§ WAYS AND MEANS—considered in Committee.
§ (In the Committee.)
§
Motion made, and Question proposed,
That, towards raising the Supply granted to Her Majesty, the Duties of Customs now
1870
charged on Tea shall continue to be levied and charged on and after the first day of August, one thousand eight hundred and eighty-three, until the first day of August, one thousand eight hundred and eighty-four, on importation into Great Britain or Ireland (that is to say): on
| £ | s. | d. | ||
| Tea | the lb. | 0 | 0 | 6." |
§ MR. W. H. SMITHI had hoped, Sir, that some hon. Member would have risen before it became necessary for me to say a few words in reference to the interesting and exceedingly able statement of the right hon. Gentleman the Chancellor of the Exchequer on Thursday last. I do not think I shall be misrepresenting the character of that statement, if I also say that it was a controversial statement. It must be admitted that this is the case, even allowing that the right hon. Gentleman might not have intended it to be controversial. It would be impossible for me to attempt to follow the right hon. Gentleman through all the details referred to in his long and interesting speech. I am the less disposed to do so, because I have no doubt that I shall be followed on this occasion by several right hon. and hon. Members, who will deal more ably than I am prepared to do with some very important questions which the right hon. Gentleman has raised, and because, for my own part, I prefer to grapple with a subject with which I am familiar, rather than with complicated and intricate matters with which I am only partially acquainted. I would merely venture to make one observation with regard to the unexpected increase in the Revenue, which the right hon. Gentleman has himself said he had not anticipated, and which took place shortly before the close of the financial year. He told us that it exceeded the expectations he gave us reason to expect would be realized by the Revenue of the year, some three weeks or a month ago, by a very large sum indeed; and I cannot refrain from asking the right hon. Gentleman whether there has been, in any degree, the slightest anticipation of Revenue? I am sure that the right hon. Gentleman will understand that I do not desire to impute irregularities in the conduct of public affairs to him; but there is no doubt that there is a ready zeal on the part of public officers to serve their superiors, which might influence the amount of the Revenue for the time 1871 being; and I could not help remarking that, in one part of the right hon. Gentleman's speech, he referred to the improved arrangements in existence, principally in the Stamp Office, in the Legacy Department, and in the Inland Revenue Board, which have resulted in the realization of the Revenue somewhat more rapidly than had been anticipated; and that realization of a portion of the increase was attributed, I think, by the right hon. Gentleman himself to the greater activity and the greater zeal of the officers. The right hon. Gentleman has also referred to the fact that the Income Tax had realized a larger sum than was anticipated from it. A question was asked to-night by my noble Friend the Member for Middlesex (Lord George Hamilton), which pointed in some degree to one of the causes which may have contributed to the increase of yield from that tax. I think no one' acquainted with the course of trade in this country last year, or who is connected with agriculture, will be prepared to deny that, instead of an increase in the yield of Income Tax, we might reasonably have expected that there would have been a large diminution. I am speaking now—although in a thin House—to some hon. Members who are considered high authorities upon questions relating to trade, and I think they will agree with mo that profits have been lower in the past year on the ordinary trade of the country than almost in any previous year; and, certainly, the farming interest has been far from prosperous. It is, therefore, not unreasonable that I should express some surprise at the excess, amounting to a sum of £238,000, which the right hon. Gentleman mentioned as having been realized from the Income Tax. There is another point on which I am anxious to ask a question, and that is, whether the balances which exist in the Public Departments remain substantially at the figure at which they stood last year, and at which they have stood for a great many years? There, again, I think the right hon. Gentleman will see that that zeal and faithfulness—for I will say nothing more than that—in the discharge of the duties which are attached to the great Public Departments, might result in the shrinking of balances which, as the right hon. Gentleman knows, if included in the taxation of the present year, must be taken in diminu- 1872 tion of the taxation of next year. I believe that the balances stood at something like £1,700,000 in 1880; close upon the same figure in 1881; and at £1,670,000 on the 31st of March, 1882. The right hon. Gentleman has referred to the decrease of the spirit duties, extending over a long period of time; and he said there was substantially no adequate compensation for that decrease to be found in the additional yield on other taxes. I admit that there is no compensation, or no adequate compensation, to be found in the yield on other taxes, so far as I can see, with one single exception. The right hon. Gentleman showed that there has been an increase of £500,000 in the yield of the Tea Duty daring the last three years. There is reason to believe that in addition to the increase of the Tea Duty other sources may also have contributed, in some degree, to replace the large falling-off in the Spirit Duties, although I do not say that it at all approaches the falling-off of £5,000,000, which maybe taken as the standard of the consumption 10 years ago, and which ought to be the consumption now realized, if we take into account the increase of the population. But if £500,000 has been realized as an increase on the article of tea alone, I think it is probable that some other taxable articles, and even the Income Tax itself, may have been benefited by the better, the more frugal, and the more sober habits of the people. The right hon. Gentleman, in the course of his speech, spoke of the expenditure on the several Services; and there, Sir, I would remark that the Chancellor of the Exchequer this year has departed from the practice, which I believe has been up to this year always adhered to by previous Chancellors of the Exchequer—namely, the practice of comparing the Estimates of the present with those of the past year. [The CHANCELLOR of the EXCHEQUER: I did that.] My right hon. Friend did not compare the Estimates. He entered into a comparison, no doubt, with the Exchequer issues, and with the gross Estimates; but he did not compare like with like, which has often been insisted upon by the Prime Minister a the standard and the view which every financial officer ought carefully to keep in mind. Now, I find that the right hon. Gentleman said that the Supply Services cost so much. The charge for 1873 the Army was £15,502,000; for the Navy the charge was £10,409,000. The charge for the War in Egypt stood at £3,896,000; the charge for the Civil Service at £17,350,000; for the Customs and Inland Revenue, £2,870,000; for the Post Office, £3,828,000; for the Telegraph Service, £1,510,000; and for the Packet Service, £720,000. Now, I wish to draw attention to this fact—that these figures, which the right hon. Gentleman referred to, were not the figures stated by the Prime Minister, who was Chancellor of the Exchequer at this time last year. There have been Supplementary Estimates for the year 1882–3 since March last year. There will be, to some extent, Supplementary Estimates for the year 1883–4. I hope they may not be large. Therefore, it is necessary that we should compare the Estimates of March and April this year with the Estimates submitted to Parliament in March and April, 1882. In the absence of any comparison on the part of the Chancellor of the Exchequer, I will venture to compare these Estimates myself, because I think that the impression which has been produced is not a perfectly accurate one. The impression created is, that the amount of the increase of the Expenditure is not so great as it really is; and the impression also created is, that our financial position, as far as Expenditure is concerned, is really much more satisfactory than undoubtedly I consider it to be. The gross Estimate for the Army for last year, 1882–3, was £17,726,828; and the gross Estimate for the Army this year is £18,291,766. The gross Estimate for the Navy last year was £10,724,789; the gross Estimate this year is £11,077,163. That is to say, that the actual charge, exclusive of the extra receipts which in one way or other are to be taken in diminution of the gross charge included in it, was, for the Estimates of last year, £15,458,000 for the Army, as against £15,600,000 this year, showing an increase, in round numbers, of £150,000. for the Navy, the Estimate was £10,483,000 last year, whereas the Estimate this year is £10,757,000, showing an increase of £274,000. But when we come to the Civil Service Estimates, the addition is even still more serious, because we come then to deal with that which I am afraid, when it is once increased, can 1874 never be reduced, or rather, if it can be reduced, there is very great difficulty in bringing about a reduction. The difficulty of reducing the Civil Service Expenditure is very well known to the right hon. Gentleman himself; and I am sure he will agree with me when I say the difficulty is infinitely greater in dealing with these Services than with the increase of expenditure either of the Army or of the Navy. It is great enough there; but if you have created or increased establishments and entered upon a particular course of policy, you will find it very difficult, if you wish to change that policy, to discharge the men that you have engaged. The result is that in such cases you would incur a loss so serious and so considerable that, in point of fact, no Government attempts to face the difficulty. Now, what is the first Estimate of the Civil Services? Last year the first Estimate was £16,502,789; whereas this year it is £17,253,004, showing an increase in the Civil Services of £750,000. Well, Sir, the Revenue Services also show an increase; but, no doubt, I shall be met by the statement that the Revenue Services—the Post Office and the Telegraph returns—show an ample profit upon the increased expenditure. I hope that will be the case; but we have the admission of the Prime Minister himself that, during the last two years, there has been a decrease in the relative proportions of profit upon the Post Office and Telegraph Expenditure, and that decrease is a very alarming one in the case of a Government carrying on trade, because it is nothing but trade. In 1882–3, the Estimates were £8,790,000; whereas, in 1883–4, they were£9,155,000, and this is altogether exclusive of the proposed expenditure upon the Parcels Post. It is a simple expenditure for the ordinary service of the Revenue Departments; and, notwithstanding the profit from the Post Office and the Telegraphs during the past year, I think these figures are larger and more considerable, and that they show a more rapid advance than was ever shown at any period in the history of the Post Office or of any administration. Now, Sir, what do the gross figures show? They show this—that the money to be paid for the Civil and Military Services in 1883–4, no matter how it is obtained, amounts to £55,777,000 in the gross; whereas last year it only amounted to 1875 £53,744,000, showing an increase of upwards of £2,000,000. I again take the gross, because I wish to take into account the whole cost of the Service from whatever source the contribution may be obtained, whether we get it from Egypt, or whether we get it from India—for it must be remembered that a larger amount is to come in this year from India towards the cost of the Army—or whether we get it from selling old ships. What I contend is that the cost of these Services amounts to the figure I have stated, and that figure is £2,000,000 more than it was this time last year. The right hon. Gentleman has displayed great ingenuity in dealing with the figures, and I have no desire to cast the slightest suspicion upon any statement he has made. I only wish to show that there is another view of these Estimates, and that which I consider to be the most straightforward view. It does not matter, in my opinion, how the charge is met, or from what source it is obtained; the only question is, what does a thing cost? If a Revenue is obtained, that Revenue is the property of the public as completely as the taxes taken out of the pockets of the public. But what is the cost of the Services? I can show that the cost has increased during the year for precisely the same things; and although there may have been more men in the Army, or more tons of shipping built, the cost of government is £2,000,000 more than it was at this time last year. I have, to-night, to say a word or two with reference to the charges which the right hon. Gentleman brought against the late Administration in respect to their expenditure. When the present Government came into Office the Estimates on account of the cost of building additional ironclads and re-plating others rose to £25,000,000 in 1882–3, and this year they stand at £26,250,000. Here, again, I complain that the right hon. Gentleman has not compared like with like. In speaking of £26,500,000, he has forgotten, or it has slipped his memory, that the figures in the Return for 1881–2 do not compare with the net figures in the Return for 1880–1. To compare them rightly, there are extra receipts which ought to be added to the charge this year. These extra receipts were taken by the Treasury up to 1881. [The CHANCELLOR of 1876 the EXCHEQUER (Mr. Childers): They are added.] If that is so, I beg the right hon. Gentleman's pardon, and I will withdraw the remark, and proceed with my observations in regard to other parts of the statement of the right hon. Gentleman. He said that the present Government, when they took Office in 1880, complained of the arrears in regard to the building of armoured ships; that a rule had been laid down to build 12,000 tons per annum; and that, although that had occasionally been done by the Government of Lord Beaconsfield, in 1877–8 the Estimates only provided for 9,226; in 1878–9 for 9,849; and in 1879–80 for 6,555 tons. It is satisfactory to be able to refer to a Return presented by my hon. Friend the Secretary to the Admiralty (No. 273, of last year) of the actual shipbuilding accomplished by the Governments to which reference has been made; and let mo ask how the "rule" to which the right hon. Gentleman refers compares with work done in 1871–2? In that year, during the preceding Administration of the present Prime Minister, 6,261 tons of iron-clad shipping were built in the Dockyards, and there were actually built in the Dockyards and by contract 13,920 tons. In 1872–3 the rule was observed to the extent of 6,353 tons; and in 1873–4 it was observed to the extent of 5,003 tons; so that, in the two years preceding the accession to Office of the late Government, in which years the present Government were in power, they failed to build the amount which the right hon. Gentleman now says it was the rule to build in one year. That is a valuable example of how to carry out a precept. Nothing can be more satisfactory than to lay down a rule, and nothing can be more economical than to take credit for your excellent principles, and then entirely to avoid all adherence to them. These figures are probably the lowest that have been known for the last 18 years. No such small figures appear in these Returns as the figures of 1872–3 and 1873–4, the years preceding the Administration of Lord Beaconsfield and the Naval administration of my late right hon. Friend, Mr. Ward Hunt. After that the figures began to rise; they went up to 8,457, and the number in the succeeding years were respectively 14,276 and 11,450, from which they fell to 7,113 in 1877–8, 8,429 in 1878–9, 1877 7,427 in 1879–80, and rose again to 9,235 in 1881.
§ THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)1881 was when the present Government was in Office.
