SECOND HEADING. [ADJOURNED DEBATE.]

HC Deb 08 May 1894 vol 24 cc610-90

Order read, for resuming Adjourned Debate on Amendment proposed to Question [7th May],"That the Bill be now read a second time."

And which Amendment was, to leave out the word "now," and, at the end of the Question, to add the words "upon this day six months."—(Mr. Grant Lawson.)

Question again proposed, "That the word 'now' stand part of the Question."

Debate resumed.

MR. BARTON (Armagh, Mid)

said, he had ventured to take part in the Debate because he happened to have special means of information with reference to one part of the Budget, inasmuch as he was a member of the Board of the principal brewery in Ireland. He did not wish to speak on behalf of any particular concern, however, nor unduly to press the claims of any interest in which he was concerned, but he thought that there were certain matters which deserved to be brought before the House. As, however, he did not intend to vote solely upon the Beer Duties, and as he thought the Bill was very unfair to Ireland in other respects, he would like to say a few words about the Death Duties. The Chancellor of the Exchequer had said that the burden of the Death Duties which would be levied in Ireland would be less than that of the duties levied in England. He had no means of ascertaining whether this were so or not, but if it were so it was because there were fewer large landowners and wealthy people in Ireland. He need not say that every observation which his hon. Friend had made with reference to English landowners applied to Irish landowners, and that when an Irish estate was burdened with an additional tax, as it would be under this Bill for several years after each succession, not only would the landlord be burdened, but the tenants and labourers would be indirectly affected. He would remind the House that the Irish landlords were not receiving any special compensatory rebate such as the English landowners were to receive by the reduction of and the alteration in the Income Tax. The Chancellor of the Exchequer was tempering the wind to the shorn lamb in England, although in Ireland, where the lamb had certainly been shorn, the wind was not to be tempered. He would give some examples to show that the tenants would be more heavily burdened under this Bill than they were at present. There were certain tenants who held by freehold tenures. Many tenants held under fee-farm grants, and there were others who held on leases for one, two, or three lives. The last-named cases were very frequent in Ireland amongst what he might call the middle-sized farmers, and in these cases the increased rate of valuation would result in imposing an increased burden upon the farmers.

THE CHANCELLOR OF THE EXCHEQUER (Sir W. HARCOURT,) Derby

Will the hon. and learned Gentleman state what is the average rental in these cases?

MR. BARTON

said, he could not at the moment state what the average was, but he would take care to find out as far as he could and inform the right hon. Gentleman. Certainly farms of 150 or 160 acres were frequently let for three lives. One reason was that it was considered better than police protection. Landowners were not likely to be shot when the leases of the country depended upon their existence. There was a little provision at the end of Clause 13 which was of some importance to the tenants of Ireland, though he was afraid it had escaped their attention. It would repeal a provision in the Customs and Inland Revenue Act of 1881 in favour of small estates not exceeding £300 in value. Since 1881 these estates had only paid a fixed duty of 30s., or half per cent. It was a great boon, but the present proposal of the Government would repeal it. The Chancellor of the Exchequer would give estates under £1,000 value a certain advantage, but the duty would be doubled in the case of the small estates to which he referred. It would be £3 instead of 30s. In Ireland there were a largo number of small estates of the value of £250 or £300 held by small farmers and shopkeepers, and these people would strongly object to the increased imposition. Another point was as to the tenant purchasers under the Ashbourne Acts. It was not easy to state what would be the effect of the Bill upon such purchasers. None but practising solicitors could know how a duty would work, but he had tried to ascertain the facts, from the best solicitors in Ireland, what would be the effect, and as a result he believed that the Bill would impose a distinct additional burden on these purchasers. The estates were freehold, but descended on a death as personalty. They paid Succession Duty. In future the duty would be calculated on the actual value, while hitherto it had been calculated at a lower rate. He did not say that this was wrong, but he thought it should be understood by every tenant purchaser in Ireland that he would equally with the landowner have an additional burden to bear. He regretted that this Bill would hamper the operation of the Purchase Acts, which most people wanted to see working smoothly and well. But he would now pass on to the question of the Beer and Spirit Duties, which was a far more serious matter for Ireland. The opposition in Ireland would be based not on moral, but rather on fiscal grounds. There were many amongst his constituents who took a strong view with reference to temperance legislation, and he found himself so much in sympathy with them that though he was a Director in a large brewery he was in favour of Sunday closing, and, to some extent, a heretic amongst the English brewers. But whilst there were Members of that House from Ireland who held that view, nevertheless they felt that the burden upon spirits, which were so largely consumed and manufactured in Ireland compared with the rest of the Kingdom, was a serious matter, and, if made excessive, would become a national calamity. The general opinion in Ireland was that the proposed extra tax of 6d was an excessive burden. They had so very few remaining industries in Ireland that they could not regard except with alarm any additional fiscal burdens upon them. And there was another danger—a moral and social one—namely, that of illicit distillation. In 1890 the present Secretary of State for India, when the House was induced to accept the 6d. per gallon on spirits, said that all the evidence went to show that there was a certain high-water mark beyond which an increase of duties produced illicit distillation, and the Revenue suffered. He then saw that high-water mark, but what did they think of the springtide proposal of this year? He could not help thinking that the right hon. Gentleman would find it difficult to reconcile his position now with what, he said in 1890, and there was also the point of the injury to the people to be regarded. It was these poisonous decoctions which ruined health and led people into crime; yet this was what the Government, at any rate, were lending encouragement to. In 1880 Mr. Childers proposed an additional tax of 1s. on spirits, and the Government was defeated. In 1890, however, 6d. was put on, and in 1894 they were proposing to add another 6d.—or, in effect, to complete the very shilling extra tax over which the Government of 1880 was defeated. It was no satisfaction to the spirit trade in Ireland that the cherry had to be eaten in two bites, or to receive in instalments that which was refused by Parliament as a whole. Then, with reference to the supposed concession of the imposition of the tax for only a year or 14 months, he thanked the hon. Member for North Kerry (Mr. Sexton) for having drawn attention to the matter, but he must declare that it was absolutely worthless. In 1890 an Amendment was proposed to the Budget limiting Mr. Goschen's tax of 6d. to one year, but in that Debate the present Chancellor of the Exchequer, who was then in Opposition—and he would commend this to the Irish Members—declared that The House of Commons may save the tax for one year, but the Inland Revenue will go on, and the Chancellor of the Exchequer will say I am entitled to compensation, and that compensation will be the continuance of the tax for ever. And he was not the only authority. Mr. Childers in 1885 was asked to place the Beer and Spirit Duties for one year, and he said he could do so in respect of beer, but not of spirits, because in the latter case it could not be done without throwing the trade and the revenue into a complete state of disorganisation. He did not know if anything could be shown to have happened in the trade and in the Revenue Department since that time to alter the condition of things then alluded to. He had read an amusing speech of an Irish gentleman connected with the trade at an indignation meeting in Ireland, in which he said that a Spirit Duty in the Budget was like a lost spirit in the hot quarter of another world—when once it got there, there was no escape. He earnestly hoped if this duty were imposed it would not be made permanent, but he was afraid that the assurance given by the Chancellor of the Exchequer was of no value. He would say a word with reference to the Beer Duties. About one-twelfth of the beer of the United Kingdom was made and consumed in Ireland, and the effect of the tax in Ireland would be especially serious, where the process of brewing was more expensive than in England, especially amongst the smaller brewers. A reference to the published Returns would show that there was a larger proportion of barley and malt used in Ireland than in England. While in England 1 cwt. of sugar was used to between 20 and 30 bushels of barley, in Ireland it was one to 330 bushels, or, in other words, 15 times as much barley and malt were used in Ireland as in England. He did not say that as showing that the Irish breweries were superior, because he admitted that the matter was governed largely by public taste. But the effect of the tax upon the smaller breweries, from their having to do their work with these more expensive materials, would be very hard indeed. With reference to the firm of Messrs. Guinness and Sons, with which be was connected, he at once said that theirs was an exceptional case, and that they could not argue from the particular case of that brewery to the general case of the breweries in the country, and least of all in Ireland. It would not be becoming in him to enlarge upon the subject of that firm, but from what had been said by others, and from what was known in the trade, he did declare that if the Chancellor of the Exchequer were to use the facts connected with that single firm they would be entirely misleading and most unfair to the other members of the trade. He must, however, put one or two facts with reference to that firm before the House. The right hon. Gentleman said that this tax was imposed deliberately on the brewers. He would not discuss there whether the tax would or would not come out of their pockets. Such things as those had to be decided in another place than the House of Commons. But taking the assumption of the right hon. Gentleman, who were the brewers in a concern like Messrs. Guinness? They were no longer one or two rich men. The ordinary shareholders numbered 4,700, and of those nine-tenths of them only got between 4 and 5 per cent. on the price which they paid for their shares. [Ironical Ministerial cheers.] Yes; but the right hon. Gentleman was taxing these persons, and not those who made their money years ago. The amount of the tax on the Company's stock he calculated would be £43,000 a year, and this would amount to something like one and three-fourths of the present dividend of the ordinary shareholders, or, in other words, it would amount to between one-eighth and one-tenth of the total income they got on their shares. That meant that those persons would have to pay a 2s. Income Tax upon the dividend they received on their shares. But he would remind the House that those persons were already Income Tax payers. He had heard it said, "Why don't you tax wines—the drinks of the rich? Why do you go to beer and spirits?" The answer given was, "Because the wine drinkers were Income Tax payers, and Chancellors of the Exchequer wanted to tax a different class of persons." But in the present case the Government were doing the reverse—putting an additional tax on the Income Tax payers. He would go further than that, and remark that it was not true to say that these shareholders were rich people. In hundreds of cases the firm with which he was connected had applications for certificates for the payment of Income Tax in order that those shareholders might claim a rebate or total exemption. That showed that while the Chancellor of the Exchequer gave a rebate upon the said Income Tax with one hand, with the other hand he was taking a 2s. Income Tax out of the same pockets. There was one way in which the large brewers had a melancholy prospect of recouping themselves, and that was by the ruin of the smaller traders in the brewing in- terests, He had had information given him from other brewers in Ireland with reference to the effect of the tax upon them. He would take the case of a substantial brewery there, in which the duty would be £2,000 a year, and he was assured that that £2,000 would represent 43 per cent. of the annual profits of the last three years. Similarly in another case he was informed that the tax would amount to £1,500, and that the whole profits were only £3,000, and the tax would amount to 50 per cent., and in another case, where the tax would be £1,200 and the profits were £3,000, the tax would swallow 40 per cent. He declared that the Government had no right by taxation to reduce the profits of people by the single addition of an impost so large as this. But the case was worse even than What he had stated. He was assured by those in the trade that small brewers must be ruined by this tax, because it would just take away the margin of their profit. The imposition of similar taxes in 1880 and 1889 directly caused the ruin of many breweries. In 1880 there were 23,000 brewers in the Kingdom; in 1889 they had fallen to 12,000, and it was matter of common knowledge that the greater number of these failures were due to the additional tax imposed in 1880. The late Chancellor of the Exchequer did temper the wind to the small brewer, because he imposed his tax in a manner so as to operate less hardly by altering the gravity of the beer; but since that time 2,500 brewers had disappeared, and the question he would put was this: If a 3d. tax in four years ruined 2,500 brewers, how long would it take for a 6d. tax to ruin the rest?? Had the Chancellor of the Exchequer any right to relieve the small Income Tax payers by means of a tax which was likely to bring ruin upon others? They were all glad that the rebate should be given, but the Chancellor of the Exchequer had selected a year with an extraordinary deficit to give this relief, and the fact was he had tried to do too much in his Budget. It were better that he had been just rather than generous. Of course the tax would operate to the benefit of large firms, who, however, would not thank the Chancellor of the Exchequer, because they would contemplate with greater regret on strictly business grounds the loss which it would inflict on many people and a great many classes, and because it would not be a satisfactory thing that a few large monopolists here and there should become the central tax gatherers of the Exchequer. It was said that it did not matter to the farmer whether he sold his barley to the big man or the small if the productions of the country were kept up. But that was not the case. Let them look at the fall in the acreage of barley. In 1880 the acreage of barley reached its highest point, being 2,659,5,000 acres. That was the time when Mr. Gladstone altered the tax and placed it on beer, and the result was that the acreage fell year by year. It recovered itself somewhat in 1889, and then the right hon. Gentleman the Member for St. George's (Mr. Goschen) imposed his homoeopathic dose, and immediately again the acreage of barley fell, and the position of affairs now was that the acreage of barley in 1893 was 60,000 less than in 1889,"and 440,000 loss than it was in 1880. Who could doubt that it was in consequence of these taxes that this great and sudden fall had occurred? And in proportion as the acreage of barley went down so the consumption of sugar went up, to the advantage of the foreign producer both of that commodity and of barley. What was the good of Labour Commissions, of attempts to get people back from the towns to villages, and of other efforts in that direction, however laudable, when all the time they were pursuing a sure and certain process of gradually driving the people into the towns and increasing the pauperism and the very dangers they deplored. He thought the right hon. Gentleman would find his Budget was very ingenious but also very injurious. The right hon. Gentleman thought it was popular, but its popularity did not extend beyond St. George's Channel, and he doubted from what occurred last night whether it extended beyond the Thames even. He made no complaint with reference to the particular business his connection with which led him to study the particular subject. If any business in the brewing trade could stand the extra taxation that business could, and possibly though it would suffer immediately it might gain in the end by the miserable results and losses of others. But he said that in this and other respects the Budget would have a mast in- jurious effect on the country, and, as would always happen when a Chancellor of the Exchequer in trying to injure the rich unfairly aimed at the rich man, so before the shot reached its destination if scattered and struck many of the others.

* SIR J. PEASE (Durham, Barnard Castle)

said, that he would not follow the hon. and learned Member who had just spoken into the mysteries of the spirit and beer trades; but with regard to what the hon. and learned Member had said as to the small brewers, it should be borne in mind that the large brewers had been buying up the smaller public-houses and breweries for many years, and that the country was actually suffering from the increase of tied houses. Just as they had bought up the small public-houses because they found it to their interest to control the trade as much as possible, they would buy up the small breweries. It was by no means, therefore, to be inferred that any action which they might take in this respect would necessarily be the outcome of the financial policy of the Chancellor of the Exchequer, which policy, according to the hon. and learned Member, was calculated to be oppressive, more especially to the small brewers. The logic of the hon. and learned Member was indeed rather curious. He said that a largo brewery in which he was interested had a large number of small shareholders who had bought in at a premium and only got an ordinary rate of interest, and were therefore likely to suffer greatly by any increase of the Beer Duty, which diminished the profits of the trade. Hut, on the other hand, he pointed out that the small competing breweries might be extinguished—a result which, if it were brought about, could only benefit the shareholders of the large breweries, as to whose interests the hon. and learned Member was so much concerned. An hon. Member who spoke the previous night said he was very much surprised at the slackness of the attendance on the Government side of the House during this Debate. It was true there had been comparatively few upon those Benches during the Budget Debate, and he would state the reason. Some of them were under the impression that the matter had been so thoroughly threshed out in Debate upon the Resolutions that it would require little or no more Debate. On Saturday, the organs of the Party opposite told them the Budget Bill would pass through its Second Reading probably without a Division; hon. Gentlemen who objected to many of its provisions reserving themselves, of course, for the opportunity of dealing in Committee with the different points in the Bill which they thought required attention. But his hon. Friend the Member for Thirsk and the hon. Member for Wimbledon thought otherwise, and they were thus engaged in the midst of a Budget Debate, and were discussing the various sides of the question. On the general situation he wished to say that he looked upon this Debate as entirely originated by hon. and right hon. Gentlemen on the Opposition Benches. It really arose out of the Army and Navy requirements, which they put forward so zealously a few months ago. The noble Lord the Member for Middlesex (Lord George Hamilton) pressed the matter so much that he even took one of those exceptional opportunities with which they were beginning to be familiar of moving the adjournment of the House in order that he might discuss the question as of urgent public importance. It was the noble Lord and his friends who urged on the Government the expenditure which had since appeared in the Government proposals with regard to the Navy. He quite agreed in the view that the Navy scares had led to an unnecessary expenditure of the public money in the past, and this opinion was very much fortified by the late disclosures as to the extent of the defalcations in stores and materials that were actually being found to exist in the French dockyards. At the present time, however, they were not discussing the policy of the Estimates, which had been agreed to. They had now simply to consider how they could find this additional money for the Army and Navy, a sum of £3,500,000 in round numbers more than last year. The hon. Member for Thirsk disapproved of the methods which the Government proposed, especially as regarded the Death Duties. He told them, at the end of an excellent and well-reasoned speech, that the argument in favour of the proposals would be we must look at the Budget as a whole. No doubt they should look at it as a whole. The experience of life was that this was a course which it was often necessary to adopt, and in adopting it they usually found that they had to compromise more or less between various and conflicting interests, which was just what the Chancellor of the Exchequer had done in this case. The Budget generally was a matter of compromise, and the hon. Gentlemen who were disposed to criticise its details with some severity ought to bear this in mind. The Sinking Fund might be referred to as a matter in which the Chancellor of the Exchequer had been attacked. His right hon. Friend had been attacked because he had not adhered to the financial purity which he at one time advocated. He (Sir J. Pease) had, however, never been much in favour of a Sinking Fund. It seemed to him to have great drawbacks to the existing generation. In his grandfather's time they accumulated large debts; in his father's time they did little to pay them off; but in his own time and his son's time it looked as if they were getting the debt largely discharged—a debt of the past. His grandchildren might find that they had very little to do with the National Debt. That was not quite as it should be. One result was that when current expenditure came upon them in large amounts the Sinking Fund always stood in the way. In his opinion, it would be better to confine their efforts for the reduction of the Debt to the application of the surpluses of the Revenue in good years instead of making the present generation pay so largely for the expenditure of the past. The Member for the Wimbledon Division (Mr. Bonsor) in his speech tried very hard to prove that the extra 6d. a barrel on beer and the extra duty on spirits would damage the British farmer in arresting the growth of barley, but turning to these statistics with which Members were pretty well familiar, he found the sales of barley during the last few years were shown. In 1876 we received 2,700,000 quarters of foreign barley in this country, and an interesting column of statistics showed that the amount of home-grown barley sold in the various local markets was 1,800,000 quarters. The brewing interest, it might be supposed, used this home-grown barley, and of the total amount of barley in that year the percentage was 59.87 foreign and 40.13 English. Then, without giving the intervening years, it was found that the total in 1881 was 8,145,000 quarters, and in 1892 7,500,000 quarters. The receipts to the Exchequer from the Beer Duty rose £139,000 in the last financial year more than the Estimate, and £91,000 more than the year before.

