could not help thinking that if a Government in search of relief for local taxation were to appropriate these licences, which were locally collected, and put them, in the different counties, in a county Schedule for county expenses, it would be found the best means of meeting the difficulty which was now complained of. The average amount of local rates was 3s. 4d. in the pound all over the country, the amount in towns being 4s. 2d., and that in counties, 2s. 6d. Now if the persons who had to pay these amounts paid instead an income tax of 2d. 3d. or 4d. in the pound they would be great gainers by the transaction, and it was to be hoped that some mode or other of effectually dealing with this great question would soon be devised.

MR. TORR

said, he wished to raise his voice in opposition to the mode proposed by the Government for paying the Alabama Claim. Being a great maritime and commercial nation, and as the depredations of the Alabama were, in a certain sense, committed in a commercial direction, he thought that it was unworthy of us, as a nation, to assent to such a settlement of the matter as that proposed by the Chancellor of the Exchequer. In his opinion, the first claim upon our surplus revenue was the payment of the Alabama Claims. What would be thought of a wealthy merchant resisting for several years as far as he could the claim of a brother merchant, and denying his liability, but at length having submitted the matter in dispute to the arbitration of the highest court that could be devised, and being condemned to pay a certain sum with costs, what would be thought of that merchant if, instead of paying the amount so awarded against him, and having ample funds in hand, he should propose to pay the debt in cash 10s. in the pound, and get his banker to discount his promissory note for the remaining 10s. in the pound. Well, what would be censurable in an individual would be equally censurable in a Government. He should enter his protest against any other mode of acting than the payment of this Claim out of the first surplus in the hands of the Chancellor of the Exchequer. Then as to the other proposals of the right hon. Gentleman, it appeared to him that it was most injudicious to devote a large portion of his surplus to the remission of the duty upon sugar, because he was convinced that the poor man would never receive the benefit of such reduction. The last reduction in the duty on sugar was 4s. 6d. per cwt. The poor bought their sugar in small quantities; but grocers varied their prices by half-pennies, never by farthings. The reduction last year was large enough to enable the grocers to give to poor purchasers the benefit of a half-penny per 1b. But now the reduction was only 2s. or 2s. 4d. a cwt., and the grocer would not reduce his prices by one farthing a-pound. The reduction in the sugar duty, therefore, was a sop to the poor man, but would be no real advantage to him. Perhaps he might be asked how he would apply this £1,600,000 for the benefit of the poor? Surely there could be no better object than a reduction of local rates. For 15 years he had sat as a magistrate hearing the annual rate summonses when poor people were summoned for non-payment of their rates; and if any man wished to see what real poverty was, he should go to the court on some of these occasions. He had had before him as many as 200 cases a-day, and they made one's heart bleed to see the distress of the poor people who were thus summoned. As to the income tax, he did not condemn it in its higher, but he did condemn it in its lower ranges. Upon incomes of over £500, there was no tax less felt. Why not, then, reduce the tax by one-half on all incomes below £400, or if the Chancellor of the Exchequer could afford it, below £500? Instead of giving this relief to poorer payers of the tax, the Government had reduced it by 1d. upon all those subjected to the tax—rich and poor alike. Thus, with a splendid surplus, they had lost two opportunities of benefiting the poor and the comparatively poor.

MR. RATHBONE

said, that from an ever-strengthening and growing conviction of the immense difficulties which beset the subjects raised by the Motion of the hon. Member for Westminster, he had always been most anxious that they should be approached with the utmost caution and deliberation, and that no attempt should be made to force the Government to adopt any immature or ill-considered plan. And even if he had not been before convinced of this, and if any further argument had been required to convince his mind on the subject, it would have been found in the evident state of chaotic unpreparedness with respect to it which had been shown during this debate by the Opposition. The gravamen of the charge brought forward by the mover of the Resolution was that the Chancellor of the Exchequer had not only put it out of his power to do anything for the relief of local taxation this year, but had also rendered it impossible either for himself or his successor to do anything next year. He (Mr. Rathbone) thought the hon. Member would have done well to have consulted some of his friends acquainted with commercial or financial matters before he ventured on the statement which he made to the House. His commercial friends would have told him that the experience of previous inflations and crises was, that when the country had entered upon a course of expansion and expenditure, when a crisis did come it was some time before that expenditure, in wages especially, could be stopped; and therefore that even if, as he hoped was unlikely, we had a crisis this year, there was no likelihood of the expenditure of the country, and consequently its revenue, being stopped this year in the way that he contemplated. Then, again, he threatened us with diminished revenue, owing to strikes which were to be caused by a fall in the price of coal. Now, he (Mr. Rathbone) thought his coal-owning friends would have told him that any fall that was probable in the next 12 months was more likely to have the effect of preventing strikes than of causing them. They would tell him that a comparatively small proportion of the advanced price of coal had gone in increased wages to the collier, and that a very considerable fall indeed in its price could take place and still leave the coal-owner a profit so largely in excess of the ordinary profit that he was not in the least likely to risk it by producing strikes resulting from the reduction of wages; while, on the other hand, any fall in price would, being known to the workmen, naturally prevent any attempts on their part for advancing wages likely to cause a strike. So that any fall that was likely to take place did not increase the likelihood of a strike arising from action on the part of the masters, while it decidedly decreased the likelihood of a strike arising from action on the part of the men. He had little fear that what, between the excess of the revenue beyond the Estimates and expenditure below the Estimates and sums received from repayment of loans, the Chancellor of the Exchequer would be able to pay the greater part, if not all, of the second half of the Alabama Indemnity out of the receipts of the year. But it was hardly necessary to argue this point, for the right hon. Baronet the Member for North Devon (Sir Stafford Northcote) at once admitted, with his usual candour, that the hon. Member for Westminster was all wrong in this his main argument, for that nobody believed, except he presumed the hon. Member for Westminster, that the second half of the Alabama Indemnity would have to be provided for out of the Ways and Means of next year. But the right hon. Member in his speech seemed to contend that we ought not to consent to the reduction of the sugar duties till we received from the Government an understanding when they would abolish the income tax. But if to please the right hon. Member for North Devon we were to abolish the income tax, how were we to redress the injustice of which the hon. Baronet the Member for South Devon (Sir Massey Lopes) and those who thought with him—of whom he confessed himself one—complained, that the wealthy owners of personal property did not pay their fair share towards the burdens of the country. Almost the only thing clear in this debate, which had otherwise been confusion worse confounded, was that there was no such requirement on their side of the House as could enable them, if they defeated the Government, to come to the House with any definite proposal for the adjustment of local and Imperial taxation. The Government, on the other hand, had said that they did not see their way to deal with the question during the present Session. What, then, but confusion to trade and to the whole Government of the country could be sought by such a Motion as that? He most cordially agreed with the hon. Member for Brighton as to the extreme importance in any relief which they proposed to local taxation to guard it with such provisions as should prevent it from promoting waste, pauperism, and demoralization—nay, he had always contended that it ought to be given in such a manner as should prevent it from weakening in any way the interest in and habit of local government in this country. He had always believed that it might be so guarded; but he should be very sorry to see the Government forced to any premature declaration of policy, or to commit themselves to any immatured proposals. He believed, with the hon. Member for Brighton, that there was no man in the country, and rarely had been, so capable of bringing that question to a safe and advantageous issue as the Prime Minister, and that if his great financial ability were once concentrated on this subject, aided by the great administrative talent of the President of the Local Government Board and his Colleagues, we might really hope to see that great and difficult question worthily dealt with; but did anyone in that House believe, knowing the position which the Irish Education Bill occupied in the counsels of the Government during the last Recess, that the great subject had had the necessary concentrated attention from the Government and from its Chief, and did the House think it desirable that that wide and difficult subject should be undertaken by the Government before it had had that attention? Though he had argued with the hon. Baronet the Member for South Devon that the time had arrived at which the very large and of late years rapidly-increasing burden on the ratepayers should receive some sensible relief—though he was prepared to contend with him that some of that relief would probably advantageously come in the form of direct grants from the Imperial Exchequer, conditional on efficiency; yet he thought there was another source from which that relief must be sought—a source to which he attached, if possible, greater importance, he meant the relief which could be worked out by improved administration in economizing the funds and diminishing the calls upon them. As it was one of the most important duties of the Government to promote independence and forethought on the part of the working classes, he begged to suggest that Her Majesty's Government should complete the work they had already commenced by establishing savings-banks and life insurances, by setting up a National Provident Institution, when it might become a question worthy of consideration whether a man should not be allowed to pay to such an institution the sums he was now called upon to pay to the poor rates. He hoped that the House would mark its sense of the mischievous character of the Resolution by refusing to allow its withdrawal; it should be met with a direct negative.

LORD GEORGE HAMILTON

said, he was not at all surprised at the remarks which had fallen from the hon. Member who had just sat down, because he had gone further than anybody else in proposing to tax personalty for local purposes, and yet whenever a division was taken on the subject he always voted against his own proposal. A distinguished Member of the Liberal party had once been kind enough to inform the Conservatives that they were stupid; but had he been in the House throughout the present debate his sense of justice would have compelled him to have applied that term to his own party. Three out of every four hon. Members who had spoken on this subject from the opposite benches had declared that they were unable to understand this Resolution, and yet they had endeavoured to put upon it a construction which those who sat on the Opposition benches, and who did understand it, wholly repudiated. The hon. Member for Brighton (Mr. White) had been the greatest offender in this respect—he had stated that he did not understand the Resolution, and his remarks on it perfectly justified his observation. But he then went on to characterize the Motion as "ineffably mean." If the hon. Member wished to use strong language it would be better for him to apply it to something which he did understand, and not to what he acknowledged he did not understand. What was the real effect of the Resolution? The hon. Member for Westminster (Mr. W. H. Smith) asked the House to request Her Majesty's Government to place before them their views in reference to the maintenance and adjustment of taxation, both Imperial and local, before they permanently remitted a large amount of indirect taxation. He hoped that Her Majesty's Government would give a plain and intelligible answer to that demand. This suggestion had reduced Her Majesty's Government to the greatest straits, and, consequently, they had put up the Chancellor of the Exchequer on the first night of the debate in the disguise of "the poor man's friend." As might have been anticipated, the right hon. Gentleman overplayed the part, for he had commenced it rather too late in life to play it with much chance of success. All who heard him deliver his speech on Monday night could not help feeling that he undertook the part, not because he cared for the poor, but because he carried the bag. It was only two years since the right hon. Gentleman had proposed to impose the heaviest indirect tax, considering its proportion to the value of the commodity on which it was to be raised, that had ever been suggested. If the match tax had been imposed a large trade would have been utterly annihilated, and a large number of persons of the very poorest class would have been reduced to beggary and starvation. Under these circumstances, it was unwise of Her Majesty's Government to put up the Chancellor of the Exchequer as the poor man's friend. The Government appeared to have no idea of the strength of the movement that was going on in London, and in other large towns, with regard to local taxation—a movement that was supported principally by the poor middle-class householders. Those persons might be in the opinion of the Chancellor of the Exchequer, "either saints or idiots;" but such language would in no degree deter them in the course they were pursuing. A conference had been held at the Cannon Street Hotel of persons from all parts of London who were interested in the subject of local taxation, at which it was unanimously determined that the right hon. Gentleman the Prime Minister should be requested to receive a deputation on the subject. Unfortunately the public duties of the right hon. Gentleman had prevented him from receiving that deputation; otherwise he would have obtained information on the question which might have been of great value to him. Three things had been distinctly proved in connection with this subject. First, that the rates in towns were much heavier than they were in the country; secondly, that in towns the rates mainly fell upon the occupiers; and thirdly, that the vast majority of occupiers in towns were poor persons. It was therefore clear that the greater portion of the local taxation fell upon poor persons who occupied houses in towns. A very curious argument had been used in reference to this subject. The hon. Member for Brighton appeared to argue that because the grievance of towns was greater than that of the country, therefore that neither should be redressed. If, however, the sum spent in improvements and for reproductive purposes were taken into account, it would be found that there was not much difference between town and country. The First Lord of the Admiralty found great difficulty in meeting the case for local remissions, and the brilliant idea accordingly occurred to him of writing an elaborate Report to set town against country. The right hon. Gentleman had, however, overshot the mark, and town and country were now united like the twin principles of taxation described by the right hon. Gentleman (Mr. Gladstone), never to be disunited again. The remission of taxation proposed to be given by the Budget would by no means give so much benefit to the poorer classes as a judicious remission of local taxation, and he trusted that before the debate ended the Government would give a plain and intelligible explanation of their intentions. Last night the First Lord of the Admiralty insinuated that the proportion of local taxation contributed respectively by town and country was as seven to three, and that the object of the country party was to get a remission of 1s. all round, so that the proportion to be paid by the country might be 2s., against 6s. paid by towns. All that he would say in reply was that whatever might be the remissions made in local taxation the country would only ask for a remission proportionate to that made for the towns. They would not ask for more, and it would not be fair to offer them less. The Government might attempt to ignore a social movement which last Session converted their majority of 98 into a minority of upwards of 100; but they would not find it easy to do so. In the year before his hon. Friend (Sir Massey Lopes) carried his Resolution, he (Lord George Hamilton) moved a clause in the Army Bill, providing that the cost of maintaining barracks for Militia stores should be transferred from local to Imperial sources. He found himself in a minority of only 2 in a full House, and he had reason to know afterwards that if hon. Gentlemen had only understood the question upon which they were dividing he should have been in a considerable majority. There was, however, no question as to the feeling of the House, and the Secretary of State afterwards embodied that very proposal in a Bill which transferred the charge of these barracks to the Imperial Exchequer. It would not be wise for any Government to ignore this movement, and it would be especially unwise for a Government tottering to its fall. The Chancellor of the Exchequer had addressed the Opposition in terms which, as a young Member of Parliament, he hoped never to hear again. He very much questioned the advantage of a classical education if it would not make a man express himself in terms less coarse and more polite. He should not like to reply to the Chancellor of the Exchequer in words similar to his own; but he wished to remind the House that in a speech made by the right hon. Gentleman about three years and a half ago, in addressing an audience in the West of England, he pointed out that there were certain duties incumbent upon the Opposition, and that one of them was "to moderate the insolence too apt to be engendered by great prosperity." If the Chancellor of the Exchequer were correct in that definition of the duties of an Opposition it must be admitted that in one individual case they had lamentably neglected their duty.

