BEER AND SPIRIT DUTIES.

HC Deb 02 May 1895 vol 33 cc314-68

We have, therefore, to deal with an estimated deficit of about £300,000, and some form of taxation must be resorted to which will yield that amount, and also a moderate margin of surplus reserve as a provision against unforeseen contingencies. In order to find that sum we turn naturally to the taxes which are to expire on July 1 next—namely, the taxes upon beer and upon spirits. I stated in the discussions on the Budget last year that the manner in which these taxes would be dealt with would depend upon the financial situation in which we found ourselves when the time arrived. I will quote the words of my reply to various questions on this subject on April 23, 1894. The hon. and Gallant Member for Galway said that— he always understood the Chancellor of the Exchequer to speak exactly in the sense in which he had spoken that night. The right hon. Gentleman's mind was left perfectly open on the question.

To that I replied that— I was happy to hear that the hon. and Gallant Gentleman understood my statement exactly in the sense I had made it. First of all, it was not intended to make this duty a permanent tax, leaving it a perfectly open question whether it should be renewed or not.

It is perfectly obvious that the choice lies between the spirit and the beer duty. I will state to the Committee the reasons why I shall choose one rather than the other. I shall have to satisfy hon. Gentlemen opposite, because I was so unfortunate last year as to have their unanimous votes against both the spirit and the beer duty. Having been solid upon the one, and then upon the other, I may say that they impartially condemned them both. Now, in regard to the spirit duty, there are several very cogent reasons against the renewal of the extra 6d. I have already referred to the fact that hon. Gentlemen opposite voted unanimously against it last year, and I supposed they would this year. But that is not, to a Chancellor of the Exchequer, the main and conclusive reason. The first and the most conclusive reason is that it has not, and is not likely to, yield the required amount. I have already stated that as regards foreign spirits under the head of Customs, the extra 6d. has yielded substantially nothing at all, and that, to a Chancellor of the Exchequer, is a conclusive reason for not choosing the tax. As regards the home-made spirits, it has only yielded £270,000 out of the £600,000 which it was estimated to produce. This failure in the past year may be due in part, no doubt, to the holding back of stocks in anticipation of the removal of the tax. This is a thing which it is difficult exactly to gauge; but it is also probably due to the fact that the spirit duty is already at a very high figure relatively to the cost of the article itself. There is a point, no doubt, which taxation reaches when an addition to the duty fails to realise the expected result in increased revenue. That was notably the case with the tobacco revenue, when Sir Stafford Northcote's increase of the duty failed to produce a sensible increase of revenue. Since the additional duty was removed by the right hon. Gentleman opposite (Mr. Goschen), the tobacco revenue has rapidly advanced, though a portion of that increase is, no doubt, to be attributed to the regulations in regard to moisture, for I admit that the prohibition of moisture is an element in the tobacco duty. It is quite certain there is a point, which can only be ascertained by experiment, at which the increase of a duty will not yield an increase of revenue. In 1890, when the right hon. Gentleman opposite proposed to increase the spirit and beer duties, my right hon. Friend the Secretary for India moved that the increased duty should be imposed for one year only, and one strong ground on which he based the Motion was the experience of former years that such increased taxes fail to yield increased revenue. That, no doubt, is a very strong argument in dealing with duties of this character. There is another objection which has always been very strongly urged against the increase of the spirit duty, both in Ireland and in Scotland—namely, the unfair proportion between the relative amount of the taxation upon beer and upon spirits. There has been much controversy on this subject, and calculations made upon the basis of the alcoholic strength, but I prefer to look at the matter from the point of view of the weight of the tax upon the cost price of the article which, from the estimates supplied to me, may be represented by the figures of from 34 to 40 per cent. upon beer, and about 700 per cent. upon spirits. Now, these considerations appear to me clearly to point to the conclusion that if, in order to raise the required amount, a choice is to be made between beer and spirits, it is not upon spirits that the additional taxation ought to be placed. The situation as regards beer is altogether the opposite of that which I have described in respect of spirits. In the first place, beer has entirely responded to the expectation formed of the yield from the additional 6d., and has realised the estimate within a trifle, and, but for the exceptional frost, would certainly have considerably exceeded it. The price of beer to the consumers has not been altered. There is no reason to believe that its quality or strength has been generally deteriorated. Whatever other interests and manufactures may be suffering from depression, the brewing trade is not among the number. Of this the income tax assessments afford conclusive evidence. Never have the returns been so large as in the past year. The great fall in the last 12 months in the price of materials has given to the manufacturers of beer a great profit upon an article which they sell at the same price in spite of the diminution in cost of production. The fall in the price of materials has operated principally in the last few months, but it will operate still more in the coming year; and, applying the lowered prices to the quantities of materials used, the Inland Revenue are of opinion that the advantage to the brewers has covered, or will cover, the payment due to the extra 6d. several times over. A slight reduction in this profit is to be made on account of the somewhat smaller extract obtained from the malt of last year's harvest. This influence also seems to have operated only in the second half of the financial year, and it is quite insufficient to counterbalance the gain from the great fall in the price of all the principal articles used by brewers. These facts show, beyond all doubt, that, as regards beer, the additional tax is one that has been borne by the trade without oppressive effect—I might say without sensible burden. I have examined the more recent reports of the brewery companies in the country and find that they bear out that view. The consumer has found no difference—the brewer has not suffered—the revenue has benefited. Therefore, the inference I draw is, that there is no other tax which, in my judgment, could be so fairly imposed and which would cause so little inconvenience either to the producer or to the consumer, which, after all, is the sound test by which all taxation must be tried. I therefore propose to re-impose the additional 6d. upon beer when the duty expires on July 1. The estimate of its yield for the nine months from July to the end of the financial year 1895–96 is £500,000, which will cover the estimated deficit and leave a narrow margin by way of surplus of £181,000. I do not think it necessary to impose the additional duty beyond the present financial year, but to leave it to be dealt with according to the state of the finances as they may be found at the expiration of the year. As was pointed out in the discussions on the Budget last year, and as has proved to be the fact, the risk of loss by holding back does not apply to the case of beer in the same manner as it does to spirits. The additional spirit duty, of course, will not be re-enacted; it will be allowed to expire on July 1; but the additional beer duty will be renewed for a single year from that date. A similar proposal to this was made in 1885 by Mr. Childers. This course is also that which we advocated in the year 1890, in which year, on the discussion in Committee of the Customs and Inland Revenue Bill, Mr. Childers said:— The Chancellor of the Exchequer has not quite correctly stated what was proposed as to the increase of the duties in 1885. In the case of the beer duty, an appeal was made to me only to enact the increase for one year, and I complied with that request. I do hope that, after the strong appeal which has been made by my right hon. Friend (Mr. H. H. Fowler) and other Members, the Government will allow this provision to be only for one year. That will be very much more in accordance with precedent than the proposal of the Government.

Therefore this is not a new proposal of ours; it is one made in 1885, and made again in 1890 in the same manner. Now, Sir, with this addition or renewal of the 6d. a barrel upon beer, yielding £500,000, I am now in a position to state the final balance-sheet for the current year. The final balance-sheet will stand thus:—Revenue from Customs, £20,240,000; Excise, £25,950,000; stamps, £15,800,000; land tax, £1,020,000; house duty, £1,450,000; income-tax, £15,530,000,—total tax revenue, £79,990,000: Total non-tax revenue, £16,172,000: total revenue, £96,162,000. The expenditure on Consolidated Fund services will be £26,625,000; supply services, £69,356,000: Total expenditure, £95,981,000, leaving an estimated margin of £181,000. I have spoken of this as a margin, but, as I have always contended, the true surplus is only to be regarded as the excess of the revenue of the year over the actual expenditure of the year. And it must be taken into account that we are this year borrowing £1,000,000 upon terminable annuities for expenditure on naval works which is to be incurred in the current year, and we also expect to have to borrow £700,000 under the Barracks Act of the late Parliament. That is, I believe, a defensible arrangement in regard to the cost of permanent works, which are to last for a considerable period. But it must be borne in mind that this is an expenditure not covered by the revenue of the year, but a proportionate part of which will be defrayed in future years, which will share the benefit of the works. I have now endeavoured to lay before the Committee the financial state of last year's account, and also a forecast of the balance-sheet of the current year. I have not aimed at an eventful Budget. The financial situation neither required nor would have justified such an undertaking. The slight adjustment I have proposed will establish the equilibrium of the National Account. It is, no doubt, to me a great disappointment—as it must be to the country—that what would have been a surplus of £2,000,000, available for the relief of taxation, has been swallowed up by the insatiable demands of increased expenditure, and that, with a largely augmented revenue, we are only just able to make both ends meet. But, in that position of things, it appears to me to be sound finance to disturb as little as possible for the present the existing fiscal system. After the large and far-reaching changes which were made in the Budget of last year a period of rest is required to develop and establish its results. With these results, so far as we have experience of them, we have every reason to be satisfied. They have produced the resources which were required, and which were expected, in order to cope with a vastly increased expenditure. The general arrangements of last year not only met the demands of that year, but have enabled us, by aid of the anticipated growth of the death duties, to deal with the enhanced outlay of the current year. We had to encounter last year an increased expenditure of £4,000,000, to which is added this year a further increase of £2,000,000. When the new Death Duties were imposed I stated that the increase of a million in the Revenue estimated for the year 1894–95 would be largely exceeded in the ensuing year; and I had in my mind at that time the prospect of a largely augmented expenditure in regard to the engagements made for the increase of the Navy. The acuteness of the right hon. Gentleman. (Mr. Balfour) divined that when he asked me what business I had to provide for the extra expenditure which would accrue in the year 1895–96—what I had to do with the Budget of the present year. The reform of the Death Duties was, therefore, a provident arrangement for the anticipated increase of demands on account of the Navy in the present year, as well as the necessities of the past year. We calculate in coming years on a still further growth of revenue to be realised from the same source. The requirements have been immense, but the resources of the nation have fully answered to those demands. I heartily desire it had been my good fortune to have been in the position to diminish the weight of this great burden. My office has been confined to distributing its pressure, so that it should bear as lightly as might be on those who are the least able to endure it. If the Committee are of opinion that the proposals of the Government are, under the circumstances with which we have to deal, reasonable and equitable, I trust they may receive their sanction.

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

I do not propose on the present occasion to enter in any detail upon the interesting statement which has been made by the Chancellor of the Exchequer. I will observe what I believe to be the most orthodox practice—that is, that such changes as are proposed in the taxation of the country are better discussed after reflection, and when the matter can be properly considered. I will confine myself, therefore, now simply to offering congratulations to the Chancellor of the Exchequer, the House, and the country upon some of the statements which it has been in his power to make. I join most heartily with him in the congratulations which he makes to the permanent Civil Service for the marvellous accuracy with which their forecasts have been fulfilled. I must say, looking to the extraordinary changes which have taken place in the taxation, as regards income-tax and the Death Duties, that this is simply short of a marvel. I congratulate, also, the officers of the Customs; and, there again, that they should be so nearly right on a total receipt of 20 millions shows the great ability and the great accuracy with which now the departments conduct these duties. There is only one point which struck me in connection with the estimate as regards the death duties, and perhaps the Chancellor of the Exchequer might be able to throw a little light on the subject. He placed before us some most interesting statistics with regard to the deaths which had taken place in the respective years 1893–94 and 1894–95. I am not sure that I remember the figure exactly, but I think he told us that 40,000 less people died than in the previous year.