MR. BONSOR (Surrey, Wimbledon)

(interrupting) said, he thought the hon. Gentleman's figures were wrong. There wore 60,000,000 bushels of malted barley used in 1876, which would be something over 7,000,000 quarters.

SIR J. PEASE

said, he took the figures of barley as they appeared in the Official Returns, but he did not use any Returns as to malt. The figure showed an increase of the consumption of barley from 4,500,000 quarters in 1876 to 7,500,000 quarters in 1892.

MR. BONSOR

said, he was quite certain the hon. Baronet was misinformed. There was an annual Return called the Brewers' Return, which went out every year, and he would find that in 1876 the consumption of barley malt was as he had said, and that in the last year it had fallen to 55,000,000 bushels.

SIR J. PEASE

said, he was not speaking of malted barley, but of barley, to which reference had been made.

MR. BONSSOR

For use in brewing.

SIR J. PEASE

said, the question at issue was, had the Beer Duty done harm to barley growing in this country, and would it do harm? Out of the whole stock of barley sold in the markets and imported in 1876, the proportion of imported barley was as 60 to 40, and now the percentage was more nearly equal than it was then. Therefore, this duty Chancellors of the Exchequer had laid upon beer had had no effect on British agriculture, or on the quantity of barley brought into the market or sold, although the acreage of barley had decreased. It had decreased, unfortunately, in its use as a feeding stuff, though such a desirable food, and especially in dairy farms. The hon. Member for Wimbledon, in his speech, tried to prove a little too much, because the figures showed that, whilst malted barley had gone down from 45s. 6d. to 28s. 10d. in price between 1886 and 1893, or 34 per cent., beer had only been reduced 10 per cent. And yet they had this great cry from the brewing interest in respect of these duties, notwithstanding the fact that whilst they paid 34 per cent. less for the price of material they had only lowered the price of beer by 10 per cent. Whilst it was perfectly true that the large brewers had increased, and the small brewers had gone down; the large brewers had machinery and facilities for brewing against which small brewers could not stand, and he submitted that the brewers were well able to meet any difficulty without adding a single fraction to the price of what was called the poor man's beer. There was another point in reference to these duties, as to which he should like to say one or two words. It had been stated two or three times in the course of the Debate that the right hon. Gentleman the Member for Midlothian abolished the Malt Tax and laid a tax upon beer. Yes, but the right hon. Gentleman did that, at the earnest instigation of the agricultural interest, who urged it time after time. He dared say many hon. Members sitting around him would recollect when this matter was regularly brought forward by Mr. William Morritt, a distinguished Conservative Member of the House, who on one occasion counted himself out on this very Motion by ironically calling Mr. Speaker's attention to the number of Members present interested in the subject. It was certainly at the instigation of the agricultural interest that the right hon. Member for Midlothian laid the duty on beer and took the tax off the material used in manufacture. He was surprised that in all the speeches which they had heard in criticism of the Budget from the Opposition Benches not a word had been said in gratitude to the Government for the relief which was given to so many of the constituents of hon. Members in connection with the Income Tax. He had had great experience of the clerks in their great railways and manufacturing concerns, and was convinced that the new arrangements by which the Income Tax was fixed at a higher limit would be to them a great boon—indeed, he felt that if hon. Gentlemen only would look at this Budget as a whole they would find that it would be to a large part of the community a real and important service. The abatement under Schedule B would be much appreciated by the agricultural interest. That affected a very large class of tenants in the Midland and Northern Counties, where the rents were not high, and the benefit of the abatement would therefore be enjoyed. In connection with this part of the Budget much had been said about the difficulties which the landed interest had in these days to encounter. He admitted the difficulties of the landed interest owing to the constant diminution of rent, the number of repairs, and the amount of drainage that had to be done to keep tenants comfortable in their holdings, the roofing-in of fold-yards, &c, which had to be done by the landlord on a decreased rental. |But other trades had been quite as equally depressed which got no allowance of this kind whatever, and it was a most difficult thing to have any Income Tax on an equitable, fair general basis. In regard to the trade which he represented in his own district and which he knew something of—mining—there was no deduction from the Income Tax for the amount of the colliery owners' expenditure which had to be written off yearly, because in sinking a mine a large amount of capital must go in the same ratio as the minerals were estimated. The Income Tax assessors, however, allowed them no return for that, although it was reduction from income which had to be made from time to time; therefore, while he did not begrudge in the slightest degree to the agricultural interest the 10 per cent. proposed to be taken off the assessable value of the Income Tax for the rent of the land, surely it was a boon to them not given to other people—the professional man, for instance—and which other taxpayers had, of course, to meet. He defended the graduated Death Duties, contending that the principle of the equal taxation of all property at death was right. There were, he admitted, difficulties in ascertaining the value, and the clauses relating to the question of valuation would have to be carefully considered, and it might be found necessary to insert words in the Bill laying down clearly on what principles the valuation ought to be conducted. In the levying of taxes it was a material point that they should, if possible, be levied in a way which added the least to the irritation of paying them. He wished to say a few words with regard to the general principle of the Bill. The principle was, to his mind, clear and right that whatever might be the property of a man, or however it might be invested, it was liable to a charge for the benefit of the State. He had always advocated the proper adjustment of local burdens. The only reason for giving the agricultural interest, or the lauded interest, the privileges which it had enjoyed in the past, was the idea that it had to bear a share of the annual taxation of the State more than what was just or equitable; but the late Chancellor of the Exchequer and the present Chancellor of the Exchequer had done what they could by local grants to equalise the burden. He thought the landed interest had a right to be placed on an equality as to the Death Duties with personalty; and to claim that the burdens should be equal burdens as between personalty and realty. No one had ever denied that proposition, but he thought that when realty and personalty were put on the same line and level it would be more possible to arrive at a better adjustment of other burdens.

* MR. COCHRANE (Ayrshire, N.)

said, the hon. Baronet who had just sat down had stated that the Budget was the penalty which had been placed upon the patriotism of the Opposition in urging the demands of the Army and Navy on the consideration of the House. But he thought that the hon. Members who had called attention to the needs of the Army and Navy would not complain if they had to suffer some additional burden, so long as other interests suffered equally with them. He found himself in sympathy with the Irish grievance which had been brought forward by the hon. and learned Member for Mid-Armagh in connection with the imposition of increased taxation on whisky. In Scotland, as well as in Ireland, they manufactured whisky and drank whisky, and the additional tax was considered by all classes—whether the producers of the whisky or the humble consumer of an occasional glass—as an injustice imposed upon them. Some time ago the Chancellor of the Exchequer had kindly promised that he would grant a public inquiry into the financial relations of Scot-laud with the other portions of the United Kingdom; but the right hon. Gentleman, with some considerable prudence, had delayed giving that inquiry, for it would have shown the great hardship in the matter of taxation imposed on Scotland and Ireland, who, in this instance, might very well join hands together in laying their case before the Chancellor of the Exchequer. The population of Scotland, according to the last Return, was 4,250,000; the population of England was 29,000,000. Scotland, therefore, had only one-seventh of the population of England. But Scotland paid not one-seventh, but one-third, of the. Spirit Duty, for while England contributed about £9,937,000, Scotland contributed £3,313,000, and Ireland £2,113,000. Therefore, the burden borne by Scotland in the shape of a duty on whisky was in an unfair proportion to the burden on alcoholic spirit drunk in England, especially as they took this alcohol in strict moderation in Scotland, though they drank whisky. The consumption of alcohol was less per head in Scotland than in England, and everyone knew that whisky was a better drink than beer, and was constantly preferred to beer by Members of the House. He thought "the predominant partner," of whom they had heard so much lately, should allow the junior partner to have the books inquired into, to see whether the predominant partner took the lion's share of the products of the taxation of the country. Taking the alcoholic strength as the basis of taxation, he would point out that if an Englishman drank a gallon of beer he only paid a tax of 2½d.; but if a group of Scotchmen consumed the same quantity of whisky and water, with the same strength of proof spirit as the beer, they paid 1s. 1¼d., which was most unjust treatment. As the Chancellor of the Exchequer proposed to raise £760,000 additional from whisky, and as an unfair proportion of the tax would fall on Scotland, he maintained that he had a substantial grievance to lay before the House, and that it was one that should receive attention. It was quite obvious that in the circumstances the quality of the whisky would suffer. There would either be more water or the ingredients would be of an inferior character, and of the two alternatives the water was the least objectionable. The Chancellor of the Exchequer should at least grant Scotland the inquiry asked for; and if the contention that Scotland paid too much were proved true, he would ask the right hon. Gentleman to consider whether the excess which Scotland paid in duty in proportion to England should not be paid back to her in ways that would benefit the country. In the Western Counties of Scotland the agricultural industry was in a very depressed condition indeed; and if by means of this money light railways were provided there, as in Ireland, and the country opened up, the industry would be greatly benefited. Again, the fisheries were languishing for a little money to help them forward; and the expenditure on them of a few thousand pounds would enormously develop them. He therefore hoped the Chancellor of the Exchequer would take the whole case of Scotland into consideration, and if the right hon. Gentleman found the country was unjustly taxed by the Spirit Duty that he would repay it back again to Scotland in grants for the development of her resources.

* MR. GOSCHEN (St. George's, Hanover Square)

The hon. Baronet the Member for the Barnard Castle Division seems to be of opinion that hon. Members whose seats are on this side of the House are responsible for the deficit of the Chancellor of the Exchequer. The hon. Baronet was preceded in that argument yesterday by the hon. Gentleman the Member for the Woodbridge Division, who stated he was glad that the additional taxation incurred at the call of the classes was going to be placed upon the right shoulders. I noticed that the Chancellor of the Exchequer began to cheer that statement, but immediately stopped when he discovered that it was received with hearty cheers by Members on this side of the House.

SIR W. HARCOURT

You are mistaken. I did not cheer him.

* MR. GOSCHEN

But, however that may be, when the hon. Member for Woodbridge stated that who on this side of the House are responsible, I wondered how it was that no protest was raised by hon. Members opposite when the expenditure was incurred for which the bills are now coming in? We see now that, in the opinion of trusted Members of the Party opposite, this expenditure was forced on the Government, not by any desire of Lord Spencer nor by any of the Naval Lords, nor by any of the exigencies of the country, but by the criminalities of the classes, on this side of the House. We were a little doubtful, I must confess, before that statement was made, as to the quarter from which the pressure on the Government came. We should not claim the credit, except it is forced on us by hon. Gentlemen opposite. I do not propose to traverse the same ground which I covered the other day when the Resolutions were being discussed in Committee, with two important exceptions. I pass over the question of the seizure of part of the money applicable to the discharge of Debt last year for the purpose of applying it to meet Expenditure in this. I dismiss the question of the suspension of the Sinking Fund, and its application to other purposes than those for which it was intended. I dismiss the question of the repeal of the Act by which the dividends on the Suez Canal shares are appropriated to the payment of the Debt and their application to meet the Expenditure of this year. I will not specially dwell upon the question which others have dealt with at considerable length—namely, the question of the Beer and Spirit Duties, except to note with satisfaction that the Chancellor of the Exchequer has extended the date from the 31st of March to the 1st of July. It is, however, a little odd that this most scientific and brilliant Budget was on the eve of tumbling to pieces at the first touch, and that the right hon. Gentleman forgot the elementary rule that when a tax is proposed to end at the termination of the financial year, a portion of the proceeds of that tax is likely to slip through his hands. It reminds one of a great scientific gun, splendidly equipped, which has the misfortune to jamb at its first trial owing to the awkward handling of the gunner in charge. The right hon. Gentleman was rescued from that position by the advice which he received from this side of the House. But will pass to two points which I wish to discuss to-night, though I touched them on the last occasion—namely, the question of exemptions and the question of graduation. With regard to graduation, I think hon. Members, whether they agree with graduation or not, are of opinion that it is a new departure, and marks a new era in finance, for good or for evil. That, I think, will be felt by hon. Members on both sides of the House. The right hon. Gentleman sought to fasten upon me that, in speaking against graduation, I was pledging the Conservative Party. I had no such intention. While I have myself strong opinions on the subject, I am aware that they are not shared by all who sit on this side of the House. In fact, there are Members behind me who have stated a different opinion. But before I approach that subject let me say a word on the exemptions from Income Tax. The hon. Baronet the Member for the Barnard Castle Division said that hon. Members on this side of the House did not express sufficient gratitude to the Chancellor of the Exchequer for these exemptions, which he said must be of great importance to our constituents. The hon. Baronet, I thought, was a Gladstonian of the strictest school. I should have thought that he would be acquainted with the views of the right hon. Gentleman the Member for Midlothian. He must he aware that the right hon. Gentleman the Member for Midlothian has made on more than one occasion the strongest protest in this House against a system of exemptions of this kind. The right hon. Gentleman considered that such a policy as that now proposed is both dangerous and weakening to the efficiency of the Income Tax; and especially was the right hon. Gentleman opposed to it when in the same year in which an increase of taxation is put upon people by means of this very tax the Government smooth their way by making abatements at the lower end of the scale. The right hon. Gentleman the Member for Midlothian, who is considered to be a master of finance, warned the House against this policy; but these warnings are absolutely of no value, it appears, to some hon. Members opposite, and the Chancellor of the Exchequer scoffed at certain words which I quoted from a speech of his late Leader. Contrary, I believe, to the majority of this House, and possibly contrary to the majority on both sides of the House, I believe the right hon. Gentleman the Member for Midlothian was entirely right in the view he took, that if you grant these exemptions to any class—and certainly if any class deserve exemption it is the class you propose to exempt—it is not right, at the same time, to increase the tax on other people. The Chancellor of the Exchequer said that we have often before put on taxes in order to relieve taxation; but the peculiarity of this case is that you are not introducing fiscal reforms; what you are doing is to relieve one class of the pressure of a tax, while making it heavier on others.

SIR W. HARCOURT

It was done in 1876.

