FINANCE BILL.

HC Deb 16 May 1895 vol 33 cc1349-426

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a Second Time."—(Chancellor of the Exchequer.)

*MR. JAMES LOWTHER (Kent, Thanet),

who had given notice of the following Amendment— That, in the opinion of this House, the Beer Duty should be readjusted with a view to the relief from taxation of home-grown barley and hops; and that import duties should be imposed upon foreign barley and hops used for brewing purposes,"— said, that he proposed to make some slight modification in the wording of his proposal, with the view of eliciting a more general consensus of opinion in its favour. It would not be necessary for him to furnish evidence to show that a grave crisis existed in agricultural affairs, and that a very large portion of the agricultural community were actually on the brink of ruin. That statement would not be seriously challenged. It had been admitted by Ministers themselves both on public platforms and on the floor of the House. But when any remedy for this acknowledged evil was suggested, this unanimity unfortunately came to an end. The remedies proposed covered a very wide and diverse field. Some advocated the dog-eat-dog style of remedy—that one section of the agricultural community should be invited to plunder the other section; that one class should feed upon the property of another. Then there were those who held theories as to the changes that should be adopted in the methods of cultivation. It was said that wheat, barley, and oats could be obtained in unlimited quantities on better terms from outside, and that agriculturists should turn their attention to the rearing of poultry and the growing of fruit. That was the egg and jam theory. It was not likely to commend itself to practical persons, especially after the recent experience that had attended efforts in that direction. And agriculturists were further deterred from embarking upon this system of agriculture when they found that foreign and colonial communities, by means of bounties on exports of agricultural produce, even dairy produce, were prepared to deal with any phase of English competition. Parliament had been invited to do something to relieve agricultural distress, and in response they had this Bill, which added very seriously and materially to the difficulties which faced the barley-growers in this country. This additional duty of 6d. on the top of an already large impost was distinctly a tax upon both English barley and English hops. The Chancellor of the Exchequer said that the abolition of the malt tax, the predecessor in title to the Beer Duty, had been generally approved in agricultural circles. He (Mr. Lowther) had not been in a position to criticise the Budget scheme of 1880 in the House of Commons as he was temporarily out of Parliament at that time, but he had availed himself of extra-Parliamentary opportunities to denounce the substitution of a Beer Duty and had taken advantage of his position of greater freedom and less responsibility to characterise that proceeding in terms which perhaps went beyond what Parliamentary restraints might prescribe. He had not hesitated to denounce the much-vaunted repeal of the Malt Tax as a financial juggle, and he feared he had added a transparent humbug and swindle, and a proposal which he did not think the meanest yokel in any corner of the three kingdoms would be taken in with. He considered the repeal of the Malt Tax one of the most gigantic impostures ever palmed off upon Parliament, because it did nothing whatever to relieve the home producer from the burdens under which he groaned, and so long as the foreign competitor, who paid no taxes at all, and who had the means of locomotion at his command, was enabled to compete on equal terms with the home producer, who had to pay all these taxes, so long would the inequality remain, and there would be no relief to the agricultural community. He could not understand why a tax on beer instead of upon malt should be any advantage to the producer of barley and hops. These views on the subject, to which he gave expression on the occasions to which he alluded, received strong confirmation so soon as this new principle was reduced to practice. He thought it would be scarcely doubted that the duty, as it at present existed, was far more onerous on the grower of barley than the old Malt Tax was in former days. Under the existing system, inaugurated by the right hon. Gentleman, the Member for Midlothian, in 1880, by which the Beer Duty took the place of the previously existing Malt Tax, the burdens had fallen far more seriously on the growers of home barley. He found that this contention was put forward by many competent authorities of practical experience in the brewing trade. He had received many communications on the subject, including one which had reached him from the representative of a large brewing firm, in which that proposition was laid down. He had also in his hand a printed document signed by the Chairman of the County Brewers' Society, who distinctly said that by the present system English barley was placed at a very serious disadvantage. Other correspondents assured him that the Malt Tax was far less onerous to the home producers of barley than the imposition in its present form. As to the effect of this change, so far from proving a benefit to agriculture, its operation had proved exactly the reverse. As to the views of the agricultural community on this subject, he thought it would be found there was a very large consensus of opinion amongst the barley and hop-growing districts of England in favour of some remedy for the present state of affairs. What he had ventured to sketch out in the motion which stood in his name was a readjustment of the Beer Duty, which, he thought, the Chancellor of the Exchequer held out to them the other day as being the idea he principally favoured—[The CHANCELLOR of the EXCHEQUER was understood to dissent]—though he did not give them any details as to the method by which