§ MR. W. H. SMITHYes; but I am only anxious to show that the present Government have failed to carry out the rule which they now insist upon. These figures for 1877–8 to 1880 do not include four powerful iron-clads which the late Board of Admiralty purchased, and which, at the date of purchase, were estimated at 14,400 tons, but which now figure in The Navy List for 28,220 tons; of that the actual addition to the Navy of iron-clad ships in the three years largely exceeded the so called rule, whilst our Predecessors in 1873 and 1874 fell lamentably short of the rule which the right hon. Gentleman lays down. I did not feel myself rightly bound by any rule of the kind. What I felt I was bound to do was to endeavour to keep the Navy in the most efficient condition, so as to be ready for any emergency that might arise; and I also felt that, from time to time, it was my duty to the country and to my Colleagues, who placed confidence in me, to make such provision as I thought necessary. What I charge against the present Government, of which the right hon. Gentleman is a Member, is, that they allowed the repairs to fall into such a condition that we had very few ships to avail ourselves of. The error was not so much an error of shipbuilding, but one of repairs, and a serious arrear of repairs. The right hon. Gentleman has heard that before, and I cannot help feeling some surprise that he should again desire to raise a controversy upon a question which we had hoped had been settled some time ago, and which we had also hoped, as far as the interests of the Service were concerned, would not be frequently revived. If there is one misfortune greater than another to the Navy of this country, it is the introduction of purely Party considerations into questions which ought to be kept, as far as possible, from the domain of Party. The condition of the Army and Navy is a question of the highest importance to the country at large. It is a question which ought to be considered, as far as it is possible to do so, apart from Party considerations; and, from the very mo- 1878 ment that I became, in any degree, responsible for the conduct of affairs, either as First Lord of the Admiralty, or since in Opposition, I have endeavoured, as far as I possibly could, to abstain from giving anyone the slightest cause to say that I was endeavouring to make political capital out of the condition of the Navy, or the acts of my Predecessors, or doing anything to hamper the Executive Government in the discharge of the duties they owe to the country in maintaining a perfectly efficient Navy. But I have a Return here showing a condition of things which would be positively alarming, if it had not been checked. In 1874, on the 1st of April, the ships thoroughly fit for service were 16 iron-clads, amounting to 101,044 tons, 74,908 horse power, with a total weight of metal thrown by armament of 37,060 tons; and of unarmoured vessels there were 80,073 tons, and 72,472 horse power. On the 31st of March, 1880, there were reported fit for service 272,007 tons of armoured vessels of 195,792 horse power, with a weight of metal thrown of 111,329 tons, and of unarmoured vessels there were 122,427 tons, with 133,186 horse power. Now, I ask which of the two policies was the best in the interests of the country? Was it best that the Navy should be kept efficient for a war which might occur at any moment, or was it best that ships, which needed repair, and were inefficient and incapable of rendering service without repair, should be allowed to remain with their boilers and engines in such a condition that they would not be able to go to sea? In my judgment the late Government did their duty, and only did their duty, in keeping the ships efficient and in building to the extent which they deemed necessary. There is, I think, a danger that the policy which the right hon. Gentleman himself practised in 1869, 1870, and 1871 may be followed by the present Board of Admiralty. If I have made comments on the subject, I am sure they have not been unfriendly comments, or dictated by any Party object; and I notice that the observations which I made last year have been followed this year by such a considerable increase in the provisions for repairs, that I have reason to hope the at the expectation which the House has a right to form as to the condition of the Navy will be realized, and that the ships of 1879 the Fleet will be put into a proper state of repair. But I say distinctly that the condition of these Estimates—the fact that it is necessary to add 1,700 men to the Dockyards, and £107,000 to the amount of the Vote, in order to provide for the repairs, show that my contention was right before, and that the necessity for these repairs was very serious. I pointed out and I gave the names of the ships and the weight of the metal, and I pointed out the fact that the Fleet was lees efficient in point of numbers than it was in 1880, and that we were unable to send as many ships and as many guns to sea last year as we wore in 1880. I further pointed out that that was owing to the fact that ships were allowed to remain in harbour unrepaired, which, if intended to be repaired, ought at once to be taken in hand. My desire is to give to the present Government all the assistance I can in doing their duty. I do not wish to place the slightest obstacle in their way, nor to throw odium upon them in the performance of their duty. I think they were wrong in neglecting to do the work which ought to have been done two years ago; but they now show clearly that they intend to do that work. There was a very great arrear with regard to guns, and everybody knows there is much truth in the assertion of the right hon. Gentleman himself, that the Fleet has been less efficient in this respect than the ships of war of some other countries. [The CHANCELLOR of the EXCHEQUER, (Mr. Childers): No!] My ears certainly misled me if I did not hear the right hon. Gentleman say that for 20 years the guns of Her Majesty's Fleet had been inferior. I do not think they have been; but I must ask my right hon. Friend to say what was done during the first two years of his administration at the War Department. The right hon. Gentleman found, when he went there, that there had been great pressure put upon the War Department to supply the Navy with good, guns, and that that pressure had hitherto failed to produce satisfactory results, because, although the work was a serious one and it had been seriously undertaken, there had not been sufficient time to complete it. My right hon. and gallant Friend on my right (Colonel Stanley) first seriously undertook the work, and we were in hopes that we 1880 should soon have had efficient guns for Her Majesty's Fleet. Then the right hon. Gentleman opposite came in, and a Committee was appointed; but I think I am right in saying that there has not yet been a 43-ton gun mounted in Her Majesty's Fleet, and that no 43-ton gun has yet been delivered to the Fleet; further, that none of the large guns included in the Estimates of 1881–2 have yet been delivered, and that the only delivery yet effected has been the delivery of 6-inch guns. I hope that the right hon. Gentleman will give me a Return showing the provision made in the Estimates for 1880–1, 1881–2, and 1882–3 for new guns to Her Majesty's Fleet, showing the guns which were delivered during each of those three years; and, if he thinks it right to be positively just and fair towards the manufacturing Departments, my right hon. Friend may show the guns in course of construction, and the amount of money expended on them in the course of the financial year. I think I have a right to ask for that Return, in order to make it perfectly clear how great the pressure has been upon the War Department in the last three years, how much of the work has been done, and how much of the money which has been provided has been spent. I think it will turn out that the amount actually expended up to the 31st of March of this year is considerably less than has been provided for, so that the Navy has the credit of being a much heavier charge and burden upon the War Department and the Exchequer than it really has been. I know the right hon. Gentleman is right in saying that our guns have been, and still are, inferior to guns that may be found in the ships of other countries; and it is not right, if we have costly ships and still more valuable lives to deal with, that we should have less efficient weapons than the weapons to be found in any other Service. I am sure the right hon. Gentleman will see that he has invited an Army and Navy debate. He has invited a discussion on the whole condition of the Army, Navy, and Civil Services; and he must not complain if I occupy a few minutes in endeavouring to touch the very fringe of the subject, which, no doubt, is one which must be discussed more fully and satisfactorily when we come to the Army and Navy Estimates. I wish to 1881 say a word or two upon another question. The right hon. Gentleman made a most ingenious, a most clever, and a most able comparison as to the effect of what is called the pressure upon the taxpayer. The Return to which he drew our attention is a very interesting and a very skilful Return; but I have always thought that there is nothing so fallacious as figures, and a clever and able statistician, or a man accustomed to shuffle figures about like my right hon. Friend, can make almost any display he thinks fit with figures, when he gets them into his hand. The right hon. Gentleman comes to the conclusion that we are rather better off, and are paying a great deal less for everything than we were 10 years ago; and that, although there is a gross increase in the Expenditure, somehow or other, it comes to be less than nothing to the taxpayer. The right hon. Gentleman said the first thing we must do is to ascertain what the pressure on the taxpayers is. Now, this Return shows that the pressure is reduced to the figure which, he gives. I will not go into the particular figures which he gives, because it would only add to the complication of the matter. The main object of the right hon. Gentleman's speech Was to show that the increased pressure upon the taxpayer, if you only eliminate the great causes of increase—such, for example, as the increase in the Education Vote, and the increase in the contribution in aid of local rates—then the net result shows some diminution in the pressure on the taxpayer as compared with what it was 10 years ago. In any case, I prefer to take the Estimates as they stand. I think it is more satisfactory to take the figures which are presented to the Committee, and which we understand. The figures are for the Civil Service Estimates for the year, to which I now propose to address myself. The right hon. Gentleman says, deducting the contributions in aid of local taxation, which have increased by £3,110,000; and, deducting £2,000,000 for education, you will see the result is highly satisfactory. Well, I will deduct, if you please, the appropriations in aid, and I will deduct the Education Vote altogether from the present (Estimates, and compare them with the Estimates of 1873 in each case. I find that, deducting the appropriations in aid of local rates, £5,882,000, as 1882 shown in the Estimates for 1883–4, and deducting the Education Vote, which amounts to £4,500,000, the sum for the other Civil Services amounts to £6,871,000 now. In 1873 I find that the Civil Service Estimates stood at £11,087,000; but, deducting these appropriations in aid of rates and the Education Vote, I find that the remaining Civil Service Estimates stood at £5,695,000. The appropriations in aid of rates were estimated then at £2,872,000, as against £3,010,000 now; and the Education Votes were £2,500,000. Then, what do I find? I find that the net sum for the other Civil Service Estimates has increased in 10 years from £5,695,000 to £6,871,000—that is to say, that the increase which was looked upon as so entirely satisfactory, and which was said to be really and positively nothing at all to a great country like this, in the opinion of the Government, has been £1,200,000. But it must be borne in mind that that increase is an increase of over 20 per cent; and it is these percentages which alarm me, and the relative proportions which require to be brought home to the understanding of the Government, of the House of Commons, and of the people of this country. There is a positive and a continuous growth in the Expenditure; and it is only deceiving and misleading ourselves, so as to defeat the object we have in view, if we do not put the facts plainly, and in a straightforward manner, before the House of Commons. If we do not do this, and if, by any shuffling of figures, by any mode of dealing with property, or dealing with the income arising from other sources than taxation, we hide from ourselves the real facts of the case, we are only defeating the real object we have in view. The Revenue Departments show a considerable increase; but I prefer to insist upon that which is perfectly clear and patent to all. This amount is exclusive of the grant in aid altogether, and exclusive of the Education Votes. I exclude from them, as my right hon. Friend did, the Votes for English Education, the Science and Art Department, and the Scotch and Irish Votes for Education. I must, in passing, make one remark as to the fallacy of dealing with extra receipts—this income and profit in mitigation of only one portion of our expenditure. I think the compilers—although I am not able to 1883 say so positively—of this Estimate of the pressure of taxation have left out of consideration one fact—namely, that the very sums contributed in aid of local taxation are thus reduced, by the charges? which are made and the revenue which is derived in various ways, from the police, from prisons, and from other sources, reducing the amount by the not inconsiderable sum of something between £200,000 and £300,000—the precise sum, I think, is £'228,4 00. So that we have this singular condition of things—that the full credit is taken for the increase of the charges, which ought to be diminished, according to the rule now laid down, by the receipts which come into the miscellaneous revenue, and that miscellaneous revenue is applied in the diminution of other charges to which they have no relation whatever. Now, when you depart from the well-understood rule of taking revenue as revenue and expenditure as expenditure, you get into a vast complication of difficult calculations, some of which are almost certain to turn out to be wrong. It is impossible for the very best and most accomplished person to avoid overlooking something, and then is it fair to say—"Your calculations are all based on unsound principles?" As far as I can see, the contributions in aid of local taxation are not diminished by the sums which appear among the miscellaneous receipts; and there are other receipts which, no doubt, go into the Exchequer in mitigation of this particular charge. I am afraid I have taken up a great deal of the time of the House; but I have desired to compare like with like, and I find that, comparing like with like, the Army Estimates have risen since 1873–4 from £14,416,000 to £16,694,000; the Navy Estimates from £9,875,981 to £11,077,000; the Civil Service Estimates from £11,067,757 to £17,253,000; the Revenue Expenditure from £7,351,941 to £9,155,000; and the total Estimates from £42,712,000 to £54,179,000. But, comparing them with the Estimates of 1880–1, I find the Civil Service Estimates were £15,436,000; the Revenue Estimates, £8,156,000; the Army Estimates, £ 16,64 i, 000; and th e Navy Estimates, £10,492,000, so that in three years the increase has been from £50,725,000 to £54,179,000. These were the Estimates that were handed over to the right how. Gentleman opposite, and 1884 the Estimates presented to Parliament this year; and for the same Services which were calculated in the year 1880 it cost £50,725,000. The cost this year is estimated at £55,777,004. There can be no doubt, I think—the right hon. Gentleman himself will admit that—wherever the money comes from, there has been an increase of taxation, as well as an increase in the yield, in certain profitable sources of Revenue belonging to the country—namely, the Post Office, but not the Telegraphs; and certain other miscellaneous receipts have come in in various ways. For instance, this year, we have had the advantage of receiving a large contribution from Egypt, in aid of the costs of the Army. How is it this large increase of charge in the cost of Government arises? That is a point which it is well to consider. Is it due to one Government or to another? Is it due to the force of public opinion, or to the pressure exercised by Members of this House? Is it due to the necessities of the case? I cannot help feeling that we must face the question and examine it careful by. I am afraid it is duo, in some measure, and perhaps very considerably, to the fact that a large number of persons in the Civil Service are constituents of hon. Members in this House. It may not be a popular, and I am certain it is not a pleasing view to take, that we are now paying more money for the same work than was paid some three or four years ago, and still more than was paid some eight years ago, and that every man, speaking broadly, in the Public Service costs more money. I do not say he does not do a good day's work in return; I am far from suggesting that there are any servants in the Public Offices who are not entitled to their full pay; but what I do say is, that every man employed in the Public Services costs more than he did three or four or eight or ten years ago. I think it is for the interest of the country, for the interest of the Government, and the duty of this House, to see that every officer in the Public Service, no matter whether high or low, rich, or poor, is properly and sufficiently paid for the work he discharges. But it is an alarming fact that £12,000,000 a-year are paid to persons who have most of them votes and power to influence Members of this House in their own interests, and to forward their own 1885 peculiar views and purposes. I want to know whether the Government are satisfied with this condition of affairs? Whether they are willing to allow this continued pressure to be exercised upon them, or whether the policy indicated by the hon. Gentleman the Member for Stoke (Mr. Broadhurst) is to be followed by the Government, and that more and more duties are to be undertaken by way of inspection, by way of control, and by way of internal administration, instead of leaving the people of the country, as far as possible, to their own self-reliance, and to the protection of the law, subject to penalties upon those who do not observe the law? I have regarded for some time past with apprehension the tendency of people to fall back upon the Government, in order to ascertain whether the food they buy is good, and whether the people they employ sufficiently discharge their duties. In fact, this reliance upon the State tends to demoralize our people from the cradle to the grave, and leaves them in such a condition that they have no occasion to exercise any of the responsibilities which are attached to ordinary men and women. All they seemed to think is that they should be well cared for and well protected, and carried through life with ease and comfort. But if that course is to be followed, not only must we have a great increase in the charges for the Public Services, but there must also be great demoralization. We have been vigorous and powerful in this country, because we have been self-reliant, and we have been willing to endure some amount of personal inconvenience, and to run some personal risk, in order to obtain that liberty and independence of action which has given to England a pre-eminence in arts, in manufactures, and I believe also in arms. It is for the Government to say—it is not for the House of Commons so much as for the Government to say—what their policy is. I know it may be said, from time to time, that the Government must follow the House of Commons. I say that the Government exists to suggest a policy to the House of Commons. It is the Government which presents the Estimates. No individual Member of the House can add a single farthing to those Estimates; and that represents, to my mind, a principle of the very highest importance in insisting on the respon- 1886 sibility of the Government. It does appear to me—and I say it with humility—but it does appear to me that if the Government are not of opinion that the course which is being pursued, the disposition to yield to this pressure, is a wise one, they ought to say so, and to say it boldly and manfully; and I do not doubt myself that, in response to such an appeal and such a statement the House would feel, the country would feel, and, I believe, the Party who sit behind the right hon. Gentleman would feel, that the occasion was one which required and demanded their support, and that it would be readily and cordially accorded to them. Sir, there are one or two questions to which I would ask the attention of the Committee. The right hon. Gentleman has told us what he proposes to do in the way of remission of taxation, and I now refer to the smallest of all the alterations which he proposes—namely, that with regard to silver plate. I will say nothing of the communications I have had with some of my constituents upon this subject; but it appears to me that no more unfortunate proposal than this could have been made. I understand the proposal of the right hon. Gentleman to be that silver plate shall be, in some way or other, shown in bond; but, having regard to the peculiar circumstances of the case, I would suggest that any plan for the bonding of silver plate for the purpose of sale will be practically unworkable. I think anyone who has a practical knowledge of the course of business will feel that silver plate is not a thing which is bought by the merchant for sale from a warehouse, like so much tobacco or spirits. It is bought by those who wish to use it, and the purchasers of it are not likely to go to such a place as a bonded warehouse to make choice of it, nor could the makers of silver goods afford to send persons to the warehouse to attend to customers. I think that the right hon. Gentleman will see that the proposal is, for the so reasons, impracticable. But the right hon. Gentleman's proposal is accompanied with a kind of promise that next year the duty on silver plate will be repealed. There seems to be, however, no doubt that this will have the effect of throwing out of employment every silver worker who is working on design in order to attract 1887 the taste of future purchasers. I believe that it will cause a very large number of persons to be entirely deprived of employment, because the silver manufacturers of London will say—"We cannot run the risk of adding to our stock; we must not employ workmen, except for the orders we receive;" and the result will be that they will wait until the duty is taken off. I hope the right hon. Gentleman will seriously consider these points before he proceeds any further in this matter. I must leave the question of Carriage Duties to the consideration of the right hon. Gentleman, pointing out, at the same time, that the decrease in the use of carriages evidenced by the decrease in the amount payable for carriage licences has had a very depressing effect upon the trade, and has, in consequence, deprived a large number of persons of employment. There is no doubt that carriages are not a luxury with a great many persons who use them. A doctor, for instance, is obliged to make use of a carnage for the purposes of his profession. I throw out this as a suggestion as to the manner in which the remainder of the right hon. Gentleman's surplus might be employed, and also as a suggestion for giving a stimulus to a trade which has been very much affected by the taxes that have been imposed upon it. I say nothing with regard to the reduction of the Railway Passengers' Duty. But I must express my regret that the right hon. Gentleman has thought it necessary to bring in increased Governmental control and responsibility on the part of the Board of Trade. I look upon the interference of the Government in any trade as the greatest possible misfortune to that trade, when such interference can possibly be avoided. There are, of course, cases in which Government control cannot be avoided; but, in cases of this kind, although I am willing to support wise legislative measures, and even the imposition of penalties where necessary, I shall always oppose indiscriminate Government interference by all the means in my power. I say that by introducing perpetual supervision of any department of trade you deprive it of the power of going to work in the most profitable way, and thereby do infinite injury to the interest you desire to promote.