THE CHANCELLOR OF THE EXCHEQUER

Seventy-five thousand.

MR. GOSCHEN

Seventy-five thousand less people died than ought to have died. This is the marvel, that the officers of the Inland Revenue seem to have been able to foretell such an extraordinary result. Otherwise, unless they had expected 75,000 less people to die, how could the results be such as to yield the precise amount which they estimated? I should presume that the same has taken place this year as has taken place on previous occasions—namely, that there are compensating circumstances, and that though the officers of the Inland Revenue are able to foretell as a whole what the result will be, there are in the course of events extraordinary changes which nevertheless are compensated by other changes. I should be glad to have some more information upon that point. At the same time I do not wish in the slightest degree to diminish the compliment which has been truly earned by the extraordinary accuracy of these estimates. The same of course applies to the estimates of expenditure, although there the difference is less remarkable because it is more difficult to foresee. In the next place I would congratulate, not only the Chancellor of the Exchequer, but the country generally, on the figures with regard to savings banks and the general savings of the country. I think the right hon. Gentleman was perfectly right, and did a public service in opposing some of those pessimist views which circulate so much in the country. If the masses are suffering under oppressive circumstances, prosperity amongst the artisans has not entirely ceased. The facts that have been placed before us show that the consumption of articles has been progressive with the increasing population, being at least 3 per cent. greater, a circumstance which should afford satisfaction to all classes of the community. I congratulate the right hon. Gentleman the Chancellor of the Exchequer on his statement as to the increase of deposits in the Post Office Savings Banks, and in other similar institutions. There is, however, one thing which must be borne in mind with reference to the increase in Trustee Savings Banks and the Post Office Savings Banks. It is not possible that a certain amount of money has been transferred to these banks because the rate of interest is high as compared with that allowed by other banks? I am sure that the Chancellor of the Exchequer will feel that this is a matter which requires some watching; because, while we all rejoice that money should be put into the bank by the real working classes, it would be wrong that there should be a a loss to the country upon deposits which might be withdrawn from other undertakings by persons in a better position in life, who simply transferred their savings to the Post Office Savings Bank to get a higher rate of interest. All the same, the amount of deposits in the savings banks is a matter of national satisfaction and congratulation. It shows that the working classes are becoming capitalists themselves, and by that means new links are being established between all classes of the community. There is one point to which I wish to call attention, not in any controversial spirit, and that is in reference to Supplemental Estimates of one year which may be used for the relief of the following financial year. The Chancellor of the Exchequer mentioned that they were taking a Supplemental Estimate of £200,000, not because it was required in the past year, but in relief of the present year. That is to say, that the amount has been withdrawn from what would have been the old sinking fund, and that there would have been a surplus of £900,000 instead of £700,000 for the present year. There is nothing that the departments are so anxious to do as to take Supplemental Estimates one year in order to reduce the Estimates of the next, and this is a practice which the Treasury have resisted to the best of their ability. That, however, is a venial offence, but I think that the right hon. Gentleman will see that it is a practice which ought to be looked upon, I will not say with suspicion, but certainly with some anxiety and with some care. However, having congratulated the right hon. Gentleman upon the result of his figures, I do not wish to offer any more comments upon his able statement to-day, beyond a passing reference to his most ingenious proposal, by which to meet the deficit which otherwise he would have had, and provide a small surplus, by reimposing the Beer Duty and taking off the extra Spirit Duty. We recognise that the right hon. Gentleman has many "cogent reasons" for taking that course.

MR. G. C. T. BARTLEY

They have all left the Irish Benches.

MR. GOSCHEN

I think that my hon. Friend is really too suspicious. I mean that there may be very cogent financial reasons for the right hon. Gentleman's action in the matter. Among other reasons I may point out that the Spirit Duty is a declining Duty and the Beer Duty is a flourishing Duty. But with regard to this portion of the right hon. Gentleman's proposal I offer no comment at the present time. We have before us at this moment a comparatively simple Budget, and I should hope that before the evening is over the right hon. Gentleman the Chancellor of the Exchequer will tell us when he proposes to resume the consideration of that portion of his proposal which will touch the only alteration in the Duties which he has submitted to the House.

THE CHANCELLOR OF THE EXCHEQUER

I may say at once that I propose to take it on Friday of next week, if that would be convenient.

MR. ARTHUR JEFFREYS (Hants, Basingstoke)

complained that no relief had been given to the agricultural interest, and suggested that the land tax, which amounted to £1,000,000 a year, should be given to each county according to the proportion of its contribution. He should like to ask the right hon. Gentleman the Chancellor of the Exchequer what became of the land tax? Nearly every penny of the English land tax went into the Exchequer. There was no such tax in Ireland; and in Scotland the money was applied to other purposes, and did not go to the Imperial Exchequer. He also wished to know why the land tax was increased this year from £1,015,000, at which it stood last year, to £1,020,000. The tax, which in some places amounted to 3s. 9d. in the £, pressed very heavily upon the landowners. The Chancellor of the Exchequer, although he had done nothing to relieve the agricultural interest, had indirectly done something that would tell against that interest by reimposing the Duty upon beer, which was almost exclusively an English product. He was not a brewer, and he held no brewery shares, but he thought it very unfortunate that the Beer Duty should have been reimposed while the extra Duty upon spirits, which were made chiefly in Scotland and Ireland, should have been taken off. The right hon. Gentleman had referred to another matter which he regarded as being of some importance. He alluded to the £17,000 that was to be granted towards the construction of light railways in Ireland. Why had not the right hon. Gentleman proposed to make a grant in aid of the construction of light railways in Great Britain? The right hon. Gentleman the President of the Board of Trade had brought in a Bill for the construction of light railways in this country, but that Bill would remain a dead letter unless a grant were made from the Imperial Exchequer, which would, at all events, partly defray their cost. What was the use of telling the landowners and the farmers of England that they were at liberty to construct light railways at their own expense? The right hon. Gentleman the Chancellor of the Exchequer might easily put aside a small amount every year in aid of the construction of these lines, and thereby do much good to the agricultural interest. If he were in order he should like, at the proper time, to propose an Amendment that would have the effect of transferring the proceeds of the Land Tax from the Imperial Exchequer to the counties in which it was raised.

THE CHANCELLOR OF THE EXCHEQUER

That would involve an addition being made to the Income Tax.

MR. JEFFREYS

said, that he should not object to an increase of an additional ½d. in the £ upon the Income Tax, provided something were done for the benefit of the agricultural interest. If the right hon. Gentleman would only make the proposal to transfer the Land Tax from the Exchequer to the counties, he believed that it would meet with acceptance, certainly on the Opposition side of the House and, he believed, in the country generally. The Chancellor of the Exchequer was delighted that prices got lower and lower. But although we produced food at extraordinarily low prices, our taxation not only did not become lighter, but increased year after year. It was very unfair and unjust that something should not be done for the agricultural interest, and when the proper time arrived, he would move that the Land Tax be given to the counties.

*SIR SAMUEL MONTAGU (Tower Hamlets, Whitechapel)

considered the proposals of the Chancellor of the Exchequer very satisfactory. No objection could be reasonably raised to them. He regretted, however, to find that the right hon. Gentleman had not included in his Budget any further modification or simplification in the Stamp Duties on bonds to bearer, and, thereby, given an impetus to reviving trade and eventually benefit the Exchequer. The Chancellor of the Exchequer two years ago abolished the vexatious adhesive transfer stamp. The right hon. Gentleman conferred a great boon on traders; and, he was glad to learn, that the increased contract stamp had yielded the equivalent to the Exchequer. They must remember that the transfer stamp was a declining duty, being applied only to old bonds, while the contract stamp was a permament and advancing source of revenue. There was, however, more to be done in the same direction. They noticed in neighbouring countries that duties were imposed with the object of benefiting their people—giving them an advantage over foreign traders. He did not ask for protection, but why impose Stamp Duties here to our disadvantage and to the advantage of our French and German rivals? He had, on previous occasions, pointed out in the House that we thus handicapped our traders and drove lucrative business into the hands of our rivals. We imposed a Stamp Duty on bonds to bearer greatly in excess of what obtained in France and Germany. Here the Stamp Duty was 10s. per cent., while in France it was 3s., and in Germany 4s. per cent. It might be said that nations which came here to borrow must pay that extra stamp. That might be a good argument if we had a monopoly and ours were the only market. But countries which enjoyed good credit issued their loans elsewhere. And if our investors bought such bonds abroad they paid, or were expected to pay, for the stamp. It was a good thing for this country to lend to many nations and to borrow from none. If we lent money to a country we generally gave some of our manufactures in exchange, thus making a profit on our goods and obtaining a tribute in the shape of interest from foreigners. It might be said that transfer of stocks paid 10s. per cent. duty. That was, he believed, so also in Germany. Then, again, the transfer stamp was charged on the actual money value of the stocks, whereas on bonds the 10s. duty was on the nominal value. Few foreign loans were issued over par; and in many cases the 10s. stamp on bonds equalled £1 and even £2 per cent. on their actual money value. Excessive duties always led to evasion. The evils of our present system were, that we often divert profitable trade to rival countries; that those who bought bonds abroad left them there, and did not have them stamped unless they were sold again in England. They thus very often evaded the Stamp Duty altogether. Again, Indian railway companies which issued many millions in short-dated bonds—over £10,000,000—always tried to renew them by attaching fresh coupon sheets, thus avoiding the 10s. per cent. stamp, which amounts to £5,000 on every million. Besides this, we had a very complicated system. The Indian Government paid no stamp on their direct loans issued here. But Indian railway bearer bonds guaranteed by the Indian Government bore the 10s. per £100 stamp. Our Colonies paid 2s. 6d. per cent. on their loans issued in this country; and some old issues of foreign bonds bore 2s. 6d. per cent. stamp, while new bonds bore 10s. He proposed that there should be a 5s. per cent. stamp on all bonds dealt in in this country—old or new, Indian or Colonial—every existing bond, and every renewal. He had very good authority for asserting that increased revenue would eventually result from such a change with benefit to our traders. We should even then impose 2s. per £100 more than France, and 1s. more than Germany; but we could give our competitors that slight advantage owing to our abundance of capital seeking investment. One word regarding Bills of Exchange, which are international instruments of credit. Our laws and duties pertaining to Bills of Exchange differed essentially from those of other countries, and ours were not the best. Take one instance. We exempted Demand Bills from ad valorem duty, imposing only penny stamps. If we imitated Austria and Holland we should extend that exemption to bills drawn within eight days. This would be a great advantage, especially in transmitting large sums through the post, and danger of robbery and delayed payment, would be avoided. He did not urge these reasons last year, as the Budget was complicated; but he certainly expected that this year the Chancellor of the Exchequer would have given his attention to these matters. He trusted that before long his right hon. Friend would give this question of stamps his serious consideration.