that should be carried out. He certainly understood the right hon. Gentleman had viewed such suggestions with favour, and, in common justice to the English producers, some readjustment of that kind should take place. In the Motion he had put upon the paper he had suggested that a duty should be placed on foreign barley and hops which entered into competition with British produce. The Chancellor of the Exchequer the other day took some objection to the views which were put forward by several Members regarding the ingredients which were used for the making of beer. He understood the right hon. Gentleman to say that it was not the use of the so-called substitutes which militated against home-grown barley and hops, but it was the competition from abroad. It was possible, no doubt, that the free use of ingredients such as those which were referred to in the previous debate might have tended considerably in the direction then indicated; but he believed, with the Chancellor of the Exchequer, that, in the long run, the foreign competition was in reality the enemy. Foreign barley was coming more and more into use, though, when it could be obtained at prices which would prove remunerative, he was told that good English barley was preferred, as a rule, to the foreign samples. In the proposals he had sketched forth he had not asked that a duty should be placed on all barley and hops coming to this country, but had confined his proposal to imports used for brewing purposes only, as there were some persons who held the theory that foreign barley was useful for cattle-feeding purposes. He himself however, did not think much of that view, and there were plenty of other things to feed cattle upon.—[An HON. MEMBER: "It is good for pig feeding."]—He was rather an extensive cattle-feeder himself, and he never, under any circumstances, used barley at all. Owing to the very large importation of wheat flour into this country as a feeder of stock he had felt very severely indeed the want of the home-grown acticle called corn offal, so valuable for feeding purposes; and pig-feeders would find that in the wholesale introduction of flour from abroad a very heavy blow was dealt at the pig-feeding industry of this country. In his judgment, the proposal he now made would enable the Chancellor of the Exchequer, by putting a reasonable duty upon foreign hops and barley, to recoup himself for the money taken from him by the exemption from taxation of home-grown articles, and would also leave him a surplus in hand to carry out some of his financial operations. As to the action taken by many agricultural bodies on this subject, he would warn the right hon. Gentleman and the House against accepting the resolutions and statements of many agricultural Chambers as truly expressing the agricultural view. He held in his hand a resolution which had been adopted by the Central Chamber of Agriculture. He had had the honour to belong to that body for a good many years past, and it contained among its members a large number of personal friends for whose judgment he had the greatest respect. But that Chamber and many of the associated Chambers with which it was connected were largely dominated by what was known as the suburban fringe of agricultural community; that was to say, by those who lived in or near large towns, consisting in many cases of millers and middlemen, and persons whose interest was in many respects, rather against the home producer. Owing to the fact that these gentlemen for the most part resided in close contiguity to the places of meeting of the Chambers, their relative influence and voting power were largely in excess of their due weight. As a test of the real opinion of the agricultural world, he would rather point to the proceedings of such a representative conference as that which was held in St. James's Hall a few years ago, and at which a resolution was passed by an enormous majority to the effect that the continued imposition of rates and taxes on home-grown produce, while foreign produce was free from all such contributions, was an injustice and an anomaly which ought to be removed. He would warn the right hon. Gentleman against being led to believe that the agriculturists of England had gone back from that resolution because some weak-kneed resolutions had in recent years emanated from far less representative bodies. As he might be told, he was suggesting a return to Protection, which was viewed with such horror by many estimable Members opposite, he did not shrink from saying that he was in favour of recasting our fiscal system in the direction of protection to native industries. And when he spoke of native industries he did not confine himself to agriculture alone, but included the great bulk of the employments of the people. Public opinion, he believed, had largely changed on this subject during recent years. The cheap loaf had grown wondrous stale. People had learnt that it was no use having a cheap loaf if they had no money to buy it with. To stand with empty pockets and idle hands outside a shop which was full of tempting loaves might be very well for economists and philosophers, but the occupation possessed few attractions for more practically minded people. It would not be denied that opinion outside this country was now virtually unanimous against the one-sided system which we alone endorsed; whilst in this country a large body of opinion was already formed, and was continually increasing in favour of a reconstruction of our fiscal system. He would ask the Chancellor of the Exchequer whether he did not think the revenue from beer was raised in a manner which was objectionable, and that it was egregiously misspent—he referred especially to the sum which the right hon. Member for St. George's, in despair of what to do with it, threw at the heads of the County Councils, to be by them spent on what was called technical instruction. That money had, in his opinion, been squandered and wasted in a great many districts to which it had been sent.