§ MR. ANDERSONsaid, he did not intend to enter upon the debate with re- 1888 gard to the Army and Navy; but there were one or two points in connection with the Budget to which he desired to refer. The Budget was a very simple one, everything had gone favourably, especially in the last few months, and the right hon. Gentleman had been able to carry out an act of justice in remitting the ½d. of Income Tax. He wished to say nothing about the reduction of the Passenger Duty, nor with regard to the reduction of cost of telegrams; but he did regret extremely, with the right hon. Gentleman who had just spoken, that the matter of silver plate was not dealt with in another way. He was also strongly of opinion that the only effect of the measure that was proposed would be to stop the trade entirely. The public would not buy, because they would know that the duty on the plate was coming off in a year or two, and manufacturers would not make for exactly the same reason, and in that way the workpeople would be thrown out of employment, and the trade would be altogether disorganized. He knew the right hon. Gentleman would concede at once if it was merely a trifling amount of duty that was involved. He found that last year's accounts showed it to be only £113,251, but the difficulty was the drawback; but that must be faced sooner or later, and the best way to face it was to take off all the duty and pay no drawback. He learned that the holders of largo stocks of old plate and of new plate were not the same men. In no case could drawback be paid on old plate, and yet taking off the duty would lower the price of both old and new. Thus paying a drawback on the new only would be hard on the dealers in old plate, if they held heavy stocks. The holders of new plate, in any large quantity were, he believed, not numerous, and, on account of their wealth, were very well able to bear the temporary loss; besides, he believed that the recuperation of the trade freed from the duty would in a few years recoup them for any loss they might temporarily sustain. The bonded warehouse plan, he believed, would have no practical result. He should have liked the right hon. Gentleman to have made some concession of the duty on Marine Insurance. That was a matter that had been pressed by Lloyd's and other persons for the past 10 years; and he could not see why 1889 some measure of justice, such as was extended to Fire Insurance, should not be extended to Marine Insurance. The great disadvantage of the present system was that it was a distinct tax upon trade, and it operated worst on the smallest premiums, forming a larger percentage on small premiums than it did on large premiums. The duty ranged from 3d. to 6d.per cent, and the amount derived in this way, according to the last Returns, was £141,000; and by perpetuating this wretched little grievance they were driving part of the trade of insurance out of the country and sending it elsewhere. He therefore hoped the right hon. Gentleman would put this item in his most favoured list for reduction, and make a point of reducing it in the next Budget to the same level as Fire Insurances—namely, a 1d. stamp on each policy. Then the right hon. Gentleman had not made any allowance for the reduction of profits from fees on patents for inventions. That produced a surplus income during the past year for which they had Returns of £163,441. The Bill before the House would reduce that sum to £70,000, provided there was no increase in the number of patents applied for; but his opinion was that if the Bill was passed there would be no reduction at all upon the surplus; but he hoped before the Bill left the House it would have that surplus done away with altogether by further reduction of the scale of fees, because he did not think the brains of inventors wore a proper subject of taxation for Revenue. Two years ago, when the House fully discussed the matter, it would be remembered that it was admittted, even by the President of the Board of Trade, that if the Patent Office paid its expenses it was all that ought to be expected of it. Before the Bill left the House he hoped to be able to move that if a surplus remained it should be devoted to a fund for the erection and maintenance of a suitable Patent Office and Museum, which were very much needed. The Bill before the House proposed to take steps to erect such a Patent Office and Museum; but it did not say from what fund it was to be done, and he thought it would be a very proper thing to devote any surplus arising from the patents themselves to the purpose. There were two most important points in the right hon. Gentleman's Budget 1890 Speech, though they did not properly belong to the Budget of the year. One was that he intended to put upon Corporations charges in lieu of Succession Duties. As far back as 1876 he had occasion to urge the matter very strongly upon the right hon. Baronet opposite (Sir Stafford Northcote), who was then Chancellor of the Exchequer. He pointed out to him that it would be a very fitting thing to make such a change in the Succession Duty. He thought it a very wrong thing that anyone should be allowed so to alienate his property by putting it into trust, and thereby exempt it from bearing its proper share of the taxation of the country. He was very glad that the right hon. Gentleman thought the time was approaching when some change should be made. He did not know what change he contemplated; but he thought it should be something like payment of duty once in a generation, which was commonly considered 30 years. In Scotland ground rents for land for building had usually a fine of double duty on the entry of a new proprietor, and that was often commuted into a duplicand every 19th year, showing that it was believed that a change of succession came, as an average, every 19 years; and if the right hon. Gentleman adopted that period, he would, of course, get a great deal more than if he took as a basis once in 30 years. Then, with reference to Terminable Annuities, he was sorry that the Chancellor of the Exchequer had brought up that question. He thought Annuities falling in 1885 were the property of the Budget of 1885, when it would be a suitable time for dealing with it; but he did not think that it ought to be forestalled in the way proposed. He supposed the right hon. Gentleman found his Budget rather commonplace, and saw no way of making it brilliant except by bringing up the abortive proposal of 1881; but he thought it a mistake. There were many reasons why he thought so. One was that the right hon. Gentleman himself had shown that the finances of the country were in a sort of transition state. For example, the Education Charge was increasing largely, and he did not think anybody wished that charge to be less. For himself, he looked forward to its being a good deal more. On the other hand, the right hon. Gentleman had told them that, by the improved habits of the people, they were 1891 drawing £5,000,000 a-year less into the Treasury from duty on spirits than, allowing for natural increase of population since 1875, would have been expected. That process might go on and, by 1885, the Chancellor of the Exchequer might be very thankful to have some of these Terminable Annuities to make up for what he was losing from other sources. He hoped the right hon. Gentleman might himself be still Chancellor of the Exchequer in 1885, when he would have the benefit of the natural expiry of these Annuities; and the term ought not to be forestalled, as it would be much simpler to deal with them then, as to do it now would require a conversion scheme into a lower amount expiring now, which was a needless complication. As regarded the scheme itself, he thought taking £40,000,000 from the Chancery Suitors' Fund a safe enough operation, as he saw that, in 1879, the Fund reached £61,886,000, and he presumed it was a good deal more now. He found, also, that the largest sum ever taken out in one year was £6,598,000; while the smallest ever received in one year was £5,579,000. Thus, the outside possibility of shortcoming seemed £1,000,000 a-year, for which the margin left appeared very abundant; the probability being that, instead of any shortcoming at all, there would be a continued annual surplus. Then they came to the other item—the £30,000,000 from the Savings Banks Funds. These Funds were a more ticklish thing to deal with. Their permanence depended on the continued prosperity of the country, as well as on perfect confidence in the safety of the Funds. It might be difficult to satisfy ignorant people that the Fund was as safe as before it was manipulated. They would only see that something was being done, and might fail to see that the national guarantee remained just as before. He quite understood the detail of the scheme as regarded the £40,000,000; an Annuity of £2,674,000 would replace it with interest in the 20 years. But he did not quite understand the £30,000,000 which was to be converted into one Annuity of £1,200,000 for five years, renewable for 15 years; a second of similar amount for 10 years, renewable for 15 years; and a third of similar amount for 15 years, renewable for other 15 years. It appeared to him that such a scheme would only be complete at the 1892 end of 30 years, instead of the 20 years spoken of by the Chancellor of the Exchequer.
§ THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)here explained that the scheme was not to be complete at either of these periods, as he intended his plan to create a system by which every five years there would be an Annuity of £1,200,000 falling in, to be used for a still further extinction of Debt, by the renewal of the Annuity.
§ MR. ANDERSONsaid, he had been at a loss to understand that part of the scheme; but, as now explained, it evidently did provide for the probable reduction of a large amount of Debt. He ventured, however, to question altogether the policy of the scheme of renewing the Terminable Annuities. Paying debts was an admirable principle; but it was possible sometimes to use a surplus to much greater advantage for the country than by paying the country's debts with it, particularly at a time when the Three per Cents were above par—say, 102, as at present. The Terminable Annuity Scheme in question would inevitably force up the price of Consols, already far above the most sanguine dreams of the original lenders. The Budget had been styled "a rich man's Budget." In no particular was this more the case than in this very matter. Many were asking for a reduction of the taxes on articles of general consumption—such as tea—from which £4,000,000 were drawn—dried fruit—from which £500,000 was drawn—and coffee and chicory, which yielded one-third of a million. All these were things on which the country was looking for some reduction. But how was any reduction to be got except through these Terminable Annuities, expiring in 1885? Excessive taxation had been maintained in order to get that expiry; and now the people were to be robbed of the relief for which they had paid so long and so patiently. The right hon. Gentleman told them that in the last three years the annual average of Debt paid off was £6,829,000; or nearly £4,000,000 a-year more than in the previous six years. In the current year it would be £8,000,000. He had also told them that during the last quarter of a century they had reduced the National Debt by a sum of £107,100,000. That was as much, he thought, as the present generation could 1893 be expected to do. Our forefathers did not do their duty in the matter, and had handed down a large Debt. We were not adding to it, but were paying our way, and doing something towards paying it off. They were told that the American people were doing a great deal better than we. But American Debt was all incurred by the present generation. The present generation was endeavouring to pay it off. We were doing still better than that, for we were paying oil debts we did not incur. At the same time, did anyone believe that the Americans were doing this from any keen sensitiveness about paying their debts? Not at all. It was because certain interested parties had pledged the Government to the doctrine of Protection, and the payment of the National Debt was the excuse for it. These parties were looking forward with dread to the time when the Debt would be all paid, and when the Government would be obliged to reduce the Import Duties on account of having nothing to do with the money when they got it. But did anyone doubt that if America had paid Debt a little slower in order to reduce Import Duties a little faster, it would have been far more to the benefit of her people? We need not be so anxious to copy America? A better plan for the Chancellor of the Exchequer would be to find out a plan of reducing the interest rate to the people. Already about £35,000,000 had been got from the Post Office Savings Banks. He was getting the money at 2½ per cent, and that 11101103' he was going to use for the purpose of raising the price of the Three per cent Consols, which the people had, consequently, to redeem at a higher price. Instead, he should issue 2½ or 2½ per cent Stock to save the interest to the people. The principle of bringing forward the Terminable Annuities, instead of allowing them to fall in in 1885, was to give future Chancellors of the Exchequer a lesson in a new thing—the mutability of Terminable Annuities. By this moans they might be able to obtain a surplus for some purpose possibly less legitimate than the paying of Debt. I11 that ease the reduction of Debt might yet turn out to be visionary.