SIR TOLLEMACHE SINCLAIR

said, he appreciated the reduction of the sugar duties, but he hoped the remission of all duties on tea, coffee, and sugar, would have precedence of any contribution to local taxation out of Imperial resources. The working classes had a right to a larger share in the remission of taxation. It had been computed that the average consumption of alcoholic drinks by British workmen was no greater than in France, and he was inclined to think that the increased consumption of spirituous liquors during the past year was owing to a more equal distribution among a larger class. The repeal of the tea and sugar duties would benefit the lower middle class more than a reduction of the income tax, on which they were allowed a deduction. If the duties on tea and sugar were repealed, it would, to that class, be equal to a reduction of 2d. in the pound on the income tax. He regretted that the Chancellor of the Exchequer had not preferred to reduce the duty on tea. It was said that the Budget disturbed the balance between direct and indirect taxation; but while the Opposition strained at the gnat of the sugar duties, they swallowed the camel of the repeal of the malt tax. There was no reason why any portion of the Alabama Indemnity should be paid out of the surplus of the present year. He regretted that the income tax had been reduced instead of some of its injustice having been removed. It was not levied on one invariable plan, as farmers were only assessed on half their rent in England and on one-third in Scotland, whilst their profits were often much greater, and certain classes were clearly entitled to some remission. Complaint had been made that no margin was left for the remission of local taxation; but the Chancellor of the Exchequer could not foresee what would be the result of the debates on local taxation, which would probably occupy a great part of the remainder of the Session. He hoped the Government would adhere to the proposal they had made, to give the house duty in aid of the local rates. He knew a man worth £100,000 who lived in a house at £18 a-year, and he paid no house duty for many years. If this tax were made over, probably the claim made by the hon. Member for South Devon (Sir Massey Lopes) would be satisfied. From inquiries he had made, he felt sure that those who occupied palatial residences escaped by paying one half of what was due from them. He was glad that the poor rate in the east of London had doubled, for he was sure that not a penny too much was laid out on the maintenance of the poor. He suggested that each proprietor should be compelled to give a return of the true value of his property, as he had to do with respect to the income tax.

MR. CLARE READ

said, that in the early part of the Session some hon. Members believed there would be this year an heroic self-denying Budget, while a still larger number believed that there would be an honest one—using that expression in a polite and Parliamentary sense. But the old adage of being just before one was generous applied to nations as well as to individuals; and though the hon. Baronet who had just sat down would like to make posterity pay the Alabama Claims, he (Mr. Read) thought they ought to be paid at once. In future years the result of the Geneva Arbitration might be that neutrals would find it cheaper to go to war than to preserve peace. The Government were under two guarantees with regard to the Budget—a moral one to pay the Alabama Claims out of the proceeds of this year, and an absolute bond to provide for some expenses of local taxation; and, as the House was deprived of the pleasure of paying the debt the hon. Member for Westminster (Mr. W. H. Smith) was justified in proposing his Motion. It was a somewhat unfortunate one, because it banded together the Ministerial party, and this local taxation question ought to be as little of a party one as that of woman suffrage. This was not a local taxation debate at all, but a debate on the financial policy of the Government. The hon. Member for South Devon (Sir Massey Lopes) and himself had never asked that personal property or stock in trade should be rated, nor for any contribution to the outdoor relief of the poor, nor was there in poor law administration much to be asked for, unless it were some of the establishment charges. They had never asked for contributions to local rates levied expressly for local convenience and improvement, and under local control; but they had asked for some relief in respect of the police, of lunatics, and the administration of justice. Government had made many excuses, one of which was that they would not act rashly; if so, how they had changed in a few years! In 1871 the First Lord of the Admiralty told them their case was a most urgent one, and the year before that, when a Commission was asked for, the Government said—"We will be your Commission; we want no inquiry; we are masters of all the details." Now the Secretary of the Treasury said neither the Government nor any one else was aware of the magnitude of the subject, or prepared to deal with it. If we were to wait for a really perfect scheme we must wait a long time. A recent Return showed that, of the £1,640,000 of the county rate, the magistrate had control over the small proportion of £339,000. He hoped the property tax would never be abolished, but he wished to see its incidence more equitable and its assessment less irritating and annoying, and he regretted that the right hon. Baronet the Member for North Devon (Sir Stafford Northcote), if he sounded the Opposition trumpet, had not given a more certain sound. The Chancellor of the Exchequer had complained that his Estimates had been discredited, but he would remind the right hon. Gentleman that for three years past his Estimates had been all wrong and his critics all right. He hoped the recent Estimates of the right hon. Gentleman would not be found to have been based on an inflated prosperity, and that no dulness of trade or any other cause would stand in the way of his realizing his anticipations. A short time since the right hon. Gentleman received a deputation of innkeepers, and because he could not answer their arguments, he gave thorn, as he said, £30,000. When, however, a deputation waited on him to ask for a reduction of the malt tax, he gave them an answer based upon fallacies and misrepresentations, which was worse than no argument at all. The right hon. Gentleman said that the surplus was more imaginary than real. But surely a surplus of £4,500,000 was a reality. No doubt at that time the right hon. Gentleman intended to pay the whole of the Alabama Indemnity. The Budget he had since brought in was not the Budget he had contemplated proposing. It was said that the farmers of England were put up by the landowners to demand a remission of the malt tax. They were not. It was the farmers made the demand, and it was one which in justice ought to be yielded. Again, it was said that the farmers really did not pay that or any other tax, for that all these taxes were paid by the landowner or by the consumer. Well, if the consumer paid the malt tax the working classes had more interest in its being remitted than in the lowering of the duty on sugar. They would be more benefited by cheap beer than by cheap sugar, for cheap beer would serve the cause of temperance, while the profit to be derived by the lowering or total abolition of the sugar duties would go, as Mr. Dudley Baxter had shown, into the pockets of the merchant and the retailer. That was not the time to discuss the claims of the agricultural classes to a remission of the malt duty, but he hoped his hon. and gallant Friend the Member for West Sussex (Colonel Barttelot) would take an opportunity, before the Budget was finally disposed of, of eliciting by a Division the opinion of the House in reference to those claims.

COLONEL AMCOTTS

believed that the merits of the Budget very considerably exceeded its demerits, and he was not prepared to fix an indirect Vote of Censure upon a Government who had, in his opinion, deserved well of the country. He must, however, at the same time, tell the truth and shame the Evil One. There was one thing with respect to the Budget which he deeply regretted, and that was the fact that there was no mention whatever in it of, and no preparation made to give effect to, the vote which had been carried last year by a majority of 100 with respect to local taxation. As to the allegation that it was a "snap" division, he had never known a more deliberate debate and decision, and the Resolution was supported by Members on both sides of the House. The hon. Member for South Devon (Sir Massey Lopes) brought forward no new principle. He simply enunciated an old principle. At the time that the principle of granting Treasury allowances was brought forward by the late Sir Robert Peel, and when the Corn Laws were repealed, all that was proposed by the hon. Member for South Devon was that further assistance should be given to lunatic asylums, the police, and administration of justice, and he was very glad to have an opportunity of seconding it, well knowing what was the feeling of his constituents on this now great and important question of local taxation. He regretted that the Government had, as far as was yet known, taken no notice of the decision, and he thought that the Prime Minister had therein hardly done justice to his party as respected the appeal to the country which must ensue before very long. The Liberal party having been united in supporting the great measures which the right hon. Gentleman had carried, he should not have overlooked a matter so small in detail and so great in principle. He feared that the result with the Liberal party would be that when they were weighed in the balance in the matter of local taxation Her Majesty's Government would be found wanting.