*SIR JOHN LUBBOCK (London University)

hoped the Chancellor of the Exchequer would consider the subject just raised by the hon. Gentleman. There was, he was sure, a general feeling in support of the suggestions of his hon. Friend, except possibly as regarded two points. It might act unfairly and undesirably if fresh stamps were charged on renewals; and he also rather doubted the desirability of allowing a penny tax upon eight-day bills. He listened with great interest to the statement of the Chancellor of the Exchequer, but, he confessed, he heard with much regret, the right hon. Gentleman speak almost with despair of the prospects of economy. The increase of expenditure was, he could not help thinking greatly due to the practice which had grown so much of late years of putting off the Estimates. The fact that the permanent officials knew that the Estimates would be carefully considered in Committee of the House, had had a beneficial effect in keeping estimates down, and he therefore hoped the House would put pressure on the Government to induce them to produce the Estimates at a time when they could be properly considered. He trusted, too, that when he replied, the Chancellor of the Exchequer would tell them how he got the statistics in respect to meat of home production. [The CHANCELLOR OF THE EXCHEQUER: "Through the Agricultural Department."] Did the right hon. Gentleman think the Department had got the statistics in such a form as they could be thoroughly relied upon? The House expected to hear from the Chancellor of the Exchequer, when he dealt with the beer duty, something about the probable effect on the revenue from beer of the passing of the Local Veto Bill, but on that interesting point the right hon. Gentleman gave them no information whatever. The large increase in deposits in savings' banks within the last few months was very remarkable. So far as the increase was due to the greater prosperity and economy on the working classes everyone would rejoice; but he feared it was to a great extent due to the fact that there was no other means of getting so high a rate of interest as that offered by the savings banks; and therefore he should be glad if the right hon. Gentleman saw his way to reccommence the return showing the deposits classified according to amounts. He should also like to impress on the right hon. Gentleman the necessity of the savings banks keeping larger cash reserves. The savings banks, of course, relied upon the credit of the nation. Every banker who held consols relied upon the credit of the nation; but every other banker held, in addition to reserves of consols, a considerable amount of ready cash available at any time; and he hoped the Chancellor of the Exchequer would consider whether it was a safe or a satisfactory state of things for the savings banks to hold those large deposits without any available reserves against them. The right hon. Gentleman had always shown a desire to reduce the floating debt. And why? Because it was a debt the country might be called upon to pay at the most inconvenient time. But the real floating debt at the present moment were the deposits in the savings banks. They were far larger than the ordinary floating debt, and they were far more likely to be demanded in a sudden emergency than the ordinary floating debt. He therefore hoped his right hon. Friend would, from the point of view of sound finance, take the matter into his most serious consideration. He thought there was a great deal of force in what the right hon. Gentleman the Member for St. George's had said in reference to the Land Tax. It was a tax that fell very heavily on England as compared with Scotland and Ireland, and he should be glad to see it handed over to Local Authorities for local purposes. But, as there was a Committee inquiring into the financial relations between England, Scotland and Ireland, this was not perhaps the most convenient moment to enter upon a discussion of that important question. The Chancellor of the Exchequer had pointed out that there had been a diminution of something like six millions within the last two or three years in the deposits of building societies. To prevent any injustice being done to the building societies, it would be well to state that the great bulk of the diminution of deposits was almost wholly due to the failure of the Liberator, which had called itself a building society, but had never been a building society in the proper sense of the term. It was a strong testimony to the solvency of the building societies, and the care and skill with which they were managed that, not with standing the Liberator failure, very few had succumbed, and that the funds entrusted to them had not been materially reduced. He had always looked upon building societies as one of the best forms of investment; and, although he knew his right hon. Friend the Chancellor of the Exchequer had not intended to say a word that would throw a slur upon the building societies, he thought it well, in order to prevent misunderstanding, to say a few words in defence of those institutions, which he believed were doing a great and good work in the service of the country.

*COLONEL HOWARD VINCENT (Sheffield, Central),

said that, as the representative of an industrial constituency which was suffering severely at the present time, he must express his surprise that the Chancellor of the Exchequer had done nothing to relieve the existing industrial depression in the slightest degree, and had taken on notice of the vast number of the unemployed, and the great amount of poverty which prevailed throughout the country. The right hon. Gentleman had said that our commercial system was sound in principle and satisfactory in its results. That was a most amazing statement in view of the facts, as shown by the returns in The Labour Gazette month after month, that the number of unemployed was this year six times as many as in 1890, and that 400,000 paupers had been registered last month. Why did the Chancellor of the Exchequer give £45,000 for the relief of Irish distress and nothing whatever for the relief of English distress? A Committee was now sitting to inquire into the causes of unemployment and the extent of the unemployed, but there was not a word of sympathy from the Chancellor of the Exchequer in his Budget statement in reference to those matters. The Irish alone were taken notice of, both with regard to their distress and their agricultural interest. If the right hon. Gentleman had been present, as he had been, at two deputations, received recently by the Home Secretary, from two of the most important industries of the country—the glass industry and the iron trade,—he would have heard a tale of depression which would probably have considerably modified his views as to the condition of our commercial system. The representatives of the glass trade, masters as well as men, had said that between 40 and 50 per cent. of the men had been unemployed for a considerable time; and that a very heavy levy for their relief had to be paid by those who had the good fortune to obtain work. The deputation from the iron trade had been introduced to the Home Secretary by the President of the Iron and Steel Institute—an hon. Member who sat behind the Chancellor of the Exchequer, and he had told how, owing to the foreign competition, orders were being given in a decreasing degree to the iron districts of Yorkshire and Staffordshire. The Chancellor of the Exchequer might, in these circumstances, have at least readjusted the taxes on home industries, so that the burden might be less felt by those industries which were suffering most from the present depression. The tendency of foreign countries was to increase rather than to diminish their protective duties so far as they affected English imported goods. He had in his hand a new law which had been introduced into the Belgium Chamber, which, while reducing the duties on foreign-made articles required in Belgium and not produced in sufficient quantities in Belgium, increased the duties on every article of British manufacture. One of his leading constituents wrote him only that morning that this act on the part of Belgium was the last straw that would break the camel's back, and that if it were allowed to pass without protest on the part of England it would encourage every other foreign country to increase its import duties. Not only was it the case that those foreign duties were increasing; but the importation of foreign goods into this country without any profit to British workers was also greatly on the increase. Although the imports from this country went down considerably last year, the importation of foreign manufactured goods largely increased. The importation of such goods amounted last year to close upon £69,000,000 sterling, showing an increase from the comparatively small sum of £41,000,000, which was the total some 15 or 20 years ago. What a large revenue would be in the hands of the Chancellor of the Exchequer if he laid a slight toll on goods manufactured in foreign factories and prisons, and which were every year increasingly displacing British labour. A toll of 5 per cent. on £69,000,000 would produce a revenue of between £3,000,000 and £4,000,000 a year, which was nearly equal to the duty on tea. He had always understood the Chancellor of the Exchequer was anxious to see a free breakfast table and to follow the example of the right hon. Member for St. George's, Hanover Square, in diminishing the taxes—which were all paid by the consumers—upon those goods which were not produced in this country; and if he would do that, and levy taxation rather upon goods which entered into competition with those of this country, then great benefit would result to the industrial masses of the people. The Chancellor of the Exchequer had stated that everyone must be gratified with the large increase in the deposits in the savings banks. He should like to know the classes into which the depositors were divided. He agreed with what he understood to be the view of the right hon. Member for the University of London—namely, that the increase in the deposits in the Post Office and Trustee Savings Banks was due to the favourable rate of interest now given and the difficulty of placing deposits at the same rate of interest in other banks and elsewhere. Although the working men and others were saving in an increased degree when they were in regular employment and in receipt of good wages, there could be no doubt whatever that with the enormous numbers who were without employment, the increase in depositors was due to the deposits of the better, rather than to those of the working, classes, for whom the Post Office Savings Bank was really established. He deplored the fact that, while the expenditure had increased by no less than £6,000,000 in the past two years, no effort had been made to increase the sources of revenue, to inquire into the applicability of the fiscal system, which had existed in this country since 1846, to present conditions, to develop markets in our colonies or foreign countries, or to do anything which would be of the smallest benefit to the commercial classes; and above all he regretted to find that the greatest of their industries, that of agriculture, which was suffering from such depression at the present moment, had not even been mentioned

MR. E. HENEAGE (Great Grimsby)

observed that the Chancellor of the Exchequer, from his statement, seemed to think that the last year had been one of prosperity. He thought the right hon. Gentleman would find it very hard to make those who lived in agricultural districts believe that they were in a state of prosperity. In face of the fact that farmers were going daily into liquidation, that enormous numbers of labourers were out of work in every district, and that farms were going out of cultivation, it was very hard to understand how this prosperity had been attained. He did not intend to further criticise the remarks made by the right hon. Gentleman with regard to last year, but he was extremely surprised that no notice whatever had been taken of the agricultural interest. He had hoped that the Government would have conceded something towards the light railways. He would state honestly that he believed the Government might just as well take the Light Railways Bill from the Order Book to-morrow as to attempt to pass it in its present shape. In its existing form it would be of no use to anybody, and would certainly not be received with thanks by the agriculturists. If these railways were to be provided out of the rates they would prove a burden rather than a relief. The Chancellor of the Exchequer had told them that he had taken great trouble to distribute the burdens amongst those who could well afford to pay them, and to relieve those who could not. He did not agree with this view. His own opinion of the Budget was that it was the Budget of last year plus a sop to the Irish Members. It was the Budget of last year without a sixpence on the Spirit Duties; and he did not think that there had been any great trouble taken in trying to distribute the burdens this year among the different classes. At any rate there had been no attempt to relieve the agricultural classes. What was the object of the Chancellor of the Exchequer? He, no doubt, desired temperance every year, and he had taken sixpence off the whisky in Ireland, where there was to be no Local Veto Bill, and he had put sixpence on the beer in England where, as they were told, they were to have a Local Veto Bill. Surely if the contention of the Chancellor of the Exchequer was correct—namely, that he had put the tax on the article from the consumption of which he hoped to get his revenue, he either could not believe that there would be much effect from the Local Veto Bill, or else it was not intended that they should have it at all. In his opinion the Budget dealt the deathblow to the Local Veto Bill or to any likelihood of their getting it in the future. Last year when the tax was put on beer he then stated that he believed it would not affect the brewers at all, and he thought the statement that had been made by the Chancellor of the Exchequer had proved that he was right. What he (Mr. Heneage) said was that the tax was equal to an imposition of 2s. per quarter on barley. He should like also to refer to the circumstances under which the tax was voted last year. They were told it was only for a year. He remembered the Member for Bedford (Mr. S. Whitbread) getting up in his place and stating, as the reason why he considered that many of his friends who objected to it should still vote for this tax, that a great concession had been made to them. What was the concession? These were the words which, upon that occasion, were used by the hon. Member for Bedford. He stated that he and some of his friends thought they had secured a most valuable concession, and one which was not often given to them from the Chancellor of the Exchequer. …A great difference of opinion existed as to who would pay the tax. He spoke for himself in this matter. Much depended upon whether the brewers believed the tax would really be for one year only. If they believed that, he could not help thinking that any successful man would hesitate a long time before he altered the gravity or quality of his beer, or the material he used for the sake of avoiding a temporary imports which was to terminate at the end of the year. Therefore, if they had had good beer during the last year, if a certain amount of barley had been used, it was clearly on the understanding that the tax would only last for one year. Did the House suppose that the brewers would go on in the same way, now they knew that the concession, if it was a concession, for one year might be repudiated at the end of the year again? It had been so repudiated this year, and why not next? Under these circumstances, it might be assumed that the brewers would seek to use more foreign barley, sugar, and other things, and would not continue to supply the pure beer which many of them advocated last year. He, for one, regretted the effect of this Budget. He regretted it because the Chancellor of the Exchequer had not, in his speech, given one single word of sympathy to the agricultural interest, because no effort had been made to do anything to promote light railways, and because he believed the right hon. Gentleman had again placed an imposition of 2s. per quarter upon barley, which would prove very hurtful to distressed agriculturists.