§ LORD GEORGE HAMILTONsaid, he believed that, although the Resolution under discussion related solely to the Tea Duty, it had always been open to 1894 Members of that House, upon similar Motions, to discuss the whole question of the forthcoming financial year. And the first point to which he asked the attention of the Committee was one which, although it ostensibly had reference to the Income Tax charged last year, in reality related to the Income of the present year. He ventured to ask the right hon. Gentleman the Chancellor of the Exchequer whether the Income Tax had not been illegally levied; and, in the event of that being so, whether a certain amount of the produce of that tax, which otherwise would have fallen within the present year, was not appropriated to the financial year ending on the 31st of March, 1883? He did not think it would be disputed that an infraction of the law had been committed, and that, although the amount realized by that infraction was small, the principle involved was a very large one; because no private individual would venture to question any taxation authorized by General Circular of the Board of Inland Revenue. The Chancellor of the Exchequer was always responsible for the proper exercise of the legal powers contained in the Customs and Inland Revenue Act; and as the right hon. Gentleman the Prime Minister was Chancellor of the Exchequer when the last Act was passed, he asked him to pay especial attention to the statement of facts which he was about to make. If an infraction of the law had been committed, he was sure that no one would be more ready than the right hon. Gentleman to take steps which would prevent an unscrupulous Chancellor of the Exchequer hereafter obtaining more Income than he was entitled to for any particular year. The Committee would be aware that the Income Tax last year was raised from 5d.to 6½rf. in the pound, and this amount was to be levied in unequal portions on the Income of the year; and the clause of the Act under which it was to be raised concluded with words to this effect—that when any dividends or interest were payable half-yearly or quarterly in the course of the said year, the first half-yearly, or the first two quarterly payments, should be deemed to be only chargeable with the duty of 5d.in the pound, and the other half-yearly or quarterly payments should be deemed to be chargeable with the duty of 8d. in 1895 the pound. Now, the Income Tax year ended on the 5th of April, and did not tally with the financial year, which began on the 1st of April; and, therefore, no financial year was ever credited with the exact amount of Income Tax received "within the year. For instance, the present year would obtain a certain proportion of the Income Tax imposed last year—that was to say, the portion of the tax which applied to the time between the 31st of March and the 5th of April. As the law stood, all dividends payable between the 1st and 6th of October were only liable to the tax of 5d.; and the second portion of the tax to which they were liable at 8d. in the pound was payable after the 1st of April, 1883; and a certain part of it did not, therefore, come within the financial year which closed on the 31st of March, 1883. Now, the Board of Inland Revenue had issued a General Circular, by which they charged 6½d. in the pound on the first dividends of the year payable in October—that was to say, they anticipated by six months 1½d. of the tax which did not become due until after the 1st of April; and, consequently, a portion of the tax was credited to the year 1882½3, which it did no belong to, and the year 1883–4 was deprived of that sum. No one who read the Act of Parliament could doubt that there had been an infraction of the law. As he had already stated, the amount was not large; but it was possible that, if it had not been credited to the last financial year, the surplus from that year might have been converted into a deficiency. No one would conclude that the Chancellor of the Exchequer had authorized this infraction of the law; but he wished that some Member of the Government would rise in his place and admit that it had taken place; because, so far as principle was concerned, it was a gross infraction. It was for the Chancellor of the Exchequer to see that the Revenue Acts were carried out in accordance with the letter of the law; and if the House were to allow an infraction of the law, however slight, to take place, it would form a precedent which, if there were an unscrupulous Chancellor of the Exchequer in Office, might, at a future time, be made use of. He did not think that any satisfactory explanation of what had taken place was possible; but he hoped there would be from some Member of the 1896 Government an acknowledgment that the law had been broken, so that this infraction of the law might not be laid down hereafter as a precedent. With the indulgence of the Committee he would now make one or two observations upon the Budget Statement of the Chancellor of the Exchequer; and, in the first place, he hoped the right hon. Gentleman would receive his congratulations on the great ability and vigour with which he had laid his various points before the Committee, because this seemed to him a very satisfactory contradiction of the statement that he had somewhat suffered from the labours of the War Office. But a portion of his statement was of a very controversial nature. And what had been the result? He thought the right hon. Gentleman the Member for Westminster (Mr. W. H. Smith), who preceded him in addressing the Committee, had been able to controvert some of the figures of the right hon. Gentleman, and he (Lord George Hamilton) thought he should also be able to do so; and then, if a portion of the statement of the Chancellor of the Exchequer was found to be overdrawn, and some of the figures shown to be inaccurate, he believed he would be correct in saying that the whole of the right hon. Gentleman's statement was seriously invalidated. Now, the complaint he made was that the right hon. Gentleman, in order to draw a comparison between the present and late Government unfavourable to the latter, was compelled to manipulate the system of Terminable Annuities now in force, in doing which he unconsciously laid down a principle most dangerous to economy, and likely to encourage extravagance in the future. What was the object of the system of Terminable Annuities? He had heard the Prime Minister, who was, more than anyone else, responsible for that system, in his financial speeches often state that, year after year, by Act of Parliament, a certain sum of money was to be put aside for the reduction of Debt; that the reduction of Debt under that system was automatic; that year by year it increased; and that no Chancellor of the Exchequer could, if he wished, in any way interfere with it. But the Chancellor of the Exchequer had credited himself throughout with the increase in the payment of Debt that resulted from 1897 the Annuities, with which he had no more to do than the Man in the Moon. The right hon. Gentleman went a step further—he took the reduction of Debt by Terminable Annuities, and, deducting it from the actual charges for the Army, Navy, and Civil Service, he concluded by saying that those Services cost less than they did eight years ago, and that, therefore, the country was now more cheaply administered. The Committee would understand that if the principle laid down by the Chancellor of the Exchequer were allowed to pass unchallenged, this system of extinction of Debt by Terminable Annuities might lead to great extravagance hereafter; because it would be always possible for the Chancellor of the Exchequer to say—"No matter how great is the increase of the Estimates, so long as, by means of the system of Terminable Annuities, the payment of Debt may be deducted from them." The right hon. Gentleman stated that between the financial year 1873–4 and the financial year 1882–3 the Expenditure had apparently increased by the sum of £8,550,000, and that this increase of charge was paid out of the taxes. But he said there were some deductions to be made from that amount; there was, first, a deduction of £2,000,000 for the increased expenditure under the Education Vote, which was an annual charge; secondly, there was £3,010,000 to be deducted for Grants in Aid of Local Taxation, which was an annual charge also; and, thirdly, there was to be deducted £220,000 for the cost of collecting £7,000,000 additional Revenue. The right hon. Gentleman also took into account the sum of £3,670,000, which he said represented the increased payment of principal of the Debt. He (Lord George Hamilton) had read the Return which the right hon. Gentleman quoted as showing the increased charge for the period between the years 1873–4 and 1881–2; and it appeared from that Return that the charge for the payment of Debt, including interest, was £26,549,000 for the year 1873–4, and £28,187,000 for the year 1881–2, the difference being £1,638,000, and not £3,670,000, as the right hon. Gentleman stated. He (Lord George Hamilton) would now call the attention of the Committee to the conclusion drawn from his figures by the Chancellor of the Exchequer. The right hon. Gentleman said— 1898
If these are added together it will be found that they represent an increased charge of £8,900,000; whereas the increased charge on the taxpayer is £8,550,000; so that it follows that for Military, Naval, and Civil Expenditure, in spite of a considerable increase of expense in Ireland, the charge of last year is not greater than, but £350,000 less than, for 1873–4.
§ THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)I said—
So that for the Interest on Debt, and for the Army, Navy, and Civil Service Estimates, &c.
§ LORD GEORGE HAMILTONsaid, it was unfortunate that an omission had been made in the report. But he had no objection to the addition, of the words, so far as his argument was concerned. If the Chancellor of the Exchequer was to be allowed to take the diminution under the system of Terminable Annuities, and credit himself with that diminution for the purpose of deducting it from the Estimates connected with the Army, Navy, and Civil Service, it was a system that would be of no use whatever in reducing Expenditure; because it would then be competent to the Chancellor of the Exchequer to say—"Our Expenditure is increasing very fast; but under the system of Terminable Annuities which we are carrying out it does not matter, as our reduction of Debt is greater." He did not regret that his observations had drawn attention to the omission in The Times report of the right hon. Gentleman's speech; but even if the words in question were added, it was no reason whatever that the diminution under the system of Terminable Annuities should be deducted from the Expenditure on the Army, Navy, and Civil Service. He felt bound to press this point upon the Committee at length, because of the use which the right hon. Gentleman had made of the figures in his comparison between the Expenditure of the late and present Governments; and if he now went into controversial calculations he trusted he should be excused, the right hon. Gentleman having somewhat boldly thrown down the gauntlet. The Chancellor of the Exchequer said that the amount of Debt paid off last year was £7,100,000, and the statement was received with applause by hon. Members opposite; but, looking closely into the subject, he found that the actual reduction amounted to the insignificant sum of £21,000, for both 1899 Funded and Uufunded Debt. He had to make another statement which he thought would be a very useful reply to a large portion of the speech of the Chancellor of the Exchequer, who had told them a great deal about what the present Government had done during the last three years, as compared with all that the late Government had done in the three years preceding their abandonment of Office. But the right hon. Gentleman never told them what was the difference in the amount of the Income which the present Government had to deal with, as compared with that at the disposal of the late Government. The Statistical Abstract showed that the Income, in the aggregate, of the last three years of the late Government was £244,000,000; while the Income of the first three years of the present Government was £259,000,000, the difference at the disposal of the present Government being an excess of £15,000,000. But that was not all; there were the Extra Receipts, which were treated as Income by the late Government, and these were now being treated in a different way—that was to say, for the last two years they had been deducted from the gross Expenditure on the Army and Navy; and as they represented a sum of £1,600,000, it followed that the actual excess of Income, just referred to, amounted to £16,600,000. Now, he did not find fault with that. On the contrary, he thought the Prime Minister had shown a praiseworthy energy when he came into Office by proposing additional taxation. It was well known that all Governments could put on taxes at first better than they could when they had been some time in Office; and he repeated that the Prime Minister had made good use of the authority and prestige which attached to a new Administration in this respect. But with regard to the composition of the £16,600,000 which he had shown the Government to have had by way of Income in excess of the Income of the late Government during the last three years they were in Office, he had analyzed it, and found it to be made up of the following items—namely, £9,500,000 imposed as taxes in the early days of the Government; £5,500,000 was the growth of pre-existing Revenue and of certain services which the State had undertaken; and the remainder represented the Extra Receipts which were 1900 now applied to the reduction of the gross Expenditure on the Army and Navy. He was dealing with the actual Income; and having shown that the Government had received more by £16,600,000 than the late Government, he asked, what had been done with the money? He was sure the hon. Baronet the Member for the University of London (Sir John Lubbock) would excuse him for pointing out an error which, on a former occasion, he had put before the public by taking the Annuity in existence when the present Government came into Office as an additional charge of £1,350,000 per annum. That was not so, because his right hon. Friend the Member for North Devon (Sir Stafford Northcote), when in Office, had created a Sinking Fund for the extinction of Debt; and £500,000 of the Sinking Fund so created was annually appropriated to this Annuity; the charge was, therefore, only £850,000. After allowing for the payments on account of India, and other items paid by the Government, there remained £14,000,000 of the £16,600,000 additional Income still unaccounted for. It was popularly believed that it had gone in the payment of the debts of the late Government. But that was an absolute delusion. The present Government had not added one farthing of the cost of the arrangements made by the late Government to meet the deficiency in existence before they came into Office. But the Expenditure of the present Government had increased enormously; and the Army, Navy, and Civil Service Estimates for the present year showed an increase of £4,000,000 over the Estimates left by his right hon. Friend (Sir Stafford Northcote) three years ago. It was in this way that the money had gone. Now, with regard to the payment to India in connection with the Afghan War, the Chancellor of the Exchequer said this was a legacy from the late Government. He had never heard a more extraordinary statement. The truth was that it was nothing else than a hustings' legacy to the Liberal Party. He happened to be in the India Office at the time—only a few months before the Afghan War broke out—and he could assure the Committee that the impression that the late Afghan War was an European war was altogether a delusion. It was a very convenient one, however, because it enabled the 1901 then Opposition to say that, for the purpose of carrying on the war, the taxation of this country should be increased to pay for a war, not Indian, but European in its origin. When the Prime Minister had to develop his hustings' theory, he did it in a way contrary to every principle of finance which he had ever laid down, either in the House of Commons or elsewhere. Of the sum of £5,000,000 given to India, only £3,500,000 had been paid, a portion of this being raised by Annuities; and the last portion of the balance of £1,500,000 would not be paid until the financial year ending on the 31st of March, 1886; whereas, if a General Election were to take place, and the majority of the House of Commons were afterwards not to take the hustings' view of the Liberal Party, India would not get all of that amount, although it had been credited to her. Therefore, he said that the principle on which the Government based their hustings' theory was contrary to all that the Prime Minister had ever laid down, either in or out of Office; and to say, in the face of these facts, that the cost of the Afghan War was a legacy from the late Administration, appeared to him rather audacious on the part of the Chancellor of the Exchequer. He believed he had laid before the Committee the real facts as to the Expenditure during the last six years. It was true that there was a large deficiency on the three years ending on the 31st of March, 1880; but that had been converted into an Annuity that was in force before the present Government came into Office, and was not in any way connected with the increase in the Expenditure which had since occurred That was entirely due to the Army, Navy, and Civil Service costing more than it had done before; hence the Motion which the hon. Member for Burnley (Mr. Rylands) had brought forward on Friday last; and, if the hon. Member would allow him to do so, he would take this opportunity of congratulating him upon the singularly able and clear speech with which he introduced that Motion. But perhaps the most audacious portion of the speech of the Chancellor of the Exchequer was that in which he treated the sanction given by the late Government to the scheme for the organization of the Army and Auxiliary Forces as entailing on the 1902 present Government an enormous Expenditure. He would refer to what occurred in 1870, because he regarded it as a warning to all Governments not to attempt reform unless they knew what the consequences would be. In that year the Bill of Lord Cardwell was introduced; but, his hand having been forced by some Gentlemen below the Gangway, he was compelled to bring in a Bill for the Abolition of Purchase in 1871. The Conservatives did not care much about the system of Purchase, and would have been glad to get rid of it; but they pointed out to the House that if there was to be a hasty abolition of Purchase, without the adoption of some scheme by which promotion could be secured, the country would have to incur a very great burden of cost. Their advice was utterly disregarded, Purchase was abolished, and a system of short service was established. The Bill under which Purchase was abolished went up, in the ordinary course, to the House of Lords. As events had shown, the House of Lords took a very statesmanlike view of the question; they passed a Resolution declaring that they were unwilling to assent to the second reading of the Bill until the House had laid before it, either by Her Majesty's Government or through the medium of an inquiry, a complete and comprehensive scheme for the appointment and promotion of officers. What, however, did the Government do? They made an obsolete use of the Prerogative of the Crown, by which use they hastily abolished Purchase in the Army. It would be very interesting to know what that hasty abolition of Purchase had cost the country. As a matter of fact, they had to pay something between £7,000,000 and £9,000,000 in cash to officers for the abolition of a system which insured promotion. Lord Cardwell gave a solemn pledge that if stagnation resulted a system of retirement would be brought in. Lord Cranbrook, as War Minister, had to introduce such a system; and he (Lord George Hamilton) believed that the consequence was that the Army Estimates had been increased from £500,000 to £1,000,000 annually. The Short-service system might have been necessary—he would express no opinion upon the value or otherwise of the change effected by Lord Cardwell, for he was now dealing with 1903 figures. The pay of the private had to he increased 2d. a-day to insure an increased number of men. Lord Cardwell's primary object in introducing the Bill was to weld the Army, Militia, and Auxiliary Forces into a harmonious whole. A most able Committee at the War Office inquired how this could best be done. They found that to do it effectively would cost a very large sum of money; and then down came a Liberal Chancellor of the Exchequer—a Colleague of Lord Cardwell—and actually said this increased cost was a legacy they had received from the Conservative Government.
§ THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)said, he did not say anything of the kind.
§ LORD GEORGE HAMILTONsaid, the right hon. Gentleman spoke of it as something left by the late Government which would entail a large Expenditure. He hoped that, as the right hon. Gentleman took so very wide and broad a view of what he called legacy, he would enforce it in collecting the Probate Duties. A variety of proposals had to be made for effecting economy in the administration of the Army, Navy, and Civil Services. He fully believed they got more for their money from the administration of the Navy than they did from the administration of the Army, and the reason was not far to seek. Under the Naval system there were always three of the ablest Naval officers straight from the Service at the head of the Admiralty; and, moreover, there was a happy combination of the Naval and Civilian elements, which was productive of efficiency and economy. As to the War Office, although there was at the head an illustrious Duke, who had probably more knowledge of the Army than any other man alive, and although he was assisted by very able men, he (Lord George Hamilton) believed most of the time was spent in fighting who should get the War Office; and that until a system was hit upon whereby the Military and Civilian elements could be amalgamated, the country would not receive as good results from the Army Expenditure as from the Navy. The Prime Minister had suggested that a special Committee, or a number of Committees, be appointed for the purpose of investigating the sources of Expenditure. He (Lord 1904 George Hamilton) could not believe that any real benefit would result from the adoption of the suggestion. The House had had experience of Select Committees, and there was one fact which it would be well for a Radical House of Commons to swallow. It might be an advantage, from many points of view, to enlarge the franchise, and to bring into the House of Commons Gentlemen who would directly represent those who would be enfranchised; but Select Committees wore not now as efficient as formerly. Self-preservation was the first instinct; and Members of Parliament, representing large constituencies, knew full well that they must advertise themselves, or else they would lose their seats. It was not possible now-a-days for a Member of Parliament to sit in the House and not ask a large number of Questions. It would be interesting to look back 20 or 30 years, and compare the proceedings of Select Committees of that time with those of the present Committees. Committees were appointed 30 years ago to inquire into most complicated questions—such even as the renewal of the Charter to the Indian Government. If anyone looked at the Report of that Committee, over which Sir James Mackintosh presided in 1833, or another which sat in 1853, and compare it with the Reports of the Committees which sat in 1871, 1872, 1873, and 1874, they would see a great difference. Formerly, the Chairman was allowed to conduct important examinations; but it was not so now. He had had a good deal of experience on Committees appointed to inquire into the affairs of India. What was the result of the Committee appointed, with probably the ablest Chairman who could possibly be got—Mr. Ayrton? That Committee sat for three years: it commenced with 21 Members, and a quorum of seven; but ultimately the number of Members was increased to 30, and the quorum reduced to five. [Mr. R. N. FOWLER: No, no!] His hon. Friend contradicted him; but he was, nevertheless, speaking an absolute fact. There was always the danger, in appointing a Committee, that at the next General Election the Chairman and other Members would lose their seats. The idea he had always had—though he confessed it was an idea which did not find favour on either of the Front Benches—was that 1905 a Committee for the purpose of investigating into Expenditure was not of much use; but that a Committee might be appointed to supervise the Expenditure, which might be of advantage. It had also occurred to him that if the Estimates were referred to some strong Committee, not very numerous, but having the Minister in charge of the Estimates as Chairman, and if power was given of calling witnesses, a most effective instrument would be possessed for checking unnecessary Expenditure. He knew the theory prevailed that such a course would weaken the supervision of the Treasury. To speak frankly and openly, he must say he had not much faith in the supervision of the Treasury. The duties of the Treasury were too multifarious. More elasticity was required in the Department. At present the rule was to reject every new proposal, and to sanction all existing establishments. Everybody who had a suggestion to make was regarded, more or less, as an enemy of the public purse. Although he (Lord George Hamilton) admitted there was much to be said in favour of maintaining intact the authority of the Treasury, yet he was of opinion that some system, such as he had suggested, would be very effective in keeping down Expenditure. He acknowledged that the House would never give up its control of the Expenditure to a Select Committee. Some arrangement could always be made by which, after the investigation by the Select Committee, the House should still be able to exercise its powers and its authority as to whether or not it would pass the Estimates which had been under the supervision of the Committee. He had always been in favour of economy, and of avoiding unnecessary Expenditure; but one thing must be perfectly clear to everybody—namely, that if the State was to undertake annually fresh services on behalf of the public, the country must be called upon to meet an increased charge. Every year the State was taking upon itself fresh services; and now Parliament was considering a proposal by which bankruptcy arrangements were to become part of the duties of a Government Office. There seemed to be an idea in the minds of Liberal Members that it was only the Army and Navy which put pressure on the Government in regard 1906 to the increase of salaries. The Government, however, had a far heavier call upon them from the civilians they employed than from the Army and Navy. He thanked the Committee for the patience with which they had listened to his observations. Notwithstanding the criticisms which he had devoted to the statement of the Chancellor of the Exchequer, he congratulated the right hon. Gentleman upon the clearness with which he laid before the Committee his figures; and he trusted that next year it would be the country, and not a Party, which would have the undivided benefit of the right hon. Gentleman's exertions.
§ SIR JOHN LUBBOCKsaid, he had listened with much interest to the speech of the noble Lord, because, during the last few months, he had constantly accused Her Majesty's Government of reckless extravagance. He did not think the noble Lord had succeeded in making good his case. As the noble Lord admitted frankly, in comparing the Expenditure of different Governments there were certain matters for which allowance must be made. For instance, the Expenditure on Terminable Annuities ought not to be noticed in any such comparison. The noble Lord admitted that allowance must be made for grants in aid for Education, for the Post Office and Telegraph Expenditure, for the Customs and Inland Revenue Expenditure, and so forth. "If they compared the Expenditure in the last year of the late Conservative Government with that of the present year, there was, no doubt, an increase of something not much less than £4,000,000 sterling. But they must allow £1,000,000 for grants in aid, £900,000 for the extra amount voted to Debt, £800,000 for Post Office and Telegraphs, £100,000 for Customs and Inland Revenue, and £500,000 for Elementary Education—a total of £3,300,000. That left only an increase of about £750,000, notwithstanding the Egyptian War. It must also be borne in mind that, last year, the Government had to pay £2,000,000, the legacy left them by their Predecessors, besides the expenses of the Egyptian War, amounting to £4,000,000. The character of the Expenditure of the two years ought also to be taken into consideration. This year, according to the Estimates, £2,000,000 less was being spent 1907 on military matters; £900,000 more in grants in aid, which, after all, was not in itself an expenditure—at least, it was an expenditure from one pocket instead of from the other; £700.000 more in Education, which they almost all approved of; £1,000,000 on account of the Post Office, which would come back again in the shape of additional receipts; and a much larger sum would be devoted to the repayment of Debt. It was a matter of satisfaction that there was a surplus on the right side at the end of the year. It was very true the surplus was but a small one—£100,000. Last year, however, there was a surplus of £900,000, and the year before one of £350,000. In the last three years of the late Conservative Government there were deficiencies of £2,240,000, £2,230,000, and £2,000,000—in fact, in the six years of the late Conservative Administration the average deficit was over £1,000,000 a-year. Before that time there were five years of Liberal Government, with surpluses amounting to £17,000,000; and, before that, there were two years of Conservative Government, with deficiencies of £4,000,000. Before that, again, there were several years of Liberal Government, with annual surpluses of £2,000,000 and £3,000,000. In fact, it happened with mechanical regularity—Liberal Government and surplus; Conservative Government and deficiency. In fact, whenever there was a Liberal Government there was a surplus, and when there was a Conservative Government there was a deficiency. His right hon. and learned Friend the Member for the University of Dublin (Mr. Gibson) asked the other day who had benefited by the change of Government? He (Sir John Lubbock) would like to put the question somewhat differently—he would like to ask who was there who had not benefited by the change of Government? When the Expenditure had been once increased it was very difficult to reduce it. The Government had done a great deal in the reduction of Expenditure, and the country were indebted to them for all they had accomplished. If, however, he ventured to make a few remarks expressive of his regret that they had not been able to accomplish more, he did so in no spirit of unfavourable criticism, but rather in the hope of encouraging and helping them, as 1908 far as he could, in the future. They must all feel that though a great deal had been done the Expenditure of the country was far too high. In regard to the Army, there was an apparent reduction of £1,480,000—namely, from £17,086,000 to£l5,606,000; but if they compared the Estimates with those of last year they would find there was an increase of £150,000. He was persuaded that that would be a matter of sore disappointment to the country. Moreover, if they looked at the character of the military economies and increases, he was afraid there was very little which would give them any more satisfaction. If he understood the accounts accurately, there was an increase of £400,000 in the permanent Expenditure which was partly balanced by the receipts from stores. He should like very much to ask Her Majesty's Government whether it would not be possible to diminish somewhat the Military Expenditure in our Colonies? In North America and the West Indies the Expenditure was £500,000 a-year; and he could not help thinking that some reduction might be made in that direction. Again, in Hong Kong, they spent £95,000, of which the Colony only paid us £20,000. As to the Expenditure on the Navy, he was afraid there was very little prospect of any reduction as long as they expected so much from the Navy. Considering, as he did, that the Navy was our first line of defence, he should be sorry to see a large reduction in the Expenditure upon that Service, as long as International Law remained in its present condition. He thought, however, that this question urgently demanded the attention of the Government. It must be remembered that the Navy had two main duties to perform—one was to guard their Coast, and the other was to protect their Mercantile Marine. It was a very extraordinary thing that while they had by far the largest Mercantile Marine in the world—more, at the present moment, than all the other nations of the world put together—that they were the one nation which still insisted upon the right of capture and seizure at sea. He believed they might do more to make their ships secure by agreeing to an alteration of the law in this respect than they could by any improvements in the Navy. If a war took place the prosperity of the 1909 Mercantile Marine became, to a great extent, a question of insurance; and if merchants who shipped their goods by vessels belonging to one nation had to pay even 2s. 6d. more for insurance than other merchants, it followed that the vessels belonging to such a country were placed at a very great disadvantage. This was not a proper occasion to discuss the question fully; but it was one worthy of the attention of the Government. He believed that an alteration of the law in regard to the right of capture at sea was desired by all other nations but our own; that it would tend towards peace; and that no one would gain so much by the change as they themselves. They would make their ships at sea more secure than at present; and he thought that, in that case, some reduction could be made in the Naval Expenditure. Both the noble Lord (Lord George Hamilton) and the right hon. Gentleman the Member for Westminster (Mr. W. H. Smith) had, much to his (Sir John Lubbock's) satisfaction, pressed the Government to avoid undertaking commercial business. Again, he thought there was great danger in the system of paternal legislation which had been adopted; that universal inspection must more and more increase their Expenditure, and required to be very carefully watched. The very fact that much must necessarily be done in that direction ought to make Parliament most careful not to go further than was absolutely necessary, for legislation of that kind was very apt to defeat its own object. The right hon. Gentleman the President of the Board of Trade pointed out, a few days ago, to a deputation of shipowners who waited upon him that since the passing of the Act relating to and regulating merchant shipping the loss of life at sea had actually increased. As far as the Telegraphs were concerned, his hon. Friend the Member for Glasgow (Dr. Cameron), a few days ago, paid a well-merited tribute to the Government officials connected with that Department; but, in his view, no excellence on the part of the officials could replace the stimulus supplied by open competition and personal interest. In the address which he recently delivered to the Society of Telegraph Engineers, Dr. Siemens showed that in America, the one great and important country in which telegraphic communication was not in 1910 the hands of the State, but remained under the control of private Companies, telegraphy was making the most rapid strides. Therefore, he held that those who desired economy in government must set their faces dead against the multiplication of official inspections and the extension of commercial undertakings by the Government, a course of action against which there were many other and good reasons. A few nights ago the hon. Member for Stoke (Mr. Broadhurst) brought the question of pensions before the House; and he quite agreed with the hon. Member that there was considerable room for economy in this respect. It was, of course, necessary to distinguish between different classes of pensions. It would, for instance, in his opinion, not only be unjust, but, in the long run, would prove bad economy, to disturb such pensions as had been settled by Act of Parliament and placed on the Consolidated Fund. The only relief they could look for was when pensions dropped in, and by the exercise of greater care in granting new ones. Again, it was important to distinguish between pensions granted for long service and pensions which simply arose from the abolition of offices. With regard to the former class, he agreed with his right hon. Friend the Member for Ripon (Mr. Goschen) that if the right to pensions was abolished the scale of salaries must be increased; and he feared they would end before long in giving pensions too. But it was well worthy the attention of the Government to consider whether steps could not be taken to diminish the second class of pensions to which he had referred. His suggestion would be that the terms of entry to the Civil Service should be so modified as that gentlemen would not be entitled to retire with pensions in the prime of life; and he thought this modification could be effected without running the risk of getting a less efficient class of applicants for appointments. Another suggestion he would venture to make was that the Government should take enlarged powers to transfer officials from one Department to another in case their offices were abolished. With regard to the question of Terminable Annuities, he could not think that the hon. Gentleman the Member for East Sussex (Mr. Gregory) was correct in supposing that the suitors in the Court of Chancery 1911 would be prejudicially affected by the proposal of the Chancellor of the Exchequer; because, under the arrangement proposed, every suitor would be as certain of getting Government securities as he was at the present moment. He was of opinion, also, that the argument of the hon. Member for Glasgow was a little inconsistent; because, in the first place, he objected to the scheme that it would prejudicially affect the security of the depositors in the Post Office Savings Bank, and then went on to state that it would raise the value of Government securities—a fact to which he should have thought the depositors in the Savings Bank would have been among the last to object. As far as he was personally concerned, he would, of course, rather not see the interest reduced from 3 to 2– per cent; but, at the same time, he was bound to admit that, in his view, the country would benefit by the proposed arrangement. The right hon. Gentleman the Member for the City of London (Mr. Hubbard) was another among the objectors to the proposals of the Chancellor of the Exchequer, and his objections were based mainly on his objections to the proposal made some few years ago by the right hon. Baronet the Member for North Devon (Sir Stafford Northcote)—a proposal which certainly struck him (Sir John Lubbock) at the time it was made as being valuable, and bringing the matter very clearly before the public mind. The Chancellor of the Exchequer, in his Budget Speech, explained to the Committee very clearly the manner in which he proposed to deal with the Annuities terminating in the year 1885, and stated his view that if everything went on as he wished his proposal would have the effect of cancelling, in the course of the next 20 years, £170,000,000 of Debt. Hon. Members—or, at any rate, some of them—appeared to regard this as a too sanguine anticipation. But, even supposing the anticipation was realized, the country would still be left with a Debt exceeding £500,000,000 sterling; while by that time their keen competitors in America would probably be free from their National Debt altogether. This was a matter calling for most serious consideration in a mercantile and manufacturing country. A country which depended upon agriculture was in a very different position, in that agricultural occupations could be car- 1912 ried on in almost any country in which industry and intelligence were to be found. Manufacturers, on the contrary, went to the countries in which they could get the best return upon their capital. It was, therefore, most desirable to lose no opportunity, in these comparatively good times, of reducing their national indebtedness. He hoped, therefore, that the Chancellor of the Exchequer would not be discouraged by the criticisms which had been, or might yet be, passed upon his proposals. Rich and prosperous as this country was at the present time, they were heavily handicapped in the markets and the trade competition of the world by the Debt hanging round their neck, and partially crippling their commerce and manufactures. The country stood in a position of great danger in this respect; and he, therefore, hoped that the Government would, avoiding foreign complications, and leaving the taxation for some years at least, in the main, undisturbed, do their utmost to reduce the National Debt.