MR. DISRAELI

Mr. Speaker—The right hon. Gentleman the Chancellor of the Exchequer, on the last evening of this debate, expressed his surprise at the Motion brought forward by my hon. Friend the Member for Westminster (Mr. W. H. Smith), and said he could not understand what was its object. Now, I confess that, in considering that Motion and the circumstances brought before us, it appeared to me to be a Motion reasonable, natural, I would say even forced upon the attention of any one occupying a position similar to that of my hon. Friend. It is universally acknowledged that this country is at the present moment in a state of great prosperity; that the wealthy are very wealthy; that the labouring classes are in the enjoyment of higher wages than probably at any period of our history have been received by them; and that that high rate of wages has been combined with less toil than they have hitherto been subjected to. And yet there is no question that a considerable portion of the population of this country, a very large class, a class entitled in every sense to our respect and consideration—classes, I may say, that we have been accustomed to look up to as the very marrow of our population, and on whose sense of order and reverence for law we have greatly depended for the security of the Commonwealth—are in most straitened circumstances; that they feel even intensely the pressure of taxation, and that their condition is aggravated, if not occasioned, by the high prices which now prevail, caused by that very prosperity which has made the rich more rich, and which has given to the working classes that welfare which is universally admitted to exist. We know, too, that this class prevails in our great towns, and especially in this metropolis—a city of cities, an aggregation of humanity that probably has never been equalled in any period of the history of this world, ancient or modern. My hon. Friend represents a portion of this metropolis—itself a city—in which he must know from his own experience that a considerable portion of his constituents are now suffering from the pressure of taxation, and from the manner in which the taxes of the country are raised. Now, if that be a true account of the circumstances in which my hon. Friend is placed, I am surprised that any one in this House should rise and express his astonishment that my hon. Friend should bring forward a Motion of this kind on an occasion like the present. And what is that occasion? At this period of prosperity, when the wealthy are in the enjoyment of an unrivalled degree of wealth, and when the most laborious portion of the nation are in the possession of a degree of comfort they have never before attained, yet a period when there is a portion of the country suffering from the pressure of taxation, the Minister to whom is entrusted the management of our finances comes before us to tell us he is in the possession of a large surplus which he is about to distribute, according to his view, for the best advantage of the country; and the class that is suffering, the only suffering class, finds in the propositions of the Government that their situation is not considered, and their needs are not apparently before his mind. Well, then, I say, instead of being a surprising and unreasonable course, it was a natural course for the hon. Member for Westminster to come forward and ask us to pause before coming to a final decision—to beg the Government, in language which I maintain is temperate language, to pause a moment to hear his case. What he says is—do not decide in a hurry; we have confidence in your sense of justice, in your patriotism—for which I give our opponents as much credit as I claim for this side of the House. Consider the case we would place before you; and before arriving at an ultimate decision consider calmly whether you cannot modify your propositions in such a manner as may give to those who, and who alone, in the country are suffering some remedy and some relief.

It is extraordinary that a Motion of this kind should immediately be stigmatized as a Vote of Censure on the Government. We are, lain sorry to say, too much accustomed to such remarks from Her Majesty's Ministers, and I wish Gentlemen on both sides well to consider this habit which the present Government have of viewing every independent movement on the part of the House of Commons as a Vote of Censure. It is a habit really fatal to all Parliamentary independence, and if it is allowed to pass without comment and unchecked I really see very little use in the House of Commons ever assembling. A Vote of Censure we have heard of before. I have on other occasions attempted to vindicate the independent right of this House to express its opinion upon great subjects of policy without its being supposed necessarily to involve a Vote of Censure or Want of Confidence in the Government. But of all questions, questions of finance are ever held to be subject to independent criticism on the part of the House of Commons, and the utmost indulgence is shown to the feelings and suggestions of hon. Members, because, under such circumstances, it is known that they are acting under the immediate impulse of their constituents. Thus it happens that the feeling of the House of Commons is never more accurately or sincerely represented than on financial questions. I therefore feel the greatest regret that any Member of the Government should have been so ill-advised as to have risen immediately after the introduction of the Motion so justifiable as that of my hon. Friend the Member Westminster, and which had been recommended to the House in terms so moderate and well considered, and attempt to meet it by the common-place, but still effective, accusation that it was intended as Vote of Censure on the Government, as if the endeavour to induce them to modify their financial proposals, made with the utmost respect by my hon. Friend, and authorized by circumstances of such commanding and peculiar interest, deserved to be stopped by such an imputation. The hon. and gallant Gentleman who has just addressed the House distinguished himself last year as a participator in a victory in which certainly no party feeling was involved, and by which the complaints of the undue weight of taxation of a peculiar character was vindicated in this House by a large majority. But even the hon. and gallant Gentleman rises up behind the Minister, and while he makes a speech which, if it means anything, is a speech in opposition to the financial propositions of the Government, tells us he must forfeit the position which he so honourably acquired last year, and which, by his own admissions, recommended itself to his constituents, because he is obliged to vote against the Amendment of the hon. Member for Westminster, which, though couched in the most moderate language, the hon. and gallant Gentleman looks upon as a Vote of Censure on the Government.

Let me touch before I enter on the merits of this question—and I think I shall be able to show the House that it is a great question—on the circumstances under which it has been introduced, so far as they refer to the charge which has been made against this side of the House—that it has not been brought forward at the right time, and that it has been brought forward too late. "It is too late," said the learned Professor the Member for Brighton (Mr. Fawcett). "It is too late to discuss a Budget which was brought forward before Easter." Now, it is very true the Budget was brought forward before Easter. But how long before Easter? It was announced by the Prime Minister that the Budget would be introduced the day before the Easter holidays, and an hon. Gentleman who sits on the other side of the House rose immediately after that announcement was made, and urged the great inconvenience of the adoption of that course. He appealed to the right hon. Gentleman, saying it was impossible to decide on the propositions of the Government at a moment's notice, and protested against the course which the right hon. Gentleman had indicated, inasmuch as the House might be committed to a policy which on reflection it would not approve, merely because of the technical circumstances under which the Budget was introduced. With that candour which always distinguishes him in the conduct of the Business of the House, the right hon. Gentleman thereupon arose and said it was for the convenience of the public service that the Budget should be brought forward the day before the adjournment for the holidays, but that he could assure the hon. Gentleman that it should not in the least affect the judgment of the House, for not a proposition would be made, not a vote would be asked for under the circumstances, that would at all be considered to pledge the opinion of the House. What, then, let me ask, becomes of the charge that it is too late to discuss a Budget which was brought forward before Easter? Why, so far as this House is concerned, we had to consider the subject after Easter, not before. The Budget was introduced by the Chancellor of the Exchequer, and that desultory conversation followed which seems to me to be the most unprofitable form of Parliamentary discussion. We thou adjourned, and the Government named the Thursday after the Recess for the consideration of the Budget. On that day, before the Public Business commenced, my hon. Friend the Member for Westminster gave Notice of his Motion. How was it possible, if we were to discuss the financial proposals of the Government—and what is the use of the House of Commons if it does not discuss them—that earlier Notice could have been given of the intention of my hon. Friend to invite the attention of the House to the subject?