*MR. T. GIBSON BOWLES (Lynn Regis)

remarked that this, instead of being an heroic, was an unheroic Budget, and was, in fact, more unheroic than he expected. He should have thought that the Chancellor of the Exchequer, if he had placed taxation on anything in the world, would have placed it on those obnoxious elements of food which were to be dealt with by the Local Veto Bill. But the right hon. Gentleman had run away at the mere echo of the sound of the voices of the Irish Members, and given up the spirit duty. The duties on wines had decreased. There was now a less duty on wine, especially on sparkling wine, which showed that the rich of this country were getting poorer and soberer. He further noticed that spirits had also been a failure, with the sole exception of rum, and that beer had been a success. He presumed, therefore, that the right hon. Gentleman would revert to that well-known British motto, in vogue at the commencement of the century—"Beer and the Bible; rum and true religion." He rose principally for the purpose of asking for information with regard to the Death Duties. The Chancellor of the Exchequer told them they had increased by £973,000, which closely approximated to the increase he expected in his statement of last year of £1,000,000. He, himself, was not surprised that there had been a considerable increase in the total revenue from the Death Duties, whatever the source, because he had become acquainted with the fact that the mere whisper of the Chancellor of the Exchequer last year brought into the exchequer a large number of duties which he should call the result of the panic created by this Act. What he wished to point out was, that the right hon. Gentleman had not given them quite enough information to enable them to ascertain how much of this increase was due to the new Estate Duty. His belief was that very little of it was due to the new Estate Duty. But a very remarkable thing he noted, and that was that the Chancellor of the Exchequer had had to admit that the personalty returned for taxation under the Death Duties in the course of the year had diminished by 18 millions from what it was last year. Practically, the Act had only been in force for six months, and if in the course of that period the effect of the Finance Act had been to reduce the amount of personalty returned by 18 millions, it might be reckoned that in a whole year there would be a reduction of 36 millions, and that would have a serious effect upon the revenue. Therefore, although the golden egg was laid, the goose was very sick. Why should personalty be decreased by 18 millions?

THE CHANCELLOR OF THE EXCHEQUER

I explained that.

*MR. T. GIBSON BOWLES

observed that one part of the explanation was that there had been influenza, or not enough influenza, and another was that the accounts had taken longer to come in. He did not think they had taken longer to come in. Only the other day he noticed in that oracle of wisdom The Daily News, no fewer than nine large wills reported, the average time being two months after death. The longer time alleged by the Chancellor of the Exchequer was not the reason at all. The real reason was that people were disposing of their convertible property in such a way as to secure it against the most violent and unjust attacks of the Chancellor of the Exchequer. Rich persons, to whom it was of no consequence, were well prepared now to divest themselves of a portion of their property in favour of their children and relations, in order that the rest might escape not merely the ordinary but the exaggerated Duty. A man who had only to pay 1 per cent. did not mind paying it, but the wicked millionaire had two motives to try to escape all he could. If he gave away half-a-million or a quarter of a million, not only did he escape taxation on that, but he thereby brought the whole of his property into a lower scale of Duty. The diminution in question was unprecedented. There was no year which showed so small a return of personalty to be charged with Duty as this year showed. There was only one reason to which it could be attributed, and that was that the goose was sick—very sick. He believed there was not a single millionaire who had come into the charge under the Finance Act. On looking into the figures he found that, from 1864 to 1871, nine millionaires died; from 1871 to 1884 there were no returns; but from 1884 to 1894 no fewer than 30 millionaires died. This year the millionaire was gone—he was dead, and there (pointing to the Chancellor of the Exchequer) was his assassin. The millionaire would no longer die. [Much laughter.] He was assassinated fiscally. He ceased to return anything to the Treasury. He was a great source of revenue at one time; but, in consequence of the accumulated inducements given him to dispose of his property, possibly they had seen the last of him in the Taxation Returns. As to next year, the Chancellor of the Exchequer told them they might expect an increase of the Death Duties. He did not know how the right hon. Gentleman was going to get his increase. He would remind him there were a great many sacrifices that would begin to tell next year. He did not believe the Estimate would be realised, or even nearly realised, and if so, it would be rather an awkward matter for those who then had to deal with the finances of the country. If the Budget was to be based upon that particular increase—because in almost every other respect than that of the Death Duties a diminution was allowed for, and the Chancellor of the Exchequer was to be saved by a combination of beer and death—[laughter]—and this increase failed, why, the Budget failed. He believed it would fail. He did not believe the Chancellor of the Exchequer would get anything like £12,500,000 from the Death Duties next year.

*THE CHANCELLOR OF THE EXCHEQUER

The hon. Member who has just sat down visited his constituents in November last and spoke on the Finance Act. He said:— When the Act had been before the House of Commons for a certain time, a distinguished Member of the Radical Party met Mr. Bowles in the Lobby of the House of Commons and said, 'Bowles, I understand that there are only three men in the House who understand this finance Act, and that you are one of them. Is that true?' To which Mr. Bowles replied, 'Well, it is true about me; but who are the other two?'" You will not export me to tell you whether this anecdote is true or not; I read it in the newspapers, and I can only say there is a strong air of probability about it. I rather wonder that the hon. Member should ask for information after that. Then he proceeds:— The Act came into operation on August 2, and from that time to this—namely, for another three months—all the people liable to these duties were found, as it were, sitting—were shot on the ground, you know. Yes, but they are beginning to rise now; the lawyers are coming back to town, they are beginning to look into this Act, and are beginning to understand it; so that, in spite of the panic quarter ending in June and the unprepared quarter which is now ending, I think that, although there will probably be a considerable increase in those two quarters, the next two quarters will show very considerable diminutions, and the last quarter the greatest of all, because then there will have been more time for the lawyers to arrange schemes of evasion and avoidance. He also said:— I have always predicted that the Act would be a financial failure. I believe I have been entirely alone in that; certainly I was alone in Parliament. Of course he was, for was not the hon. Member the only man who knew anything about the subject? Then, in the Debate on the Third Reading of the Bill the hon. Member said:— The right hon. Gentleman would not listen to his practical suggestion, and instead of getting £1,000,000, as he thus would have done, out of the Death Duties this year, his belief was that the Chancellor of the Exchequer would now got nothing at all. That was the prediction of the only Gentleman in this House who knew anything about the Bill, and then he proceeded in the allegorical style to which he is so partial:— Like a modern Orpheus, the Chancellor of the Exchequer descended to the realms of Pluto, with his lyre of graduation in his hand, clutched his deceased Eurydice, and, like Orpheus again, he would find he would lose her before he brought her into light. Well, the modern Orpheus descended and brought back, not absolutely a million, but £973,000 from those realms which were to yield nothing. The hon. Member affords an excellent illustration of the old saying that "a little learning is a dangerous thing." He has learnt a little about this subject, just enough to lead him into making extraordinary mistakes, not enough to enable him to form a sound opinion. He found that, month by month the receipts from the stamp duties were constantly increasing in spite of his prediction that the Chancellor of the Exchequer would get no benefit from the new duty.

*MR. T. GIBSON BOWLES

I said that the right hon. Gentleman might get £700,000, but that probably it would be less.

THE CHANCELLOR OF THE EXCHEQUER

That proves that the hon. Gentleman has not read his own speech. That sum was to be the ultimate result of the whole plan. It was not to be £700,000 in the present year. The hon. Member has asked me why it is that I expect far more in future years. He cannot have read the Act. One of the provisions of the Act is, that the duty in respect of real property may be paid in instalments, so that in the present year next to nothing has been got from real property, but the payments will be coming in in future years. I recommend a little elementary study of this question to the hon. Member, and then he may find out that he is not the only person in the world who understands it. The hon. Member's theory is, that people in a panic paid the death duties last year early in the year, and that the whole of the increase in receipts was due to that alleged fact. But the increase of which I have spoken was the increase after deducting all the old probate duty. The hon. Member has said that every quarter has seen a smaller sum produced. The hon. Member is wrong; facts confute him. There has been a gradual but marked increase in every month. The solicitors on their return to town apparently did not adopt the many methods of evasion recommended by the hon. Member in his speech on the Third Reading. They have not adopted them, or, if they have, their methods have not been worth anything, for in August the yield of the new duty was £15,700; in September, £119,100; in October, £286,100; in November, £391,600; in December, £420,100; in January, £460,500; in February, £506,700; in March, £597,600; and in April (two weeks), £319,000, or at the rate of £638,000 for the month. Therefore the hon. Member is absolutely wrong in his facts and in his conclusions. Instead of a diminishing return the yield has increased every month at an even more rapid rate than we anticipated.

*MR. T. GIBSON BOWLES

How is it that the right hon. Gentleman has found it necessary to allocate less to the local taxation accounts?

THE CHANCELLOR OF THE EXCHEQUER

Again I recommend the hon. Member to read the Act. He can know nothing about it; otherwise he would know that the local taxation account derives no benefit whatever from the increased duty. Until the hon. Member masters the elementary fact that the local bodies do not derive any benefit whatever from the new Finance Act and were only secured in their old position, I shall think that he is the only person in this House who knows nothing about the Act, instead of his being the only person who understands it. I am sure the hon. Member must be glad to find that all the evasions which he recommended to solicitors have not in fact been adopted and that we are £1,000,000 to the good. Had the hon. Member been right I should have been obliged to impose a new tax amounting to £1,000,000; as he is wrong I am relieved from that painful duty.