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

Would you give it to the Treasury?

*MR. JAMES LOWTHER

Yes, I would certainly. If the Chancellor of the Exchequer would resume the old position and let the County Councils provide technical instruction out of their constituents' pockets instead of the national purse, he would deserve the thanks of the great masses of the rural districts. As a County Alderman he had had opportunity of seeing how these matters were arranged. Technical instruction was understood by this House to be instruction other than ordinary book learning, but he had found Latin, Spanish and Portuguese actually sanctioned by the Science and Art Department under the name of technical instruction. In other words the doctrinaires and crochet-mongers had been allowed to have their way, and the money granted by Parliament with the view of enabling agricultural communities to make themselves acquainted with various subjects that would assist agriculture, had been absolutely wasted, and a mischevious system of expenditure encouraged. A log-rolling system prevailed in County Councils with regard to the distribution of this windfall from the pockets of the brewers. A County Councillor representing an urban district would say:— Oh! I cannot be a party to agriculture getting all this, unless you give something to the High School in my town. And he had found as much as £50 a year given in the form of a single scholarship out of this fund to promote higher and secondary education, which was certainly never contemplated by Parliament, the assurance having been given that the money was for the encouragement of technical instruction only. He hoped the right hon. Gentleman would see that the money derived from beer was spent in really national objects, and not given to local bodies to be fritted away on the log-rolling principle. Now, with regard to the Amendment, he proposed to meet his right hon. Friend the Member for Grimsby by incorporating in his own Amendment the Amendment which his right hon. Friend proposed to move, so that his own Amendment would read: That in the opinion of this House the Beer Duty should be readjusted with a view to the relief from taxation of home grown barley and hops, inasmuch as a duty on beer is a tax on British agriculture, and has materially tended to the recent reduction in wages and employment of agricultural labourers. The proposal as thus amended, of course, differed substantially from the proposal of which he originally gave notice, but, as it now stood, it would afford the Chancellor of the Exchequer an opportunity of undertaking to re-adjust the Beer Duty in a manner which would be less oppressive to a class, which the right hon. Gentleman would admit, deserved some consideration and relief at the hands of the Exchequer.

MR. E. HENEAGE (Great Grimsby)