Let me now say a word on the causes which have induced a great portion of the constituency of Westminster, and a very large portion of the people of England, placed in the same situation and represented on this occasion by my hon. Friend, to urge the adoption of the course which he has taken. My hon. Friend wishes to induce the Government to consider the claims—I will say the sufferings—of a great portion of Her Majesty's subjects which are occasioned, in his opinion and in theirs, by the action of two particular arrangements of our financial system, the first of which is the income tax. That is a tax which presses on them with great severity. Its administration has of late become strict and severe. Vexatious and inquisitorial it has always been; but there is a mode of administering all laws which in some degree mitigates their incidence. That, however, has not been the character of the administration of the income tax of late years. The classes on whom it falls find it oppressive at a time when the rise of prices in the country naturally rendered them more sensible of it. It appears there are also many among the wealthier classes who are not insensible to the peculiar incidence of the income tax at the present day, for those of whom I am speaking were encouraged by finding that the merchants, bankers, and leading men in the City and in other civic communities were meeting together to denounce the tax and its administration. They naturally thought, therefore, that Her Majesty's Government, if they had an opportunity, would consider the present position of the income tax, its administration and incidence, and that they would obtain some relief in that respect. It was not so much remission of taxation, which, of course, we would all only be too willing to accept; but they thought that Her Majesty's Government would have an opportunity of considering whether it would be possible, without compromising the vital principles of the tax, to mitigate the evils of its administration, and to render its incidence less strict and severe. They knew very well that the income tax had been introduced as a matter of great policy in order to reform our tariff. They saw—as many have for several years been observing—that the income tax, instead of being an instrument for reforming our tariff, had commenced to be an instrument to destroy it, and that under the influence of the income tax other sources of revenue wore constantly disappearing. Suffering as they did under the incidence of this direct taxation—taxation originally introduced for temporary purposes—they very naturally became alarmed; and under these circumstances they looked with confidence to the Government—if they had an opportunity—of considering this question in a large and becoming manner, and giving them some relief. But there was another subject which was even more in the minds of the constituency of my hon. Friend—as I believe it was in some degree in the minds of the constituency of every hon. Gentleman on either side of the House—which every year assumes a more alarming and offensive character, and which every year excites their anxious thoughts—I allude to the system of local taxation in this country. The increase and accumulation of rates, and the fact that the progress and advance of the nation indicate that there must be a large and progressive increase in this form of taxation not only alarmed but distressed a class already struggling under great disadvantages. They were encouraged by the vote that the House had arrived at by a commanding majority on the Motion of the hon. Member for South Devon (Sir Massey Lopes), seconded by the hon. Member who has just addressed us (Colonel Amcotts)—they were encouraged to believe to the amount of conviction that the Government, if they had an opportunity, would largely and completely deal with that the greatest source of their distress and disquietude. Now, I must call the attention of the House—and I will do it with as much brevity as I can command —to the real character of this question of local taxation; for I have been surprised that in this debate, in this House of Commons, even after the debate and the vote of last year, such erroneous views should be entertained of it. Sir, I can speak on this subject with some personal experience. I remember very well the day when the subject of local taxation first began to command the attention of the House of Commons. The Corn Laws had been repealed. There had been—whether from the repeal of the Corn Laws, or from casual and accidental circumstances I will not now stop to inquire, because I wish on this occasion to avoid anything approaching to controversy—considerable suffering in: the agricultural districts. There had been such a fall of prices that there had been throughout England a fall of rents; and therefore at that time the agricultural interest was extremely sensitive to what has since been popularly called local taxation. But at that time it so happened that the Government then embarking in that system of social improvement which has since been maintained, and will not, I hope, be for a moment deserted, called on the payers of local taxation, and especially on the landed interest, to embark in the construction of buildings of a very costly character, which they were called on to erect by large sums of money raised on the security of the rates; and the affair became of so serious a character that an hon. Gentleman, then a county Member, called on the House to consider the question of local taxation with a view to a remedy. No doubt at that time the landed proprietors were most interested in the subject; but it is a mistake to suppose, though that error has circulated in this debate, that under any circumstances, and at any time, the proprietors and occupiers of land ever came to this House to ask for relief solely for themselves. They asked for it for real property—for property in land and houses—and therefore, of course, in towns. They placed this case before the House. They said—"Here is a very large sum we are called on annually to contribute for purposes which we maintain are strictly national, and the means to accomplish these national purposes are levied from a part of the property and income of the country which represents in round numbers, only one-eighth of the whole." This flagrant injustice never was questioned in the House; but it was a very convenient thing for the Government to evade an appeal likely to disturb the finances of the country; and, as it appeared that only the owners and occupiers of land were then much interested, it was evaded. But it was felt at the time by those who understood the question that, as time advanced and these rates increased, the tow ns would feel that they had a brother grievance with the land. So it has happened, and of late years the rates in the towns have exceeded the burden of local taxation on the land; and the right hon. Gentleman the First Lord of the Admiralty, who is master of the subject, and therefore speaks on it with authority—though it is not very intimately connected with the naval service—the right hon. Gentleman seemed to feel he had a triumphant argument on the subject of local taxation if he proved that the towns paid more than even the land; but I say every instance he adduced and every argument he offered only proved still more strongly the case against him. Well, this question, which might be parried and evaded so long as it was supposed by the country merely to concern a particular class—the class connected with the land—grew every year more urgent and more important; and seven or eight years ago it was a question which no Government could neglect. When the Government of Lord Derby was formed evidence was placed before us which proved that the settlement of that question could no longer be neglected. We had other business to deal with; and I think that was a fair excuse. We had a great nut to crack; but had we remained in office it would have been the first subject that would have engaged our attention. What is more, I will venture to say—and I think I shall be able to prove it—when the right hon. Gentleman opposite found himself in our position, although he had great measures also to conduct, the affair of local taxation was so pressing that he could not for a moment disregard it. No doubt the Irish policy of the right hon. Gentleman engaged the attention of Parliament to that degree that it was not absolutely necessary to bring forward a measure on local taxation; but I will show you that the subject was pressing; for imme- diately after the formation of the present Government—at the end of the Session of 1869—an hon. Gentleman—I am not sure that it was not the hon. Baronet the Member for South Devon—immediately addressed a Question to the Government, and he was answered by the First Lord of the Admiralty, then President of the Poor Law Board—to whose Department, of course the matter belonged—the right hon. Gentleman acknowledged that the question was one of the greatest and most urgent importance; and whatever might be the engagements of the Government at that moment, he assured the hon. Baronet that the question occupied the attention of Her Majesty's Government; they were taking steps to obtain, through the Inspectors of the Poor Law, certain information which was absolutely necessary with reference to the areas of taxation and the new system which was to be introduced, and when answers had been received from those Inspectors the Government should consider the whole question. This proves that even at the time when the unhappy disestablishment of the Irish Church and other questions of the same kind were looming in the future, the Government knew well from the pressure of local taxation on the country that it would be impossible to neglect the question. That was in the year 1869, the moment the present Government stepped into office. In 1870, the year afterwards, the Minister charged with this business, the present First Lord of the Admiralty, took an early opportunity to say that he had received all the Reports of the Inspectors—I am speaking from memory, not from extracts—because it is disagreeable to throw Hansard always at the heads of those we address, but I know I am tolerably accurate—the right hon. Gentleman announced that the Government had received their Reports from the Poor Law Inspectors upon the leading question of the area of assessment; and when they had digested them, as they were earnestly doing, they would state the course they would take, and very shortly afterwards he said he was about to propose a Committee on the subject. He proposed a Committee in a speech which showed that the right hon. Gentleman was completely master of the subject. An abler speech never was delivered in this House on a matter of that kind, and it was a great satisfaction to know that the question was in the hands of a Gentleman who was able to deal with it. That was in 1870. Well, the Committee sat and we received from that Committee a most valuable Report, and many other Papers illustrative of the policy recommended and the circumstances of the case, forming a fund of information seldom equalled in our Parliamentary literature on any question. The Committee having reported and the matter being in the hands of a competent Minister, that competent Minister came forward and proposed a measure on the subject. That was two years ago. Some disapproved the suggestions which the Cabinet made to remedy this great evil. The matter was never fairly brought before the House for discussion, but I will not enlarge upon that. It was perfectly open to the House on either side to question the inferences drawn from the premises of the right hon. Gentleman. The remedial scheme in the opinion of the House of Commons might have been most injudicious and totally inapplicable—I do not say it was, but it might have been—but no one can deny that the premises were sound and complete. No one can for a moment maintain that the Ministry having brought forward a plan, however unfortunate and unsatisfactory that plan may have been, did not make themselves masters of the subject. This was in the year 1871. Well, nothing was done. A year, another year elapsed, and nothing was done; and this year the subject is mentioned in the Queen's Speech. The pressure of local taxation has increased and been aggravated in every part of the country. We have since the inception of the investigation of this subject by Her Majesty's Ministers passed laws upon laws that have increased the pressure of local taxation, and now, the matter having been mentioned in the Queen's Speech, nothing whatever is proposed by Her Majesty's Government. My hon. Friend the Member for Westminster—who represents a body of constituents, unfortunately resembling many in this country, who acutely feel the pressure of rates—asks, in the Motion which he has brought forward, the Government to pause for a second and consider the statements that have been made, and say whether they cannot meet the exigencies of the case, and offer some satisfactory solution of these difficulties. Well, what is the answer of the right hon. Gentleman the Chancellor of the Exchequer? I will not criticize the answer of the Chancellor of the Exchequer with the severity with which it has boon criticized by many hon. Gentlemen. I do not view that answer in that spirit of indignation which has pervaded the House. The answer of the Chancellor of the Exchequer was certainly expressed in language and conveyed in a manner to which we are not used in this House. But I take a more charitable view of it than my hon. Friends. I look upon it rather as an indication of what may be the juvenile ardour of some primitive Assembly, which has inherited, and I hope may excel, the traditions of our Parliament. It is not every one of us who has had the good fortune of dwelling in the Antipodes, and I was glad to learn, from the experience of the right hon. Gentleman, how a Parliament of that kind, which must naturally interest us deeply, would meet a claim from the aggrieved subjects of Her Majesty for some relief from unjust and oppressive taxation. What says the Chancellor of the Exchequer? He says—This business of local taxation is a subject on which you are speaking with the greatest familiarity and rashness. It is a question that nobody knows anything about. It is difficult—it is full of anomalies. Good God! says the Chancellor of the Exchequer, you must first of all scrutinize those horrible exemptions, and then there is another thing you must do; you must inquire how you can establish an adequate area of taxation under the new system. And so he went on. Why, they must have done that four years ago. It must be remembered that the Cabinet which introduced the Bill of 1871 had for two years been collecting this information; for, by the admission of the First Lord of the Admiralty, they received in 1870 answers from all the Inspectors of Poor Laws on this very weighty subject of the area of assessments, and as we all know from the admissions of Ministers they had long given their attention to the subect of these horrible exemptions. Why, Sir, this is trifling with the House. There might have been some grave reason—and perhaps hereafter I may advert to it—which might have authorized Her Ma- jesty's Government, if they met the House of Commons frankly and fully on this subject, to postpone for a Session a matter of this great magnitude. We had evidence that for four years Her Majesty's Government had their mind intent upon this subject; that for two years they had been storing knowledge; that two years ago that knowledge bore fruit in their councils, for they brought forward a large and comprehensive measure, the policy of which may be questioned; but the premises, the sound information upon which that policy was founded, was never for a moment disputed. But if after four years have elapsed, if after all that has occurred in this House, and after the majority of 100 last year we are to be told now by the Chancellor of the Exchequer that the Government know nothing at all about it, that they must begin to inquire, commence their studies and investigations of a subject which those who have studied and investigated it know is one of a profound and complicated character—I say the situation is desperate. What hope can we give to our constituents, who, as far as finance is concerned, care for this question and no other? What hope can we give, what expectation can we hold out of the settlement of this question which engages the feeling of the country so much that, like all questions of the kind, we have agreed it shall not be a party question, and the hon. Gentleman who has just addressed us has himself most clearly expressed that opinion? How, I say, are we to meet our constituents and give them any prospect of relief in this matter after the admissions of the Chancellor of the Exchequer? And when we take our present course—a course which I hope before I sit down I may induce the House on both sides not to view in the light in which the acrimonious language of the Chancellor of the Exchequer has painted it, but which I hope to show is a temperate and reasonable course—a course required by the country and to the verdict upon which, however it may go, depend upon it, the country will look—how are we met by the Chancellor of the Exchequer? He says—"What do you mean?" I will not say he said it rudely. I will not resent his having accused an assembly of English Gentlemen of being influenced only by greed and selfishness, because I have indicated the school in which these expressions probably were learnt. But the Chancellor of the Exchequer says—"What is to happen if you carry this Resolution?" Well, that which might happen if we carried this Resolution might be what happened before—it is not the first Budget of the Chancellor of the Exchequer that has been humbly criticized. This is not a Budget that has been received with indignation and treated with contempt. It has been treated, I think, with reason and courtesy. The Chancellor of the Exchequer asks us what will happen? I say that will happen, probably, or might happen, which happened before. The Chancellor of the Exchequer will take back his Budget; he will reconsider it; and he will give us a Budget which may unanimously pass, and which may in some degree satisfy the country. The Chancellor of the Exchequer did, indeed, proceed a little further, for he said—Are we to have another crisis? Are we to have another fortnight spent in passing to and fro? Well, Sir, so far as this side of the House is concerned in the waste of the public time, which I always regret under such circumstances, I do not think this side of the House is particularly guilty. So far as the waste of the public time in the late crisis, we are responsible only for a small hour—a short hour; and therefore I look upon the exaggerated view of the Chancellor of the Exchequer as a personal attack upon his Colleague and his chief. It is not the first attack that he has made on the right hon. Gentleman. The right hon. Gentleman does not need me to defend him he bears it like an angel; but the hour will perhaps arrive when he may vindicate himself with diabolic vengeance.