*SIR ALBERT ROLLIT (Islington, S.)

thought that the correct estimate made with regard to the death duties, the graduation of which he had supported, would be considered as satisfactory by the House as by the officials who served the State so well. This estimate showed that public finance had now almost arrived at the dignity of an exact science, and this was a great protection to the public purse. There was in the Budget little to criticise. With respect to the Suez Canal, the increase both in capital value and in dividends was satisfactory both pecuniarily and also commercially, on account of the preponderating interest of our shipping in the canal. Our tonnage amounted to two-thirds of the whole tonnage passing through. Therefore it was highly desirable that the management of the undertaking should be proportionately under our influence and control. The foresight of Lord Beaconsfield in purchasing the shares they must now all heartily admire. As Chairman of the Committee of Inspection of the Trustee Savings Banks he welcomed the figures given by the Chancellor of the Exchequer as showing the prosperity and prudence of the people. Part of the large increase in deposits was perhaps accounted for by a distrust of other securities and of building societies, but this increase both in Great Britain and Ireland was certainly very satisfactory. The Committee of Inspection took all the care they could that statutory requirements as to expenditure, credit, &c., were complied with by the trustees and managers of the banks, and these had generally readily responded to the demands made upon them. The effect of the inspection and control had been to close the weaker banks and to strengthen the residue, which stood on good foundations. People could now rest satisfied as to the safety of the funds invested in these banks, and as that knowledge spread, so, he believed, would providence and thrift increase. He spoke, of course, generally, and there might be exceptions, but the reports of their Inspectors justified these conclusions. These banks were undoubtedly most used by the class for whom they were intended—that was, by the wage-earning class, and he did not think that the ordinary bankers had anything to fear from the accumulation of savings in this way. On the contrary, they created resources for general trade. He wished to address one word to the Chancellor of the Exchequer as to a great grievance under which these banks existed. If they were doing all the good for the people that he contended they were doing, they were certainly entitled to great consideration. One effect of the Act of the right hon. Gentleman the Member for St. George's, Hanover Square (Mr. Goschen) undoubtedly had been to restrict the operations of some of the largest and best banks in their investments. They certainly ought to be allowed to make the best of their money. They had been in the habit, till 1891, of lending to local institutions, to Municipalities, and School Boards on the security of the rates—in his opinion a very good security. The result of the Act of the right hon. Gentleman the Member for St. George's had been to prevent those investments, and thus the local community had ceased to enjoy the advantage of the loans, and the banks had been deprived of good and safe investments. He still hoped that the Chancellor of the Exchequer would see his way to agree to one of the Bills before the House, under which trustee, and so savings' banks (like Industrial and Provident Societies, under an Act of last Session) investments might be extended to loans to Municipalities and School Boards on the security of the rates, which the Committee had been reluctantly compelled to forbid. On the cognate matter of Friendly Societies he wished to say one word. No one could fail to appreciate the value of these great foundations, and they ought to be very careful not to do anything, even for so great and good an object as National Pensions, that would endanger institutions which had done so much for the people, which had been managed and worked so well by the leaders of the working-classes, and had conduced so greatly to the prosperity of the nation. With regard to local taxation, the Chancellor of the Exchequer had said that the past had been a bad year for the doctors. Was not that an indication of the advantage of the municipal and other authorities providing for the health, and so for the strength, of the people? Although the rates might have risen somewhat, still a great return might, as in the case of public education, be expected from the narrowing of the kingdoms of disease and death, and in the end such expenditure must be most beneficial to the community. So far from parsimony being wise, it was unwise in such a case; and expenditure made for the purpose of meeting inroads on the health of the people by zymotic and epidemic pestilences, was true economy, and reconciled one even to local indebtedness, which was thus reproductive. He would only add one word on agricultural depression. He had hoped that something would have been said about a provision by the State for light railways. Railways could not, of course, be provided for the people, except to some extent by their own efforts; but he thought that the State, the locality, and private enterprise should be combined more on this and other matters. In Belgium and elsewhere such a combination was doing much to develop railways, and he thought that was a very wise example. On the question of the revision of local taxation, he thought that, after the last Budget, a primâ facie case was made out for some readjustments; but the question could only be effectually dealt with, in his opinion, by an inquiry, and he was surprised that there had never been a Motion for a Committee to take the whole subject into consideration. He was quite sure the Members of the House generally sympathised with the agricultural population in their distress, and that they would most willingly take part in securing a full inquiry in order that justice might be done, but it would not be done without inquiry, or until the speech of Mr. Fowler in the last Budget had been answered. He was glad that the Chancellor of the Exchequer had indicated by his figures that the rates on Government property would be increased, and he hoped the time was not far distant when the right hon. Gentleman would apply the true principle of equality, and would take care that local taxation should be shared equally by every class of the ratepayers.

*MR. CUTHBERTQUILTER (Suffolk, Sudbury)

thought it must must have required some hardihood on the part of the Chancellor of the Exchequer to keep so heavy a hand on beer for the paltry sum of £500,000. The right hon. Gentleman would recollect that he had put an Amendment on the Paper last year, and if the spirit of that Amendment had been adopted, it would have saved the necessity of re-imposing the beer duty this year in its present form. His suggestion in that Amendment was, that for beer made from wort of more than 1.055 degrees of specific gravity, and containing other ingredients than barley, malt, or hops, a duty of one shilling should be imposed beyond the ordinary duty. Had the Chancellor of the Exchequer thought fit to take that course, the effect would have been to give him about £400,000 more. The Chancellor of the Exchequer must expect to hear a great deal more of this beer question before these Resolutions were finally settled. He was not given to interrupting, but in the fulness of his heart he could not help allowing an ejaculation to escape him that evening. When the Chancellor of the Exchequer said that the quality as well as the quantity of beer had been fully maintained, that was too much for his feelings, but he apologised for the interruption. If the right hon. Gentleman had also considered a very humble suggestion of his, that some slight alteration should be made in the forms of Somerset House, they would have been able to know what brewers had used other ingredients than barley, malt, or hops; and there would have been a considerable improvement in the quality, and an increase in the quantity of beer consumed. The result of what had taken place, during the past year of depression, had shown that while rum might he drunk in the colder weather, beer was continually drunk during all seasons of the year; and whether it were wise to take the duty off spirits or not—he did not propose to question that—this extra beer duty was paid out of the pockets of the agriculturists. They could not forget—and if they attempted to forget it, they had been reminded of it by what the hon. Member for Wimbledon had said—that if the Chancellor of the Exchequer was going to run up the duty on beer, the brewer would seek other ingredients. He believed he had used other ingredients, and very largely, and though the quantity of beer had not decreased, he ventured most respectfully to suggest that the quality had deteriorated. He believed that this extra beer duty was a very heavy burden on the agricultural industry in the East of England, which was already burdened beyond endurance. He believed that it was the coming shadow of this Budget which had something to do with the result of the Election in Mid-Norfolk; and that when the re-imposition of this beer duty was explained to the agriculturists of East Anglia, they would offer the greatest opposition to the proposal of the Chancellor of the Exchequer.

MR. G. C. T. BARTLEY (Islington, N.)

said, that the Chancellor of the Exchequer in his time had played many parts, but never so many as in the last few days in relation to the Local Veto Bill and the Spirit Duty. The whole reason of the right hon. Gentleman for the repeal of the extra tax on spirits was that it did not pay, which meant that the imposition had tended to check the consumption of spirits. If the right hon. Gentleman were really desirous of reducing the amount spent on drink, he ought to regard this check as the highest result of his last year's Budget; because beer was a much more wholesome drink for the masses than spirits. Was the right hon. Gentleman in earnest on the temperance question, or was he not? He must decide which horse he was going to ride. The other day, on the Local Veto Bill he showed the virtuous side of his character, in a keen desire to reduce the consumption of alcohol. Now, when it appeared that a duty imposed last year had had a remarkable effect in this direction, he abolished the duty because it "did not pay." The country would probably prefer some one as a temperance advocate who really meant business, instead of someone who merely tinkered with the question. There was no doubt that this change in the Spirit Duty was made at the dictation of the Irish Members. The country would be informed that this Government, which professed to be so keen for temperance, was reducing the duty on spirits—the worst form of drink—to please the Irish Members, and was at the same time going to allow the Irish Members to force Local Veto on England, while Ireland itself was exempt from that measure. The cup was already pretty full; but these beer and spirit items had filled it to overflowing. As to the Income Tax, he was sorry that the right hon. Gentleman had not said a word on the question of married women's incomes. Last year the right hon. Gentleman gave a concession to the joint incomes of married people, but owing to a technicality, this had been a boon to very few working people. He should propose, and he hoped the right hon. Gentleman would accept the proposal, that all married people who were both earning their incomes, should be allowed to consider their incomes as separate. He was glad to hear that the debt had been reduced by £6,300,000. He had always urged the paying off of the debt, and had regretted that the higher maximum adopted by Sir Stafford Northcote had not been maintained. It was gratifying to know that if the present rate of repayment were continued, the debt might be wiped out in 50 years. That would give an enormous reserve of strength for emergencies. He wished to emphasise the remarks of the late Chancellor of the Exchequer with respect to the savings banks. No one rejoiced more heartily over these large increases in the returns than did he; but they must be looked at with more than a superficial eye. It was remarkable that the deposits should jump from £2,000,000 to £3,000,000 in one year, and from £3,000,000 to £7,000,000 in another year. He believed the explanation was that there was no other outlet for fairly large savings. He dissented from the opinion of the right hon. Member for London University as to the necessity for keeping a larger reserve at the savings banks. They had the guarantee of the State, and if it was attempted to make them keep a reserve like an ordinary bank, the sum would be too fabulously large. But these increases in the amount of the savings showed that the questions of social legislation, increasing the facilities of savings banks, and the purchase of Consols in small sums, were what the House ought to look to for really making the people happier and better, and were more important than many of the great measures before Parliament. If anything more had been wanted to convince the country that the Government's action in relation to Local Veto was a sham and a delusion, this Budget would have served the purpose.

THE CHANCELLOR OF THE EXCHEQUER

I only rise to make one observation on the speech of the hon. Gentleman, who voted last year against the imposition of a Spirit Duty, and who, if he thought he could enter into combination with the Irish Members against the Budget, would vote against the repeal of the Spirit Duty.

MR. BARTLEY

I protest against the right hon. Gentleman imputing to me what I should do. He has a light to speak of what I have done; but he has no right to say what I should do in certain circumstances.

THE CHANCELLOR OF THE EXCHEQUER

I make my own inference. The hon. Member said that last year it was the Irish Members who compelled me to make the Duty temporary. Why was it the 70 or 80 Irish Members, and not the 300 odd Tory Members, who equally put pressure on me, and who combined with the Irish Members in order to defeat the Budget. But why in the world should these hon. Gentlemen, who were the active promoters of this combination, and who very nearly succeeded in defeating the Government on the Spirit Duties, now come forward and urge that the Spirit Duties which they opposed should be retained? The hon. Member says I have no right to say what he would be likely to do. But my opinion is, that if he saw his way, by a combination with the Irish Members to defeat the Budget and the Government, he would do again exactly what he did last year. Therefore, this affectation of virtue on the part of the hon. Gentleman is a little misplaced, and everyone in this House, and out of this House, will thoroughly see through the tactics which the hon. Gentleman adopted last year, and intends to pursue this year. But I venture to say that my action as a temperance reformer, which the hon. Member chooses to disbelieve in, but which I am bold enough to believe in myself, and of which I intend to give very solid testimony, is distinct altogether from my action as Chancellor of the Exchequer. It has always been admitted that, in the departmental character of Chancellor of the Exchequer, you must deal with taxes in their fiscal character and not at all upon a social view of them. A Chancellor of the Exchequer may hold the view that the smoking of tobacco is a bad thing. I do not hold that view myself, and I do not act upon it; but if I did believe, as some do, that the smoking of tobacco is injurious to the individual British constitution, I could scarcely act, as Chancellor of the Exchequer, in regard to tobacco upon that view. The real truth is that in these matters I am obliged to act upon the fiscal view of the question, and therefore to put on a tax for the purpose of preventing consumption is a policy which I believe no Chancellor of the Exchequer in his senses would adopt. What the hon. Member proposes to me is, that when I want a sum of money for a temporary purpose I should put on a tax that would not produce it. That would not be a very logical proceeding for any Chancellor of the Exchequer. Therefore I pass from that point without further comment. The hon. Member for Hampshire complained that I said nothing to express sympathy and proposed no remedy for depression in the landed interest. It is not from any want of sympathy I said nothing; it was from a want of means. I take great interest in the depression of the landed interest; but what can I say? If I had any money to give away they would be among the first persons who would be deserving of the consideration of this House; but I have no money to give away. The hon. Member asked why I did not give away the land tax. How can I? It is a difficult question. I entirely admit that the land tax is of all taxes the most unsatisfactory, and I believe one of the first duties of the Chancellor of the Exchequer is to look into the question of the land tax with a view of putting it entirely on a new footing. I have not been able to do that this year. Of course, I could not do it last year, because I had a great deal to do last year; and I cannot do it this year because I have not the funds at my disposal to enable me to deal with it. But I have no hesitation in saying that I regard the land tax, in its present position, as altogether unsatisfactory. I was asked to give some figures regarding the consumption of meat, and I have obtained them from the Board of Agriculture. In the years 1891–2–3 the home produce was 1,423 thousands of tons, and the foreign imports were 650, making a total of 2,073 thousands of tons, as against, in 1882–3–4, home produce 1,307 thousands of tons, foreign 419 ditto, making a total of 1,726 thousands of tons. The consumption per head of the population has grown from 101.4 lb. in 1867–8–9 to 121.8 lb. in 1891–2–3, or an increased consumption per head of the population of no less than 20 per cent.