MR. GOSCHEN

Yes; and I spoke against it in 1876, and I speak against it now. The Leader of the Liberal Party spoke against it then, and I daresay the right hon. Gentleman himself was in the Division against it. I know that in the main the Liberal Party followed the right hon. Gentleman the Member for Midlothian on that occasion, because he said that it was almost a claim of honour to vote against it. At any rate I hold that view, and I know it; is not now a popular view. I have endeavoured, while Chancellor of the Exchequer, to help in every way to lighten the taxation on that very class of persons who, as I said, are entitled to sympathy. This sympathy I showed by reducing the Inhabited House Duty in their case. Therefore, it is not because of want of sympathy with that class that I hold this view. Further, I still hold very strongly the view, in which, I believe, if the right hon. Gentleman the Member for Midlothian were in his seat to-night, he would entirely agree with me, that a reckless resort to the Income Tax on every possible occasion, weakening at the same time its power by exemption, is a bad financial policy, for it weakens the credit and resources of the country for those great emergencies in which, as the past history of our country shows, the Income Tax has been such an immense engine for meeting immediate and pressing needs. With regard to the relief which the Chancellor of the Exchequer has given by levying the Income Tax on the net instead of on the gross, the hon. Baronet opposite has said that the right hon. Gentleman has not been sufficiently thanked for the concession. The position appears to me to be this: the right hon. Gentleman is like a man who takes 10s. from a certain number of people; then gives them back 5s., and expects them to be extremely grateful that he did not keep the entire 10s. When realty and personalty were put, as regards the Death Duty, on the same footing, the right hon. Gentleman was bound to make this concession. It was justice rather than generosity that actuated the Chancellor of the Exchequer. Much stress has been laid on this matter. The hon. Baronet said what a great boon it was. Let me give the House an example. Take the case of a man with £20,000 a year derived from rents. Who will assume the Income Tax stands at the even figure of 6d. The Chancellor of the Exchequer allows him 10 per cent., or 2,000 sixpences, amounting to £50 a year. That is the boon—£50 a year, or, with the Income Tax at 8d., £60 a year. That is all a man in receipt of rents amounting to £20,000 a year will receive at the hands of the generous Chancellor of the Exchequer. On the other hand, if you capitalise this £20,000 a year at 25 years' purchase, you get £500,000. Seven per cent. on that sum is £35,000. Under the present system he may have paid £15,000, so that the balance is £20,000, which the Chancellor of the Exchequer has taken from him, and in return he gives him a little annuity of £50 a year. If that sum is applied to other cases it will be seen how great is the value of the boon. With regard to the Death Duties as a whole, I am aware that in certain quarters of the House there are many Members who are desirous to have these duties placed on a similar footing, and to equalise the weight of taxation on personalty and realty, if it could be so arranged as to combine with it all the safeguards necessary to prevent any of those injustices continuing under which the landed proprietor or the occupier may be at the present time suffering. To bring about such a state of things would be, in my opinion, the most important object to which any Chancellor of the Exchequer could devote his ambition. The Chancellor of the Exchequer has not succeeded, and I am not surprised that he has not succeeded, in reducing the Death Duties to one duty. He has been battled by the difficulty of arranging the consanguinity scale. If you have one duty simply for estate and probate, you lose all the advantages of the consanguinity scale. On the other hand, I understand the right hon. Gentleman was not prepared to abolish probate and arrange all the duties upon a Succession Duty or a Legacy Duty basis. So far as I am concerned, I think it is an ingenious arrangement by which he divides the A duties and the B duties, and follows that, up; but I am bound to say that, in following up that line, he has stumbled upon many difficulties which give rise to complications and which may threaten his scheme as a whole. There is one point not yet touched by any-one, and a question that arises under settled property. When a wife inherits—I will not say inherits—derives—from a husband, or a husband derives property from the wife, there is, at present, no charge payable to the State of any kind—the lawyers will correct me if I am wrong. In the case of a settlement of £10,000, if it was settled on the wife, and after her life on her husband, and after him on her children, if the wife dies, the husband takes the interest and pays nothing. Under the Bill he will pay 4 per cent. and 1 per cent. in order to clear the way for the remainder of the settlement. Therefore, you have a new principle to which I doubt whether the public would give its adhesion. Contrary to all precedent, you make the husband pay 5 per cent. as a minimum. I now pass to the question of graduation; and last night we were told by the Member for Bradford, without giving his authority, that all economists are now in favour of graduation. He did not produce a single authority for that. I think he might possibly have done so; but I thought that professors of certain financial doctrines were not to be heard upon this class of questions—at least, not by the Chancellor of the Exchequer. When professional economists are quoted by bimetallists he rejects their views entirely as simply those of theorists; but when they come to deal with taxation, a subject of which, I presume, they know as much, but no more, than they know of bimetallism, then they are quoted with approval as giving the basis of authority and of action. I do not know many eminent authorities in favour of graduation; I know one, but I am not acquainted with others; and what I deny distinctly is that all the authorities, as the right hon. Gentleman said, are in favour of graduation. This is a question so important that, with the indulgence of the House, I will dwell on it for a few moments. I think hon. Gentlemen opposite will accept Sir Louis Mallet. He was a good Radical, the friend and associate of Mr. Cobden, and a great authority with the Party opposite.

SIR W. HARCOURT

An authority on bimetallism?

MR. GOSCHEN

I hope his bimetallism will not shake the confidence of the Chancellor of the Exchequer in his general views, otherwise the Chancellor of the Exchequer will have to give up all economists. Sir Louis Mallet may be taken as a Radical who sympathises with the old Manchester school. What does he say? He says— The principle of progressive taxation, which has been a favourite idea with the schools of Continental Socialism, is one which it is impossible to discuss within the limits of this paper. The question has been so thoroughly dealt with in past controversies that there is little new to be said about it. Even Mr. Mill, who favours some scheme of limiting inheritances, observes that such a tax as applied to incomes' is a tax on industry and economy, and imposes a penalty on people for having worked harder and saved more than their neighbours. It is partial taxation, which is a mild form of robbery.' The House will remember that M. Thiers, quoted by the right hon. Gentleman the Member for the University of Loudon, spoke of this as "pillage." I do not know whether he was aware that the words used were almost the same words as those of Mr. Mill. Then Sir Louis Mallet says— If the subject has not attracted much attention on the part of English economists, it is because fortunately this country has until lately enjoyed a comparative immunity from the economic heresies which have sometimes threatened the foundations of society on the Continent, but it is needless to say that the system in question is altogether at variance with the four rules of taxation laid down by Adam Smith. "Economic heresies !"This is now the foundation-stone, of the Budget of the Chancellor of the Exchequer. Sir Louis Mallet proceeds— The aim of Governments should always be to encourage the motives which promote industry and economy, and there can be no more disastrous folly than to regard wealth as the commercial classes were regarded in the Middle Ages, merely as a fit subject for fiscal rapacity.

SIR W. HARCOURT

Did he refer to graduated Income Tax or Death Duties?

MR. GOSCHEN

It is with reference to "taxation on income or property." But look at the tone! It is the same as that frequently adopted by the right hon. Gentleman the Member for Midlothian. He never would be responsible for graduated taxation being submitted to the House. I do not wish to weary the House with regard to the special point of my personal dealing with this matter in 1889. The Chancellor of the Exchequer has charged me with being the originator of the system of graduated taxation. He said he was my faithful disciple, and that he sat at my feet. I am afraid that my pupil has been a bad pupil. He has forgotten half of what I taught, and he has distorted the remainder. He seems to have forgotten altogether the argument I used. It may be a bad one; but in my view, and in the view of those with whom I am acting, the imposition of the Estate Duty of 1 per cent. was based on the same principle as the exemption below a certain point in the Income Tax. I put that forward on the first day. The Chancellor of the Exchequer read a portion of my words, but he did not read them all. I argued over and over again that that was the substance of the proposal that I made. It was perfectly easy for the right hon. Gentleman with that rhetorical sagacity which characterises him to fasten on this point and say, "Now we have got. the basis of graduation." Others did so. But I repudiate the idea that I am responsible for this doctrine, which I repudiated at the very time that he was sitting at my feet. After all, it is a small matter whether I am responsible or not. I ask the House, do they believe that the matter would be left alone by the Chancellor of the Exchequer now if I had not acted in the way I did act in 1889? His proposal would have been made just the same. When the right hon. Gentleman attacked me he intended to strike at the Conservative Party through me. That seemed to me to be the object. I was responsible in the late Government, but the shafts of the right hon. Gentleman must lodge in me, and I protest against their reaching the Conservative Party behind me. I wish to maintain my own responsibility, and I cannot permit that any views of my own, some of which I may have inherited from the great Leader under whom both the right hon. Gentleman and myself have served, should be used in any manner to damage the Party with whom I am now acting. Now, with regard to the authorities of the right hon. Gentleman. He has quoted some of them. He has quoted the Australian Colonies, and for the first time we have a British Cabinet Minister coming down to this House and quoting the example of the Colonies as a good precedent for Imperial finance. We have not been accustomed to such treatment from the great Leader whom the right hon. Gentleman succeeds. He and the right hon. Gentleman the Member for Bradford say that this policy has succeeded in the Colonies. But there is no evidence before us that they have succeeded. The Chancellor of the Exchequer has not argued this question yet with us. He made a few somewhat gibing remarks in reply to me, hut he did not grapple with the question, and this is the point with which he ought to grapple. When yon once embark on this system of graduation there are no stages, no landmarks, nothing whatever to guide you. There is no principle of justice—no principle where you can say you ought to stop; no principle of prudence—no principle whatever. What is the answer to that? It is because there is an absence of any landmarks and any standard that the Continental Socialists have hitherto favoured the system. I pay Socialistic literature on this subject, of which there is a good deal, the compliment of reading it; I think it ought to be road; people ought to know and appreciate more than they do the aims of some very capable literary men who are guiding the Socialist movement. And what is one of the main doctrines by which by peaceful means they think they may secure for a certain portion of the population a greater share of the wealth and property of the nation? It is by means of graduated Death Duties. The Chancellor of the Exchequer might have quoted the essays of the Fabian Society as expressing the views of the economists who are in favour of these measures. Perhaps it was to some of these the hon. Member for Bradford referred. They recommend two forms of action—the graduation of Death Duties and a graduated Income Tax. The Chancellor of the Exchequer and his-colleagues may be absolutely free from any design upon property; but, as I ventured to say the other day, they would provide the machinery for not only a mild form but a strong form of fiscal robbery. There are persons who have a creed of their own as to how they will bring about a redistribution of capi- tal; and it is to them that the scheme of the Chancellor of the Exchequer will he most satisfactory. I must guard myself against a possible misrepresentation which is certain to follow. I am afraid no amount of explanation or protestation will prevent it. In what I am saying I am not guided by any special regard for capital or the rights of wealth or property; I am looking at the matter simply from the point of view of national interest. We cannot realise what would be the condition of the country without large accumulations of capital in the ordinary forms of business. It would be a disaster that capital in those forms should be dispersed. I declare in the strongest possible manner that I am not guided by what might be called the class interests of the rich, but I am doing my duty to the best of my ability in placing before the House what I conceive to be the dangers of the new departure. It is not only in the capacity of a representative of the class interests that I am opposed to graduation, or rather to the particular form of it which the Chancellor of the Exchequer has introduced; but it is rather as an ally of his, as an ex-Chancellor of the Exchequer, who wishes to see that if a tax is imposed that tax shall realise what it ought to realise—as a joint custodian with him of the Public Purse—that I am anxious to show that the plan proposed will not realise what is expected. I protest against these enormously high duties—and 8 per cent. is a very high duty—because they will frustrate the object aimed at. It is bad finance to set any tax so high that everybody sets about thinking how to evade it. In indirect taxation high duties lead to smuggling and to diminished returns; and I believe that in the same way these high duties imposed by the Chancellor of the Exchequer may possibly break in his hands. I have already told the House that when at the Treasury I was warned by experts of the danger of unduly raising the Death Duties. I do not know whether the right hon. Gentleman has been similarly warned; but I do wish we had some further knowledge with regard to the figures of the Chancellor of the Exchequer. We know the cases in which the additional taxation will be enormous, and yet the estimate of the total increase appears to be small. The right hon. Gentleman says the addition will realise £400,000. That is an extremely small sum, and it is a great disadvantage to us that we should have no means of checking his figures. We have not only to look at totals, but we have to illustrate the scheme by individual cases. My point is that the duties are so high that the object in imposing them will be defeated. Take a man who has personal property worth £250,000—or, say, £251,000. Suppose that he is not near death, but well on in life. At present the estate would pay in Death Duties £10,400, which by this Bill would be raised to £17,500. I am speaking not of realty, but of personalty, which has not had very much attention in the course of this Debate. Suppose he has four children—grown-up men and women—and to them he gives during his life £26,000 apiece. The estate would then be so reduced that he would pay £9,000 under the new system instead of £10,400 under the old. What I am afraid of is that these enormously high rates will set people at work to see how they can escape paying them, and that even the amounts raised by the present low rates will not be realised. Let us look the question fairly in the face. Here, in the case of personalty, we have conflicting motives—the motive of accumulation, the longing for parental control, the preference for personal expenditure; and we have, on the other hand, the feeling that these duties are so high that when you can trust your children you may as well partially evade the duties by giving them a portion of their inheritance in your lifetime.

SIR W. HARCOURT

Hear, hear!

MR. GOSCHEN

The right hon. Gentleman is cheering, not as Chancellor of the Exchequer, but as a social reformer; he cheers the evasion of the duty for the sake of social advantage. He is repudiating his ally. But I am speaking as an ex-Chancellor of the Exchequer, who is anxious not to see the duties evaded, and I say that if you once set people about seeing how these high duties may be evaded you do not know how far you may make an inroad on the Death Duties from which you derive so much benefit. The Chancellor of the Exchequer ought to finance for the Exchequer and not for social reform. I am not at all sure that, even from the point of view of social reform, the dispersion of capital is always a blessing. How has this Metropolis managed to secure its permanent position as the banking centre of the world? How has it secured the position which acts and reacts in thousands of ways, attracting commerce and shipping and giving employment to tens of thousands of people? It is, to a great extent, because here there have been large accumulations of capital; and I am not at all sure that the dispersion of capital would tend to social and national advantage in the way some hon. Members seem to think it would. Another mode of evading the duty may be mentioned. Where a man has two estates he may give the smaller one to the second son, or in the prospect of death he may give money to the second son. That may commend itself to those who approve of raining the eldest son as the residuary legatee and prematurely endowing the second son. But will it be said this is not likely to be done? That leads me to the point of what is called equality of sacrifice; that is, I believe, supposed to be the basis of graduated taxation. It is only aimed at, in theory, and you may find it work great injustice in practice because you cannot find your equal sacrifice. Take two men, one worth £.5,000 and another worth £10,000 a year; a levy of 10 per cent. may be a greater sacrifice to the latter than to the former, because the extent of the sacrifice depends upon circumstances. In one case there may be duties connected with the property, and in the other there may be no duties whatever. One man may live in chambers in the Albany and have no duties or outlay of any kind; another man may have a large family and may have to keep up his estate, to incur expenditure, and to discharge duties. Equality of sacrifice will not find correspondence in the geometrical progression of taxation. You have attempted an impossibility if you attempt to reach what is real equality of sacrifice. There are many men in the Provinces and elsewhere who lead quiet lives, not spending more than £1,000 or £2,000 a year, while they are in receipt of £10,000 or £20,000, and what do they toil and sacrifice themselves for? They work to leave fortunes to their children, or to keep capital in their business. Is it not highly probable that if you are going to tax them on the very heavy scale proposed —8 per cent.—that they will contrive some way of avoiding such large contributions to the coffers of the Chancellor of the Exchequer? In considering this possibility of evasion, or, as I should rather prefer to call it, avoidance, we must remember one of the great distinctions between realty and personalty. Personalty can be transferred by a simple visit to a banker, or by handing over a bundle of securities. Landed property, on the other hand, lies exposed to the tender mercies of the Chancellor of the Exchequer. In that respect it is certainly worse situated, because, whatever hon. Members opposite may say, it is frequently impossible to sell it, to divide it, or even to value it. Under all these circumstances, landed property is worse situated for the purposes of premature disposal than other property. Therefore, those high duties, which may be avoided to a certain extent in the case of personalty, will fall heavier upon realty. The right hon. Gentleman rather congratulated the landed interest that the proposed tax was only 8 per cent., and not 10 per cent., as in Australia. This is an Australian Budget. The lauded interest, now ruined by Australian mutton, is to be wiped out by Australian finance. We have heard a great deal during the course of this Debate about the respective burdens on personalty and on realty, and here I come to a matter of issue with right hon. Gentlemen who sit beside me. The right hon. Gentleman the Secretary of State for India has for a long time attempted to climb on my shoulders into the impoverished treasure chambers of the agricultural interest, but he must bear in mind that the situation has changed indeed since 1871. I am afraid I am responsible in part with others for the phrase "hereditary burdens." I do not repudiate that view, though I know it is considered to be a frightful heresy by many right hon. Gentlemen who sit upon the Front Opposition Bench and many hon. Gentlemen behind me. But let me remind the House of some other considerations. Earlier in the century the landed interest was the senior partner and personalty was the junior partner. At that time personalty paid comparatively less than realty, and it was at that time that realty had its "hereditary burdens" placed upon it. Since that time the junior partner has been accumulating profits and money at such a rate that it has entirely distanced the senior partner, and is now in a position that it can more equitably bear a very considerable share of those local burdens which are placed almost exclusively upon realty. I do not know if hon. Members opposite would admit, even in theory, that personalty ought to be taxed to contribute to local burdens. For my part, I have always held that personalty may be made to contribute towards the burden of local taxation, and in the year 1888 I took a share of the Probate Duty and applied it in relief of local taxation, the Probate Duty being distinctly a tax which was borne by personalty. In opposition to the right hon. Gentleman, I hold that at present personalty is only paying 1½ per cent. Probate Duty to the Imperial Exchequer, the other 1½ per cent. going to the Local Authorities. The right hon. Member for Bradford last night gave some figures with regard to local taxation, and some figures that rather startled us with regard to certain Unions. Now, I asked across the Table at the time, "Has not the total amount of local rates in rural districts increased?" The right hon. Gentleman said, "I am coming to that presently;" but he never came to it at all. He confined himself to his particular Unions, and he chose—why I cannot conceive—Hatfield, Sleaford, Thirsk, Marlborough, and I know not what others. It seemed as if he wanted' to make a kind of personal selection in this matter. I do not know whether he considered them average cases or not.

THE PRESIDENT OF THE LOCAL GOVERNMENT BOARD (Mr. SHAW-LEFEVRE,) Bradford, Central

I mentioned certain other cases at the same time.