There is one point which I wish to impress much upon the House. The Chancellor of the Exchequer told us the other night—it was the financial principle upon which his speech rested, and it is now accepted as the financial principle of his Administration—that indirect taxation was paid by the poor and direct taxation by the rich. Before I enter into that question, allow me to remind the House of an important consideration. The local taxation of the United Kingdom now amounts to £25,000,000 a-year, and I believe the moiety of that is raised from those who are not wealthy; and we have evidence that of those £25,000,000 more than £5,000,000 are paid by the pure working classes. The rating of their houses, estimated only at the average of 3s. 6d. in the pound, that being the general average, would yield £5,000,000; and we know very well that the dwellings of the working classes are rated very often at 7s. in the pound instead of 3s. 6d. Therefore, it is of the greatest importance that you should not be misled by these statements of the Chancellor of the Exchequer, and that you should not look upon the question as simply a question that may be resolved in a moment by saying indirect taxation is paid by the poor and direct taxation by the rich. We have heard much of remissions of indirect taxation. As regards the interests of the working classes, what is the question of this reduction in the sugar duty of a farthing in the pound, which, under the most favourable estimate that 36 1bs. are annually consumed on the average by every working man, would secure to him 9d. a-year—what, I say, is this question compared, even where his individual interests are concerned, with the question of local taxation? The hon. Member for Finsbury (Mr. W. M. Torrens), who spoke with great effect and truth upon this subject the other night, knows very well how infinitely more important to the working classes is the question of local taxation than the question of indirect taxation. I mention this as a warning to the House not to accept the calculations which the Chancellor of the Exchequer has provided for us with fatal facility. I am not a bigoted, I am not even an enthusiastic, admirer of indirect taxation. There was a time when this country was powerful and prosperous, and yet indirect taxation could hardly be said to exist in it. Indirect taxation is not the gift of arbitrary sovereigns, or even of a selfish and rapacious aristocracy. It is the popular creation of Parliament; and it was carried to the great extent and excess in which it once prevailed in this country by a sympathizing multitude. What we have done to reduce it during the last 50 years, since the revision of our tariff after the war, was commenced by that great man Mr. Huskisson, who has been more or less continually supported by every Minister who has succeeded him. We have thus been relieved from much, I may say from most, of the injurious consequences of excessive indirect taxation. We have curtailed and we have controlled, and in many instances we have entirely destroyed it; and with any prejudice we may have against indirect taxation, and the excesses of indirect taxation that have sometimes prevailed in this country, we must not allow our eyes to be shut to the truth that indirect taxation is moderate, and that, on the whole, it has been so regulated that the position of our population in this respect can be compared advantageously with the position of every people in the world. Now, Sir, the Chancellor of the Exchequer lays down the principle that indirect taxation is paid by the poor. The Chancellor of the Exchequer says that indirect taxation being paid by the poor, he can acknowledge no system of remitting taxation but that of remitting fairly, on both sides, direct and indirect taxation—that is to say, the taxation of the rich and the taxation of the poor, and therefore as indirect taxation is paid only by the poor, he, with admirable consistency, proposes to remit a tax, the tax upon sugar, which is not particularly paid by the poor. I am perfectly willing to accept the authority who has been quoted on this matter in the course of the debate—none the less so because I understand the Professor is an ultra-Liberal and a great opponent abstractedly of indirect taxation. Accepting the conclusions of the authority of the party opposite, we find the Chancellor of the Exchequer proposes to benefit the working classes by remitting duties of which they pay only one half. Half the surplus he gives to the rich, and half he says he gives to the poor; but we find, upon authority he will not dispute, that only half of this half he professes to give to the poor will be secured to them. I will not press the matter so far as my right hon. Friend (Mr. Hunt), and say the working man will not get the farthing a pound upon sugar, although I believe that statement can be substantiated. I will put the advantage to the working man of this remission of the sugar duties at 9d. per annum. But the duty he professes to remit in the interests of the working classes is only partially paid by them. You will find that the duties on sugar, tea, coffee, preserved fruits, and so on, are almost equally divided between the wealthy and the working class. According to the Return made by the Inland Revenue Office the excess paid is on the side of what are called the wealthier classes. But this Return was made some time ago, and, taking the other estimates to which I have referred, there is a slight excess against the wealthier classes. Speaking generally, upon all these articles of necessity, the tax is paid equally by the working classes, and the propertied classes. It is very true that, if you come to spirits and tobacco, a considerable excess of the duties paid is contributed by the working classes. But then I want to have a clear understanding with the Government upon this subject. The Chancellor of the Exchequer lays down the principle that indirect taxation is paid by the poor and direct taxation by the rich, and that in any remissions of taxation there must always be an equal division between them. I ask the right hon. Gentleman, then, does he mean to deal with spirits and tobacco upon the same system? We ought to know these things. I am not one of those who grudge the working classes, or any other people, the mode in which they spend their money. No solemn admonitions or sad regrets will come from me upon that subject. I do not drink spirits and I do not smoke; but I can imagine that others may derive considerable pleasure from both these things. From what I know and have seen of the working classes, I think their tastes will purify and refine; and they are as likely to purify and refine as the tastes of any class I know. But that is not the question for Ministers and for the House of Commons. A Minister has never yet got up to propose an increase of this kind but he has said, with a countenance arranged for the occasion—"There is a terrible deficiency, and what we propose is to increase the spirit duties;" whereupon hon. Members, especially those on the Liberal side, have immediately replied—"Pray increase them as much as you possibly can, provided only you keep out the smuggler." Hitherto, therefore, we have been arranging this portion of our fiscal system not upon financial but upon moral considerations. Which of these considerations is to influence us now?— 'Under which King, Bezonian? Speak or die. If these duties are to be dealt with on the grounds suggested by the right hon. Gentleman, not only the finances but the morality of the country will be in serious danger. At this moment we raise a revenue of £90,000,000. It is a very large sum, but easily raised; and, except a portion, the £25,000,000 of local taxation, little distress is caused by this taxation. The working classes number 21,000,000 out of the total population of the United Kingdom, and it is calculated by the Statistical Society that they contribute £30,000,000 out of this £90,000,000. Considering their numbers and their incomes, it is not an immoderate contribution. Their revenue is estimated at £400,000,000 sterling. That being so, I say no country in the world can show a system of taxation which falls so lightly upon the working classes; and I freely admit that you have brought about this result by the wise legislation commenced by Mr. Huskisson and pursued, almost without intermission, to the present time. Let me make one more observation upon this head, because it is one upon which the House ought to have accurate information. The workman in this country is taxed only half as much in proportion to his wages as the workman in Republican France or Autocratic Russia. In both countries the workman is taxed double the amount he is taxed in England, and even in industrious, liberal, and constitutional Belgium he is taxed at a higher rate than the English workman. Do you suppose that the English workman is not aware of all this? The Chancellor of the Exchequer has suddenly come out as the friend of the British workman. His sympathies in that respect have been long known and distinguished. But on this occasion he has shown that it is not so much from love as from fear that he wished to benefit them. To my surprise at hearing such accents from a great officer of State, the right hon. Gentleman says—"If you do not reduce indirect taxation, which is paid by the poor, with the power they now possess, you must take the consequences." Well, I for one do not believe that the working classes of this country possess more power than they ought to possess; and I want to know what authority the Chancellor of the Exchequer has for the statement he made to the House? What evidence have we that the working classes are at all dis- contented with the system of taxation which at present prevails, or with the general system which regulates the revenue or even the property of the country? I have heard some propositions winch are dangerous, but silly, respecting the tenure of land. I have heard some absurd schemes to regulate the national revenue and taxation. But they have never come from the working classes. They have come from addlebrained Professors. They are the men who abound in solemn platitudes, and who certainly, if they had their way, would destroy any country and any Constitution. I protest, therefore, against the argument of the Chancellor of the Exchequer that we are to reduce indirect taxation, though that reduction may benefit the working classes to an amount they would despise, because they are now invested with political power, and we fear they may abuse it. What evidence is there that the working classes have ever abused their political power? [Ironical cheers.] I am ready to repeat that observation. I keep my eyes upon these affairs. I have seen some absurd statements made by individuals, made by all classes, but I say with satisfaction and confidence that there never has been, on the part of the working classes, any such stuff talked about finance as I have heard from Ministers of State. In my mind the right hon. Gentleman has made a great mistake as to the working classes. It is not the first mistake he has made on the same topic. Having suddenly determined to become a patron of the working classes, he supposes that the only things they are thinking of are matters of finance. No doubt that 30 or 40 years ago there was a pressure upon the working classes of this country. Whether it was occasioned by our financial system or not, they were discontented and expressed their discontent. But the working classes perfectly understand our present tariff, and know that it is a tariff which, on the whole, is framed with a due consideration for their interests. And we should be fools if we did not consider their interests, for if—so far as depends upon the Legislature—21,000,000 of people belonging to the working classes are not placed in a satisfactory condition, what becomes of the country? The right hon. Gentleman seems to think he will command the sympathies of the working classes, whose sympathies he has not yet successfully obtained, by reducing the price of their sugar by a farthing in the pound. I presume to think—and hope it is not presumptuous to think so—that I know more of the working classes of this country than the Chancellor of the Exchequer. I will not say more than that. But I think the right hon. Gentleman has totally mistaken the temper of the times, the mind of the working classes, and the condition which they at present enjoy. They are now in a position to secure not only the means of existence but the means of enjoyment. The working classes, I may also presume to say, are as proud of their country—and perhaps prouder—than any other class, and they are not the class to destroy our Navy or reduce our Army. They know that they belong to a great country. They are resolved, as far as they are concerned, still to belong to a great country. They never hesitate to contribute fairly to the resources of the country to maintain our means of power and defence, and, if necessary, of aggression. I give no opinion upon the justice, or the reverse, of the course taken by the working classes. They believe they have realized—I am speaking of the working classes in the great scenes of our industry, Lancashire, Yorkshire, Cheshire, and so on—the dream of their youth, "A fair day's wage for a fair day's work," and that they have at last secured that share of profits which, in the partnership between labour and capital, labour ought to secure. Whether they are right or whether they are wrong is another point; but the question is, what are their sentiments; If you will go to them and say—"The Chancellor of the Exchequer has taken up your cause, he is going to reduce the duty upon sugar," they will say—"We know something about this Gentleman; we have got his character of us stuck up on our mantelpieces, we do not care about his farthing philanthrophy, but we should like to know what he and his Colleagues mean to do about the master and servant question, and several other questions of that kind." They are deeply interested in those questions, and by the settlement of them according to their views they hope to secure the abounding prosperity which they now enjoy. Therefore, I think the Chancellor of the Exchequer, in the course he has adopted, is entirely mistaken.

I made an appeal to the Government to consider the case that has been put before them by the hon. Member for Westminster, and which many Gentlemen have supported. The right hon. Gentleman must feel that, as far as regards the wealthy classes and the great body of the working classes in this country, no reduction of taxation is requisite. He must know—for no Minister can be uninformed on the subject—that daily and hourly the pressure becomes greater upon a class in this country who deserve the respect and the consideration of Parliament. The right hon. Gentleman should feel how expedient it is to mitigate the incidence of the income tax, provided it can be effected without touching its vital principle. The right hon. Gentleman must feel that if he cannot do that, the great and commanding question in the minds of those suffering classes is the infliction which an ever-increasing taxation under our local system now imposes upon the people of this country. Can he for a moment think that after having himself enjoyed four years of power under circumstances of extraordinary command and favour, and having from the first acknowledged that unjust burdens under our local system should be under his auspices removed—can he reconcile it to his conscience that with an abundant surplus at his command, he is justified in making propositions which, he must admit, are not necessary, even if they are desirable; and that he should be deaf to the appeals of those the justness of whose claim he formally acknowledged years ago, for the satisfaction of which he has devoted the labours of himself and Colleagues now for a series of years, and to satisfy which we have absolutely on the Table of the House a large and matured measure of the Cabinet, and which was brought before our notice in the Queen's Speech on the opening of the Session? I wish to know how the right hon. Gentleman will answer that question; but I can assure him that I do not ask it in the spirit of hostility. I want him to satisfy the House that the manner in which those appeals have been received by the Chancellor of the Exchequer was not one suggested by the Cabinet. I want the right hon. Gentleman to tell the House that the Chancellor of the Exchequer was not justified in coining forward and announcing, after all that has occurred, to an expectant and disappointed people that Her Majesty's Government have during a series of years been trifling with them, that they have no intention of dealing with the question of local taxation, and that they have not yet commenced their preliminary study of the controversy. I cannot believe that the First Lord of the Treasury has for a moment sanctioned the statement made by the Chancellor of the Exchequer. I am sure that the right hon. Gentleman acknowledges the gravity and general importance of this question. I hope the right hon. Gentleman may save us from a division on this question. If the right hon. Gentleman does not he may depend upon it we will not shrink from a division. We know very well what is at stake. We know very well the tribunal to which we shall soon appeal. We shall watch with interest the effect of the speech of the hon. Member who preceded me in vindication and in explanation of his conduct on the vote upon which depends the question whether the local taxation of this country shall be revised and re-modelled or not. I make that appeal to the right hon. Gentleman because I should be glad if this subject were not treated as a party question. That was the only reason that induced me to make the appeal. I maintain that the Motion of the hon. Member for Westminster is a Parliamentary and proper Motion to make. We have not had an opportunity of discussing the financial scheme of the Government, and of arriving at a clear understanding of the principles upon which the financial policy of the country is to be based, and which it is of the utmost importance we should know. I will say nothing further on this subject beyond this—the Chancellor of the Exchequer and one of his Colleagues have asked us what we propose. I do not admit that it is our duty to make propositions in this House. But I am not of a churlish character, and I will make an exception upon that point. I do not blame Her Majesty's Government for not proposing to defray the whole of the Alabama Forfeit in the present Budget. I should have been prepared to support them—and I believe everyone who sits on this bench would also have supported him—in so doing but before the Budget was introduced, I could not have answered for the result of a division. Since however it has been discussed there has been a marvellous agreement on both sides that we should settle the American charge at once. If, therefore, Her Majesty's Government would adjourn this debate, and reconsider their position, they might reckon on my support in so doing; but I fear there is no probability, of its being done. Having provided otherwise for the Alabama Claims, it is their duty, in my mind, to deal at once and conclusively with the question of local taxation. I entirely reject the statement of the Chancellor of the Exchequer that they are not prepared to deal with that question. We know that they are prepared. We know that two years ago they brought forward a measure on that subject, but on which they never took a division. They showed then that they were completely competent to deal with it. Still they have done nothing. There is no justification for the unsatisfactory position in which the House of Commons is placed. This question of local taxation has been for years before the country, before Parliament, and before the Government. It is time to deal with it. With their present surplus the Government have ample means of doing so. I call on them now to avail themselves of the general disposition of the House to perform a great act of justice, and to prevent a fruitless Session which will be looked upon by the country with contempt.