MR. GOSCHEN

Perhaps the right hon. Gentleman can now answer another question. If 75,000 fewer people have died than were expected to die, and if 18 millions more of property have been brought into account than before, and yet nevertheless the Estimates were right, can he give any explanation as to the compensating causes by which the result has been brought about?

THE CHANCELLOR OF THE EXCHEQUER

The right hon. Gentleman can give the true explanation himself. In these matters, as in astronomy, allowance must be made for what are called compensating errors; these are elements in all our calculations. It was estimated that very few people would pay up sooner than they need on real property, but it was found convenient, by a certain number, when they were paying upon personal property, that they should pay on their real property, too; and that produced a certain sum more under that head. That is but one illustration of the sort of compensation that takes place.

SIR RICHARD TEMPLE (Surrey, Kingston)

wished to ask a question of the Chancellor of the Exchequer. He did not complain that the right hon. Gentleman was not present when he considered the fatigue that his Budget speech must have involved, because they had the benefit of the Secretary to the Treasury, who, he had no doubt, would report the matter to the Chancellor of the Exchequer. He desired to know whether the Budget included any provision for the superannuation of teachers in elementary schools in England and Wales. Possibly that increased sum included the provision for which he was pleading. If so, it would have been well if the Chancellor of the Exchequer had mentioned it, because the matter excited supreme interest among many thousands of hardworking men and women in all parts of England and Wales. It might be within the recollection of the House that a Departmental Committee was appointed by the Vice President of the Council to submit a definite scheme. The Report of that Committee was based upon a Resolution passed unanimously by the House two years ago, which Resolution was, again, based upon the Report of a Select Committee which sat in that year. The financial proposals of the Departmental Committee were generally considered by the educational world to be businesslike and satisfactory, and they had confidently anticipated that these purposes would in some shape be embodied with the Budget. He hoped the Secretary to the Treasury would report the substance of his remarks to the Chancellor of the Exchequer, and that some statement would be made by him before the Debate closed. He understood that the proposal was viewed with favour by the Education Department, and that all that was required was the approbation of the Treasury. He should be the last man to ignore the financial necessities of the Government, but he would remind them that the amount required in the first year was extremely small—so small that it would hardly make a fraction of difference in the Chancellor of the Exchequer's moderate surplus. Of course, the amount to be provided would go on increasing in future years until a certain maximum, set forth in the Report of the Departmental Committee, was reached. But, as the amount at present required was small, and as the interests at stake were vast—the efficiency of education in this country being concerned—he ventured to press the matter on the consideration of the Government. He understood that they were at present giving it their practical consideration with a view to immediate action being taken; and, of course, it was possible that the scheme might be begun during the present year, although no provision was made for it in the Budget. But he submitted that the provision could be more conveniently made in the Budget than in a Supplementary Estimate, to which there was always an objection. He concluded by repeating his expression of the anxiety with which this matter was regarded by one of the most hardworking, important, and meritorious classes in English Society, and by assuring the House, with his practical knowledge of education, which ought to be as considerable as that of most people, that this matter vitally concerned the efficiency of that education which it was the pride of the House and the nation to promote.

THE FINANCIAL SECRETARY TO THE TREASURY (Sir JOHN HIBBERT,) Oldham

agreed with the hon. Member as to the importance of the subject of teachers' superannuation, and of the body in whose interest it was brought forward. No provision was made for it in the Budget, for the reason that the report to which the hon. Member alluded had not been considered by the Treasury when the Estimates were prepared. That report was now under the consideration of the Treasury, and if it was decided that money should be devoted to the purpose of teachers' superannuation during the present financial year the necessary provision would be made by a Supplementary Estimate. He would be very glad to report what the hon. Member had said to the Chancellor of the Exchequer, and he felt quite certain that the matter would be dealt with sympathetically by the Treasury. Certainly, so far as he was concerned, it had his warmest sympathy.

*MR. JAMES ROUND (Essex, Harwich)

said, that, as the representative of an agricultural constituency, he shared in the regret already expressed that no reference had been made in the Chancellor of the Exchequer's Budget speech to the state of Agriculture. The state of agriculture in the Eastern Counties—and, indeed, in all wheat-growing counties—was very critical at this moment. The right hon. Gentleman had expressed the view that the Land Tax was not in a satisfactory position, and it certainly fell with excessive severity on wheat-growing counties; he was glad to hear some hope held out that on a future occasion that tax would be dealt with. A Light Railways Bill had been brought in, but it was a remarkable fact that, while the Government proposed to contribute no less than £17,000 for the construction of light railways in Ireland, there was no proposal whatever to offer any sum towards the construction of light railways in England. He should like the President of the Board of Trade and the Secretary of the Treasury to try to prevail on the Chancellor of the Exchequer to surrender the land tax to local purposes in the several counties, so that, if desired, it might be used for the construction of light railways. It would be impossible for owners and occupiers in Essex to find the money wherewith to construct these light railways. There were two districts in the county which he represented where they would be very thankful to have light railways constructed; but he was afraid, under the present provisions of the Bill, there would be no chance of such railways being constructed unless some assistance was given from Imperial funds. He regretted that the Chancellor of the Exchequer did not refer at all to the state of agriculture. It was contended last year by the hon. Member for Chelmsford Division that barley was taxed at the rate of 100 per cent., and he thought it would have been far better to retain the duty on spirits and not re-impose the duty on beer. At all events they ought to be placed on an equal footing. The proposal of the Chancellor of the Exchequer increasing the death duties had increased the difficulties of the owners of land, particularly in the Eastern Counties; and he believed that experience would show that the number of landlords who were unable to live in their homes would be increased in consequence of the policy of the Chancellor of the Exchequer, that improvements would be checked, and that their means of employing labour would be reduced. He much regretted that the present Government had not followed the policy of the right hon. Gentleman (Mr. Goschen) with regard to local taxation. Real property paid much more than its due share of the £100,000,000 now raised by taxes and rates, and he only trusted there would be a sufficient number of Members in that House before long to force the Government of the day to continue the policy of the Member for St. George's, Hanover Square in the direction of lightening the burden of local taxation.

CAPTAIN BETHELL (York, E.R., Holderness)

said, that last year the Chancellor of the Exchequer promised that the English farmer should be placed on the same footing as the Scotch and Irish farmer in respect to the income tax, but that had not been done. In England a farmer was taxed on half his rent, whereas in Ireland and Scotland the farmer was taxed on only one-third of his rent. Take the case where the rent was £320. The English farmer had to pay on £160, but the Scotch and Irish farmers escaped altogether. That was not carrying out the undertaking given last Session by the Chancellor of the Exchequer. He had hoped that they would be told that the English farmer would be taxed on one-third only. The English farmer felt this to be a grievance. The position of English agriculture made it extremely hard for the farmer to be called upon to pay this sum, and he thought the Treasury might have found means of obviating the difficulty. He hoped this matter would be simplified at once. They were extremely glad to hear that the public generally had not been suffering from the bad times which they generally supposed until during the last two years. It made one ask whether the present condition of wages was likely to be maintained. So far the speech of the Chancellor of the Exchequer was very satisfactory in that respect; but, having in regard the fierce competition to which the trade of the country was subjected, the question arose, whether the present scale of wages was likely to be maintained. The Chancellor of the Exchequer had rather criticised those who took a pessimistic view, but was not the right lion. Gentleman inclined to take a too optimistic view? They were told by some good authorities that there was a prospect of a revival of trade, but it was certain that the country had to submit to a competition which it had never had to submit to before, during all its industrial progress, and against which it was hard for us to maintain the position amongst industrial nations which we had hitherto held. This was an extremely serious matter, and ought to be seriously considered.

MR. LAURENCE HARDY (Kent, Ashford)

said, that lie only rose because his constituents felt so strongly on the condition of agriculture; and, seeing that this Budget rather increased than lessened the burdens which fell upon it, he desired to take the earliest opportunity of entering his protest against it. They would doubtless have an opportunity later on of discussing the one addition which was proposed in the taxation of the country, but he would remind the Chancellor of the Exchequer of what he said last year, to the effect that, if the additional burden on beer was to be made into anything like a permanent tax, he was afraid more brewing substitutes would be used. From statistics already to hand, that sugar had increased in percentage, since the additional tax was imposed on beer, more than it had done in any previous years; and there was an ever growing temptation to introduce sugar and chemicals, which were more and more taking the good old English ingredients of malt and hops.

*THE CHAIRMAN

I do not think it is open to the hon. Member to discuss that in any detail; I understand that the two Resolutions with regard to beer stand over for the present.

MR. W. E. M. TOMLINSON (Preston),

on the point of Order, said, that it was generally understood that on the first Resolution a general discussion on all the points might be held.

*THE CHAIRMAN

I said nothing about a general discussion. I was only pointing out to the hon. Member that it was not in Order to go into detail on the point he was discussing.

MR. L. HARDY

said, that he did not intend to go into details. In regard to local taxation, at a time when they had a right to expect some further help, the Chancellor of the Exchequer admitted that a less sum had been paid over to the counties towards the relief of local taxation than in any previous year; while, at the same time, an extra tax was imposed which especially affected the agricultural districts. The English agriculturists had as much to contend with as any others, and they should not be chosen for extra taxation at a moment when the agriculturists in Scotland and Ireland were being relieved of the share which they had to bear last year. He was surprised to learn that the Estate Duties of last year had only added £1,000,000 to the Revenue of the country. He had been about the country and seen its effect. He had seen places deserted, houses shut up, the labour previously employed in the gardens and surroundings of the houses of country squires dispensed with, and those places lying practically useless, waiting to recover from the effects of a most cruel and oppressive tax. Coining fresh from those sights, he had a right to object to a fresh tax affecting more especially the agricultural constituencies of England. The reason why such a large sum had gone into the Savings Banks was because the money could not find an outlet in industrial and commercial enterprises. It was thus driven into Government Savings Banks in particular, where a larger interest was being now paid than the Government could properly afford to pay with Consols at the present price. The optimistic figures of the Chancellor of the Exchequer should therefore be accepted with care. On these grounds, feeling as he did, that the present Budget, so far from being a help, was likely to prove oppressive to the most oppressed industry in this country, he had ventured to take the earliest opportunity of entering his protest against it.