MR. GOSCHEN

All I can say is that they cannot have been average cases, because the amounts, if correctly stated by the right hon. Gentleman, and if all the rates were included—which was doubted on this side of the House—were very much below the average even of the counties in which they were situated. Therefore, the right hon. Gentleman either selected some that were extremely low to illustrate his general proposition or he made a mistake in the method of his calculation. I give him the benefit of the doubt. The average rate in the £1 in the rural districts in all England is 2s. 3d. I think the right hon. Gentleman quoted one case where it was 1s. 3d. Now, this 2s. 3d. comes from the Report of the right hon. Gentleman who sits next to him (Mr. H. H. Fowler). If the right hon. Gentleman's is the average rate, why did the right hon. Gentleman—

MR. SHAW-LEFEVRE

I said the 1s. 3d. came from Lancashire, and that is one of the few counties where the rates have not fallen. I selected that case on that account, and I shall be able to show the right hon. Gentleman what it is in respect of districts where the rates have not fallen.

MR. GOSCHEN

Yes, but I think it was rather an unfortunate selection to take that case when we were discussing the rural districts.

MR. SHAW-LEFEVRE

This was a rural Union in North Lancashire.

MR. GOSCHEN

Yes, but where the rural district has the whole advantage of a teeming population. I will acquit the right hon. Gentleman of any sinister intention; it was an innocent selection, but it is one which will not strengthen our confidence in the right hon. Gentleman's statistical demonstrations in the near future.

MR. SHAW-LEFEVRE

There are examples of precisely the same character in Shropshire and in Hampshire.

MR. GOSCHEN

But how does the right hon. Gentleman account for the fact that the average is 2s. 3d.? The right hon. Gentleman, in selecting all the low cases, adopts a new statistical method. How can the right hon. Gentleman get 1s. 3d. or 1s. 6d. if the average is 2s. 3d.? There must be a number of others in that case where it is 3s. or more. I think the effect of the right hon. Gentleman's method will not be to convince the House that he has at all impaired the case which hon. Members interested in the rural districts have made out. Let me give one more figure. I find in the Report of the Secretary of State for India that in 1868 out of a total of £16,504,000 the rates raised in purely rural districts were £1,416,000. Of a total of £27,818,000 paid in rates in 1892, the purely rural districts supplied £2,109,000, a difference of £693,000. Then where is the reduction of the rates? The House must be warned that by the system of averages they may possibly be deluded into misunderstanding the actual position of the case. Here we find that the right hon. Gentleman has made very careful inquiry, with the result that notwithstanding the subventions, increases of rateable value or decreases of rateable value, notwithstanding changes in the rate in the £1, the fact remains that in the rural districts £700,000 more is raised in rates now than were raised before.

* THE SECRETARY OF STATE FOR INDIA (Mr. H. H. FOWLER,) Wolverhampton, E.

And the average rate is 4½d. less.

MR. GOSCHEN

That is just my point. If you raise more in the rural districts they actually pay more. These two facts—namely, that in the rural districts they have paid more rates, while the rate in the £1 has gone down, can only prove one thing, and that is that the rateable value cannot have decreased in those particular places where actually more rates are paid. I wish to give one more illustration with regard to the payment of rates, and it is one which shows how the situation is changed since 1871 Take an estate bringing in £8,000 a year, paying rates amounting to 2s. 6d. in the £1, and with mortgages and incumbrances absorbing £1,000 a year. The position of the landowner in 1868 would be this—that he would receive a gross rental of £8,000, and, after paying mortgages and incumbrances, there would remain for himself £4,000, out of which £1,000 would be paid in rates. Then the rents fall 25 per cent., and the gross rental is £6,000 instead of £8,000. The incumbrances remain the same, £1,000; but the rates fall in proportion to the rental, and are now £750 instead of £1,000. The landowner, however, has to pay that £750 out of £2,000, leaving a margin of £1,250, instead of paying £1,000 out of £4,000, leaving a margin of £3,000. It is in this way that the pressure of rates may be felt extremely heavily, and may come home to every agriculturist far more severely, because of the fact of the margin having been reduced. I doubt whether it is generally understood to what an extent the nominal income from estates in land differs from that which a man is really able to spend. I can assure the House that I am in possession of a vast number of cases which have been sent to me by owners of land, who have actually submitted to me their accounts, or the result of their accounts, and I have been staggered to see the small amount of net income which remains over to spend. And here we come to this point. You have two owners side by side. One of them has kept up his estate to the best of his ability, and has pinched himself in order to do justice to the buildings and to the demands of his tenants—and is, in fact, a good landlord in every respect. His neighbour, on the other hand, has neglected his estate, and has kept or spent a larger portion of the rents he has received. They both die, and what happens ! The property of the good landlord is valued on his improvements, while the property of the other landlord escapes a considerable portion of the Death Duty. I know of cases where the income of five, six, seven, eight, and, in one case, even 10 years will be necessary before the estate can be cleared of the enormous duty which you are placing upon it. The outgoings are so heavy. I have seen a case where the outgoings are as 10 to 60. I have seen a case where the subscriptions and charities alone absorbed two-ninths of the whole net income of the landlord. Hon. Members say these are large incomes, but it is the fact, and hon. Members should appreciate the fact, though there are some in the House who have not done so, that it is not desirable to penalise those landlords, who no doubt have vast estates, and who turn their wealth into the direction of keeping their estates in splendid order, and in being model landlords for all those who surround them, and who may learn many lessons in farming and otherwise from their landlords. It is certain that in many of these cases they will have to pay from 8 to 10 years' income of their estate in order to meet this heavy duty. Can they continue this expenditure? What is the heir to do when he comes in? His first visit will be to the money lender, unless there is very considerable personal property attached to the estate. What is he to do? There are two alternatives. One is that the estate will be less well kept, the other is that it will be broken up. But you cannot always break estates up. Still, I admit many hon. Members would like to see that result, and if that is their policy no doubt they will find a good many adherents amongst their constituents. But I do not believe it is the view of the Government; and if their proposals have this effect it is not because they desire it. But the right hon. Gentleman plays a little too much to the gallery as a democratic financier. I cannot believe he would wish to see some of these results. But many landlords will not disperse their estates; they will do that which has so often been done, and which is a great misfortune; they will leave their estates in the care of agents, and will live in London or abroad until they are able to save enough money to enable them to live on their estates. They will not part with them so easily as hon. Members think they are likely to do. Then the question arises—What is the policy of the Government? I venture to think the scale imposed is too high; and, as I have explained before, the right hon. Gentleman will frustrate his own purpose, and in the case of these great landed estates he will do much to damage that which is very valuable. It has been pointed out over and over again that the agricultural population is not likely to gain either by the dispersion of these properties or from their abandonment in consequence of the owner living abroad. Absenteeism has done much already to damage a great portion of the country. The Chancellor of the Exchequer will say that these prophecies have often been made before. He said they were made in 1853. Yes, but parts of these prophecies have unfortunately come true. It was prophecied that the landed interest would suffer. The landed interest has suffered and is suffering, and I join with my hon. Friend in thinking that whatever may be the relative proportions of the burdens between personalty and realty it is not at a moment such as this that heavier taxes should be placed upon these properties. But we have not argued this question simply from the point of view of great proprietors. It is the squires, as has been pointed out, that will suffer most severely, and no one has attempted to answer the excellent speech of the Member for Thirsk, who pointed out how the yeoman farmers would suffer. Other hon. Members have pointed out how Irish tenants and Scotch crofters may suffer in the same way. I have had papers put into my hands which would show that in their case there are points which will have to be carefully examined. The fact is, the whole scale is placed on too high a scale of duty, and not only that, but the changes which have been rendered necessary by the right hon. Gentleman's view of putting personalty and realty on the same footing have affected realty at some of the lower grades. Surely the right hon. Gentleman does not want to put further taxation on the tenants in Ireland. But when he adopts the new principle of taxing the corpus and abandoning the Succession Duty he will find himself landed in new difficulties. I have only one further remark, and it is with reference to the final passage of the speech of the right hon. Member for Bradford. I sympathise with the Chancellor of the Exchequer in having to find money to cover a deficit which he has reduced to £2,300,000. But yesterday the right hon. Member for Bradford spoke of a deficit of £4,000,000.

MR. SHAW-LEFEVRE

I said the money we had to find for the expenditure upon the Navy was £4,000,000.

MR. GOSCHEN

No, no. In the more florid portions of his peroration the right hon. Gentleman made this remark: "Here are £4,000,000 to find, and if you reject our Budget how are you going to find that money?" The right hon. Gentleman dangled £4,000,000 before us, and wanted to frighten various interests in the country by saying, "If you reject this Budget you will either have to pay additional Income Tax, to the extent of £4,000,000, or you will have to pay more on tea and tobacco." But he forgot that the Chancellor of the Exchequer has reduced the deficit to £2,300,000, and the question the House has to decide and will determine at the end of these discussions is whether the right hon. Gentleman has chosen the best means of finding that sum. The right hon. Gentleman has been complimented upon his ingenuity and on the vastness of his proposals. It remains to be seen whether those proposals are workable and will stand the test of argument, or whether you are to carry into the whole of the vast interests which they touch fresh complications, fresh inequalities, and fresh injustices. I believe that will be the upshot of the Budget, and under these circumstances I shall range myself with my hon. Friend the Member for Thirsk, and I shall vote against the Second Reading of the Bill.

THE UNDER SECRETARY OF STATE FOR THE COLONIES (Mr. S. BUXTON,) Tower Hamlets, Poplar

said, that while he did not propose to deal at any length with the speech of the right hon. Gentleman the Member for St. George's, Hanover Square—a speech couched in a very different tone on many points from that which marked other speeches delivered from the same Benches—he would call the attention of the House to the fact that the right hon. Gentleman, unlike the attitude he assumed in 1885, had now ranged himself on the side of the holy alliance of the land and liquor. What, however, they had to ask the Opposition in regard to this matter was, if they destroyed this Budget, were they prepared to have a Dissolution on the question whether one form of property, realty, should obtain exemption on the lower scale of remissions, and in regard to the principle of graduation? That point had been too much forgotten in the course of the Debate. The position was this: a certain amount of money had to be raised at the present moment, and the burden must necessarily fall on some one's shoulders. Everybody admitted that increased taxation in itself was had and oppressive, and, indeed, very often injurious. But the point was, whether, at the present moment, the proposals of the Chancellor of the Exchequer were not the best way of meeting the deficit which the House generally admitted ought to be met. The discussion had turned chiefly on the question of the Death Duties, and they had heard wails from hon. Members interested in the laud as to the fall in prices and the rise in rates. Every Member sympathised very much in the distress of the lauded interest; but hon. Gentlemen talked as though the Government were gratuitously raising the question of the taxation of land at the present moment. He believed that the proposals of the Budget in regard to the Death Duties were in themselves just and proper; it was imperative that they should be carried out, as money must be raised somewhere, and realty ought to be thankful that it had for so long a period escaped equalisation. Further than that, it should not be forgotten that while an additional burden was being thrown upon realty, consider- able relief was being granted in other directions, especially in the matter of Income Tax assessments. Much of the discussion had been directed to the question of the incidence of rating, and in regard to that he might point out that the figures placed before the House by the Secretary for India had not been controverted, and it was clear that rates bad not been increasing to the extent supposed. But why were they discussing this question at all at the present moment? The principle of the Death Duties was not in dispute, and the only object at the present moment was to obtain simplicity of and equalisation in the tax. The whole of our fiscal system except in respect of the Death Duties was founded, as it should be, on a principle of simplicity, and it was to be regretted that the same policy had not in the past been applied to these duties. But when they once began to introduce equality it became necessary not to level down personalty but to level up realty. He was quite sure that the House would not desire that in any way the Death Duties in regard to personalty should be reduced, and they had further to remember that while they were levelling up the duties on realty they were also putting on personalty a considerable new contribution in respect of the Death Duties also. While the equalisation would chiefly affect realty, the principle of graduation, introduced for the first time in these duties, would affect personalty much more, and it would be impossible to introduce the principle of graduation in connection with the Death Duties without also introducing the question of equality of treatment. The only way to bring that equality about was the way proposed by the Chancellor of the Exchequer—namely, that all property coming at death should, in regard to probate, be charged at its true capital value. The result of the proposal was to substitute for five complex duties two practically simple duties, one on the corpus of the estate and the other in respect of legacies. At present settled property under a marriage settlement only paid 1½ per cent. instead of 3 per cent. as personalty; there were too many exemptions and allowances, and the object of the Budget was to redress the inequalities which consequently prevailed. The right hon. Gentleman the Member for St. George's, Hanover Square, said the Government had not answered the hon. Member for Thirsk, but the figures which the hon. Gentleman gave seemed to prove the necessity for this greater equalisation of the Death Duties.

MR. GRANT LAWS ON) (York, N.R., Thirsk

I was taking the case suggested by the Chancellor of the Exchequer, where he gave relief.

MR. S. BUXTON

said, that no doubt the hon. Member did allude to one such case, but his chief point in regard to these cases was that they would be paying more Death Duty in consequence of the equalisation. At present an enormous advantage was given to realty. Let them take the case of a child with the greatest expectations of life coming into an estate, which in the case either of realty or of personalty would be of the value of £10,000. In the case of personalty he would have to pay 3 per cent., but in the case of realty he would only be charged on the capital value, which would not probably be more than £5,800. That was an enormous advantage obtained by realty. Again, if they took an extreme case the other way they would find realty obtained an equally great advantage. Take, for instance, the case of a man 90 years of age. He died and left an estate of like value to that he had cited in the case of the child. His heirs would pay 3 per cent., not upon £10,000, but upon something like £4,000. Again, they found very great inequalities in the method in which land was at present assessed—especially as between urban realty and rural realty. Under the present system estates were assessed for duty on the capitalised rent. In the case of agricultural estates, that to a very large extent represented the real capital value, but in the case of urban estates that was very far from being the case, especially where the estates were close to large towns. He was informed by the Inland Revenue Authorities that the average number of years' purchase at which realty was taken was 14. That was, as he was informed, the average throughout practically the whole of realty when assessed for Death Duty. Probably the number of years' purchase at which freehold and agricultural land would in future be assessed would be something between 18 and 20 years; but in the case of improving ground rents, he was informed that the ordinary estimate that would be taken of their capital value would be 28 years' purchase.

MR. GIBSON BOWLES

On what does the hon. Gentleman found his statement, that of 18 or 20 years' purchase. Is it not as a fact 24 or 25 years?

MR. S. BUXTON

said the hon. Member was mixing up two things—he was mixing up the question of the Estate Duty with that of the Probate Duty. The figures he had quoted were those officially supplied to him by the Inland Revenue Authorities. The great point was this, that the proposals of the Bill would be of advantage to agricultural laud and of disadvantage to urban land. He did not wish the House to take his figures as absolute, but his point was that as between agricultural laud, in which hon. Members opposite were specially interested, and urban land, the new system of assessment would be to the advantage of agricultural land. As regarded the system of capital value now being introduced in the case of agricultural land, the number of years' purchase which would be added would not exceed probably four or five, but in the case of the ground rents 14 would be added.

MR. GIBSON BOWLES

pressed the hon. Gentleman to say upon what basis he arrived at the conclusion that 18 or 20 years' purchase at the outside would be the assessment of agricultural land.

MR. S. BUXTON

said, the figures were those of the Inland Revenue Authorities, and gave what they believed would in the future be the valuation put on agricultural land. The present position of leaseholds seemed to him about the strongest argument that could be used in favour of the proposals of the Government. At the present moment, though practically realty, they were treated as personalty and charged the full Probate Duty. While a great deal had been heard with regard to the agricultural interest, no objection had been raised as to the effect on settled personalty and urban realty. No doubt they all admitted that the agricultural interest was a very important one, but it only represented 36 per cent. of the whole, urban realty representing 44 per cent., and settled personalty 20 per cent.

MR. GOSCHEN

I did not touch the question of settled personalty at all?

MR. S. BUXTON

said, he did not understand the right hon. Gentleman to raise any objection to the proposed treatment of the settled personalty and urban realty, nor indeed did he appear to take any objection in principle to the general proposals of the Government in regard to the Death Duties. The right hon. Gentleman the Member for West Bristol, too, said he had no objection to offer to the extension of the Death Duties to urban realty, and, taking into account the valuable nature of the latter kind of property, its increasing value, and the fact that it did not entail any question of breaking up estates, he did not think that any objection would probably be raised. With regard to that question, they had to consider the strong arguments raised by hon. and right hon. Gentlemen opposite as to the burden of the rates. He scarcely thought those arguments applicable to this case. In the case of urban realty the occupier bore the whole of the rates, and, therefore, he would be affected much more than the owner. It. was interesting to observe that out of the whole amount of rates no less than 62 per cent. were paid in the Metropolitan and urban districts. In those districts they were practically borne by the occupier and wore paid, not by realty, but by personalty. Therefore, the position of the Opposition was narrowed down to the question of the effect of the Government proposals on agricultural realty; but while no doubt the Bill did affect that interest, and every one was sorry that fresh burdens should be placed upon it, it very much more seriously affected the two other interests to which he had referred, which paid rates to the extent of 62 per cent. of the whole. It did seem to him under the circumstances just and right that these equalisation proposals should be carried through, even if certain interests thereby affected were in a somewhat distressed condition. It was impossible in imposing such a duty as this to distinguish between rural realty and urban realty. He did not think that either of the right hon. Gentlemen opposite had weakened the effect of the figures which had been given by the President of the Local Government Board. His right hon. Friend the Member for Bradford had looked into the matter again, and informed him that his figures included every single rate in the localities to which they referred. Those figures proved that whilst the valuations had unquestionably diminished the total rates in the £1 had gone down, and were very much lower than formerly.