MR. GLADSTONE

Sir, I cannot think it unnatural or extraordinary that the right hon. Gentleman should take a favourable view of the Resolution proposed by the hon. Member for Westminster (Mr. W. H. Smith). Probably he has the best of all reasons for regarding this Resolution with a feeling analogous, at least, to that of parental fondness. The right hon. Gentleman, therefore, without difficulty, finds the Resolution to be reasonable, natural, and, under the circumstances, inevitable. But, instead of replying upon him by epithets drawn from the armoury of my own vocabulary, or that of any other hon. Gentleman on this side of the House, I will remind him that there are those upon his own side of the House who have not found the Resolution rea- sonable, natural, or inevitable. One hon. Member—I think the hon. Member for North Wiltshire (Sir George Jenkinson)—has this evening described it as unhappy; another—the hon. Member for South Norfolk (Mr. Clare Read)—has called it unfortunate; while a third—the hon. Member for South Northumberland (Mr. Liddell)—deprecated the Resolution of the hon. Member for Westminster. In this divided state of opinion among those from whom the right hon. Gentleman might, perhaps, have hoped for agreement, it can hardly be wondered at that we on this side of the House are not disposed to concur in the sanguine and favourable view which the right hon. Gentleman has taken of the Resolution. For my own part, I will not call it a Vote of Censure, because the right hon. Gentleman objects to a vote of that kind. But it is a vote aimed at the vitality of the Budget; and, that being the case, it is a vote with respect to which we are at liberty to say that, if we follow the practice of the right hon. Gentleman rather than his teaching, it is aimed at our vitality as a Government also. To listen to the right hon. Gentleman to-night, there is nothing so simple, nothing so commonplace in its character, as an attempt to dislocate a Budget. He says there is no controversy and no party move in the Resolution, and that he would not for the world introduce those elements into the matter. He says that it is a mere matter of every day, which we are not discussing or debating, but merely conversing about across the Table, and so he seeks to win us to his will. When we attempted with controversy, but without party movement, to treat the Budget of the right hon. Gentleman in that way 20 years ago, and when we succeeded in making what we thought a great improvement in his Budget by rejecting one among a dozen of his proposals, the result was that the right hon. Gentleman and his Colleagues walked out of office. He will not, therefore, be surprised if, when his preaching goes one way and his practice goes another, we are more moved by his example than by his words. Being such a Motion as it is—so grave and so serious in its effects upon proposals we have made with very great deliberation—I must say that it is impossible for the Government to have loss cause of complaint for the Motion made against it. I have no disposition to complain of it at all. I must own that there is a body of Gentlemen who have a considerable reason to complain of it, and that is the Gentlemen who are expected to vote for it. That, is a matter, however, upon which there may be a difference of opinion. Let us endeavour to get at the meaning of the Resolution. That is not an easy matter. I find it difficult to ascertain its meaning even after the laboured comment of the right hon. Gentleman. I feel it difficult to connect that comment intelligibly with the words of the Resolution. Just now the right hon. Gentleman told us that he was perfectly willing, if we altered the Budget by striking out what relates to the income tax—that is to say, all that relates to direct taxation—that if we would do that and enlarge the Alabama payment, and devote £1,500,000 to the reduction of local taxation, we should have his support. But this is not what the Resolution says. It makes no mention whatever of the sum to be set apart for the payment of the Alabama Indemnity; and the right hon. Gentleman seems to have had occasion to change his mind since he took counsel with his friends with regard to the Resolution. The Resolution should have said that the House, before deciding upon the further reduction of indirect taxation, should be put in possession of the views of the Government with reference to the local taxation, and the liabilities incurred on account of the Arbitration at Geneva. The speech of the right hon. Gentleman is therefore hopelessly at variance with the Resolution of the hon. Member for Westminster. When I read it first it seemed to me that a sanguine and self-complacent Ministry might have found in it something complimentary, for it seems to assume that such is the confidence on the part of the House in the Government—such is the weight that it attaches to all that proceed from it, that it cannot proceed a step in the settlement of the finance of the year until we have told them a good deal more of what we think of direct and indirect taxation. But I am afraid that that is not the meaning of the Resolution, and therefore I look a little further, and I observe that the embargo put upon the action of the House, until further information as to the views of the Government wth regard to indirect taxation, is an embargo not only applicable to the sugar duties, but to all indirect taxation whatever. That is a most remarkable and significant feature of this Motion. It is impossible that this phrase "indirect taxation" can have been adopted without a purpose, and I think it must have been used with a moral object. The right hon. Gentleman has referred to the speech of my hon. and gallant Friend behind me (Colonel Amcotts), with reference to the constituencies. I am sorry at the moment not to see in his place the hon. and gallant Member for West Sussex (Colonel Barttelot), the present leader of the anti-malt tax army, because I really hope that he will give us the favour of his support against the Motion, inasmuch as the hon. Member for Westminster cruelly—not by a mere vote, but by a positive declaration of the House in terms—interposes between him and the realization of his favourite project for the repeal or the reduction of the malt tax. I have been glad to see that several of the reasons for this Motion, as put forward in the early part of the debate, have gradually disappeared. The hon. Member for Westminster unintentionally mis-stated the conduct of the Government with regard to the pledges they had given. He said that last year I had given a pledge on the part of the Government that we would, early in the present year, introduce a measure for the settlement of the whole subject of local taxation. I never said anything to that effect. I do not say that the hon. Member has intentionally misrepresented, because I find he has commenced the study of my speeches from the year 1851, and I do not wonder that by the time he got to 1872 he was completely bewildered by the volume and unintelligible character of what he read. It was said by the hon. Gentleman at the commencement of this debate that this reduction of the sugar duties was useless, for it would never reach the consumer. That was a declaration which has been in great favour out of doors. But by a bad tactical arrangement on the other side, the right hon. Member for North Devon (Sir Stafford Northcote) was put up to follow and support the hon. Member for Westminster, and the right hon. Member for North Devon flatly contradicted that statement that the reduction would not reach the consumer, and stated, on the contrary, that the probability was that not only the reduction but something more than that would reach the consumer. The proof of that is a proposition elementary in the minds of those who have given the smallest attention to the subject of political economy. We know very well that one of the objections to indirect taxation is that the tax is paid long before the commodity reaches the consumer, and that it enters into the commodity and forms a part of all the subsequent dealings with it, and of the capital by which the transaction is carried on. Upon the whole of that capital, including the duty and the original price, a profit must be added, and by those successive profits the burden of the duty is augmented. The Chancellor of the Exchequer stated truly that many untruths were in circulation about sugar; but there is one statement which is beyond all doubt, and that is that, by a custom extensively prevailing in the sugar trade, of all the commodities dealt with, there is none sold to the consumer on which the profit is so bare, and none on which the effect of a reduction would so rapidly find its way to the consumer. It is said that this change contemplates the abolition of the sugar duties. Now it neither contemplates their abolition nor their retention—those matters form a question for future years and the capacity of Parliament, and the revenue and the service of the country. If I am to be told that the abolition of the sugar duties is a result so dreadful that it is only to be held up to us in dark colours in order to frighten us out of our resolution and determine us not to take a step in such a direction, I can only say that I do not regard that result with any such horror, or with any horror at all, and if I could regard it with sanguine hope—I do not say that I do so regard it—I should also regard it with the sincerest pleasure and satisfaction. Then it is said that the revenue of the country is endangered—that there are meetings about the income tax, and vague complaints made here and there concerning brewers' licences and other imposts. We are to be alarmed and put out of our propriety by apprehensions about the revenue of the country; but I say that the revenue was never in less danger than now, and that the credit of the country never stood higher; and if we can keep our expenditure moderate, and our Debt in a course of steady and gradual reduction, and recruit the energies of the people from time to time by wise remissions of taxation, there is no fear for the revenue of the country or the performance of its duties by Parliament. Then it is made a matter of serious complaint, and this Budget is to be opposed because my right hon. Friend the Chancellor of the Exchequer in introducing it did not enter into what is called prospective finance, and attempt to sketch the destinies of the country for a course of years; and therefore it is said the provision made for the current 12 months is to be rejected or impeded. What is the history of prospective finance? I speak feelingly, because, under peculiar circumstances, I have tried my hand at it. There have been but two occasions of prospective finance in our generation, so far as I know. One of them was in 1842, when the income tax was imposed, and when Sir Robert Peel pointed out that probably it might be in the power of Parliament, after the lapse of a short term of years, to remit it, and when a hope was created in the public mind that the remission might take place. The revenue grew and prospered under the influence of the abundance of income and solidity of credit produced by the income tax; but when the time came the tax was not remitted, and the prospective portion of Sir Robert Peel's finance was therefore entirely baffled and defeated. In the same way, in 1853, I ventured to sketch out the possibility of the income tax being dispensed with at a certain date; but when the time came, in 1860, we had had the Crimean War, with great changes in the scale of our expenditure, and great changes in the whole views of Parliament with respect to it, and it was totally impossible to act on the policy regarded as reasonable in 1853. These references to precedent, therefore, cannot afford warrant or justification for attempting to force the Government into a declaration of prospective finance—so far as they go they are rather in the nature of warnings and admonitions of what should be avoided. It has been said the Estimates are over-sanguine, and that we can never get the revenue which the Chancellor of the Exchequer has been told to anticipate. It is curious to trace the course of criticism upon Estimates in this House. I do not wonder at it when it proceeds from independent Members; but I feel surprised when it proceeds from Gentlemen who have themselves been in office. And I must add that within my recollection the right hon. Member for Buckinghamshire (Mr. Disraeli) has never indulged in it; because he knows perfectly well that although the Government are responsible for the Estimates, they are formed upon the advice of the permanent Civil Servants of the Crown, and are formed upon certain advice and upon certain fixed rules which are the result of practical experience. I do not think anything could be more unsatisfactory than that the Estimates should be framed in accordance with any particular set of political feelings or prejudices. The Estimates are framed upon a permanent basis, and it is a little hard upon those who are not in any way to blame when this licence of criticism is indulged in and they are treated as being the mere creatures of the brain of the Chancellor of the Exchequer or of the Administration of the day. I do not presume to speculate upon the future of the revenue of this country; but I would venture to point out these things respecting the relation which the estimate of my right hon. Friend bears to the expenditure. My right hon. Friend has been so happy as this—that in every year of the present Government except 1870, when the Franco-German War, breaking out in July and August, caused great alteration in the scale of our expenditure, he has been so happy as to see the expenditure at the close of the year less by many hundreds of thousands of pounds than in the Estimates originally presented. That is a good test of the prudence of a Chancellor of the Exchequer; because while one fundamental maxim of good finance is to keep your expenditure as moderate as you can, another is to keep your estimate of expenditure as high as you can in proportion to what it will be. But it has been said that we are by the present Budget preparing the means of escape from our pledges with respect to local taxation by giving away beforehand a revenue out of which claims for the relief of local burdens are to be met. I contend, however, that there is not a shadow of foundation for this statement, and I will venture in a very few words to show you how I am justified in saying this. I will make even the most unfavourable supposition with regard to the payment of the Alabama Claims, and I will suppose that out of this year's revenue we shall be unable to pay more than the £1,600,000, or one half. As the hon. Member for Brighton (Mr. White) very justly observed, we have in this country a very large increment of revenue. It would not be safe to reckon upon it as a basis of your Estimates in a particular year; but, taking one year with another, and without presuming any change in the taxes, from that source there is an annual increment exceeding £1,500,000 a-year. My right hon. Friend the Chancellor of the Exchequer has taken no credit for