seconded the Amendment as amended. He was as much against the duty on beer as any Member of the House, but he could not have supported the latter part of the original Amendment, as he was strongly against protective duties in any form whatsoever. He fully believed that the repeal of the Malt Tax was one of the greatest evils that had overtaken agriculture, and he would be glad to see that tax re-imposed, and the Beer Duty done away with. He was opposed to this increase of 6d. in the duty on beer, while he was utterly opposed to any form of prohibitive or protective duties. There was, no doubt, a difference, as the Secretary for India pointed out in his able speech on Indian Finance earlier in the Session, between Protective Duties, and Duties raised entirely for purposes of revenue; but it was not now the occasion or the time to discuss that question. That time might yet come when the revenue from beer and spirits should be materially diminished under Local Veto, if ever such a Bill were passed, and were to have the effect anticipated by its supporters—when the revenue from alcoholic drinks might be destroyed; but that time had not yet come, and, looking to the results of recent elections, was not likely to come. He opposed this duty purely from his earnest belief that agriculture could not bear the additional tax, which would, in fact, affect all classes engaged in agriculture, and all kinds of agricultural produce. It was a gross injustice in the present depressed state of agriculture. Wheat could not be grown now even to pay for its production, and now barley was to be rendered unremunerative to the farmer, who had been compelled to look for his profit to barley and oats. Barley had been affected by every addition to the duty on beer, and with it labourers' wages. Ever since last year the price of barley had been steadily falling, and within a week after the Budget was introduced last year, barley went down 2s. per quarter. That was foretold by everyone conversant with the Malt Trade. The House was afterwards told by the hon. Member for Bedford (Mr. Whitbread) that— much depended upon whether the brewers believed the tax would really be for one year only as to whether they would alter the specific gravity or quality of their beer; but the hon. Member also stated, in clear words, that if it lasted longer than one year, brewers would look about for cheaper substitutes with which to make their beer. The brewers never made any secret that they were only the persons through whom the tax was collected; they would not really pay it, and would either pay less for their malt or find substitutes. That the brewers had already begun to look out for cheaper substitutes was proved by the speech of the Chancellor of the Exchequer himself, who stated that the brewers had not lost by the tax, but that a large amount of money had come into the revenue. That money must, obviously, come out of somebody's pockets. The consumers had not paid it, as he had not heard of the price of beer being increased. He was afraid that brewers did not believe in the great and vaunted concession made by the Chancellor of the Exchequer to his friends, and even large firms who had, up to last year, never used sugar, had now begun to use it. But whether that were so or not, maltsters had reduced their price for British barley. Last year, he recollected, that a large farmer had told him that he had sold 400 quarters at 12s. per quarter; he got it malt, threshed it early, and it was in good condition, and he expected a good price. A quarter of barley used to pay a fortnight's good wages, but now it would only pay a week's at the reduced scale. Consequently, it was not only the farmers, but the labourers, who suffered from this increased Beer Duty. Wheat was now little grown, except to supply the necessary straw. Barley and oats were the chief crops. But the price of the chief corn crops affected other agricultural produce, notably, the price or value of fat, and especially of store cattle. He was, early one morning last September, in a large cattle fair. Trade was paralysed. A large and well-known buyer of fat and store cattle told him that he could not give full value for store cattle because his clients could not pay it on account of the bad prices of all corn, and the want of money. Again, why should the national beverage of England be taxed more than Ireland's or Scotland's whisky, especially when the tax is indirectly injurious to a depressed industry? He objected to it altogether as an indirect tax on the raw material. It was neither paid by the trade, the brewer or maltster, the middleman, or the consumer; but was a direct tax on barley, affecting both farmer and labourer, whilst there was no fairness in the Beer Duty when the tax on spirits was reduced, even if the trade and consumer paid; but to put a direct tax on barley, and select any product of agriculture for extra duty now, was injury added to insult. Again, it should be the duty of a temperance Chancellor of the Exchequer, earnestly in favour of Local Prohibition, to look out for new sources of revenue, and not rely on alcohol. But, supposing for a moment that the consumer would pay the extra 6d. on beer, why should the Chancellor of the Exchequer tax the beer of the labourer and artisan instead of the brandy and soda and the whisky and soda of the more wealthy? He spoke most unselfishly, for, whilst he would prefer good beer, he unfortunately drank whisky. There were also several other intoxicating liquors besides beer and spirits, and he hoped and believed that the people of this country, and especially the farmers' labourers and artisans would clearly understand the Budget in conformity with all Government legislation during this Parliament; and there seemed to be no time for any English legislation except taxation. The so-called "predominant partner" was only fit to be taxed! English beer and barley were to be taxed by Irish votes, and there was no time to do anything for depressed agriculture but add to its burdens! He opposed this tax now, and would do so on every stage and in every way which the forms of the House and the Closure would permit. He now begged to conclude by seconding the Amendment.

*THE CHANCELLOR OF THE EXCHEQUER

said, that if he could perceive what agriculturists themselves were agreed upon as to what was required to meet the evils of which they complained, ho would readily unite with them in trying to find, if possible, a solution. But the difficulty was that he could not ascertain what they considered to be a proper solution. What caused him despair was that agriculturists made up their minds that the crying injustice under which they suffered was the malt tax, and that the repeal of that tax would be the greatest boon and blessing to them; but no sooner was that carried out than they were told that it was the greatest curse that was ever inflicted on agriculture. It was a little discouraging when, after such a demand as that—a demand unanimously made—was conceded in the hope of benefiting agriculture, they should be told that they were inflicting the greatest injury on that interest. Now what was this resolution? It was to part at once with ten millions of money. That might be a very simple thing to talk about, but in the face of the expenditure which the country has determined to incur, to strike off such an amount as this from the revenue of the country would be a very serious matter.

MR. JAMES LOWTHER

said that what was asked for was a readjustment of the duty.