MR. W. LONG

said that, before the hon. Gentleman left this subject, he would like to say with regard to the two Unions in Wiltshire, referred to by the right hon. Gentleman, he had that day received assurances from those Unions that the rate in one case was 2s. and in the other 2s. 6d. The figures of the right hon. Gentleman were substantially lower.

MR. SHAW-LEFEVRE

said, he had consulted the officials of the Local Government Board, who affirmed that the figures were supplied to them by the Local Authorities of the districts which he named in his speech.

MR. S. BUXTON

reminded the House that the Secretary of State for India had shown that the burden in the £1 on the shoulders of the owners in rural districts, taking the country generally, had been reduced by 4½d., the reduction being largely due to the Imperial subventions, which had amounted in some cases to 10d. or 1s. in the £1. It was important that this should be borne in mind when they were considering whether it was just and right that some extra burden should be imposed on realty. They should also remember that the Budget itself did something, as hon. Gentlemen opposite bad said, to "temper the wind to the shorn lamb." The ½ per cent. in respect of lineals, which was put on in 1888, was now taken off, another duty disappeared, the benefit of payment by instalments was preserved to realty, and relief was given in respect of Income Tax under Schedule (A). This relief had been received by hon. Members opposite in a very grudging spirit. He believed, however, that many landowners would find that they would still be as well off as now, perhaps even better off, with this reduction of Income Tax, which was a set-off to the extra Death Duty which land would have to bear. The farmers' benefit, he felt sure, would be considerable. As compared with urban realty, rural realty would gain a great deal. What were the actual additional burdens that would be placed on rural realty? The deductions on the Income Tax being taken into account, the whole extra burden on rural realty would not amount to more than £400,000 or £450,000 a year. But the annual value, as assessed for Income Tax, of that property amounted to about £50,000,000, so that the burden would not be more than 1 per cent. per annum, or 2d. a year per acre. He could not believe that this burden of 1 per cent. on the annual profits of agricultural land was likely to cause the breaking-up of estates. As he understood the matter, it was the intention of the Chancellor of the Exchequer to deal tenderly with landed estates, especially such as had large mansions and were really producing no annual rent. It was intended in arriving at the capital value to take into account all the mortgages and encumbrances that might be charged on an estate, and the amount of the rates would, of course, also be one of the matters taken into consideration. Where temporary loans had been raised for the purpose of improving properties the unexpired portions of such loans would certainly be taken into account and operate to reduce the estimate of the capital value. The right hon. Member for the St. George's Division said that an owner who had expended money in improving his estate would have to pay on his own improvements. That, however, would not be the case, unless by his improvements he should have improved his rent-roll and really increased the value of the land. If, as the result of the man's expenditure, the value of the estate had not improved at all, the circumstance would, of course, be taken into account in estimating the value, and there would be a reduction. He admitted that there were greater difficulties in the way of the assessment of realty than there were in the way of the assessment of personalty, but those difficulties were by no means insuperable. Why should not a landed estate be capable of assessment, when complicated assets like leaseholds and canals could be assessed? The proposals of the Government were far-reaching in their effect, but they had to raise a certain amount of money, and they believed that, on the whole, their plan was a fair and proper way of meeting the financial needs of the country. He hoped the House would agree to the Second Reading of the Bill as a real and earnest endeavour to meet the necessities of the country without placing undue burdens upon any particular interest, while endeavouring to spread the burden of taxation as widely over the community as possible.

* MR. J. H. JOHNSTONE (Sussex, N.W., Horsham)

said, they had now received an assurance that the Inland Revenue intended to proceed on the lines of taking year's purchase as the principle of valuation, based on annual value. He could assure the hon. Member that should the measure receive a Second Reading, they on that (the Opposition) side of the House would see that effect was given to that view before the Third Reading. He (Mr. Johnstone) had several objections to take to the measure. The hon. Member for the Woodbridge Division of Suffolk showed clearly that the Budget was a vindictive one, and was intended to punish those who were anxious to see the naval forces of the country brought up to their proper strength. He (Mr. Johnstone) need not labour the point that the Budget was vindictive; but, more than that, he was clearly of opinion that many of its proposals were unnecessary, and for that proposition he claimed the support of the Under Secretary for the Colonies. The Chancellor of the Exchequer had reduced the deficit by diverting the Sinking Fund in a manner contrary to all his convictions—had reduced it to £2,379,000. The right hon. Gentleman proposed to put increased duties upon beer and spirits and to add 1d. to the Income Tax. These two things alone would have brought him in £3,120,000, so that if be had not wished to stray into the heroics of finance his Budget was made for him. And with the diverting of the Sinking Fund he would have been quite able to reduce his deficit, and to do something in the interests of the agricultural population which would have been very greatly valued. If the Government had shown an interest in the agricultural population it would have been heartily reciprocated. The suggestion had been made by a supporter of the Government that the owner should be relieved of Income Tax under Schedule (B). The occupier also sought to be relieved. This would have been welcomed by the agricultural class, and the payments into the Exchequer of Income Tax under this Schedule were so small in amount, so costly in collection, and so annoying to those from whom they were collected that it would be a positive saving to the Exchequer if that Schedule were swept away altogether. It would have been, too, an acknowledgment of the sad distress under which the agricultural community had been suffering for many years, and which was intensified in the present year. The gross assessment under this Schedule was £58,000,000, but of this only £24,000,000 were actually chargeable, and the payments for 1892 in England, Scotland, Wales, and Ireland amounted to the very beggarly sum of £260,000, or something less than the amount an eighth of a penny of Income Tax would give. He would appeal to the Chancellor of the Exchequer that even with such a surplus as he expected to get from his own figures he was in a position to give the agricultural class the benefit of the entire sweeping away of Schedule (B), and not to allow that miserable pittance of £200,000, which was drawn out of the pockets of a most long-suffering class, to appear in the Financial Returns of another year. The amount now raised would be greatly reduced under the proposed alteration, and by raising the limit of partial exemption from Income Tax from £400 to £500 there would be fewer persons to pay. There must be very few tenant farmers making a profit of £500 a year from their farms. The Income Tax collectors would tell the right hon. Gentleman whether the expenses of bookkeeping and collection under Schedule (B) would not justify him as a financier in doing away with taxation under that Schedule altogether, and allowing the farmers to make their returns under Schedule (D) instead. The right hon. Gentleman having got his surplus throw it away. In the first place, he raised the limit of exemption from Income Tax. As to that, he (Mr. Johnstone) would say nothing. The Chancellor of the Exchequer had been well answered by the right hon. Gentleman the Member for St. George's, Hanover Square, on the quotation he had read from the speech of the right hon. Gentleman the Member for Midlothian in 1876. He (Mr. Johnstone) would only say that no doubt a great many estimable people would bene- fit by the increase of limit of exemption. One could only envy them their good fortune. Another way in which the surplus was thrown away was by deductions under Schedule (A), which they were told would represent between £700,000 and £800,000. Only a small portion of that, or some £160,000, would go to the agricultural interest. The right hon. Gentleman made much of this concession, but he took away the benefit by his further proposal as to the Death Duties. What was the problem which the Chancellor of the Exchequer had set himself to solve? Having gone out of his way to dissipate the surplus which by the increased taxation he would be in a position to receive, the right hon. Gentleman set himself to the problem of endeavouring to equalise the Death Duties. In attempting this he was, in the words of the right hon. Gentleman the Member for St. George's, pricking a gigantic bubble, for the inequality was measured by the right hon. Gentleman himself at no more than between £300,000 and £400,000, which, in his own words, was all that he asked from the landed classes to place their taxation on an equality with that of others; although, since he said this, that sum appeared to be growing in dimensions, it having already been stated by a Member of the Government that evening that the sum would be between £400,000 and £450,000. The increase which was placed on personal property by the Chancellor of the Exchequer's scheme would amount to nearly 25 per cent., as against an increase of 115 per cent. on real properly. This was a very serious increase on personal property, but it was a much more serious increase on real property. How was it obtained? The House had had no figures which would enable it to apprehend how much of the increase which the Chancellor of the Exchequer expected to gain from real property, or from personal property either, would be due to the graduation of the duty or to the suggested novel mode of valuation. There was no reason whatever for departing from the present practice, and he believed that the Under Secretary for the Colonies (Mr. S. Buxton) had felt that when he was speaking. Was it right to take the principal value in dealing with land? In his opinion, the practice at present in force of measuring a man's interest by the expectation of his life was the right and proper way of valuing landed property for the payment of Death Duties. Landed property differed in one essential particular from personal property. Personal property was destructible and moveable. The man who succeeded to it could go to his bank and get foreign notes or a bill of exchange for it, and could then take it out of the country. Land, on the other hand, was indestructible and immoveable, and, as long as the country remained, land would continue to be available for taxation by successive Chancellors of the Exchequer. A man's interest in real property could be no greater than his life, and it was therefore right and proper that that interest should be made the basis of assessment and not the absolute value. Another reason for making a difference between real and personal property in reference to taxation was the expense of realisation. If a man wanted to realise personal property he had only to go to his broker or his banker, and he could realise with very little trouble and at slight expense. If, however, he wished to realise real property he must go to the expense of obtaining a valuation and subject himself to the uncertainties of a sale. If he succeeded in selling he had to pay a large commission on the price realised, and if he did not succeed he had to pay a very handsome fee for having the property put up to sale and for the preparation of the particulars of sale. The Chancellor of the Exchequer had suggested that the most respectable and well-known surveyor should be employed to value the property. Apparently everybody was to go to Messrs. Lumley, or to some firm of that sort. But who was to pay the expense? Was the right hon. Gentleman aware that when a skilled and experienced valuer was employed the valuations were charged for at a very respectable sum? The cost of valuation would certainly add another half per cent. or more to the Death Duties. The remuneration of the valuer and the agent depended more or less directly upon the amount of his valuation. Was it desirable to increase the number of professional witnesses, if he might, without offence, so call them, whose remuneration depended directly upon the largeness of their valuations, and was it a comforting condition of things to the successor of real property that his only way out of it would be to appeal (after he had paid his duty) to the High Court of Justice, where eminent counsel, with probably 100 guineas on their briefs, would be employed on each side, while eminent valuers would have to be engaged at similar fees to go over the property? These were all reasons why there should be a difference in the valuation between real and personal property. Then there was the uncertainty of the valuation to be borne in mind. Everybody knew how two or three valuers, apparently of equal ability and equal powers of judgment, would differ from one another. The anticipated yield of the Death Duties showed that the realty of England represented 5–27ths of the property of England—that was to say, less than one-fifth of the capitalised property of England was represented by realty. The Secretary for India (Mr. II. II. Fowler) said the other day that while rates were going up in the towns they were decreasing in the country, but the right hon. Gentleman did not appear to see the point that four-fifths of these local burdens were borne by one-fifth of the property of England. Ought not the one-fifth which bore four-fifths of the burden of local taxation to be placed on a somewhat more favourable footing than personal property with regard to the Death Duties? If £100,000 was all that was wanted to redress the inequality which for years had been the subject of harangues from travelling vans and Radical platforms, it was difficult to understand why the present scheme should have been brought forward to deal with so small a grievance. The Chancellor of the Exchequer, in order to redress this small inequality, had first very largely to increase taxation and then to decrease liability to the Income Tax under Schedule (A). The right hon. Gentleman's argument came to this:—"If I pay 18s. instead of £1 when I am alive, it will be very satisfactory to me to have to pay 13s. instead of £1 when I die." He (Mr. Johnstone) did not think that this would at all tend to thrift or to careful management of property. The Death Duty paid by a man who succeeded his father in the possession of property of the value of a little over £100,000 would be £6,000. Taking 3 per cent. as the yield of the property, he would have to pay two years' gross income, and probably four years' net income, and very likely more than that. This was not a question only for owners or for landlords; far from it. Anyone knew that there was no worse position for a tenant than to live on a starved property, nor for a labourer than to work on an estate where the owner could not afford to live on it, and where a shilling could not be spent unless there was a return for it. He strongly urged upon hon. Members to pause before accepting these proposals, which, to his mind, would have the effect of crippling the owners of land, and, through them, of placing their tenants and labourers at an extremely heavy disadvantage. He believed it would go further, and check the natural and economic change in the ownership of land which they could see was now going on. When an estate was sold nowadays it was more often than not bought by a man who had made his fortune in business. If so, he was usually a man of a certain age, and no practical man of business would buy a property upon which at his death a large sum of money would have to be paid away in the form of Death Duties—money which would be far better distributed among his children. Then, how was timber to be assessed? The present system of valuing was intelligible, but the Bill left it an open question whether the unlucky successor was to be charged for every stick of timber on the estate when he went in, or only when the trees were cut down. The Bill as it stood bristled with difficulties of all kinds. The right hon. Gentleman the Chancellor of the Exchequer in his opening speech said the guiding principle of taxation should be that the burden should be imposed where it would least heavily fall, but in this measure he had most widely departed from that guiding principle, and had laid the burden of taxation upon those shoulders, not where it would fall lightest, but where it would be felt the most heavily. He therefore urged the House to consider the matter very carefully before accepting the proposals which would cripple and mulct so unfairly one particular class of the community.

* MR. PICKERSGILL (Bethnal Green, S. W.)