that annual increment. His revenue for the year 1872–73—I set aside those services which do not proceed from taxes, such as income arising from the Miscellaneous, Post Office, Telegraph Services, and Crown Lands—is £66,102,000, after deducting £500,000 which belonged to the income tax since remitted; and his estimate for 1873–4 is as nearly as possible the same—£66,118,000. He has, therefore, taken no credit for this increment. But now we are dealing not with one year, but with two. We are dealing with the increment of this year plus the increment of next year; and therefore you might fairly reckon upon this even under the most unfavourable supposition—that we should find ourselves unable to pay off the Alabama Claims this year, and that Parliament was unable to find the money from other sources necessary to discharge its honourable engagements, or to meet claims which might fairly and justly be made upon it. There is one other consideration which induces me to look with greater confidence to the present upward movement of the revenue than at any former time, and that is the large and considerable increase that is now gradually taking place in the wages of the mass of the labouring population. Whatever you add to the wages of the mass of the labouring population will yield in its expenditure a larger percentage to the Exchequer of the country than those profits which go into the chest of the capitalist. I will not say that I take the sanguine view taken by the right hon. Gentleman with regard to the present state of the entire labouring population, but we know that this ad- vance has extended even to the agricultural labourers in almost every county in England; and. in augmenting the wages of the class to which he and others similarly placed belong I am persuaded we have opened a source of considerable, permanent, and steady increase to the revenue. I wish, however, to deal with perfect explicitness in respect to what has been stated and felt with respect to local taxation, for the right hon. Gentleman who has just sat down used this strange and singular expression—that nothing whatever is being done by the Government with regard to local taxation. The hon. Baronet the Member for South Devon (Sir Massey Lopes) has found it necessary to state that we have treated with contempt the Resolution at which the House arrived last year. He says we have inflicted upon those who passed that Resolution, and upon those on whose behalf it was passed, injury and injustice; and if he were not the mildest man in the world he should state that they had added to that injury and injustice insult also. The hon. Baronet knows that nothing is more easy than to use such language and to retort it. I shall carefully avoid any language of the kind; but I will venture humbly to state my own view, and I, assert that, instead of being rebellious as towards the hon. Baronet, we have been his obedient servants in all respects but one. We have been his obedient servants in this respect. We have undertaken, in deference to the feelings of the House of Commons and of the country, to deal with the entire range of a question which, in our opinion, involves many considerations which have not been sufficiently or maturely weighed by those who are the main agents in promoting the movement. We have, however, undertaken to do that, and the first indication of it was in the proceedings of my right hon. Friend now the First Lord of the Admiralty. When my right hon. Friend introduced his Bill in 1871 we were deeply impressed with the difficulties of the question; but the enormous mass of that Bill, which it was impossible to proceed to dissect and to deal with, and the view, though not an unfavourable view, so taken of that Bill, even raised and heightened our estimate of those difficulties. But when the House thought fit to accede to the Resolution to which we wore no parties, we, nevertheless, determined to meet it to the utmost of our power, and we promised to deal with the entire question of local taxation. The hon. Baronet has never dealt with the entire question of local taxation. There are two modes of dealing with the question. One is the mode described by Sir Robert Peel in former years as "the vulgar expedient of drawing a draft on the Consolidated Fund" and doing nothing else. Now I think the right hon. Gentleman the Member for Buckinghamshire must have had a strong vein of sympathy with that declaration of Sir Robert Peel; because in his speech at the commencement of the present Session he referred to the rhetoric of the Parliamentary Recess, and he combined together as the schemes which had been proposed in the exercise of that rhetoric schemes to settle the great question of local taxation, which generally end in the novelty of the expense being defrayed in Downing Street. He then went on to describe other schemes in the same category, ending with schemes for Government taking all the railways, and I suppose, if it were necessary, working all the collieries. Now, we have refused to approach the question of local taxation from that exclusive point of view. In that respect we cannot obey the hon. Baronet, and I am afraid that the hon. Baronet, like other successful generals and great rulers, is not content with a limited sway over the Government which he is leading in the rear of his triumphal car, and that nothing but an absolute and unequivocal submission both as to the thing to be done and the manner of doing it will satisfy the hon. Baronet. I know perfectly well, and I do not attempt to escape from, the force of the terms of the Resolution of last year. Relief to local burdens was the essence of that Resolution, and relief to local burdens is not to be had without—in the first instance, at least—in some way or other, applying to the Imperial Exchequer. But we contend that if there is to be relief to local burdens, there must be a comprehensive reform of local taxation. What is this great question of local taxation? My right hon. Friend the First Lord of the Admiralty endeavoured to comprise it in a single Bill; but it is in truth a Code—it is a great range and m ass. It is a system and scheme of Government rather than a thing to be described as capable of being dealt with by a single Bill. I have no doubt the hon. Baronet would deal with it by a single Bill. Nothing is easier than to pass a Bill providing for the payment of sums, be they large or small, out of the Consolidated Fund, and leaving everything else in the inefficiency and confusion in which it now exists, weakening all inducements to economy, strengthening all inducements to centralization, and leaving the valuable old English principles of local government without a care or a thought. In our opinion, it is the absolute duty of a Government which has pledged itself to deal with this subject to begin by an endeavour to reform local taxation as it exists. Had it not been for the Motion of the hon. Gentleman the Member for Westminster, at this very moment the plans of the Government in this respect would have been laid upon the Table of the House of Commons by my right hon. Friend (Mr. Stansfeld). That reform is the first, the indispensable, and probably the most difficult and complex of all the portions of the question of local taxation; and great progress would have been achieved by the House of Commons if, during the remainder of the present Session, it should be able to dispose of it in a satisfactory manner. But it will be impossible, after that reform, not to consider the question of local government. The hon. Baronet knows very well that the settlement and determination, in one shape or another, of large and considerable questions as to the mode in which the payers of local burdens are to be governed and represented in respect to local taxation, and the whole of the application and consolidation of a good system of management, both with regard to areas and the constitution and composition of those bodies, are involved in the question of local government. Then in the rear of these two questions—as I at once admit to the hon. Baronet—there comes the question of what is called relief—that is to say, pecuniary relief—to local burdens. But the House of Commons must know that even in regard to that which we propose to deal with this year—namely, the abolition of exemptions—there is involved a partial, but still not inconsiderable question of relief to local burdens from the Imperial Exchequer through the abolition of ex- emptions and the placing of Government property throughout the country, according to fixed and certain principles, under liability to the rates. This third question is the one which has apparently attracted the exclusive care and attachment of the hon. Baronet. We shall not refuse to approach it. Indeed, we shall not lose time in our endeavours to approach it. We have carefully avoided doing anything in our financial proposals which could by any possibility compromise or impair the power of the House of Commons to approach it. But it is a question of the greatest importance, which may, perhaps, be found to involve the necessity of reviewing a great deal of what we have already done in rather a slovenly and off-hand manner, as well as of providing fresh means and resources for the future, and the mode in which the question of relief to local burdens from central sources is to be applied involves all those difficult and vital questions which my hon. Friend the junior Member for Brighton (Mr. Fawcett) referred to with so much force on Monday night, and in regard to which I venture to assure him that, although we are most anxious to obey as far as we can the desire of Parliament, yet we will do nothing that shall tend, in our judgment, to compromise either the principles of economy or those sound rules of independent local government which are so closely, in our opinion, associated with the whole spirit of the institutions of this country. I have now gone through all these questions, but they do not include the whole subject of local government. I have spoken freely and in such a manner as will, I hope, be intelligible to my hon. Friend the Member for Mid Lincolnshire (Colonel Amcotts), and I will say that we shall not shrink from making proposals—when we find that in the proper order of things we are able to approach them—to give effect to the views of Parliament, for the relief of the occupiers who bear the burden of local rates. But is that the whole question? Are there no parties concerned except the occupiers? What is the position of the owners of real property? Are they suffering from the present position of local burdens? I have not heard that allegation boldly made or argumentatively sustained. We admit the hardships to the occupier; but am I to say that the owners of property in the metropolis, for example, are sufferers from local burdens? Take first the case of the metropolis and the towns. These local burdens, in their direct operation, go to increase the value of the property of these owners. Of that increment of value they do not contribute a single farthing, and the whole effect of that increment will be felt when their leases are again adjusted, and when their property will receive a distinct and positive increase of value. Are they to receive first benefit from the exaction of these rates which they do not pay; and next the benefit which is to arise from national funds given in alleviation of those rates, which are to form a double source of addition to their income? I have explicitly explained to the hon. Gentleman to his face and freely the question of relief of local burdens as far as the occupier is concerned, and it will also be part of the duty of any Government which approaches this question to consider what changes are to be brought about in the position of owners, and not to allow themselves, under the pretext of relieving the occupier, which taken at the best can only be a temporary relief, to make a vast present and gift out of the national resources to the owners of the real property of the country. Although this is a very slight sketch, it may serve to show the difficulty, the number, and the gravity of those questions which are included in the brief formula which is so glibly uttered—the reform of local taxation. What is to be said as to the meaning of the Motion before us? It says— Before deciding on the further reduction of indirect taxation, it is desirable that the House should be put in possession of the views of the Government with reference to the maintenance and the adjustment of direct taxation, both imperial and local. I do not know, I confess, how to construe that language. The utmost I can do is to paraphrase it—to give a paraphrase of it which is intended to embody the sense of the debate. The meaning of it is this—That £1,500,000 of the surplus of 1873–4 ought to be held in hand or impounded by the Government in order to meet the possible want that is hanging over us, and which is not included in the Budget of the Government. There is no doubt that is the first proposition. The second proposition is that this £1,500,000 should not be the £1,500,000 which is going to be taken off the income tax, but that it ought to be the £1,500,000 about to be given for the reduction of the sugar duties. I have shown, with regard to the first of these propositions, that it is impossible, if you really intend to reform the local taxation, to deal with the pecuniary part of that question in the present year. It does not signify what Government may be in power. The reform of local taxation is an essential preliminary. It is absolutely necessary to know what is really and justly to be had, after the abolition of exemptions, from the sources which will be opened under a more regular system; and, therefore, as far as the financial operation of the present year is concerned, there is no question between us. It is a possible want of 1874–5 for which this money is to be held in hand. We contend that there is not only no necessity but no warrant, and no plea for refusing the people that justice which we have ever yielded in granting a remission of taxation from year to year, when the state of the revenue will allow, in consequence of apprehensions of what is to arrive at a future time, and which no one believes we shall have the least difficulty in meeting. But the other question is more serious, and those who have listened to the speech of the right hon. Gentleman the Member for Buckinghamshire must have perceived the difficulty with which he faced it. The meaning of the proposition is not that £1,500,000 is to be reserved, but that the £1,500,000 to be reserved is not to be that which is allotted for the reduction of the income tax, but is to be the £1,500,000 to be applied for reducing the moiety of the sugar duties. My right hon. Friend the Chancellor of the Exchequer has unwittingly and unfortunately given great offence to the right hon. Gentleman opposite. The noble Lord the Member for Middlesex (Lord George Hamilton) is perfectly scandalized that my right hon. Friend should have shown any sort of sympathy for the poor man. He finds it convenient himself to go about the county of Middlesex and preside at meetings in favour of the poor man.