*THE CHANCELLOR OF THE EXCHEQUER

said that might be all very well; but they might readjust a man's situation by taking all the money out of his pocket. The contention of the right hon. gentleman was that there should be no tax on beer, and then the argument was that the duty should fall on barley. If hon. gentlemen opposite desired it, let 5d. more be put on the income-tax. That was really what their proposal came to, if hon. Gentlemen opposite would only consider their own interest in those matters—for he had previously said, and now repeated, that if they chose to strike off those indirect duties the burden must fall on direct taxation. If they struck off a revenue of ten millions off beer, they must substitute for it 5d. more on the income tax. In those circumstances, did hon. Gentlemen think they would be any better off, or that the agricultural interest would be in any way improved by a readjustment of that character? With regard to the 3d. which went to technical education, if the right hon. Gentleman had the support of the author of that 3d. and of the Members of the County Council behind him who shared his views that that money was wasted, he should not at all regret to see it brought into the exchequer. There had been a very large expenditure, and that expenditure had to be met, and the question was whether they could have a better form of meeting it than that which the Government had proposed. He would call the attention of his right hon. Friend to the fact that if the whole of the beer duty was removed to-morrow they would not raise the price of barley one single 6d. He had asserted that before, and he was only repeating what he was sure the late Chancellor of the Exchequer would agree with. Supposing there was no malt tax or beer duty at all, the brewer would always use the cheapest materials to suit his purpose. There was no doubt that the cheapness of barley improved the profits derived from keeping pigs, and also benefited agriculturists in other ways. It was said that the duty on beer had diminished the price of barley, but he would ask had it diminished the price of wheat? Everybody knew the price of wheat had fallen a great deal more than that of barley. From the year 1880, when the new system was introduced, to 1894, barley had fallen from £1 13s. to £1 4s. 6d., while wheat had fallen from £2 4s. to £1 2s. The fall in the price of wheat, however, was not due to the beer duty, because the price of wheat had fallen all over the world. If his right hon. Friend believed that it was due to free trade, why was not the agriculture of protectionist countries flourishing? What did the right hon. member think of the language of the agrarian party in Germany, and could he find a protectionist country where agriculture was thriving now? [Cries of "France."] They would find that the agriculturists of France were quite as loud in their complaints. He had taken some pains to inform himself on the subject, and he had found that the complaints in protectionist countries with reference to the prices of grain and of produce were quite as loud as they were in free-trade countries. The payments which had to be made in produce had forced produce on the market in a way which had lowered prices. He hoped that hon. Members were not going to vote for the Amendment under the impression that if this extra 6d. upon beer were taken off barley would be 6d. a quarter dearer; this was a complete delusion, for it would make do difference whatever, except that the whole of the ten millions would go into the pockets of the brewers. The brewers would buy their materials just as cheaply, and therefore this Amendment would throw away an immense revenue. He believed the system adopted in 1880 of putting the tax on the beer instead of on the malt had worked on the whole to the advantage both of the receivers and of the payers of the tax; but he should be perfectly prepared to consider the subject and to discuss it upon a future occasion. So great a change as going back from the policy adopted in 1880, however, was one that could not be undertaken in the month of May in making provision for the finance of the year, and he hoped, therefore, that the Committee would not support an Amendment which, if adopted, would throw away a revenue of ten millions.