said, that earlier in the Debate the right hon. Gentleman the Member for St. George's laboured with great pains to show that he was not responsible for the introduction of the principle of graduated taxation into the fiscal policy of this country. He could not help thinking that the right hon. Gentleman protested too much. It was true that when the right hon. Gentleman introduced his Estate Duty in 1889 he was very careful to tell them it was not graduation, but they could not by theory explain away the fact, and he submitted that, in the ordinary use of language and in the judgment of plain men, the Estate Duty of 1889 was undeniably the first step in graduated taxation. In the further discussion of that principle the right hon. Gentleman might, he thought, have well spared them his scornful reference to colonial precedent. Did the right hon. Gentleman think there was nothing they could learn from the colonies? Did he think that it would be beneath the dignity of the Mother Country to learn from her colonial children? He must say he respectfully differed from the right hon. Gentleman. He thought there was much which the Mother Country might usefully learn from the colonies. He could not but remember that Laud Law reformers of repute and authority had gone to the colonies for their precedents, and he thought the reference fell with a particularly bad grace from the right hon. Gentleman, who was a Member of a Government which, in adopting free education, distinctly followed colonial precedent. The right hon. Gentleman went on to say that these Death Duties would be evaded. He might take objection to the use of the word "evaded," for when a person did not bring himself within the provisions of an Act of Parliament it was not strictly correct to say he evaded that Act of Parliament. But he waived the objection to the term, and he asked how were these persons to evade these duties? The right hon. Gentleman told them that they were to be evaded by the distribution of colossal fortunes in the lifetime of their owners. He submitted that that would be, if it happened, an excellent social result. The right hon. Gentleman seemed to think that it would be positively a wicked tiling for a states- man, in framing a fiscal policy, to pay the slightest attention to anything except the raising of money. Again, he respectfully differed from the right hon. Gentleman. He thought that a fiscal policy might be properly made a great instrument of social reform, and that a Chancellor of the Exchequer might regard with equanimity some diminution in the produce of a tax if thereby great and beneficent social results were obtained. Passing away from the right hon. Member for St. George's, he desired to say a few words with reference to the speech of the hon. and learned Member for Thirsk. The hon. Gentleman fought his case with all a lawyer's keenness, and had shown a keen appreciation of those places where he might press heavily and those over which it was necessary very delicately to skim. He noticed the hon. Member treated very slightly and cavalierly what seemed to him the most able and convincing speech of the right hon. Gentleman the Secretary of State for India, delivered the other night. How did the hon. and learned Member deal with that speech? He seemed to admit that the Secretary for India had shown that "land," strictly so called, was lightly taxed, but then he said that houses were heavily taxed, and he massed lands and houses together and spoke about the burdens upon realty, and told them that realty paid so much. But "realty" was only an expression. Realty paid nothing, and could pay nothing, and what they had to ask was, not what paid but who paid? It was significant that, from the beginning to the end of his speech, the hon. Member ignored the incidence of local taxation. So far as lands were concerned, it might perhaps be conceded that the real incidence of the local rates was upon the landlord as regarded agricultural laud, but with regard to houses it was totally different. The local rates upon the houses were paid in part, no doubt, by the owner of the land upon which the house stood, and in part also by the occupier of the house. That was to say, where a house occupied an ordinary site, where the proportion of the ground rent to the total annual value of the house was small, it was, he thought, admitted by most economists that by far the larger part of the rate fell upon the occupier of the house. And these considerations were very important when it was borne in mind that in 1891, whilst the rates borne by land amounted only in round figures to £4,250,000, the rates which were borne by houses amounted to £22,500,000. The land at the present time was bearing a comparatively light burden as compared with 25 years ago. It might be shown in another way. The figures he was about to give had been taken from the two Reports issued, respectively, by the right hon. Gentleman the Member for St. George's and the right hon. Gentleman the Secretary of State for India. He found that in 1868 the rateable value of land was something under £40,000,000, and that bore local taxation to the amount of £5,500,000, whereas in 1891 the rateable value of land had fallen to £35,000,000, and that bore local taxation to the amount of £4,250,000; or, in other words, whilst the value of land fell 12 per cent., the burden was reduced by 23 per cent. The hon. and learned Member for Thirsk actually included among the burdens falling upon realty, the real incidence of which was upon the landlord, the Inhabited House Duty. He would test that by an instance which must be comparatively fresh in the memory of the House. In 1890 the right hon. Member for St. George's very materially reduced the Inhabited House Duty on houses of small annual value. The right hon. Gentleman did not recommend the proposal on the ground that it would relieve the burden of the owner, but, on the contrary, that it would affect 800,000 persons of humble means, the class just above the working class, and which was just beginning to wear a black coat. So much for the hon. and learned Gentleman's proposition that the Inhabited House Duty must be included among the burdens on realty. There was another point which had struck him. In the course of this Debate repeated complaints had been made by Members of what might be called the country party on the other side of the House against graduating taxation on the corpus of an estate—that was, upon an estate before division. They said we should graduate taxation not upon corpus—not upon an undivided estate, but upon each particular succession. But, he asked, who was it who first introduced the practice of graduating taxation upon the corpus of an estate? It was the right hon. Gentleman the Member for St. George's who was really the source of all the woes of the country party, and when that right hon. Gentleman crossed the floor of the House the country party, he imagined, very little suspected what a Sinon they were receiving within their citadel. In 1889 the right hon. Gentleman imposed his Estate Duty on the corpus of personalty, so that if five brothers each took £3,000 under their father's will they would, under the proposals for which the right hon. Member for St. George's was responsible, pay at a higher rate, not because they received more, but because the corpus, out of which their share was derived, exceeded the value of £10,000. But there was this further to be said: that the right hon. Member for St. George's was not consistent and was not just, for whilst he applied the principle of graduation to the undivided estate if it were personalty, on the other hand, if it were realty, then the principle of graduation was applied only to each particular succession carved out of the estate, and so the result was this: it was not graduated taxation on the corpus of an estate to which objection was taken, for whilst the principle was applied only to personalty hon. and right hon. Gentlemen opposite approved, but now that it was proposed to apply that principle impartially to the corpus alike of personalty and realty it became in their eyes a vicious principle, and they denounced it with that vehemence which the country party always displayed when the smallest of its privileges was called into question. He desired to make one further remark from the point of view of London. This Budget would give satisfaction to a vast body of opinion not exclusively confined to the Radical Party, because it provided the means of securing to the community a part of the unearned increment of land for the people. On the one hand, they had seen land already covered with buildings enormously enhanced in value by public improvements, and, on the other hand, they had seen large plots of land ever growing in value kept for years out of the market without contributing anything, or at all events anything substantial, either to local or Imperial taxation. The Brockwell Estate was a significant example, and he mentioned it not because it stood alone, but because it was a well-known case, the facts of which, he believed, were undisputed. What were the facts? That estate of nearly 100 acres was sold for £150,000, but up to the time of the sale, and for many years before, the land had not contributed more than £81 per annum to the local rates. They were therefore entitled to demand that besides their contribution to the Imperial Exchequer the owners of land in Loudon should pay a special quota through the Death Duties towards the cost of permanent improvements, and thus the way would be paved for a London municipal Death Duty. Before he sat down he desired to refer to a matter which exclusively concerned London, and which was raised the previous night by the right hon. Member for the Loudon University, when he made an appeal on behalf of London for a more equitable distribution of the probate grant. He very much regretted that the President of the Local Government Board made no response to that appeal, which he (Mr. Piekersgill) desired strongly to support. This mode of distributing the Probate Duty grant was fixed in 1888 by the Local Government Act, which provided that the mode then fixed should continue until Parliament should otherwise determine, seeming to contemplate that the system then fixed was not to be regarded as a permanent system. To show that London was not fairly treated in this respect he might cite the high authority of the right hon. Gentleman the Member for St. George's. The original basis proposed for the distribution of this grant was the number of indoor paupers, and upon that basis the share of London would have been very much greater than that which fell to Loudon under the plan which was subsequently decided upon, and it was in reference to that former proposal, under which London would have received much more than it now received, that the right hon. Gentleman the Member for St. George's used this language. He said— It had been suggested that Members of the Government had been influenced in the arrangement of this part by some favour to the Metropolis, but those who had spoken in this sense had failed to point out or to remember when they made that suggestion—or he thought they would not have made it—that the total result of the relief which was given to the Metropolis and the country generally had been that while the rest of the country benefited to the extent of 3½d. in the £1 London only benefited to the extent of 2½d. in the £1. These observations were, as he had said, applied to a plan under which Loudon would have gained more than she now received, and therefore they applied à fortiori to the system of which he now complained. He appealed to the Government to give the matter their very careful consideration. The time was opportune. Two claims to put fresh burdens on London were being raised. In the first place, the Home Secretary proposed, under Section 10 of the Local Government Act of 1888, to transfer the supervision of lodging-houses in London from his own Department and the Metropolitan Police to the County Council, and there were obviously many reasons why it was desirable the supervision of model-lodging houses should be under the control of the medical officer of this Metropolis. The London County Council did not object to take upon itself this duty, but at the same time, whilst the Home Secretary proposed to transfer this duty to the London County Council, he did not propose to place at the disposal of the County Council any funds for the discharge of the service. That, however, so far as finance was concerned, was a comparatively small matter, and he only referred to it for the sake of principle. But there was a larger claim which was being made to impose a burden upon London, which had been raised year after year in this House, and which was regarded in itself as a very reasonable claim. He referred to the claim that London should maintain its own police courts. He thought that was a reasonable and proper claim with, perhaps, one exception—the extradition court at Bow Street, which was an institution of an Imperial character, the expenses of which should be defrayed out of the Imperial Exchequer. With that possible exception it was, no doubt, right and proper that London should maintain its own police courts, but if this burden was to be imposed upon London he thought the time was opportune for a reconsideration of the financial relations between London and the Government. Whilst they regarded their claim as emphatically a just claim, the urgency of the case was illustrated by the observations with which the Secretary of State for India closed his speech the other night when he said— At no time during the present century has the average rate in the £ 1 of rural rates been so low, and I must add that of the London rates so high as during the years 1890 and 1891.

MR. COMBE (Surrey, Chertsey)

said, the Chancellor of the Exchequer was generally credited with holding the members of the trade to which he (Mr. Combe) belonged, whether brewers or distillers or licensed victuallers, in political hatred and contempt. They all acknowledged the necessity this year of an increase in the taxation of the country, and they did not grumble at it so much, because they believed a good deal of that increased taxation was due to the additional money that was going to be spent on the Navy, and which was generally approved of throughout the country. But what they did object to was the way in which that taxation was laid upon the people. He believed that the saddle of taxation was placed upon the wrong horse, and that horse's back had been so roughly galled by incessant taxation that it would not be wondered at if he and others did their level best to kick off the fresh duties which the Chancellor of the Exchequer proposed to place upon them. The tax on beer and spirits, to which he alluded more particularly, would affect four classes of the community very prejudicially—namely, the brewers and distillers, the licensed victuallers, the farmers, and, lastly, the consumers. As regarded the brewers and distillers, they must remember that the taxes would no longer fall upon a number of private individuals as members of private firms, but upon the ordinary and other shareholders. Some years ago repeated threats were made by various Chancellors of the Exchequer, and the brewers wisely converted their firms into Limited Liability Companies. The Chancellor of the Exchequer had said that the brewers were making extraordinary profits, but he thought he was well within the mark when he said that the average of brewery profits at the present time was under 8 per cent. He was, of course, well aware that there were a few exceptions, such as the brewery in Dublin, and perhaps one or two others. He could assure the right hon. Gentleman that the licensed victual- ling trade was not in so flourishing a condition as be seemed to indicate. When the Chancellor of the Exchequer brought forward the Budget for the first time he spoke of profits of from 100 to 200 per cent., but he did not know how the right hon. Gentleman worked out such profits. He had himself considerable dealings with public-houses, and he had never found anything like such profits. Whether intentionally or not, the figures the right hon. Gentleman gave created a very false impression. It was just possible that at some fashionable restaurant there might be something sold which gave a profit approaching 200 per cent.; but if they went to ordinary public-houses serving an ordinary class of people in an ordinary neighbourhood, they would find that the profits were far from being 200 per cent., and were much nearer 30 per cent. Some might think even 30 per cent. an excessive profit for a licensed victualler to make; but when they considered the unique position of the licensed victualler and the responsible position he held as regarded his licence, and the danger of his having it endorsed or perhaps taken away through no fault of his own, he did not think anybody would say 30 per cent. was an extravagant profit. There was another class of the community, many of whom were among his constituents, who would be seriously affected by this proposal to put 6d. on beer and spirits. He alluded to the farmers. There was no doubt that by the imposition of this 6d. on beer and spirits the right hon. Gentleman was putting on what practically amounted to 2s. a quarter tax upon barley. Lot hon. Members just imagine the outburst of righteous indignation which would fill that House if it were proposed to put a tax of a few shillings upon barley in an open and above-board manner. But because it was put on by means of a Beer Duty, that did not make any difference. The fact was, they were putting the foreigner in a better position by this impost of 2s. a quarter than the English farmer. It was perfectly true that the tax on spirits was levied when they were manufactured, and the tax on beer when it was brewed, but the profits on the production of those two articles wore so reduced by competition that the imposition of this tax could only have one result, and that was that it would largely in- crease the use of foreign barley, and at the same time tend to cause a corresponding decrease in the use of English barley. Yet barley was about the one paying crop which the farmer now produced, and it was exceedingly hard—he might go further, and say it was monstrously unjust—to impose just at this time an additional tax upon him. There was another class, a very large class indeed, who would be injured by the tax—he meant the consumer, who would not got anywhere nearly so good an article as he was getting at the present time. The brewers would give it him if they could, but it would be absolutely impossible if they had to bear this additional taxation. The Chancellor of the Exchequer, in submitting his Budget the other day, made the astounding statement that his increase in the tax was so small that the consumer would not feel it. He was astonished that so ardent a supporter of Free Trade as the Chancellor of the Exchequer undoubtedly was could deny what he had always believed to be one of the chief canons of the Free Traders, which was that whether they put on a tax or remitted a tax the consumer eventually felt the benefit or the burden; that if they imposed a tax he would ultimately have to pay it, and that if they remitted a tax he would ultimately be relieved. If they proposed, as some Members would desire to do, to put a duty of so much a quarter on corn, what a howl of indignation there would be ! It was difficult to reconcile the statement of the Chancellor of the Exchequer with the Free Trade maxim he had referred to. All the classes he had mentioned would suffer materially by the imposition of this tax, and perhaps the farmer would suffer most of all. He hoped the Division on Thursday night would prove that the farmers had more friends in the House than some of the Divisions lately had would lead them to suppose.

MR. JESSE COLLLNGS (Birmingham, Bordesley)

said, that he should not have intervened in the Debate if it had not been contended by some hon. Members, and especially by the hon. Member for the Devizes Division of Wiltshire, that the proposals of the Government would benefit the labourers. Those speeches were representative of the platform addresses that had been delivered, and probably would be de- livered again in the country. The speech of the Under Secretary for the Colonies tended somewhat in the same direction, for he asked the Unionist Party whether they would like to go to the country as the opponents of the equalisation of the Death Duties. He would say that they could go to the country on the proposals of the Budget, so far as they affected the landed interest as a whole, with a great deal of confidence. He was himself in favour of the equalisation of the Death Duties on realty with those on other forms of property. It was a matter that would have to he dealt with sooner or later. He therefore did not blame the Chancellor of the Exchequer for dealing with the Death Duties; but it was a subject so difficult that unless it were fairly dealt with the present inequalities would be greatly aggravated. If the Government had proceeded by Resolution, and had initiated a non-Party discussion on the burdens of local and Imperial taxation they would have conferred a national benefit; but as the Under Secretary for the Colonies said, the Chancellor of the Exchequer was in want of money, and the money had to be raised somehow, and at once. The Secretary for India asserted that the rates in the rural districts were lighter than in urban districts. He was not sure that the right hon. Gentleman was right. Recently he compared the rates of a farmer and those of a tradesman in a neighbouring town. The farmer's income was assessed at £550, and in Income Tax and rates he paid £173. The tradesman's income was assessed at £600, and he paid in rates and Income Tax only £31. Therefore, there was a difference of £ 142 in the Income Tax and local rates between a farmer living in the country and a tradesman living in a town. The right hon. Gentleman also said that local rates were less than they used to be. But the circumstances were different from what they used to be. In olden times the land being the principal form of property in the country naturally bore the greater part of the expenses of the nation. Since those times, however, two important changes had taken place. In the first place, there had been an enormous increase in the amount of personal property; and, in the second place, there had been an entire removal of all imposts upon the importation of agricultural produce. Burdens which were easily borne when corn was at 6s. a bushel became intolerable when corn fell to 3s. a bushel. The difficulty of bearing such burdens became almost insuperable when the Government sought to impose additional charges upon the laud, and that the proposals of the Government would place extra burdens upon the agricultura interest he had not heard denied from anyone on either side of the House. Three conclusions might be drawn from the speeches that had been delivered in the course of this Debate—first, that the proposals of the Government would fall heavily upon small estates to pay once for all upon the whole time during which the settlement endured, whereas unsettled estates would pay two or three times as much in the same period; and, thirdly, that they would bear heavily upon the class of small holders. In his opinion, the Government were bound to give satisfactory answers to these three objections. The right hon. Gentleman the President of the Local Government Board had done his best to deal with what he evidently felt to be a bad case, and, while admitting that the Government proposals would impose additional burdens upon the land, had endeavoured to minimise those burdens. The fact was, that the scheme of the Government had broken down in connection with agriculture in every test case which had been applied to it. It seemed to him that it did not matter, so far as its effect on an industry was concerned, whether the amounts levied on it was for Imperial purposes or for local purposes. The effect in the way of emptying pockets was the same. The argument of the supporters of the Government was that landed property on the death of the owner should pay the same contribution to the State as other property. To his mind, that proposition was in the abstract unanswerable. But, on the other hand, it was equally true that other property should pay the same contribution to local rates that landed property did; and that demand was almost entirely ignored by the Government, though the justice of it could not be denied. No doubt there was a great difficulty in rating personal property for local purposes. At present that difficulty was overcome by giving grants in aid of local rates, and, in the absence of a better and more scientific plan, he thought those grants ought to be enormously increased. Until some plan was devised and adopted for rating personal property for local purposes, it seemed to him they ought to extend the present system of giving grants from the Imperial Purse in aid of local rates, especially as recent legislation had tended largely to increase the burdens on local rates. As matters now stood a man might have a million of money in the funds or in other securities and yet not be compelled to pay a single penny towards the rates of the district in which he lived. Therefore, without objecting to the principle of dealing with those Death Duties, he said it was unjust to the agricultural interest to put further charges on that interest without, at the same time, giving it a corresponding relief from local burdens. The hon. Member for the Woodbridge Division delivered a speech for the Bill, but every definite utterance in the speech was against the Bill. The hon. Member said that the treatment of real and personal property alike was right and fair. But that was just how property was not treated in the proposals of the Government. The hon. Member also said that, with regard to local charges, the two kinds of property ought to be on the same footing. But that was just how it was not to be under the Bill. The hon. Member further said that in the case of farmers the Income Tax should be assessed on one-third of the rent instead of one-half the rent. But that was just what was not done. The hon. Member also rejoiced greatly that the Government had been strong enough to resist the proposals to withdraw the grants in aid of local rates. That was a case of being thankful for a very small mercy; and, indeed, he was not quite sure whether those grants would not be affected in an adverse manner by the proposals of the Government. That led him to a point on which he would like to get an answer from the Government. Up to now the local rates had benefited not only by the Probate Duty, which was devoted by the Chancellor of the Exchequer of the late Government to the relief of local rates, but by the yearly increase in the Probate Duty, and he should like to know whether a share of that annual increase would go towards the relief of local rates in the future?

SIR W. HARCOURT

Yes; certainly.