§ MR. COURTNEYsaid, he did not wish to detain the Committee longer than a few minutes; but he thought it necessary to reply to some passages in the speech of the noble Lord the Member for Middlesex (Lord George Hamilton). He could not admit that the noble Lord was accurate in stating that the Act of Parliament had been broken in levying the Income Tax last year, as he had alleged, in excess of the rate warranted by the Act. What was done corresponded with the intention of Parliament in passing the Act, with previous precedents, and also with the declaration of the Prime Minister made at the time. The whole question was as to whether the money should have come into the first or the second half of the financial year. There was no doubt whatever that the intention of Parliament was that the Income Tax for last year should be levied at the rate of 6½d. in the pound; but as part of the tax had been levied and raised at a 5d. rate before the Act was passed, it was provided that where it had been so levied and raised the remainder of the tax should be levied at a different rate—namely, 8d. in the pound. This question turned on the construction of a very technical Proviso in the Act of Parliament; but what was done was entirely, as he had said, in accordance 1913 with precedent and with the intention of Parliament. And, apart from this, the effect upon the Budget was of a very slight character indeed. With regard to what the noble Lord had said in reference to the scheme of Terminable Annuities, he thought that if the proposal of the Chancellor of the Exchequer lifted from the popular mind any existing illusion in regard to the unalterable character of those Annuities, no damage could be done by dispelling that illusion. These Annuities were a most valuable means for reducing the Debt of the country; and he had no reason to fear the operation of the machinery, though the noble Lord seemed to think it was calculated to cloud the popular apprehension with regard to the broad bases of the scheme. He thought, however, the course taken by the Chancellor of the Exchequer in anticipating the Annuities 'coming to an end in the year 1885, and converting them in the way proposed, was matter rather for satisfaction than for regret. The noble Lord, following the line which had been taken by the hon. Member for Glasgow, found fault with the scheme, because he said they were paying off Stock at par, or even above par, while they were on the high road to reducing the rate of interest. He hoped this was so; but it must be observed that if they were on the high road to reducing the interest on a part of the Debt, it was because they were paying off Stock in the way they were. By repeated purchases they enhanced the price of Stock in the market until it had come to be above par. Moreover, what had been done had been done without loss to the nation. If they converted permanent Stock into Terminable Annuities, and paid it off at par, they were paying it to themselves. With regard both to Chancery Funds and the Post Office Savings Bank, they were securing, by a process which involved no loss to the suitors or the depositors in the Savings Bank, an enhancement in the price of Stocks in the market, which would go far to reduce the rate of interest on the Public Debt. The Government had, at all events, not been guilty of that most expensive, inexpedient, and demoralizing system of paying with one hand and borrowing at a dear rate with the other. The late Chancellor of the Exchequer (Sir Stafford Northcote) had had the working of his scheme impeded 1914 by recurrent deficits; and he had been forced to incur Debt at the very time he was paying off Debt. The present Government had, at any rate, made the Income of each year pay for the charges which came in course of payment. As far as the increase in the Civil Service Estimates was concerned, he wished to point out that it was largely due to a pressure which was brought upon the Government, and which they found it almost impossible to resist, by Civil servants through Members of that House. Another cause of this increase was to be found in the pressure which representatives of new social classes which were springing up brought to bear, for the purpose of increasing the activity of the Government in certain directions for the protection of a particular class or classes of persons who ought to be able to protect themselves. In his view, the remedy for the state of things complained of was to be found in the display of greater energy, courage, and independent feeling on the part of Members of that House.
§ SIR STAFFORD NORTHCOTEI think the speeches of my right hon. Friend the Member for Westminster (Mr. W. H. Smith), and my noble Friend the Member for Middlesex (Lord George Hamilton), have been of a character likely to do much good, and to open the eyes of many hon. Members, and of the public outside this House, to the fallacies which have been very industriously propagated on the other side of the House. After the speeches of my right hon. and noble Friends, I do not think it necessary to follow, in detail, the ground over which they have travelled. I rise, therefore, simply for the purpose of making a very few general observations on the speech which the Committee heard from the Chancellor of the Exchequer when he made his Financial Statement on Thursday last. I regret to say that further reflection only confirms me in the reflection which I formed at the time, that the statement was one of an unusual character, and one hardly consistent with the position of a Chancellor of the Exchequer in bringing forward and laying before Parliament the Budget for the year. I cannot but think that there was much to justify the remark very commonly made by hon. Members, that the speech of the right hon. Gentleman was made to be an electioneering speech, 1915 such as would be addressed to a popular audience, rather than one to be made on an occasion so solemn and important as when a statement was laid before the House of the financial transactions and prospects of the year. Those who are now engaged, and those who have previously been engaged, in the financial business of the country know the responsibility which attaches to those who are charged with the conduct of the financial business of the country; and they know also how many of the taunts, which may pass current on popular platforms, are not only undeserved, but fail altogether in their aim. It struck me that the right hon. Gentleman, having to get up his case on very short Notice, and having had very few weeks of Office, and being anxious to make a Budget Speech that should be more or less interesting to his audience, rather found his interest in an illegitimate manner by sneers and attacks upon his Predecessors. If there has been rather more tendency in this discussion to take up a Party attitude than might otherwise have been expected, the right hon. Gentleman has himself to thank for it. There is one remark I feel called upon to make. The right hon. Gentleman told us, at the beginning of his address, that he had had very few weeks of Office as Chancellor of the Exchequer, and therefore we could not expect him to be in a position to bring forward a large financial scheme. So far as the right hon. Gentleman himself is concerned, there is, no doubt, great force in that plea; but, so far as the Government is concerned, I do not see any force in it at all. The Government have been in Office three years, and during that time the right hon. Gentleman the Prime Minister has held the Office of Chancellor of the Exchequer also. We are all perfectly aware that the enormous amount of business and anxiety falling on the Prime Minister must be such as to render it impossible that he can give that full and careful attention to financial business which can be given when the Chancellor of the Exchequer has no other duties; but, then I say if that be so, I think it has not been a wise, or a good, or an advantageous, arrangement, which has in that way put the Office of Chancellor of the Exchequer so far in the background as has practically been during the last two or three years. I 1916 cannot help saying that, on some grounds, the holding of the Office of Chancellor of the Exchequer by the First Lord of the Treasury gives greater authority to the Chancellor of the Exchequer in controlling and curbing the expenditure of the spending Departments, or might do so—that is, if he has time to give to it, he has, of course, greater authority than anybody else; but if he has not time, then the work of controlling the expenditure of the great spending Departments practically falls to the Secretary to the Treasury, who, however excellent an Officer he may be, has not the authority of the Chancellor of the Exchequer; and the consequence is apt to be that matters which properly fall to the Chancellor of the Exchequer are comparatively neglected. I have felt bound to make these remarks; but I hope I have not made them in an offensive way. I think it right that we should take notice of the nature of the present arrangement; and hope that as we now have a distinct Officer holding the Office of Chancellor of the Exchequer we shall have the benefit of the undivided attention which he will be able to bestow upon the duties of that Office. Now, there is another remark I have to make which applies to a great part of the right hon. Gentleman's speech. He made some defence of his Government, and of Governments generally, as against an attack which he anticipated on the following day from Gentlemen below the Gangway; and in the course of his remarks he more than once referred, in a pointed manner, to what he said were the causes of the Expenditure of the present Government. These causes of Expenditure he described as legacies bequeathed by their Predecessors, or as the war debts of their Predecessors. It is, of course, utterly impossible in this country that you can draw an absolute line at the beginning and end of each Administration, and say—"Here everything ends and hero everything begins." There must be continuity, whether you desire it or not, between the actions or omissions of one Government and the action or abstinence from action of another. But I venture to say that with regard to the charges he made upon his Predecessors as to what he called their War Expenditure, and in treating them in the way he did, the right hon. Gentleman was guilty of very great injustice. Let me 1917 take one or two of the items. He spoke of our War Charges; and when he came to particularize them what was the first? The Vote of Credit for £6,000,000, for which we asked Parliament in 1877. In the first place, I deny that, strictly speaking, that can be called War Expenditure at all. It was not expenditure in war, but in measures to prevent war, and it was successful in preventing war. Therefore, I deny that it can properly be called War Expenditure; but I do not desire to raise anything that may be called a quibble upon that. What was it that we required that money for? It was required at a moment when it was necessary that some steps should be taken to uphold the power of this country, and meet possible warlike calls in the East of Europe. At that moment, with the prospect of having to act with great rapidity, we found ourselves in this position—owing to the action of our Predecessors, and the state in which the armaments of the country had been left, we were not in a position, if a sudden demand was made, to use the Forces of this country, and lead them to the seat of war. It was absolutely necessary, if we were to make any use of the Forces at our disposal, that we should have the power of moving them rapidly to any place where they might be required; and it was to obtain that power that the Vote of Credit was asked for, and was granted. The Prime Minister, in speaking the other night on the question of Expenditure, referred, to the experience of the recent Egyptian War, and he took special credit for the promptitude with which the Forces of the country were sent to Egypt. He spoke with absolute truth and great force on the immense importance of promptitude on such occasions as that. Forces which, if sent out at once, can accomplish their object, if delayed for a few weeks, even though tripled or quadrupled, may fail. That was exactly what we felt. We thought it was necessary that there should be at the disposal of the Military and Naval Services of this country the means of rapid and prompt action. The effect of this Vote was that the country, and Europe, were saved from very serious evils that might have befallen them, and the country was able to take a position which has led to results which have generally been acknowledged to be beneficial. But the matter does not rest 1918 there. Not only was it in consequence, I will not say of the laches, but of the very economical administration of our Predecessors, that this step was rendered necessary; but our economical Successors had, to a great extent, the benefit of that expenditure. That benefit was not confined to the purpose to which it was immediately applied; but the ships and stores purchased sensibly assisted and strengthened the action of the Government when, the other day, in the Egyptian Campaign, they had occasion to make a sudden demand on our ships and stores. Therefore, it is altogether unjust and misleading to let it be supposed that that was an expenditure of which they were entirely clear. In the original steps which led to the necessity for that expenditure they were greatly concerned; and in the benefit that was reaped from that expenditure they had their full share. That was the first of what the right hon. Gentleman called the war debts of the late Government. There were others which he mentioned; for instance, the war in Afghanistan. I will not raise any discussion on that war. There is a good deal to be said, and I believe a very good case has been, and could be, made out for the action taken on that occasion by the Indian Government; and that, if you go into the origin of matters, a great deal may be said as to past actions which led to that war. I do not, however, desire to raise any question upon that; it is not a point upon which we are particularly anxious to insist. Neither will I say anything about the Zulu War, which the right hon. Gentleman also mentioned. That was a war which, I think, may be characterized in the language which the Prime Minister used in Mid Lothian with regard to the Ashantee War—it was a war which we certainly did not desire, but which we had, as it were, forced upon us. Nevertheless, it was forced upon us in our time; and, no doubt, we cannot deny that we may be fairly charged with the expenses of that war; but when we go beyond that, and when the right hon. Gentleman charges upon us the expenses of the Transvaal War, I can use no other language than that it is an outrage upon us. Is it not sufficient that we should have seen our country humiliated, as it has been, and seen all the bloodshed there has been, and should now be seeing 1919 our allies deserted, and our name do-graded; but we are told that all this is to be charged against us? I deny altogether the possibility of such a charge being made. I say the present Government is clearly responsible for that war and for what has arisen out of it, as they can be for the improvements which are being made in Piccadilly. They will say, I daresay, that all this has arisen from the occupation and annexation of the Transvaal. You may say every stop in our South African history has been the result of former stops; and you may go back, as the right hon. Gentleman told us the other night, to the time when he was obliged to say to his Successor at the Colonial Office that the problem in South Africa was an insoluble problem; but if we are to believe that the annexation of the Transvaal rendered that war necessary, let us candidly look at the facts. The present Government came into Office when there was no war, they having pronounced against annexation. It was perfectly competent for them, with honour to the country and to themselves, if that was their feeling, then and there to have receded from the position that had been taken up, and they could have accompanied their withdrawal with any safeguards and provisions they thought necessary. But they did not do that. They used language which gave every impression that it was their intention to maintain that position by force of arms. They did not take the opportunity. They had another locus penilentiœ. They might have said this was another part of the proposition for the Confederation of the South African Colonies, and they would not disturb it in the hope that the Confederation might be carried out. But the Confederation scheme broke down, and again it was in their power, still with honour and dignity, to retire from the position in the Transvaal. Of neither of these opportunities did they take advantage; and now we are