SIR MARK STEWART (Kirkcudbright)

said, that the Chancellor of the Exchequer must know the present deplorable state of the agricultural industry in this country. The price of produce was so low that it was not worth the farmers' while to cultivate the soil. While the Chancellor of the Exchequer had quoted figures to show the Committee that the lower classes had never had a year of greater prosperity than the past year, the right hon. Gentleman seemed to forget that the classes immediately above those classes—the middle class, the farmer, and the small landed proprietor—had hardly ever had a year of greater depression. If the Government intended to carry out their professions, and to do well by all interests in the country, it was obvious that they ought to take some notice of those serious matters in the Budget for the year. There was now a general lock up of capital. It might be asked why landed proprietors did not spend more to encourage scientific agriculture. The reason was because they got no return for their expenditure, although large sums were being expended almost in despair in the improvement of the land. One of the main reasons of this depression was that we were inundated with foreign produce, the effect of which was to prevent all profit to the English agriculturist. It was impossible to produce good butter, and even cheese, at remunerative prices, so long as the country was flooded with foreign and colonial produce. During the last few weeks, again, large foreign bounties had been given, to the consternation of British agriculturists, in order to still further cheapen those articles. While the Chancellor of the Exchequer was most anxious, and justly so, for the welfare of the deserving and hardworking peasantry, he seemed to take little account of the middle classes of the country, who were really the producers, and who advanced their capital to further the interests of the labouring classes. He regretted that there was no modification m this Budget of the financial Act of last year in respect to the Death Duties. If successions took place at short intervals it would be almost impossible for landed estates to bear the tremendous burden now inflicted upon them, and the longer the Duties remained unmodified the greater that burden must become. And there was this further hardship—that the better a proprietor managed his estates the more capital he spent on them, and the better the order in which he left them, the worse it would be for his heirs. So that there was really no incentive for a man to do well by his property. He hoped that when the Second Reading of the Light Railways Bill came on the Government would consider the needs of the remote districts of Scotland. The scheme of light railways in Ireland had had a good effect, and similar works would create a very beneficial change in many parts of Scotland. If a small amount of money was granted by the Government to assist the localities in raising the necessary amounts for the railways, or if the interest at a small rate—2 per cent., for instance, on a reasonable sum—was guaranteed by the State, the lines might be made. They would give a great impetus to agriculture and to other forms of industry and would allay much of the discontent that now existed, for it was felt that, in comparison with Ireland, Scotland had not been dealt fairly by in this matter.

*MR. W. F. LAWRENCE (Liverpool, Abercromby)

was sorry the Chancellor of the Exchequer had not been able to deal in the Budget with the matter of Marine Insurance So far back as 1869 the duty on Fire Insurance had been taken off, but nothing had been done in the case of Marine Insurance. At present there was an ad valorem duty of 3d. on Marine Insurance in this country, whereas less, or none at all, was imposed in other European countries or in America. This was a great disadvantage to England. The effect of the tax was very detrimental to our mercantile interests, especially considering that a large insurance might be, and often was, taken up by one Company, and the risks immediately spread by re-insuring, thereby necessitating further duty on the original sum, and, seeing that the whole amount obtained by the duty was only about £139,000, he thought it would be a wise act to abolish it. He admitted that the Chancellor of the Exchequer had a small margin to dispose of in the present Budget, and that it might not be possible to deal with the question on this occasion; but he hoped, in the interests of the shipping community, and of trade at large, that it would not be lost sight of. He regretted also that the question of teachers' pensions had not been noticed in the Financial Statement. He recognised that the question was a very large and important one, and that it would involve a vast sum of money; but he should have been glad if the right hon. Gentleman had made a few sympathetic remarks in order that the teachers might have seen that the matter was neither overlooked nor disregarded.

*DR. MACGREGOR (Inverness-shire)

said he felt bound to congratulate the Chancellor of the Exchequer on the sensible and excellent Budget he had submitted to the Committee. As a Scotch Member he heartily thanked him for having taken the 6d. off whisky. Last year he resisted the imposition of the tax, and did so because it was a tax on Scottish industry and on the national beverage out of all proportion to the tax on the Englishman's beer. The right hon. Gentleman himself had stated that the tax on whisky was 700 per cent., whilst on beer it was only 36 per cent., a disproportion that was simply indefensible. On the other hand it was shown that the tax on beer had not had a bad effect on its consumption. He thought that those who consumed it moderately were all the better for it and not worse, and he thought the same in respect to whisky. He was well aware that some of his friends on that side of the House were teetotallers, and he did not want to give any offence to their feelings by saying that. In opposing the whisky tax last year and congratulating the Chancellor of the Exchequer now, he had done so not because the tax would diminish its consumption, or the taking of it off increase its consumption. If the whisky were adulterated he thought as a medical man that it was calculated to do harm to the social condition of the people. He thought that too high a tax on whisky might do harm to the community if it led to adulteration. He congratulated the Chancellor of the Exchequer on his present proposals.

*MR. W. E. M. TOMLINSON

said it was hardly possible to take too pessimistic a view of the state of agriculture, and those who were most interested in, and knew most about, trade in this country if they did not take a pessimistic, certainly did not take an optimistic, view of it. No doubt a large number of the working classes were in a prosperous and satisfactory condition; but it must be remembered, in considering the receipts of the savings banks, that one reason for their having increased was the insecurity of other kinds of investments, which had led a number of people who could not be described as the working classes to make use of them. The Report of one of the district Mine Inspectors showed that, while mining was carried on under safer and more satisfactory conditions during last year the miners were not so well off, the collieries having been more frequently stopped for want of orders. It was stated over and over again, by several of the most experienced persons, that in the iron and steel industry a great deal of business had been leaving the country and going to Belgium and elsewhere; and thus the means of employment were reduced, while the population increased. No doubt the right hon. Gentleman had produced a Budget in which, by maintaining a temporary duty for another year, he was able to escape a deficit; but he thought a great deal of caution ought to be used by the authorities who had made the Estimates on which the Revenue for the year was founded, in having regard to the present condition of the various industries in this country. He was greatly disappointed that, out of the large sums which were to be expended in the course of the year, the Chancellor of the Exchequer had provided nothing in regard to the light railways scheme, which if it were to be successful must be backed up financially.

MAJOR RASCH (Essex, S. E.)

said, something like 5,000,000 acres of land were under barley cultivation in the Eastern Counties of England; and the result of the present legislation, coupled with the Local Veto Bill, would be to throw a considerable portion of it out of cultivation. They had heard of derelict Essex, and they would soon hear of derelict Norfolk and Suffolk. The policy of the present Government was to harass and penalise the brewing trade; and, of course, if they were heavily taxed they had to buy their raw materials cheaper. To do that they had to buy foreign barley, and in that case the British barley-grower could not sell his produce when he came to market. The result would be that the same story they had to tell with reference to wheat would have to be told with reference to barley. Land would go out of cultivation; and Norfolk and Suffolk would possibly shortly be in the same unfortunate condition as Essex was at the present day. In his opinion the Budget proposals of the right hon. Gentleman showed a want of originality and a poverty of imagination that he should scarcely have expected from so experienced a financier—because, last year, the right hon. Gentleman had taxed the brewers, and this year all he could do was to tax them again. The right hon. Gentleman had many sources of revenue open to him which he had neglected. The House was aware that in affecting transfers upon the Stock Exchange it was the practice to put nominal values in the documents, in order to avoid the stamp duty. If the right hon. Gentleman were to insist upon the real values of the stock being placed upon the transfers, he would largely increase the Revenue of the country, and would be enabled to reduce the Land Tax, and thus benefit the agricultural interest.

*MR. T. GIBSON BOWLES

said, that the right hon. Gentleman the Chancellor of the Exchequer had paid him the high compliment of quoting from one of his speeches, in order to show that he claimed to be the only man in the House who understood the Finance Act. Of course, he had not come down to that House on that occasion prepared with the speech in question, but having taken the opportunity of referring to it, he found that the right hon. Gentleman, following a practice not unusual on the opposite Benches, had confused two extracts from his speech together, had in each case only quoted part of a sentence, and had thus given an erroneous meaning to his language. He need not say that the right hon. Gentleman had altogether omitted those portions of his speech which had reflected most strongly upon himself. He was accustomed to that kind of thing, and he would not follow the bad example of the right hon. Gentleman by treating seriously what was intended for a joke. It was absurd to suppose that he seriously intended to convey that he was the only man in that House who understood the Finance Act, because he had, in the very speech the Chancellor had quoted, expressed the opinion that both the present and the late Attorney General completely understood that Act, and had contrasted their conduct in making it a point to be present during the Debates on the Act, whilst it was passing, with that of the right hon. Gentleman who was usually absent when its details were being discussed. It was impossible to understand the working of the Act from the language of the right hon. Gentleman who, in referring to it in the course of his speech that night, had denied his own figures ten minutes after he had uttered them.

THE CHANCELLOR OF THE EXCHEQUER

That is not the case.

*MR. T. GIBSON BOWLES

said, that if the right Gentleman would refer to the manuscript from which he had read his speech that evening, he would find that his observation was correct. The right hon. Gentleman had first declared that the Legacy and Succession Duties had increased, and then alleged that they had decreased. As a matter of fact, they had both increased (through the panic) by £217,000, as the right hon. Gentleman would see if he would again refer to his manuscript. But these were old duties, and that the right hon. Gentleman had no right to take credit in the name of the Finance Act for that increase which was due to the old duties. In order to ascertain what was due to the old duties and what was due to the Finance Act, he asked the right hon. Gentleman to let the House have the figures showing what had been received during each quarter of the year under each duty during the past 12 months, and also the capital sum on which the duty was charged in each case. He had prophesied that there would be a large increase of Revenue under the old duties during the first quarter of the year, in consequence of everybody who owed anything under those duties coming with a rush to pay their debts to the Exchequer. If the right hon. Gentleman would grant the return he asked for, the House would be in a position to judge of the effect of that masterpiece of legislation—the Finance Act. He, however, did not for a moment desire to detract from the great merits or from the genius of the right hon. Gentleman in having invented the new method of legislation that was embodied in the Finance Act. He believed that in the course of three or four years, when the full effects of the Finance Act came to be seen, this new principle of taxation would be found to be—not a fiscal success, but a fiscal failure.

*MR. A. C. MORTON (Peterborough)

said, that the rateable value ought to be made the basis of taxation as far as the property tax and House Duty were concerned. He was aware that the Finance Act of 1894 made on the assessment for the property tax, deductions of l–6th in the case of house property, and l–8th on landed property, but the calculations did not work well. One collector had told him he had 800 objections made in his own collection. Had the right hon. Gentleman considered whether it would not be a good plan to even now adopt the rateable value, so that we should have but one value in assessing taxes, and thus get rid of the confusion which now existed? He also wished to ask the right hon. Gentleman whether he had considered the desirability of making the same allowance with regard to the House Duty. It had always been argued it was wrong to collect taxes on what Parliament had admitted to be a false value, that was the gross value. Then, he desired to know whether the Chancellor of the Exchequer had considered the question of the making of an allowance in respect of methylated spirits. Last year the right hon. Gentleman said there was not time to consider the matter, but he (Mr. A. C. Morton) had received a letter from the Treasury in which it was stated that the subject would be considered before this year's Budget was introduced, but he had not heard anything further, and fully expected that the Chancellor would have mentioned the matter to-day. He had only to say, in conclusion, he was very sorry the Government felt obliged to collect so large an amount of money in Imperial taxes—over £103,000,000. He regretted they had been unable to reduce the expenditure, or, at any rate, to apply the proceeds of the taxation for the benefit of the people to a greater degree than they proposed.