MR. JESSE CODLINGS

said, he was glad that he had obtained that admission from his right hon. Friend. He would then proceed to deal with the question of how far these local burdens bore upon the labouring classes. It was universally admitted that the position of agriculture, as it affected the labourers, was in a very bad state. He was visiting a landowner of a very small estate in Gloucestershire some time ago, and he found that the estate, which consisted of two farms comprising 1,200 acres, was bought at the beginning of the present century for £24,000, and that large sums had been laid out since on buildings, cottages, and various improvements. Up to 1878 the lands had been let at £800 per annum, tithe bringing it up to £970, or at about 16s. per acre. But land had been steadily going down in the past few years; and now one of the farms was let at £180, which the tenant was about to leave, and the other was in grass and in the hands of the landlord. What was the effect of that state of things? On one farm labour was greatly reduced, and on the other it had disappeared altogether. There were scores of farms in the same condition, and the inference was that this was not the right time to lay further burdens on that industry. He was not advancing this argument for the sake of the landowner or the farmer, but for the good of the country generally, and particularly the labouring classes, whose condition must go up and down according as this state of things continued to exist, or was remedied. The hon. Member for Devizes had seemed to comfort the House and himself by saying that all other industries were depressed—as if that had anything to do with the matter. If agriculture was the same as other industries it would have to take its chance; but he maintained that it was different to all others, agriculture being the industry upon which the prosperity of every other trade largely, if not mainly, depended. If the Government were to ask merchants, traders, or commercial travellers what was the cause of the present bad trade they would say that it was because in the villages and market towns of the country there were no orders, owing to the purchasing power of the land having been so much reduced. The consequence was a slackness in our factories and workshops. The Chancellor of the Exchequer had said that his object was not to break up large estates into small ones. He (Mr. Jesse Collings) did not believe that was the right hon. Gentleman's object. He only wished the right hon. Gentleman would bring forward some well-considered and just plan that would tend towards the breaking up of large estates. Nothing would receive a heartier support from himself. But while the right hon. Gentleman was sincere in his intention, and was correct as to the Bill not having the effect of breaking up large estates, yet many of his supporters had declared it to be not only their intention but their hope that the effect of the measure would be to break up large estates into small ones. The remarks of the hon. Member for Devizes had been tantamount to that. But how was this to be done? By a side wind, that would bring disaster to the land that was to be broken up. The idea was that the land should be first rendered unprofitable and unoccupied, and then, when its owners were bankrupt, to force the land on to the market. Could anything be more disastrous from a national point of view? A farm could not be shut up for two or three years like a ship or a house. If it were shut up for two or three years, to bring it back to its original condition would require an amount of expenditure equal to the fee-simple. He alluded to the speech of the hon. Member for Devizes in particular, as the hon. Member for Devizes had employed just the kind of platform oratory by which this Bill would be sought to be recommended in the villages. The hon. Member had said that if some of the acres forming large estates were let loose they would be acquired by the rural population and no hardship would be done. That was as much as to say to a village audience "You shall have some of these acres." The hon. Member had gone on to say— If these large estates are sold in small portions, it will be open to grooms to cultivate some of it for their own benefit instead of grooming horses for their master's benefit. That sounded rather captivating, but it 'would be far better to advise the grooms to hold on to their situations until they could see some better prospect—which he should like them to have—of getting land to cultivate—a prospect of which there was no trace to be found in this Bill. It seemed to be a mockery—it seemed to be playing with people—to indulge in such language as he had described, conveying as it did more than a hint that such would be the effect of the Bill. During recent years numbers of estates had been sold at ruinous prices, hardly realising the value of the buildings on them, and of the improvements made on them. Could the hon. Member for Devizes name one which had ever been broken up into lots in a manner that would bring it into the hands of grooms and such-like people? The fact was, that if the estates were forced on the market they would be bought by capitalists, and there would simply be a change from one owner to another. Such talk as that used by some of the supporters of the Bill was nothing better than clap-trap when it was addressed to the rural population. No one would welcome more than he would real and just legislation to bring about the state of things described—namely, the placing of a larger number of rural people on the land. They had welcomed under the late Government the Small Holdings Act, which had secured a number of freeholders, and was securing more. In conclusion, he would say that, while in favour of all this distribution of the land where it could be brought about, he was not in favour of this lopsided proposal which proposed to place extra burdens on the land, but to relieve the land of none of its legal burdens. Hon. Members might argue it as they liked, but the effect of these burdens would fall upon the labouring classes by reducing the amount of labour and lowering wages. If the hon. Member who had moved the Amendment went to a Division he (Mr. Jesse Collings) should vote with him.

* MR. HUNTER (Aberdeen, N.)

said, that in listening to the speech of his right hon. Friend (Mr. Jesse Collings) he could not help casting his mind back for a period of 10 years; and supposing he had been gifted with the power of prophecy, and that 10 years ago he had been able to recite to his right hon. Friend the speech he had just delivered, and said that in 10 years' time he would make that speech in the House of Commons, his right hon. Friend would have answered him in these words—"Is thy servant a dog that he should do this thing?"

MR. JESSE CODLINGS

I would not have done anything of the kind.

* MR. HUNTER

said, he should recommend his right hon. Friend when he went searching for statistics among his rural friends to exercise a little more of the critical faculty. He had told them of one case in which a farmer with a rent of £560 paid in Income Tax and rates no loss than £170. If that occurred a year ago, with the Income Tax at 6d. in the £1, the Income Tax on £560 would be precisely £7, which would leave £163 for local rates, which was 6s. in the £1. He did not know whether there was any rural parish in England where the rates were 6s. in the £1. That was about the highest figure which the rates attained in any part of the Metropolis.

MR. JESSE COLLINGS

I can give name and place.

* MR. HUNTER

said, that if it were so, all he could toll the right hon. Gentleman was that he would make a great mistake if he supposed that that was a typical example or fair illustration of the rates that were paid by farmers throughout England. But the right hon. Gentleman had not asked them what would happen to the farmer if that £163 of rates wore entirely remitted. Supposing some millionaire bestowed £163 a year on the farmer to pay his rates, what would happen? He (Mr. Hunter) thought that if he were the landlord he should pay a visit to the farm and point out to the farmer that, as he was able to pay £560 rent and £163 to the rate collector, now that the rate collector had ceased to demand the £163, he might just as well for the future pay in the shape of rout £560, plus the £163. He (Mr. Hunter), therefore, failed to see what the farmer would gain by the transaction. His right hon. Friend seemed never to have devoted any portion of his spare time to the study of political economy, because, if he had studied that ever so slightly, he must have been familiar with the A B C of the subject; that whatever a farmer failed to pay in rates his landlord would not fail to exact in rent. With regard to the great question before the House, he was sorry to say he could not congratulate the Chancellor of the Exchequer on producing the best possible Budget. The best possible Budget was one in which the Chancellor of the Exchequer was able to announce that he intended to ask less money in the year that was coining than he required in the year that was past. But they knew that that was not the right hon. Gentleman's fortunate position. They had an addition at one fell swoop of more than £3,000,000 for the Navy. That was a very considerable amount. It amounted alone to a rate of 4d. in the £1 on the rateable value of the United Kingdom, and he could not help thinking that, if this £3,000,000 were to be raised by a rate of 4d. in the £1, it would not be so easy to persuade Parliament of the necessity of the expenditure. The total expenditure had now come to be a very alarming amount. He admitted that it was not so bad as in France or Germany; but, taking the most exaggerated estimate which had ever been put forward as to the income of the working classes and the income which was obtained by persons of over £150, the Imperial taxation now amounted to not less than 8 per cent of the taxable income of the United Kingdom. He believed that if they had more accurate figures than Mr. Giffen had been able to give them, they would find that the Imperial expenditure was nearer one-tenth of the entire taxable income of the United Kingdom. It would be impossible, as it would be unreasonable, to tax the very poor man on his total or gross income. They must allow a minimum for subsistence, and he thought the least sum they ought to deduct from the gross income of a man before he was taxed was £30 a year. That was £6 per head, taking five as the ordinary average of the family. On that calculation they found that the total expenditure for Imperial purposes now fell very little short of 10 per cent., which was an enormous charge on the resources of the country. With regard to the mode in which the Chancellor of the Exchequer had attempted to deal with this question, he thought the judgment of the House on the Budget ought to turn on the proposal as to the Death Duties. That was a permanent part of the Budget. If it could come into operation at once there would be no necessity for any other part of the Budget, but it would be some consider- able time before the full effect would be felt. No one would deny that the Death Duties were an eminently proper form of taxation—if, indeed, the word taxation could properly be applied to the Death Duties. It was not a tax upon the living; it was rather an interception of a portion of the money which a man left to those who had done nothing to earn it, and who received it without labour and sacrifice. This Budget, if it did nothing else, made one immense improvement in the form of the law. There was nothing worse than the present state of the law with regard to Legacy and Succession Duty. But the feature of the Budget was the equalisation and graduation of the Death Duties. It was almost impossible to conceive that any rational man could for one moment defend the present state of the law. The distinction between personalty and realty was purely pedantic, absolutely incoherent in itself, and only to be explained by reference to historical causes. If anything were required to show the absurdity of that distinction they would find it in the case of Scotland. In Scotland all leasehold houses were real estate, and consequently had hitherto escaped at the lower rate of Death Duty. In future, house property in Scotland would be placed on an equality with house property in England. The right hon. Member for St. George's had boldly attacked the principle of graduation, and had quoted Sir Louis Mallet in support of his view. He would quote an even higher authority. Adam Smith had distinctly and clearly laid down the principle on which all graduated taxation rested in these words— It is not very unreasonable that the rich should contribute to the public expenses, not only in proportion to their Revenue, but something more than in that proportion. That was graduation. There were persons who wished to use graduation taxation for a very different purpose and in a very different sense to that indicated by Adam Smith, but it was not an objection to a reasonable thing that some persons would make it the ground for an unreasonable demand. How would this proposal operate? He found that out of 51,441 estates left last year only 247 were over £50,000 in value, but these formed 38 per cent. of the entire wealth left. He agreed that in the interest of the Exchequer itself the Death Duty should not be placed too high, but he hoped a rate of 8 per cent. on incomes over £1,000,000 was not too large. The great bulk of the property left was in estates under the value of £50,000; that would therefore be under the 5 per cent. rate. He looked on this Budget as a great step towards bringing our whole system of taxation into accord with the fundamental principle that a man ought to pay according to his ability—that the big burden ought to be put on the strong shoulders, and the light burden on the weak shoulders. In our local taxation there was a very good example of equal taxation. All local taxes were based on the principle that every person ought to be charged the same rate in the £1—that was to say, that a man who had a house worth £100 paid 20 times as much as a man who lived in a £5 house. That principle was general. Shopkeepers were rated on the same basis, so that one did not get an advantage over another, and factories were rated in the same way. One man competing with another paid the same rate in the £1, so that it was immaterial what the size of his business was. They competed on equal terms. The same was true of farmers. As, between farmers themselves, the small farmer paid the small rate and the large farmer paid the large rate. But it was alleged that although on each class of property the principle of equality was rigidly observed, it was not observed as between different classes of property. Shopkeepers and manufacturers and farmers were as between themselves equally rated; but it was alleged that, although in each class of property the principle of equity was rigidly observed, that principle was not observed as between the different classes of property. It was argued that a farmer paying a rent of £100 had a very different income from a private individual occupying a dwelling-house rented at £100 a year. The whole grievance of the farmer rested upon the fact that the rent of the farm was taken as the measure of income just as the rent of a dwelling-house was. It was surprising that no hon. Member had called attention during the course of the Debate to the practice and experience of Scotland in this matter. Since 1845 every parish in Scotland had had the power of ordaining a different rating in the £1 for different classes of property, with the concurrence of the Board of Supervision; and the power was acted upon throughout Scotland. The principle acted upon was that the rates should be adjusted so us to correspond as closely as possible to the incomes of the occupiers. A very common form in Scotland was that agricultural land paid 1d. in the £1, shops and places of business 2d., and dwelling-houses 4d. In one-fifth of the parishes of Scotland a most ingenious attempt was made to solve this problem which had vexed so many minds. The poor rate assessments in Scotland showed with what ingenuity the Local Authorities had tried to work it out. There were instances, as in the parish of Greenock, in which the rates were as follows:—Farms, 1d.; shops, 4d.; manufactories, 8d.; counting-houses and offices, 1s.; and banks, 1s.4d. in the £1. That was a better way of dealing with the injustice, if it were an injustice, of the burdens on agricultural land than the method adopted by the late Chancellor of the Exchequer in putting duties on tea and tobacco, and taking money out of the pockets of the working classes in order to relieve the richer ratepayers. The Imperial system of taxation was not an equal system, it was a graduated system; but it was graduated the wrong way, the amount paid in proportion to income rose as the income diminished. The right hon. Member for St. George's, Hanover Square, had a horror of graduation; but his horror was confined to cases where the richer classes had to pay the largest share. He had no horror when it was the other way. The slightest examination of our finances must convince anyone that the effect of our system of taxation was that the richer a man was the smaller was the proportion of his income that he paid to the Chancellor of the Exchequer, and the poorer a man was—unless a mere pauper or beggar—the less his chance of escaping the heaviest burdens. In 1892–3, of £81,000,000 of taxes, £25,000,000 were raised by taxes that were equal in the £1—House Duty, Income Tax, and Death Duties; the revenue from stamps was of two kinds, part being ad valorem; and there remained £50,000,000 levied regardless alike of income upon beggar and prince. A series of calculations showed that the percentages of taxation to income paid by varying incomes were as follows: £ 100,000, 1½ per cent.;£ 1,000, 5 per cent.; £100, 9 per cent.; and £80, 12 per cent. Local taxation, which was tolerably equal and approximately fair, fell necessarily to a large extent on the rich, but the burden of Imperial taxation fell mainly on the masses of the people, and that was the reason why Tory Governments had been so anxious in the past to raise money by Imperial taxation to the relief of local rates. An Englishman consuming an average of tea, tobacco, and beer, even taking no spirits whatever, paid £3 10s. a year to the Imperial Exchequer. That was equivalent upon a rental of, say, £6 to a local rate of 11s. 8d. in the £1. It was obvious, therefore, which class it was that bore the burden of taxation. Wine and cigars contributed extremely little to the Exchequer in comparison with the humbler beer and tobacco. It was altogether erroneous to say that personalty, properly defined, paid nothing to local rates; a large amount of personalty paid, directly or indirectly, to those rates. There was one class of men who had not received fair attention in the Debate on the Budget—the working men—and he contended that more might have been done for the labouring classes of the country by a reduction of duty on articles of everyday consumption. The working man was in the position of a victim crucified between the two thieves of personalty and realty, squabbling for their own advantage. He regarded the existing system of Imperial taxation as simply a device by which money was ingeniously extracted from the pockets of the labouring classes and handed over to the owners of property. As to the proposed new tax on whisky he could not, as a Scotchman, assent to it if it were intended to be permanent, and therefore he only supported it as a temporary measure, relying in the future on the promises of the Chancellor of the Exchequer, or rather upon something more solid, the votes of that House. He could not support this as a permanent measure, because whisky was grossly overtaxed at the present time. There was this gross inequality—that whereas the duty on beer was only 6s. 9d., that on whisky was 11s. per gallon. The difference between the taxation of whisky and beer could not be explained by a reference to alcoholic strength. One gallon of spirits was equal to 10 gallons of beer, and 10 gallons of beer were charged 3s. 9d. and two gallons of spirits were charged 22s. Nor did he think the explanation was physiological or hygienic; but he pointed out this singular coincidence—that in that House the beer-drinkers of England were represented by 495 votes, and the whisky-drinkers were represented by 175 votes. What ought to be done was to level up the beer and to level down the spirits. He did not deny that there was something in the contention that these taxes were necessary in the interests of morality, though he entered this caveat. If it was necessary in the interests of morality to impose this exorbitant tax on spirits, the excessive taxation which resulted from it should not be used to enable the rich people to escape from their proper share of taxation, but if it was to be imposed the surplus should be dealt with in the same way as fines were devoted to meritorious objects—that was to say, the surplus of the tax on whisky and on beer should be given back to the working men, either in the shape of old-age pensions or in some other appropriate form.