told that we are responsible, and are to be charged in hard cash with the expenses. I have thought it right to take notice of these matters, because it is too much that we should be day after day, in every quarter of the country, charged with such things as these, which do not belong to us. With regard to the question of expenses generally, undoubtedly every Government ought to be anxious, as far 1920 as possible, and consistently with efficiency, to keep the Expenditure of the country within limits. I hope the present Government will be able to do something in the way of keeping down and checking the Expenditure, which requires to be watched in every direction, and kept continually in mind, and within bounds. I do not know that I was altogether satisfied with the line the Government took the other day when this matter was pressed upon them. Apparently the Chancellor of the Exchequer, in his Budget Speech, was answering, by anticipation, the attack which was to be made upon the Government on the following day; and it may be that, having a little underrated the hon. Members for Burnley (Mr. Rylands) and Wolverhampton (Mr. H. H. Fowler), he thought he might lure them from the direct scent by giving them his opponents to attack. But those hon. Gentlemen came forward the next day with great directness and vigour. They were not turned from their path; they said many things not pleasant to Gentlemen on this side of the House; but they did not spare Gentlemen on their own side. When the Government found they were as good marksmen as if they wore so many Transvaal Boers, they began to think it was time to look about for a surrender; and what have they done? I will not say they offered a Convention, but they offered the hon. Gentlemen a Committee—or, rather, they offered, if the House pleased, that there should be a Committee or Committees. That was a most liberal offer, and it does great credit to the good nature of the Government; but, at the same time, it seemed to show a want of leading on their part in this matter. It is very like what they have done in regard to some other matters—like their referring the question of the Channel Tunnel, and other matters, to Committees. It did not seem to me that the views of the right hon. Gentleman and his Colleagues were calculated to bear out the severity of his speech. Now, I will pass from that point to another upon which we are brought to book. It is not merely the Expenditure we are told we have incurred, but also the mode in which we endeavoured to meet that Expenditure that we are taken to task for. I cannot altogether make the confession which I suppose I am expected to make. I am not at all disposed to accept all the re- 1921 bakes which have been administered to us for the mode in which we provided for that Expenditure. I quite agree that it is desirable, where it can be done consistently with other considerations, in every year to pay off by taxation the full amount of all the charges of that year, and also to make some provision for the reduction of the Debt. But, while I admit that that is, as a rule, desirable, I consider it subject to qualifications and limitations, and to other things which are even more desirable. I cannot accept, and I altogether repudiate, the doctrine which finds favour with the Prime Minister and his Colleagues, and which is very popular when enunciated in this House—namely, that taxation ought to be of a punitive character, or a penal character. What seems to be in their minds is, that if a Government finds itself obliged to enter upon warlike operations, it ought, as a matter of wholesome discipline, to bring those operations to the mind of the people by charging them with the expenses, however heavy they may be, within the same year. There is, no doubt, something very magnanimous in that way of looking at the case; but I myself rather hold this view Assuming that the military operations are necessary and good and right, then I say you ought not to be looking principally to making the mode of meeting the expenses as punitive and disagreeable as possible; but you ought to make it as little disadvantageous to the country as possible. I do not mean that it is to be as easy a matter as possible. I do not mean that you are to meet everything by throwing it upon the Debt, and shuffling out of it in such a way. We did no such thing, and I would not advocate it. When we asked for the £6,000,000 we at once raised taxation. We raised the Income Tax; we raised the Tobacco Duties; but we did not think it right to throw the whole of the burden upon a single year, and so we provided that what was an Expenditure for the benefit of the country should be defrayed in a very reasonable and small number of years—not throwing it upon a future generation, or to any great distance of time, but throwing it over two or three years, with a view to preventing the necessity of putting a burden of stringent taxation on the country at a time when it would have been extremely 1922 disadvantageous and injurious to the country to bear it. That may or may not be the right policy, but it is a policy which was openly adopted and argued, and, which I have maintained for many years past, and which I am prepared on all occasions to stand up for as right. I will put it in this way. If you are obliged, whenever a sudden call is made upon you, to raise the whole of the money required at once, you practically have, in the present state of your financial system, no other resource than the Income Tax. In such a case you may have to raise the Income Tax, not by 2d., but by 4d. or 6d., in order to pay off everything at once; but in the following year you would have to take it off again. Now, as practical men, do we not see an enormous inconvenience to the country in thus putting the Income Tax up and down; and do we not see how great an advantage it is, especially at times like those of which I was speaking, when there was great pressure, to endeavour to keep your Income Tax level as steadily as possible? Remember, we put on the Income Tax in such a way that within the few years that were to elapse before the expiration of the Terminable Annuities in 1885, the whole of the expenses would be discharged, and the country would be relieved of them. We are, no doubt, upon that view open to be told that we are taking a wrong financial view. I believe it is the right financial view; but, at all events, it is one which is not open to the sort of charge which the Secretary to the Treasury just now intimated against us—that we were allowing everything to slide, and were not proceeding with any vigour in the matter, but were endeavouring to hope for a surplus in one year to make up the deficiency of another. We had very bad fortune, in some of the complications that came upon us, for which we were not altogether responsible, and also in the great failure that took place in our Revenue, which had been estimated most carefully. I appeal to the Chancellor of the Exchequer, who has access to the means of knowing upon what our Estimates were formed—Estimates formed most care-fully, but which, owing to the state of the country, fell £750,000 in a single year. The right hon. Gentleman has had better fortune, and I am quite 1923 ready to offer him my good wishes on the results of last year's calculations. He has received something like £1,500,000 or £1,750,000 more than he originally—or his Predecessor—estimated the Revenue at. That is good fortune. I do not suppose he or the Government would claim any merit for that; but it is an instance of good fortune as remarkable as was our bad fortune. After all, these are matters in which we must always be prepared for ups and downs. It is always the case that, make the best Estimate you can, it is impossible to foresee what the result will be. I have made these observations on the charges made by the right hon. Gentleman, for it seemed to me that he was rather intent on drawing the attention of the House away from the actual financial shortcomings of the present Government by throwing them on their Predecessors. I should have been prepared to make some observations on the Expenditure as it stands in their hands, as compared with the Expenditure in former times; but my right hon. Friend (Mr. W. H. Smith) has gone so fully into that matter that I do not think it necessary to do so myself. There is one other matter, or one or two other matters in the Budget on which I should? wish to say a very few words. My right hon. Friend the Member for Westminster said what occurred to him, and what, I know, is felt in the City with regard to the mode of dealing with the Silver Plate Duty. I will not go into that now; but I cannot help expressing the opinion that more differences will be found in this matter than we have been told of, and I shall not be surprised if the Government find they are obliged to give up their plan. They have made one attempt to deal with the Silver Duty, which was not a success; and I should not be surprised if they had to give up this proposal. I much regretted to hear what was said about the Wine Duties. It seemed to me it was repeating the error which was committed by the Prime Minister when he actually made it one reason for asking for additional taxation that he was engaged in the negotiation of a Treaty with France with a view to the reduction of our Wine Duties, and when he said he hoped to get a reduction of those duties. That all came to nothing; and now we have got again some general language, rather 1924 vague, and, at the same time, exciting, with regard to a plan the Government adopt, and which, at the same time, may be produced at the proper time, to set right the scheme of the Wine Duties in a manner that will be satisfactory to Spain and Portugal. I think that language of that sort, when you are not prepared immediately to give effect to your plan, is of an injurious character. It excites trade, and may possibly complicate our relations with other Powers. I regret very much that such language should have been used if no effect is to be given to it. As to another proposal—the reduction in the charge for telegrams—I said on the first night that which I feel bound to say now—that I think, as we were to have that reduction, it was rather hard that we were led, a few days ago, into a vote which we gave entirely on the assurance that we could not afford to make this reduction. Not with any particular pleasure, but from a feeling of duty, I and my Friends near me accompanied the Government into the Lobby in order to maintain the position which they had called on us to take, which was to assist them in protecting the Revenue. If we are to be thrown, over in this way it is not an encouragement to those who desire to support economy. It is not an encouragement to give an unpopular vote for the sake of supporting a Ministry if they throw you over the next day. Then, as to the Railways, I confess I think the Committee would be glad to have some fuller information as to the conditions upon which this boon is to be given to the Companies. I own it seems to me—as it always seemed to me in the old times, when the Railway Companies came to me asking for this relief—that we have a right to demand that some advantages should be given to the State and to the public in return for a concession which, no doubt, raises considerably the value of Railway Stock. I cannot help saying, in passing, that I think this is a matter on which we ought to have a further and fuller explanation. There is another point on which there should be fuller information this evening—namely, as to the proposals for the reduction of the National Debt. I agree with him to a certain extent; but I think that even with regard to that proposal he might have been a little more graceful in the way in which he referred 1925 to what had been previously done in the matter. The right hon. Gentleman, however, makes the proposal a very captivating and high-sounding one—to get rid of £170,000,000 of Debt within a limited number of years. That, I know, favourably impressed a great many Gentlemen, who, perhaps, have forgotten that in the year 1875 I made a proposal which eventuated, so far as the paper calculations went, in something like the same result in even higher figures. I induced the House of Commons to take a step which was of a practical character. The right hon. Gentleman does not ask one single 6d. to be expended for the purpose of accomplishing this great feat; but I found myself in a different position. When the late Government undertook to deal with the question, they found that the charge for the interest on the Debt, including the costs of the Terminable Annuities, was £27,200,000, and their first proposal was to raise that amount by additions of taxation, or by abstaining from remissions of taxation, which is the same thing, to £28,000,000, adding an expenditure of £800,000 a year to the charge for the Debt. And then, also, I proposed by Act of Parliament to fix that amount as the amount which should be continuously paid to cover the interest of the Sinking Fund. That was done on the principle that if you have a fixed sum paid every year to cover something more than the interest on the Debt, the something more which is applicable will go to the reduction of principal; and year by year, as the principal is redeemed and the same money is thus applied, a larger proportion of it will go to the redemption of principal, and a smaller proportion to the payment of interest. According to that principle, if you maintain the payment of £28,000,000 a-year, you will find that after a time you extinguish a large portion of that Debt. The right hon. Gentleman says he maintains that principle, whatever doubts the Government had upon it when it was first introduced. I think he, and certainly some some others who sit on the same Bench with him, at that time objected to the proposals, on the ground that it would bind some future Chancellor of the Exchequer when the time came for calling in the great Annuities, and that it was unfair and unbusinesslike for one Party to bind its successor 1926 in that way. All our proposal came to was that we bound Parliament, while that Act was in force, to maintain a certain payment in one way or another for the redemption of the Debt. But the right hon. Gentleman binds his Successor or himself much more closely by the Annuities he proposes to set up. I understand that in 1885 there will fall in Terminable Annuities to the amount of £5,130,000, and that upon the cancelling of £70,000,000 of Debt the interest of that £70,000,000, to the amount of about £2,100,000, will be saved. So that there will be, on the one side of the account a saving of Expenditure of £7,230,000; and against that the right hon. Gentleman creates three sets of Annuities, one of £2,674,000, another of £3,600,000, and a third of £700,000, which will bring it to £6,974,000 on the one side of the account as against £7,230,000 on the other side. Is that so?
§ SIR STAFFORD NORTHCOTEWell, that is a proposal which is entirely within the lines of the legislation of the year 1875, and a very proper proceeding it is, subject to qualifications, perhaps, as to the amount of the Annuities to be created, to be accepted in principle when the time comes. But I want to know why should it have come this year, and do you thereby gain any advantage over the more simple process of waiting till 1885, when the Annuities fall in, before you deal with the amount? I must say it does not seem very clear to me what is the object to be gained, unless it is to obtain the credit of making an arrangement which really costs the right hon. Gentleman nothing. I will not go into the darker and more mysterious prospect as to the Death Duties, and the Succession Duty on Corporations, and other matters, that are held out to us by the right hon. Gentleman as things which are to be done in another year. Sufficient for the year is the Budget thereof. I can only say that we shall look forward with anxiety to what is in store for us in the future. Undoubtedly, having regard to the serious falling off in the consumption of spirits and fermented liquors, which the right hon. Gentleman referred to, it is a moment of some little anxiety as to our financial future; but I adhere to the 1927 view which I took some years ago, and which has been quoted by my right hon. Friend, that if there really is such a change in the habits of the people as to largely reduce the consumption of alcohol, there is no fear that either the Revenue, if managed with skill and dexterity, or the country, will suffer from it in the end. The country ought to feel, and will feel, benefit from the great saving that will be brought about. I hope that nothing I have said has given offence to any of those who have heard me. They must remember who threw the first stone. I cannot think it was my duty to pass over without comment such remarks as those of the right hon. Gentleman.
§ THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)The right hon. Gentleman, and one or two of those who preceded him, have spoken very severely of me, because they said that, in the Statement I made on Thursday last, I introduced matter into my remarks which was unusual—which was not consistent with my position, and which savoured of electioneering; and my right hon. Friend who spoke last went so far as to say that I directed sneers against my opponents. Now, I beg distinctly to state that on that occasion not a single word fell from me which could, by any possibility, be construed into a sneer against anyone. What I did was this. I have referred carefully to the Statement which I made, and I will tell the Committee precisely what I did which seemed to be of so unusual a character in the opinion of some hon. Members. In describing the financial position during the last few years, I alluded to three things—first, to the "legacies," as I called them, of Expenditure which we inherited three years ago, and I described, but certainly not with a sneer, those legacies accurately. I stated carefully, and with the figures before me, what the amount of the Debt paid off was during our three years, the six preceeding years, and during the last 26 years. I gave figures which certainly contained no sneers in them, for they were simply dry matters of fact. I also made a comparison between the Army and Navy Estimates of 1879–80 and of this year, and I endeavoured to give accurately what the differences between those Estimates were, and where were the increases and the economies. This was the only statement 1928 which, during the whole of my remarks, I made as to the procedings of the late Administration. It is quite true that I made a comparison between the Expenditure of last year—1882–3—and of the preceding year, so as to show in what respect the Expenditure of last year had been more than the Expenditure of the preceeding years, and how it came to pass, after allowing for this additional Expenditure, the charge on the taxpayer was less last year than the year before. But the year I selected was not one during the Administration of the late Government, and I, therefore, did not refer, either directly or indirectly, to them. I also gave the total Expenditure for the Army and Navy at certain periods since 1857. I think, therefore, that it cannot be said that I instituted any unusual or, indeed, any comparisons at all between the acts of the present Administration and the acts of the past Administration. The three comparisons I made I was bound to make, and they were with regard to the amount of Debt paid off, and the comparative Expenditure on the Army and Navy last year and the four years before. I felt it to be my duty to the whole House, not to any particular Party in the House, that the figures should be stated; and here are the reasons. For some months past, as you know, hundreds of thousands of leaflets have been distributed up and down the country by the National Union of Conservatives, containing supposed figures to prove the great financial crimes of the present Administration. There is not a borough, not a county, in which those figures have not been distributed by thousands, giving in the utmost detail separate items to prove the great financial crimes of the present Administration. I will not trouble the Committee with the manner in which these circulars were distributed. And not only was this the case; but the noble Lord (Lord George Hamilton), who spoke so well to-night—and we are always glad to hear him, for he speaks with perfect good humour, and his observations are always pointed and interesting to all who hear them—has occupied himself during the past few weeks in circulating these figures here and there, and in bringing them forward as a great accusation against Her Majesty's Government. Well, under those circumstances, it was almost my duty, as Chan- 1929 cellor of the Exchequer, not in a long argument, but by a simple recitation of figures, to state what were the real circumstances of the Expenditure of the past few years, and what have been the financial arrangements of the Government during that period as compared with the Expenditure and financial arrangements of previous times. Feeling it to be my duty, I accomplished the task as shortly and as simply as I could; and I am bound to say, from some internal evidence I have had, that I was not only expected to take that line by those who agree with the noble Lord's view, but also by others who, within the last few days, have considered it to be their duty to address their constituents on the subject of the current Government finance. I find, for instance, that the very day before I spoke here on Thursday last, someone was kind enough to send me a newspaper, in which I I noticed that my hon. and learned Friend the junior Member for Sheffield (Mr. Stuart-Wortley)—I am not quite sure whether he is in the House now, he was a few minutes ago—when addressing his constituents was asked whether he could give information as to several interesting questions of finance. Specially, they said, they wanted to know what the bill left by the late Government was which was to be defrayed by the Liberal Budget of this year. His answer was the very natural one, that he was afraid that the Liberal Budget for this year was a thing concealed for the moment in the mind of the Chancellor of the Exchequer, and that until the Chancellor of the Exchequer made his speech—which he hoped he would do on the following night—he (Mr. Stuart-Wortley) would not be able to answer. It was quite plain that my hon. and learned Friend the junior Member for Sheffield expected on that particular point that a legacy had come from the late Government, and that I should explain what it was—what it consisted of, and how we had paid it, and how we proposed to pay it. And now, because I have done so, and have complied with the anticipation of my hon. Friend the Member for Sheffield, I am told I have done something unusual—something worse than unusual. Really, Sir, I have done nothing but tell the plain truth. It was my duty to put before the House certain facts. Of course, on all questions 1930 of this sort we expect to hear arguments and counter-arguments, and no one is surprised to hear from the other side of the House statements put forward to weaken the force of our contention; but that I said anything unusual and unexpected, I think the evidence I have now given to the Committee plainly and conclusively disproves. The right hon. Gentleman who has just spoken also said that I had taken this course because I had not had sufficient time in the Office I now hold to be able to make any important statements to the House. What I said was this—that I should endeavour to place before the House such statements as I could; and I never conceived that in dealing, for instance, with so interesting a question as the Debt—which it has been my fortune to study both in and out of Office for many years past—I should not be at liberty to make such a proposal as I thought, after full consideration, was a wise one. But what I really said was this—that I did not think the Chancellor of the Exchequer, after being only a few weeks in Office, was in a position to make large Revenue proposals—to propose large changes in dealing with great branches of Revenue. That was what I ventured in my opening words to deprecate, and I told the House some facts as to the Revenue which I was afraid would not be very interesting. But I never imagined that it would be my duty, or that it was incumbent on me, to refrain from dealing with other questions—of making the most ample proposals I thought necessary to the House in regard to other matters. The right hon. Gentleman has accused me of having, in stating these simple matters of fact, committed gross injustice to my Predecessors in charging upon them War Expenditure which, he said, was not War Expenditure at all, because the £6,000,000 which was raised in connection with the contemplated operations in the East of Europe—the Russian scare, or whatever it may be called—was provided to avoid war. Now, the Expenditure which was left to us was only in a small degree arising out of the Vote of Credit. The Expenditure left to us was mainly Expenditure arising out of subsequent operations in South Africa. The whole amount incurred was£l2,000,000, but £4,000,000 was defrayed out of that, leaving £8,100,000. But allowing a deduction 1931 by the right hon. Gentleman, the amount left to us was £7,850,000, and it was made up of the war items of 1878, 1879, and 1880. It was, therefore, in the shape in which it came to us, Expenditure for warlike purposes. But the right hon. Gentleman has given a most extraordinary account of the nature of this Expenditure, and of the reasons why he could not defray it. He said it was necessary to incur this outlay because of the insufficient Expenditure incurred by his Predecessors—so insufficient that they were unable to move our Forces without making a special appeal to the House for money to enable them to do so. That was certainly a charge by the right hon. Gentleman against his Predecessors of inadequate protection of the nation, if ever such a charge was brought in this world. But the late Government had been four years in Office then. They had said a great deal about the condition of the Navy, and they had said much as to what they would do when they came into Office. Mr. Ward Hunt, for instance, said a great deal about the state of the Navy, and his determination to take it in hand. We voted them every shilling they asked for; but after they had had four years of Office, and four years to get the Forces we left them into proper condition, the right hon. Gentleman says that the state of things in 1878 was the consequence of what we had left them in 1874; and, not satisfied with that, he also declares that we had in 1882 the benefit of the money spent in 1878, without which we should not have been able to undertake the Egyptian Campaign. I do not think the right hon. Gentleman recollects the answer given to the hon. Member for Eye (Mr. Ash-mead-Bartlett) some short time ago, when he inquired whether the Government had had the advantage of the stores left by the late Government, and the reply was, "Not a pound." The whole amount had been consumed a long time before; and now the right hon. Gentleman brings the charge of our having benefited by them against us again. The right hon. Gentleman admitted that the Zulu War was a fail-charge, and the Afghan War also. Nobody supposed, however, that the war which was estimated at £7,000,000 would cost £20,000,000. The right hon. Gentleman said also that to charge the Transvaal War on the late Government 1932 was an outrage; and how did he prove it? He argued that we might have got over the difficulty of that war if we had agreed to some changes in the Transvaal when the confederation of the Colonies was found finally to fail. Without further inquiry as to that failure, and before consulting those in this country whom it was necessary to consult, we were to suddenly abandon the Transvaal, and in that way avoid the consequences of the war. What would the right hon. Gentleman and his Party have said if we had taken that course? It is possible we may have been too patient in waiting to know more about the state of affairs in the Transvaal, and had we acted in a great hurry it is just possible that war might have been avoided; but treating the matter historically, whether our conduct in regard to the Transvaal was or was not wise, I say distinctly that the war was the consequence of the policy of the late Government, and, as such, I am perfectly justified in saying that the expense of that war was a heritage from the late Government. Then the right hon. Gentleman, passing to an entirely different subject, alluded to the debate on Friday, and said that apparently what I had said on Thursday was directed to my hon. Friends the Members for Burnley (Mr. Rylands) and Wolverhampton (Mr. H. H. Fowler), and that at the end we had to surrender. Nothing of the kind. I said, in reply to a question, that the decision to adopt the Motion of my hon. Friend the Member for Burnley, was arrived at before I spoke. I had been, from the first, anxious that there should be a debate, and I think great public advantage was gained by that debate, and I did something to assist that debate, because those who are impartial will remember that I made a great many references to Expenditure during the last 12 years, which had no connection with the Expenditure of the late Government; and it was my hope that the information I brought before the House then would be useful to the hon. Member for Burnley upon his Motion. But the right hon. Gentleman passed back again to the former question, and discussed at some length the policy which the late Government had adopted in 1879–80 in not meeting the charges for the year with the taxation of the year. He said taxation should not be puni- 1933 tive, and that we should not punish the taxpayers; and for that reason he had adopted the policy of deferring charges over a period of years. I remember a deputation to the right hon. Gentleman, and I remember that he gave a description of his financial policy, saying that it was wise to spread Expenditure over a number of years. What did we do? My right hon. Friend, and several hon. Gentlemen who are sitting opposite, said the policy of spreading Expenditure was a dangerous one, because you might have a good year, and then a bad year following, and so the process of spreading would go on. That is exactly what the late Government did. We had the Vote of Credit, and instead of its being paid for the Expenditure was spread; and what followed? We had wars, and the result was that we are now paying, and shall continue to pay until 1885, for four wars which could have been paid off at the time instead of being spread over a long period. I believe that instead of spreading Expenditure over a number of years our duty is to pay it as nearly as possible at the time. It is possible that the whole Expenditure of a year may slightly exceed the Revenue; but our duty is to make that up in the following year. That may be an unpopular proceeding at the time, but it may bring home to the taxpayers what war is; and if it has that effect it does much more good than the popular method of telling them—"Oh! we will spread it, and your burden will be only light, because it will go on for a time." So much for the remarks which the right hon. Gentleman directed against me. I will now give one or two answers to questions which have been addressed to me, and to remark upon certain portions of the Budget. The right hon. Member for Westminster (Mr. W. H. Smith) asked me a question which, coming from a Gentleman who has been at the Treasury, is full of weight. He asked me whether the balances in the Public Departments were greater or less this year than last? I cannot say positively, but no instructions for balances were given; and all I can say is that the balances in London were £50,000 more than they were last year. The right hon. Gentleman also called special attention to the Revenue from tea, and asked me whether I could say that the present steady increase of that Revenue 1934 in the last few years, compared with the fall in the Revenue from wine and spirits, was significant? I am afraid it is not so significant as I should wish. He complained rather that I did not make a triple comparison with respect to the Receipts and Estimates of previous years. I find that I did state to the House three sets of figures as nearly as I could.
§ MR. W. H. SMITHMy objection was that the figures given to the House were the gross Estimates of the past year, instead of the Estimates of March in one year compared with the Estimates of March in another year.
§ THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)If it is important to the Committee I will give those figures; but, after the full information given by the Secretary to the Treasury, I do not think I should be expected to go again into details as to the Expenditure of the last two or three years; and I must say that I could not tell the Committee that a comparison of the gross Expenditure would be any real comparison at all. I have been comparing the net Expenditure, which I think is the only reasonable comparison to make. Then the right hon. Gentleman complains that the Expenditure on ships has been so low that in one year we only built 7,000 tons, and yet we had a number of ironclads under the Vote of Credit in the previous year. That, he says, is why we kept the shipbuilding so low; but that is exactly why our Estimates must rise again. As to the construction of guns, no one could be more anxious than I am to go precisely on the lines laid down by the right hon. Gentleman. While I was at the War Office I carried out the wishes of Parliament and the country with regard to the Army, and the result has been an increase of £350,000 a-year on guns. I now come to some questions addressed to me with respect to particular remissions of taxation. With regard to silver and silver plate, it is proposed that it shall be placed in a sort of show-room, where it can be sold before it pays duty. I have noted, and wish to take such advantage as I can from the suggestions made to me on that matter. I will see if it is possible to do something in that direction, and shall be quite open to suggestions from hon. Gentlemen. I must distinctly decline to accept the right hon. 1935 Gentleman's warning as to what I said about wine. The words I used were words used with great care, and after consulting the records we possess as to the state of our relations with winegrowing countries. I hope those words will prove true. I referred to the Wine Duties in a way which I know has already been received with approval by those who are interested in the wine negotiations. As to the question of the price of telegrams, in spite of the severe censure I have received for dividing against my hon. Friend and then accepting his Motion, I can only return good for evil, and thank the right hon. Gentleman for supporting me on that occasion. I myself believe that when you have an opinion on a question it is better, instead of being silent and compromising the matter, to fight it out, and if you are beaten to take your beating and make the best of it. Therefore, I did not think it wise that the reduction of the price of telegrams should be forced upon us. What we have done is to set aside the amount which we believe will be incurred if the reduction is made at once, and study the best way of carrying out the reduction. The only other remark I have to make is on what fell from the right hon. Gentleman opposite with regard to our Sinking Fund and National Debt. He said we were not very graceful in the manner in which we developed this plan—because, I suppose, I did not give him sufficient credit for the £28,000,000 he had discharged. My objection to his plan was that it left out of sight the necessity for having Terminable Annuities; and that if, instead of laying down £28,000,000 or £29,000,000, he had arranged Annuities up to that figure, he would have been more likely to stand the fire of the position later on. But that plan having been adopted, I waived my objection. We have accepted it honourably, and intend to carry it out fully. When he asks why we did not wait another two years, all I can say is that when there is a good opportunity of carrying out a plan of that kind it is better to strike the iron while it is hot, than to wait till the last moment, when some accident may happen and prevent our carrying out in 1885 what there was every probability of our being able to carry out in 1883. I conclude by thanking the Committee for the favourable way in 1936 which they have received the Budget, which, in its main outlines, has been accepted by the Committee and by the country.
§ Question put, and agreed to.
§ (1.) Resolved, That, towards raising the Supply granted to Her Majesty, the Duties of Customs now charged on Tea shall continue to be levied and charged on and after the first day of August, one thousand eight hundred and eighty-three, until the first day of August, one thousand eight hundred and eighty-four, on importation into Great Britain or Ireland (that is to say): on
| £ | s. | d. | ||
| Tea | the lb. | 0 | 0 | 6. |
§ (2.) Resolved, That there shall be granted and paid to Her Majesty upon a licence or certificate to kill Game to be taken out under the provisions of the Act of the twenty-third and twenty-fourth years of Her Majesty's reign, chapter ninety, for a continuous period of fourteen days to be specified in such licence or certificate, the Duty of ….. One Pound.
§ (3.) Resolved, That it is expedient to amend the Laws relating to Customs and Inland Revenue.
§ Resolutions to be reported To-morrow.
§ Committee to sit again upon Wednesday.