THE CHANCELLOR OF THE EXCHEQUER

I am afraid it is quite impossible to collect Imperial revenue on the basis of rateable value. Rateable value varies in every district according to the convenience of the district, and, therefore, it would be raising Imperial taxation upon a basis which was variable everywhere. The question of an allowance on methylated spirits is really one of detail which we could hardly discuss to-night, but I shall be very happy to go into the matter with my hon. Friend. With regard to the matter of teachers' pensions, I wish it to be understood I do not at all place it beyond the region of hope that we may begin the work this Session. It is a very large question; it will affect posterity extremely heavily; it will not affect us much, and, therefore, there is all the more reason we should be very cautious how we proceed. It is well known that the ultimate charge, according to the estimate, is something between £600,000 and £700,000 a-year. That is a matter which is to be approached with great consideration, but, on the part of the Government, I have to say we are very sympathetically affected towards the question. We desire it to be dealt with—it ought to be dealt with, and 1 am not without hope we may make a beginning this session, though I do not wish to make any pledge on the subject. Now, I really do not wish to be understood to have taken to-night in this Budget a course wanting in sympathy with the distress in the agricultural industry. I recognise that distress as much as anybody, but when I am asked to do this thing and that thing and the other, I must ask what means have I of doing it? There are no means whatever except additional taxation. [An hon. MEMBER: "The Spirit Duty."] What can the Spirit Duty do to relieve agricultural distress? I am afraid uncommonly little. Then there are light railways. The hon. Member for Hampshire has spoken of £17,000 being given to Ireland. I doubt whether the hon. Member would accept £17,000 as being a satisfactory settlement.

MR. JEFFREYS

I only alluded to the difference between Ireland and England. Something is given to Ireland and nothing to England.

THE CHANCELLOR OF THE EXCHEQUER

If the hon. Gentleman is willing to negotiate on the basis of £17,000, I think it might be worth consideration, but I do not think that would be considered a satisfactory solution. The question of agricultural distress is a great question, no doubt, and the question of local rating is also a very great subject. The right hon. Gentleman the Member for St. George's, Hanover Square, very wisely, some months ago, called attention to the fact that a grant of £4,000,000 is represented by a reduction in the rate of 6d. in the £. Now that means—I put it in a rough way—2d. on the Income Tax and I ask hon. Gentlemen opposite whether they think they would make a good bargain if they got a reduction of 6d. in the £ on the rates at the cost of 2d. in the £ on the Income Tax? I am bound to say, with reference to the financial condition of the country, that in my belief, in the growth of the expenditure of the country you have very nearly reached the limits of tolerable taxation. Of course, I am responsible, and my colleagues are responsible, and gentlemen opposite will not deny their share of the responsibility. Therefore I make no Party distinction in this matter, but I do ask the House to consider what are to be the results if we are to go on at the rate of adding £6,000,000 in every two years to the expenditure of the country? There is no other result than this—you must have an enormous increase of your taxation, and taxation is very high now. If you are going to demand additional assistance towards the rates you may have it to the extent of 6d. in the £, at the cost of an Income Tax amounting to 10d. in the £. So you may go on pressing these demands upon the House. They are very popular demands. On a Friday evening you can always command a majority for them. You will have at one time a Motion to increase wages in some of the great Departments; and at another time a motion to exempt married women from taxation. All this represents hundreds of thousands of pounds. You cut off the sources of revenue every day, you increase expenditure every day; and the consequence is, that you must meet the question of increased taxation. In my opinion that is a very serious question for the House and the country to face. We are, happily, able to meet an expenditure about double what it was half-a-century ago. It is a strong testimony to the soundness of our system of finance, and of our system of commerce, that we are able to do that with so little pressure, so little suffering, and so little oppressiveness of taxation; and when we look to other States who have adopted other methods, we have no reason to complain of our position. But I feel, in the condition of the country and in the condition of finance, the seriousness of this daily increasing expenditure, and these constant demands to reduce our sources of revenue; and, therefore, when I am called upon for excellent objects, against which I have not a word to say, to produce measures which would cost millions, I must raise my voice in warning. This is not a Party question on one side or the other. The demand for increased expenditure is made by the House, and, so far as I can see, is supported by the country. But if we are able to face that expenditure to-day, shall we be able to face it tomorrow? Shall we be able to face it in the years to come, unless we take a serious view of our position? It is my duty to warn the House on that subject. It may be, and probably will be, the last time on which, from a responsible position, I shall be able to address these words to the House of Commons, or to the country. [Cries of "Why, why?" from the Ministerial Benches.] But I do so now with feelings of the deepest responsibility. You have reached a point where you cannot afford to go on increasing the expenditure of the country at the rate at which you have been going on in recent years; and if you do go on you will find yourself face to face with a burden of taxation which the country cannot, and ought not, to bear. These are considerations which I hope the House will bear in mind on every occasion when it is invited to give a Vote which will lead to an increase in the expenditure or a decrease in the sources of revenue. As there will be future occasions for the consideration of the Budget, I hope the House will now allow this preliminary stage to pass.

MR. CHAPLIN (Lincolnshire, Sleaford)

said, he had no intention whatever of interfering in the Debate, but he felt compelled to draw some attention to the observations which fell from the Chancellor of the Exchequer in regard to agriculture. When the right hon. Gentleman said that the question of agricultural depression was one of the gravest questions that could occupy the attention of Parliament at the present time, few Members on either side of the House would be disposed to differ from him. The right hon. Gentleman had often in the course of the last year or two expressed, in language at all events, his deepest sympathy with the representatives of the agricultural interest. But there the right hon. Gentleman invariably stopped. His sympathy was limited entirely to words. If they turned to the actions of the right hon. Gentleman they would find them of an entirely different character. In the very height of the agricultural depression last year, the right hon. Gentleman—against the protests of the Representatives of the agricultural interest inside the House and outside the House—thought it his duty to inflict on that interest one of the heaviest burdens it had ever been called upon to bear. They had to complain also that every proposal made on behalf of the agricultural interest was invariably dismissed by the right hon. Gentleman as unworthy of the attention of the House. They admitted there was weight in the objections put forward by the right hon. Gentleman in regard to increased expenditure; but they had every reason to complain that the Government, knowing well the desperate condition to which agriculture was reduced in England, and while perfectly willing to do something for Ireland, dismissed almost with contempt the suggestion that they should do for England in regard to light railways what they had already done for Ireland. It was really more the spirit in which this question was treated than the actual proposals in the Budget at the present time, of which they complained so bitterly. Whatever they proposed was dismissed at once as being beyond the pale of practical politics. And yet, while he acknowledged the great stress of the position, the right hon. Gentleman had never anything to suggest or propose on his own part, and the whole solution they had from Her Majesty's Government were expressions of deep sympathy with the terrible position of the agricultural interest in this country, and which they had really had almost ad nauseam. The right hon. Gentleman told them that the limits of tolerable taxation had practically been reached. What were they to understand from that? The right hon. Gentleman's position was this: he acknowledged the condition of the agricultural interest, he admitted that nothing could be worse, he was always expressing his sympathy, but, if he understood him aright, at the present moment, as the representative of Her Majesty's Government, he was prepared to accept the complete ruin of that industry with complacency and without making any effort whatever on the part of the Government to relieve it.

THE CHANCELLOR OF THE EXCHEQUER

I beg the right hon. Gentleman's pardon; that is not what I said. What 1 said was that the proposal to make further subsidies with reference to local rates would lead to an increase of the Income Tax, which would be a greater burden on the agricultural interest than the relief given.

MR. CHAPLIN

said, that the right hon. Gentleman at any rate stated that it was impossible to give the relief asked for, because the limits of tolerable taxation in this country had been reached. But the right hon. Gentleman did not restrict his observations to the limits of taxation having been reached, but he complained very bitterly of the constantly increasing expenditure of this country. Proposals of all kinds were constantly being made to increase the expendture. Some of them were, no doubt, judicious and right, but others were extremely improper, unnecessary and much to be objected to. Even during the present Session they had heard proposals from the Government of the latter description. It was not long ago since they heard from the Government a proposition for the payment of Members in that House which would involve a large increase of expenditure, and for a purpose upon which there was undoubtedly a great difference of opinion, and in regard to which he did not hesitate to express his opinion that it was wholly unnecessary, inexpedient, and greatly to be condemned. When the right hon. Gentleman had in his own pocket other proposals or promises of this description, he did not think he was justified in getting up and saying— I can do nothing whatever to relieve agricultural depression, however severe it may be, because the limit of taxation has been reached, and I utterly object to all further increase of expenditure. He should not delay the Committee any further on this occasion. They should have other opportunities, he did not doubt, of dealing with the question that had been raised by the right hon. Gentleman in the reply he had just addressed to the Committee, and which was the only thing which induced him to make these observations. Before he sat down, however, he could not help saying that he did not believe, and he would not believe, until it was absolutely demonstrated and proved, that it was beyond the genius of a Chancellor of the Exchequer in this country, beyond the genius of the present Government even, at all events, to make some proposals, in its condition of dire distress, for the relief of that which everybody acknowledged was the greatest, but which, at the present time, was the most unfortunate, industry in the country.

DR. CLARK (Caithness)

called attention to the fact that during the present Session, on a Friday night, a Resolution was brought forward, and unanimously adopted, to the effect that there should be a re-arrangement of the burdens of taxation. He regretted that so far nothing had been done to carry out that one plank of the Newcastle Programme relating to the taxation of ground values. He quite agreed with the right hon. Gentleman who had just sat down that a number of burdens that had been rearranged, and which were supposed to be a benefit to agriculture, really did not affect the agriculturists at all, but the benefits went to the towns, where they were not wanted. The burden, for instance, of the present land tax was incomparably higher upon agriculture than upon manufactures or the coal industry. In the coal industry miners' wages were falling, the profits of the colliery owners were falling very much, whilst the royalty owners' profits were increasing. He thought the time had arrived when some Chancellor of the Exchequer should really take up this question and solve it, placing the burdens on the various interests in accordance with the necessities and circumstances of the time. The burdens now in some districts were much too high, while in others they were too low. Curiously enough, the Government had brought in a Bill to rearrange the payments and quotas of the various towns and burghs in Scotland. Why should they seek to have such a rearrangement in Scotland without a rearrangement also for England? Why was a Bill to be brought in to change the burdens, to slightly relieve agriculture, and slightly add to their payments in burghs in Scotland, and a similar course not to be adopted in regard to England, where the necessity was equally great? He would support the Bill so far as it went, but it did not go far enough. It would still leave the agricultural community in Scotland to pay four or five times as much as the industrial centres, and he did not see why it should be so. If they made a change at all, it ought to be in the direction of placing the burden upon the various industries according to their abilities. He did not know whether this was the last Session in which the right hon. Gentleman was going to act in the capacity of Chancellor of the Exchequer. He hoped not; and that the next Budget would not be of this humdrum character: but that he would in the bold and free fashion of last year try to equalise the burden of taxation. In view of the increased duties on per sonalty, for example, he thought time should be permitted in which to pay them, just as was done in the case of realty; and he intended at the proper time to move an Amendment in thus sense, because if one threw some forms of personalty upon the market wholesale you reduced its value.