* MR. CHAPLIN (Lincolnshire, Sleaford)

I own that the more I have been able to consider the proposals of the right hon. Gentleman the less I like them, and no part of his proposals—and in that respect I agree entirely with my right hon. Friend the Member for St. George's—appears to be open to more question than the part by which he introduces the principle of graduation. The hon. Member for Aberdeen said that the right hon. Member for St. George's, Hanover Square, had a holy horror of graduation so long as it applied to the rich man, but when it was applied to the poor man he was able to bear it with considerable complacency. I may remind the hon. Member that my right hon. Friend drew no distinction between the poor man and the rich man. His objections to graduation were against the principle as a whole, and on behalf of my right hon. Friend I repudiate altogether the sentiments attributed to him by the hon. Member for Aberdeen. I own that it did not appear to mo until I heard the speech of my right hon. Friend that this important part of the proposals of the Government had been by any means sufficiently considered. At the same time, I endorse most fully the sentiments which my right hon. Friend has expressed. One objection to this proposal which has occurred to me is this, that once we adopt this principle and introduce it into our Parliamentary legislation no one can say where that principle is to end. The Chancellor of the Exchequer has introduced a scale of graduation which no doubt he considers to be both expedient and just. Unless he had thought so he would not have proposed it to the House of Commons. But the views of the right hon. Gentleman on this point will in no way be binding on any of his successors in the future; and I am apprehensive that whenever a future Chancellor of the Exchequer finds himself in difficulties with regard to money, the first thing he will fly to will be to an increase in the scale of graduation. That is a very grave and very serious objection to this proposal. It is an objection which has occurred to many people besides myself, and particularly to a great authority on finance, whose opinion I cannot refrain from quoting in half-a-dozen sentences— I have never been able to observe any absolute rule by means of which that graduation is to be kept within bounds. It is quite clear that it is capable of being carried to a point at which graduation would become confiscation; and I should be glad if we could be told whether there is any fixed rule which would apply to the custodians of property and to proprietary interests, for the purpose of distinguishing what is moderate and just from what is immoderate and unjust. Now, that is the opinion of a no less distinguished man than the late Leader of the Liberal Party—of a man whom you acknowledge to have been one of the greatest masters of finance, and at whose feet hon. Gentlemen opposite have sat and worshipped for years in the past. Now, is there any such absolute rule that can be applied as the one he refers to? I certainly know of none myself. Is there any Member of this House who can name one? Of course, the right hon. Gentleman opposite will no doubt tell us that what he proposes will amply fulfil both these conditions, and the hon. and learned Gentleman the Member for Aberdeen in his speech this evening seems to agree in a hesitating way with the Chancellor of the Exchequer in that view. But he spoke with doubt, and whether in his opinion the proposals of the right hon. Gentleman are moderate or not, for my own part I regard them as excessive in the extreme. Moreover, if we once accept this principle, I am afraid we shall he opening the door to what may lead to great abuse and to the infliction of intolerable injustice upon a limited class of the community, who because they are limited will be powerless to resist it. This is one of the objections I entertain to this novel principle, and it loads directly to another—namely, that it is certain to be evaded the moment you begin to make the tax oppressive. Now, will it be oppressive? You have only to take the case of any large estate you like to name in the country at the present time passing to non-lineals, and with three successions—and in many cases successions rapidly repeat themselves—one-half of the estate would be confiscated at once. That being a contingency that may readily arise within the scope and limits of your Bill, every effort will be made by the successor to avoid it—and evasion will become the practice and rule of the day—and I, for one, would never blame anybody who attempted in this way to escape it. My hon. Friend referred to the views upon this question of the late Sir Louis Mallet. But who was Sir Louis Mallet? I concur with my right hon. Friend, for I was familiar with Sir Louis Mallet's views—as it was my privilege to be intimate with himself. He was a distinguished member of the Party opposite, a Free Trader, a Radical, and a prominent member of the Cobden Club. I noticed the Member for Rochdale sitting this evening in his accustomed place, and I wondered at the same time whether he noticed the sneers of the Chancellor of the Exchequer at the mention of Sir Louis Mallet's name, because he was a bimetal-list. I remember an occasion not very long ago, within the last five or six years, when at some banquet at the Cobden Club the Member for Rochdale, who is, I believe, the President of that Society, described Sir Louis Mallet "as the intellectual head of the Cobden Club." I am sorry the hon. Member for Rochdale is not in his place. I am sure he would confirm me in this point, and I am glad that notwithstanding the sneers of the right hon. Gentleman at a question to which I have always thought he has never given adequate attention, that we had on our side, as a bimetallist and economist, so distinguished a man as the late Sir Louis Mallet. But that is the principle which the right hon. Gentleman the Chancellor of the Exchequer has thought it right to introduce into our English legislation for the first time—a principle entirely without precedent, and on which this Budget is actually based. I do not for one moment desire to assume a dogmatic position with reference to this matter. But I must say I do regard it as a very grave and serious departure from all sound principles of finance, and one which the more it is considered by this House and the country will be found the more undeserving of support. I must again refer, although I am very sorry to have to do it, to the taxation of real property—upon its capital value. It is not my fault if I have to recur to it again. We on this side of the House have pointed out over and over again the innumerable objections to the Government proposals, especially as they affect agricultural land. To those objections we have had not only no answer from the Government, but no attempt even at an answer from any Member of the Government upon that point up to the present time. I am perfectly satisfied in opposing this proposal to take my stand upon its gross injustice under all the circumstances of the present time. It has been shown over and over again that the result of that proposal must inevitably be to dispossess the owners of their estates in many cases by driving them to forced sales in order to enable them to meet your unwarrantable obligations. That is not my contention only, because it is the contention of the distinguished man who was for so long the Leader of the Party opposite. I have quoted the language of that right hon. Gentleman on a previous occasion; but since then I have found oven stronger language of his in reference to this subject. The right hon. Gentleman the Member for Midlothian, speaking on the 12th of May, 1853, used these words— But I think it would be an invidious, an offensive, and unwise, and an unjust measure….to lay on a tax in such a way as would have the effect of forcing them to part with it; and there is no tax, however moderate it might be, if it were fixed on the capital value of such an estate…which would not have the effect of compelling the possessor to bring his estate into the market. If that would he the case in the opinion of the right hon. Gentleman in the event of the imposition of even the most moderate tax upon land, what will be the case if your proposal is carried out of putting this extremely immoderate tax upon landed property, which will amount to 10 or 12, or in some cases to even 18 per cent. on its capital value? In those cases, especially if there should he more than one succession within even a limited period of time, the result foretold by the right hon. Gentleman the Member for Midlothian is absolutely certain to happen. Now I want to ask the Chancellor of the Exchequer a very plain question upon this point. Is that the object which he and his colleagues have in view? If it is, which I can hardly conceive for a moment, then they are guilty, in the language of the Member for Midlothian, of an invidious, unwise, offensive, and unjust measure. But if it is not their object, it will unquestionably have that result. If they deny that, then, instead of sitting in dull silence and giving no answer to our appeals, let them show that we are mistaken in our views of the matter, and relieve us from the very natural apprehensions which we feel in regard to it. The hon. Member for Northampton—I am sorry the hon. Gentleman is not in his place—has said that some people have been in possession of their land and houses for so long a time that the period has come when they should be called upon to surrender their possessions. The hon. Member is not now in the House, otherwise I should have characterised his language as it ought to be characterised. The hon. Member appears to be consumed with a desire to inflict injury upon all landlords as a class, but I may tell him that he cannot do so without also inflicting enormous injury upon others. Now take the case of some of the great historic places, of which Chatsworth is a type. I only mention Chatsworth, because I think it is generally better known than scores of estates which occupy a similar position. It is a matter of common knowledge that many of those places are maintained at a cost largely exceeding the income of the whole estate to which they belong. They employ hundreds of people and labourers of every description, and they give amusement and enjoyment to thousands. In the summer months the means of conveying the people who go to see these places becomes absolutely an industry in itself. But if properties like these, which are blessed or encumbered with a Chatsworth, are to be mulcted in the manner which you propose, the inevitable consequence will be that one after another they will be shut up, their contents will be sold and dispersed, the whole army of people to whom they give occupation throughout the year will be dismissed and their employment gone, and money will no longer be attracted to the neighbourhood. I venture to say that this is not a sentimental, but a practical objection to your proposals. The hon. Member for Aberdeen observed that nothing had yet been said about taxes upon labour. What does the House imagine that owners of land and houses throughout the country pay in wages to labour in an ordinary year? I have here a Report presented to the Board of Trade in 1891 by a gentleman, who is perhaps among the ablest of a class distinguished for their ability—namely, the Civil servants in this country. It is signed by Mr. Elliot, who is now the Secretary of the Board of Agriculture. In this Report the volume of agricultural wages is estimated roundly as amounting to between £43,000,000 and £.50,000,000 a year, and the estimate is arrived at in this way— The principal data upon which the above estimates are framed consist of the census figures of the numbers employed in agriculture, taken in conjunction with estimates of the average earnings, and of the average cost of labour per cultivated acre. This Return also shows the amount of wages paid by the landlords, and, as the House will observe, the later class contribute a very considerable amount of the whole sum. I turn to another para- graph, and what I find is this, which I expect will be news to some Members of the Government; and certainly it will be news to a great many Members of the House. The Report says— These figures point clearly to the fact that out of the rental paid for agricultural land a considerable payment for wages is made over and above that which comes out of the pockets of the occupier and farmer of the land. It is difficult to make any precise estimate of the amount, but it cannot well be less than 10 per cent., and probably is as much as 15 per cent. of the aggregate receipts. If this he the case the agricultural landlords' labour is not less than £6,000,000, and may probably amount to nearly £9,000,000. That is a statement which I think is worthy of the serious consideration of this House. This vast amount of wages is what you are going to destroy by the proposals in this Bill, because if the Bill is carried place after place, house after house, will have to be shut up, and although the hon. Member For Northampton may obtain his desire by inflicting injury upon a largo number of landlords and owners of property in this country it will be upon the agricultural labourers in the long run that the real burden of this loss will fall. I cannot say that I was altogether re-assured upon this point by what fell from the Under Secretary for the Colonies in his able speech to-night. He gave us some information as to the mode of valuation which is to be adopted, which, as far as J know, was new to the Members of the House. He told us that in the case of agricultural land the value was to be calculated at 18 years' purchase of the net rent, and that he had received that information from the Inland Revenue officials.

MR. S. BUXTON

I did not intend the House to understand that any fixed number of years' purchase would be taken. What I intended to convey was that, as far as one can judge, the average value of certain classes of property might possibly work out to be about 20 years' purchase, but that in urban cases it might prove to be more, and that it would not be in any sense of the word calculated upon the net rent of the capital value.

MR. CHAPLIN

Then it appears to have been somewhat negative information that we have got to-night; but I understand the hon. Gentleman to say he had been informed by the Inland Revenue Commissioners that that probably would be the system on which the valuations would be made.

MR. S. BUXTON

Not the system, but that under the new system, which is taking the principal value and not the capitalised rent, it would probably work out. to about 20 years' purchase, though in some cases it would be a great deal more.

* MR. CHAPLIN

I gather it would be unnecessary, then, for me to ask the question I was going to put—whether the mode of valuation he indicated will be put in the Bill. [Mr. S. BUXTON: No.] In some cases, it seems to me, it would be injurious to the rural interest rather than otherwise, because undoubtedly there is a large proportion of the land of the country which, although still able to pay some rent from year to year, yet at the same time it is land which no one would dream of buying, and for which for the purposes of sale there is little, if any, market whatever. With the permission of the House I must now pass to another subject. This Budget proposes, I understand, to equalise the taxation between realty and personalty; and in order to support that proposition the Secretary of State for India, began the other night by airily dismissing the question of the Land Tax and of the poor rate as being hereditary burdens. Then he proposed to show by means of figures that in 1891 as compared with 1868 in the rural districts the rates had fallen to the extent of 4½d. in the £1. My right hon. Friend dealt with that speech in the speech he made before dinner, but I desire to say a word upon it myself. As to the Land Tax and the poor rate, in which I am sorry to say my right hon. Friend the Member for St. George's appeared to agree with the right hon. Gentleman opposite, I must take exception emphatically to the view which both these right hon. Gentlemen put forward. The Land Tax was first established in 1692, but both in 1697 and in 1797 it was made abundantly clear that the taxation of personal property was the primary object of that Bill. Again, as to the poor rate, by the Act of Elizabeth every inhabitant of every parish was to contribute to the poor rate according to his ability. It may be quite true that since then personalty has managed to escape from its just contributions; but when the right hon. Gentleman says that land has been bought and sold subject to this state of things, and therefore it has become a hereditary burden, I must remind him that there is a vast deal of land which has not been sold and has not passed hands, and which therefore in no way whatever comes under his category. To tell us that for that reason these imposts have become hereditary burdens is simply to say that because for a great number of years we have been perpetually robbing a number of owners of land who have sold their properties, therefore we are now bound to continue to rob those who have kept them. In other words, if you only continue a glaring injustice long enough, it eventually becomes perfectly fair and right. I protest altogether against this assumption. I affirm that so far from being hereditary burdens of any description they are absolutely nothing whatever of the kind and that you will never do full justice or equalise taxation between the two clashes of property unless the views I have put forward are recognised and acted upon. We contend that by this Budget, while you are professing to equalise Imperial taxation between these two classes of property, you are leaving us still in a position of great inequality as regards local taxation. My hon. and learned Friend behind me in his able speech assumed the validity of your "hereditary" plea, for the sake of argument, but even then he showed that we were being unfairly treated, and that the balance was in favour of personal property—and as to the figures of the right hon. Gentleman by which he attempted to show that in rural districts there had been a fall of 4½d. in the £1 in rates, I am prepared to make a present to the Government of all the figures they have quoted. I am satisfied to rest on the quotation made from the Report of the right hon. Gentleman himself, by my right hon. Friend the Member for St. George's. In purely rural districts his Report shows that as between 1868 and 1891 there has been an increase in the rates of at least £700,000. Now, what as to the rental? In 1868 the rental was £47,000,000, in 1878 £51,000,000, and in 1891 £41,000,000, and we know that since 1891 there have been immense reductions in addition; so that we have, in the showing of the right hon. Gentleman, an increase in the rates of £700,000 since 1868, and at the same time very greatly reduced means out of which to pay it. If you think you are going to convince the rural ratepayers, either by your system of averages, or by your system of selected Unions, that they have anything to thank you for or that they are better off than in 1868, you will find yourselves very much mistaken. One word more I must say with regard to the concession in respect of the Income Tax on which the right hon. Gentleman has prided himself so much and for which he has received the repeated and effusive thanks of some of his supporters. While I welcome that concession, I think it is more apparent than real. The Government in this matter took Lancashire and the West Riding of Yorkshire for their guide. Now, I believe that these two counties happen to be the two districts in England that have suffered less than any other part of the country from the depression. Whore farms are to be let there is still competition for them, and the reductions in rent have been moderate in the extreme as compared with other parts of the country. But go to East Anglia and the counties on the South of England to the vast corn-growing districts. You will find that these reductions in rent have been enormous. In some cases rents have not been paid at all; in others the land has gone out of cultivation altogether. Although the reductions may be great, where an estate is kept in cultivation at all, the outgoings have not fallen, they remain as great as ever. In fact, they are probably greater, for where tenants are in distress every kind of demand is made on the landlord which is not made in prosperous times. You talk of a wretched 10 or 12 per cent. as a just measure of outgoings throughout the country, but I venture to tell you it is far more like 30, 40, or 50 per cent. in many of these parts of the country, and I believe that in some parts of the country the whole of the income is swallowed up by the outgoings. When my hon. Friend the Member for Woodbridge offered his effusive congratulations to the Chancellor of the Exchequer I wondered whether he had calculated what the allowance under Schedule (D) amounted to. I have had a calculation made, and if it is correct, as I believe it is, there certainly is not much to be thankful for. This calculation shows that on the 48,000,000 acres of cultivated land, this £160,000 which was to be such an immediate and sensible relief to the agriculturist would amount to 1d. an acre, and if you take the 63,000,000 acres which include woodlands and forests, it would be nearer ½d. than 1d. per acre, whereas, if you take the rental it would amount to 5s. in every £100, or a fraction over ½d. in the £1. I am ready to offer my thanks to the right hon. Gentleman for this concession for what it is worth, but I cannot say in truth or justice that it appears to me a concession for which there is any ground for the effusive gratitude offered from the other side of the House. As to the increase of the duties on beer, it has been ably pointed out that the ultimate burden of these duties will fall on the agricultural interest—on the barley-grower. It has been shown that with successive duties the price of barley has gradually and steadily fallen, and that the use of sugar is going up, and it was quite clear from the speech of the hon. Member for Mid Armagh that it was not the brewing interest—with the details of which he is thoroughly familiar—but the barley-grower who would be hit all round by these proposals. But there is a new factor, which ought to be taken into consideration. It is notonly the great landowners and farmers, the large growers of barley, whom you are injuring. Within the last few years you have created thousands of allotments; and one and all of them grow barley, so that it is the poor man whom you are injuring. The crops of barley the allotment-holders grow are first-rate; I have never seen better. But I hoar grievous complaints of the prices they are receiving. The hon. Member for the Woodbridge Division says that, though barley has fallen in price, so have wheat, wool, and meat, and other agricultural products. But I would remind the hon. Member that there is no such fierce competition in barley as there is in other agricultural products. The parts of the world from which we can get barley fit for brewing are very few. We get no barley from countries with a depreciated currency; and no one knows better than the Member for Woodbridge what that means in the case of wheat. The more I consider these proposals, the more apparent it is that real property, and agricultural land particularly, is to be hit. This is at a time when, as the Government knows well, agriculture was never in a worse position to bear an additional burden. While the Government always rise at the Table and profess the utmost sympathy for agriculture, they are regardless of its interests altogether in practice. I know that they have a majority at present, and that we are powerless to prevent any further injuries which they may seek to inflict on us. But I am sure that within and without these walls the flowing tide is steadily against them, and I hope that even the present House of Commons will take courage to itself and reject a measure which, as far as the agricultural interest is concerned, I believe to be the most iniquitous Budget that has been proposed by any Government in modern times.

Motion made, and Question proposed, "That the Debate be now adjourned."—(Mr. J. E. Ellis.)

Motion agreed to.

Debate further adjourned till Thursday