LORD GEORGE HAMILTON

I said that the right hon. Gentleman had taken up too late in life the part of the poor man's friend.

MR. GLADSTONE

And a most extraordinary and inhuman doctrine that is. Foremost from his cradle the noble Lord has been the advocate of unbounded philanthropy and humanitarian ideas, and he presides over meetings of his constituents in every quarter of the metropolis for the purpose of placing himself in most favourable relations with them. [Opposition cheers.] I am very glad to be cheered. I am corn-mending, the noble Lord; but he is so jealous of his own virtue that he resents the intrusion of any of us as competitors who may have been less fortunate and less favoured in our earlier years. He absolutely proposes at his early time of life to shut the door of repentance upon us, although we are anxious to amend, and says—"You have no right to enter, and to take the bloom off my monopoly of virtue." That is not a fair method of proceeding. At any rate, this is the state of the case. Without questioning one another's motives, or one another's titles, I have no doubt we all have the best possible intentions towards the poor as well as the rich. I am not, however, speaking of intentions, but of acts, and while studiously avoiding every imputation, I cannot help saying that the demand made by the Motion is practically this—that we should allow the reduction of the income tax, but that we should arrest the remission of half the sugar duties; and that is a claim in effect that this large remission of taxation is to be given rather to property than to labour. I did not hear my right hon. Friend employ the one-sided language attributed to him. He did not say that all indirect taxation was paid by the poor man and all direct taxation by the rich man. That would be a great exaggeration. But, Sir, I do most seriously make an appeal to hon. Gentlemen opposite to consider the position in which they place themselves by this Motion. The right hon. Gentleman (Mr. Disraeli) says he will not shrink from a Division if there be occasion for it. Most certainly, Sir, we have not the smallest disposition to shrink from a Division. But, Sir, I shall be very sorry to see any portion—and especially any considerable portion—of this House give the vote which it appears they are to be invited to give this night, the effect of which would be to say that whenever there is a large sum of money—over £3,000,000— available for the remission of taxation, they shall demand—upon what plea I care not—that the whole of that remission shall be disposed of in the modes which will make it available rather for the benefit of property than for the relief of labour. ["No!"] I do not think I have made an immoderate statement. I have studiously avoided everything like extreme propositions. That I shall show, and I think I shall obtain the assent of the House to what I state. Sir, we have heard strange doctrines in the course of this debate. With respect to the condition of the labouring classes, we heard the right hon. Baronet the Member for North Devon (Sir Stafford Northcote) lay down what appeared to be a singular proposition when he said—I think it must have been through verbal inadvertence—that there was as much suffering above the line of the income tax as below it. That is a proposition totally impossible to be maintained. There may be as true suffering above that line as below it. There may be individuals above the line of the income tax who suffer as much as individuals below it. These are, however, individuals and not masses. Speaking of the masses, the wealth of the country is above that line, the poverty of the country is below it. But that is not all. We had, Sir, an effusion to-night from another right hon. Gentleman, who spoke with great deliberation—the Member for Shoreham (Mr. Stephen Cave)—and he described the condition of the labouring classes of this country. He said—and I was astonished to hear his words—I hope he will see occasion yet to retract them—that recent events showed that the wage-earning classes of this country—he made no exceptions—work they never so irregularly and never so inefficiently, have a superfluity, and I object, he said, to this reduction or remission of the sugar duties because it goes to increase this superfluity. Well, this is the first time I have heard—and I trust it will be the last I shall hear—a Member of Parliament, in the position which Members of Parliament occupy, lay down in what I may call cold blood the abstract proposition that the labouring population of this country as a whole had more than they needed, and that the remission of indirect taxation must be stopped or suspended because it would go to increase their super- fluity. ["No, no!"] If it is the right hon. Gentleman who says "No!" I am quite ready to accept it. I do not say, like the noble Lord (Lord George Hamilton), that he should have no opportunity of repentance, or that we should not welcome him back again, but this I say—that I was sorry to hear the words I have quoted. No such words fell from the right hon. Gentleman the Member for Buckinghamshire. But, Sir, it has been denied by some and obscurely seen by others that my right hon. Friend the Chancellor of the Exchequer is profoundly true in the main proposition he lays down—the main proposition which until this debate I thought was admitted by both political parties, and carried beyond the sphere of controversy—namely, that the burden of direct taxation does fall almost entirely—at all events, in an enormous proportion—upon the wealthy classes, and that the burden of indirect taxation falls in a very large proportion upon the labouring classes. Now, is that true or is it not? It is of vital consequence to the issue to be decided. I do not like at this hour of the night to quote authorities; but here are three lines from Mr. John Stuart Mill in support of this truism. He says— That the coffee, sugar, tobacco, and fermented liquors can hardly be so taxed that the poor shall not pay more than their fair share of the burden. And again he says— It is thought a necessity to levy some fixed duty over all alike, and that this is a flagrant injustice to the poorer classes of contributors, unless it is compensated by the levying of other taxes. But the right hon. Gentleman has himself admitted quite enough for my purpose, and therefore I proceed, as some hon. Gentlemen opposite think I have taken an undue liberty in venturing to warn them against the assumption involved in this most dangerous Resolution—dangerous to those who support it, most satisfactory to those who renounce it—to establish the proposition, even within moderate limits, that indirect taxation is that in which the working classes are most profoundly interested, and that direct taxation is that the burden of which falls upon the wealthy classes. Now, there is a sum of over £3,000,000 to distribute, and for it there are three claimants. First, there is the income tax payer. I strike out the labouring class altogether from that class, not that it does not contain many of them, but that the proportion is so small relatively that I need not take it into account. And therefore I take the remission of 1d. from the income tax as given to the property of the country. It is between the next claimants the controversy lies, because we propose the remission of the income tax very much in relief of that class with which the right hon. Gentleman desires to sympathize—namely, the lower middle class, upon which it weighs heaviest. We propose two great remissions—a remission of 1d. income tax, from which they will derive most conspicuous benefit, and reduction of the sugar duties, in which likewise they have a direct, substantial, and important interest. But what shall we say as to these two cases? The right hon. Gentleman admitted that as far as sugar was concerned—I register this admission, and I believe it is considerably within the mark—the labouring class pay one-half the duty. Now, the competitor of the sugar duty is local taxation, and let us examine the influence of the two propositions upon the labouring class, for I have shown already that we have made a concession to the wealthy in reducing the income tax, and that, therefore, a large share of remission ought to be given also to the labouring class. How much does the working-man pay of the local burdens of the country? The right hon. Gentleman acknowledges the authority of Professor Leone Levi, who places the payment of the working classes towards direct taxation at what I think the high figure of one-sixth, but who places it at 16 per cent with regard to local burdens; whereas it is at 50 per cent according to the right hon. Gentleman. So that when we have £3,000,000 to give away, we first give £1,500,000 entirely to property, and then, in regard to the other £1,500,000, when two claims are before us—one respecting which the labouring population are interested to the extent of one-sixth, and another in which they are interested to the extent of one-half—we are to reject the latter and choose the one-sixth. I will now meet the right hon. Gentleman on his own figures, and will show what is the proposition which he invites the Gentlemen behind him in serried phalanx to support. He says the local burdens amount to £25,000,000. Now, 1 o'clock in the morning is not the time to unravel the multitude of fallacies involved in that statement—by showing the Government grants, harbour dues, market tolls, gas, and water rates, &c., which figure as local burdens, but which are really payments for commodities of life which go to swell the unfortunately lean figure of fiscal burdens into respectable dimensions. I never before did such violence to my sense of truth, accuracy, and reason; but I will accept the £25,000,000 of the right hon. Gentleman, portentously though it is beyond the mark. I will also accept what I believe to be also an enormous exaggeration. Not satisfied with the one-sixth which Professor Leone Levi gives as the proportion contributed by the labouring classes, the right hon. Gentleman says they contribute £5,000,000 of the local burdens. Again reserving my own honour and conscience for other occasions, and without prejudice to future discussions, I will accept this gigantic and colossal statement, though I believe £3,000,000 would be considerably in excess of the truth. My object is to make an appeal to the right hon. Gentleman. He has made an appeal to me and says that he does not want to divide. I want to make an appeal to him, to show he ought not to divide. £25,000,000, he says, is the sum total of local burdens, £5,000,000 of which is paid by the labouring classes. What is the amount of relief to be given? £1,500,000. That amount is to be applied to the reduction of £25,000,000, a proportion of 6 per cent. Now, £1,500,000 upon £25,000,000 obviously gives £300,000 upon £5,000,000. Therefore, £300,000 is the sum which, according to the right hon. Gentleman, is the measure of the benefit which the labouring classes are to derive from the remission of local taxation; whereas according to his own admission the working classes contribute £750,000 to the £1,500,000 which we purpose to remit of the sugar duty. So that he would cut down the £750,000 of which we propose to relieve them to £300,000, in behalf of the classes possessed of property, to whom we have already given £1,500,000. I hope Gentlemen opposite will believe I am using the language of seriousness and truth when I express the grief with which we shall see any considerable portion of the House committing themselves, at this time of day, to a Resolution which contemplates results such as these. Let me point out an ineffaceable distinction between the labouring and wealthy classes, a distinction to which I do not advert invidiously, for I believe it to be inevitable. At the present moment, the luxuries of the wealthy are almost free from taxation—their houses, gardens, establishments, horses, carriages, jewels, dresses, are very slightly taxed in some instances, and altogether free in others. I believe that results from the working of sound principles; but, as a matter of fact, the luxuries of the wealthy are and must continue to be lightly taxed, or not taxed at all. What is the case of the luxuries of the poor? The luxuries of the poor are, as my right hon. Friend the Member for North Devon (Sir Stafford Northcote) says, spirits, beer, and tobacco. Well, the luxuries of the wealthy are lightly taxed; the luxuries of the poor are and must remain heavily taxed. I want to know what there is affecting the luxuries of the wealthy man like the tax which the poor man pays on the spirits he consumes. There is nothing like it, and there can be nothing like it. But I go further, and I say that these luxuries of the poor man must continue to be heavily taxed. We have really seen such wonders brought about by the progress of industry and of commerce that I cannot say what is impossible; but still it seems rational to believe that this system of taxing distilled and fermented liquors and tobacco, which yield £30,000,000 of your revenue, must continue to be heavily taxed, while the luxuries of the wealthy must continue to be comparatively free. With regard to malt, I must own there are great difficulties inherent in the case of malt, and. among them there is this one—that those who recommend our dealing with it recommend it at a time when there is no possibility of our doing so. They always let the opportunity go by. Why is it that when 2d. or 1d. is proposed by my right hon. Friend to be taken off the income tax, those who are constantly telling us that the reduction or repeal of the malt tax would be beneficial to the health of the country do not bring forward their proposals? Is it that they recollect the rage that exists against the income tax? If the malt tax can be reduced I, for one, shall be extremely glad. But come what may, those luxuries of the poor man must always be subject to very considerable taxation. I would point this out as my result—and I regret having spent so many minutes in laying the ground for it—that in this state of circumstances, while it remains necessary to tax heavily the luxuries of the labouring classes, if you are to say to them, "We will not, when there is an opportunity, relieve sugar and tea," it is equivalent to telling them, "You shall have no remission at all." I will only say I hope—indeed, I feel assured—the House of Commons will not adopt a Resolution of this kind. If I were even to appeal to the selfish motives of hon. Members opposite, the representatives of towns, I fancy some of them would think twice before following the hon. Member for Westminster into the lobby. On the malt tax I have pointed out the effect of the Resolution. But do not let it be said that my right hon. Friend the Chancellor of the Exchequer has been setting class against class. That is the old story. It was said in the time of the struggle for the repeal of the Corn Laws that those who sought their repeal were setting class against class. In the struggle for the extension of the franchise, those who sought to enlarge the constituencies were habitually charged with setting class against class. I would not willingly say one word to set class against class; but if there be in this discussion any setting of class against class, the real culprits, I am afraid, are not those who wish to follow the line of precedent in dividing remissions between class and class, but those who insist on monopolizing those remissions, if not exclusively, yet in an unduly high degree, for those portions of the community which are already unusually blessed with the good things of this life. I feel confident that the House, rejecting the Resolution of the hon. Gentleman, if he thinks it necessary to put it to a vote, will discharge its duty, will be at once obeying the dictates of justice, adopting the suggestions of sound policy, and following a course which will tend to secure the contentment and advantage of the country.

Question put, and agreed to.

Main Question put, and agreed to.

Resolutions read a second time, and agreed to.