MR. H. T. KNATCHBULL-HUGESSEN (Kent, Faversham),

as a representative of an agricultural constituency, joined most emphatically in the protest which had been made against the utter neglect with which the Government had treated agricultural interests. The Chancellor of the Exchequer had really gone out of his way to inflict a most unnecessary burden on an industry which was already almost at its last gasp. If he thought the tax would fall on the brewers he should still think it unfair to continually torment one interest, but it had been very widely admitted that this tax would ultimately fall upon the farmers, and through them upon the agricultural labourers. The Chancellor of the Exchequer had found it necessary somehow or another to raise money for a deficit, but what had been the policy of the great Liberal Party which, especially at election times, posed as friends of the agricultural labourer? They had deliberately selected out of others this particular industry for additional taxation. Recent events had proved that the constituencies had seen the real value of the sympathetic utterances which was all they got from the other side of the House. Was there no other source from which the Chancellor of the Exchequer could get this sum? The right hon. Gentleman had been good enough to say he would be only too glad to do something for the relief of agriculture, but could find no source from which to get the necessary revenue. If he would only consent to a change in our fiscal system he would find numberless sources of taxation. He did not know whether many Members had taken the pains to see what an enormous revenue might be raised from a very moderate imposition of duties upon competing foreign products. The imposition of a duty of 2s. a quarter on foreign oats would bring in £500,000; a duty of 4s. a quarter oil foreign maize would bring in £1,500,000; and a duty of 4s. a cwt. on foreign hops would bring in £40,000. By this means they could protect a British industry, and stimulate British trade. Reference had been made in that Debate to the distressed state of Agriculture, which was the direct result of our fiscal policy. There was an historical document in existence, the contents of which were possibly not known to many Members of that House. He referred to the protest of Peers against the Repeal of the Corn Laws. The depression of agriculture had not come upon us suddenly, but was the foreseen consequences of the abandonment of sources of revenue to which the Chancellor of the Exchequer could return if he wished. The document to which he had referred was very interesting. The following were the reasons for the Peers' protest:— (1) Because the repeal of Corn Laws will greatly increase the dependence of this country upon foreign countries for its supply of food; (2) because there is no security or probability that other nations will take similar steps; (3) because it is to be apprehended that the removal of protection may throw some lands out of cultivation; (4) Because it is unjust to withdraw protection from the landed interest while that interest remains subject to exclusive burdens imposed for purposes of general, and not of special advantages; (5) because the loss to be sustained will fall most heavily on the least wealthy portion of landed proprietors, will press immediately and severely on the tenant farmers, and through them, with ruinous consequences on the agricultural labourer; (6) because indirectly injurious consequences will result to the manufacturing interest, and especially to the artisans and mechanics from competition with the agricultural labourers thrown out of employment; (7) because the same course will produce evil results to the tradesmen, retail dealers, and others in country towns, not themselves engaged in agricultural pursuits, but mainly dependent for their subsistence on their dealings with those who are so engaged; (8) because a free trade in corn will cause a large and unnecessary diminution of annual income, thus impairing the revenue of the country, at the same time that it cripples the resources of those classes on whom the weight of local taxation now mainly falls. He thought there was more than one lesson to be learnt from the document which he had just read. One was that, at any rate 50 years ago, a more accurate forecast was made of what would be the result of this legislation by the House of Lords than by the House of Commons; and that might lead certain rash politicians to consider whether now the country was not likely to obtain sounder advice and wiser counsels from the House of Lords upon great public questions than from the House of Commons. These considerations might, perhaps, cause those to pause who were so eager for the destruction of the Second Chamber. He hoped there were signs that before long this so-called Free Trade would disappear, and that they would once again take a common-sense view of the matter. The Chancellor of the Exchequer had told them that the low prices of barley and oats were due to foreign competition. He was glad the right hon. Gentleman had made that admission, because if he really believed that foreign competition had led to low prices, the remedy was in his own hands. He also rejoiced that the right hon. Gentleman the Member for Sleaford had returned to his old love and had advocated the imposition of a duty upon foreign barley. He wished to call attention to two remarkable speeches delivered in that House by the right hon. Member for St. George's, Hanover Square, and the right hon. Member the Leader of the Opposition respectively. What had they said? The right hon. Member for St. George's, referring to the question of the possibility of the land of this country going out of cultivation said:— It is a stupendous question and I think it right that we should face it, and that no preconceived notions, no formulas, should prevent us from facing the consequences. Whatever remedies are proposed, they should be treated with earnestness, they should not be scoffed at, but should be looked upon as an earnest endeavour to solve a question as grave as has ever been submitted to us. The Leader of the Opposition speaking on the same point used curiously enough, nearly the same expressions. He said:— Supposing, as is theoretically possible, that the result of the existing system of international industry was, that the whole land of England was turned out of cultivation, and every agricultural labourer was driven into the manufacturing towns—it may take place, and if so, you would have to take into account other considerations than these purely economic arguments which are the basis of Free Trade. If such a possibility is going to come upon us, it will strain all our statesmanship in dealing with absolutely novel and unexpected circumstances, and some cherished formulas must be thrown over if we are going to deal with it. What did the right hon. Gentleman mean by this? He hoped the words meant that the right hon. Gentleman recognised the possibility, nay the probability, of dealing with the question after his return to Office. Any statesman who would have the courage to face the question and to make the reconstruction of our fiscal methods the basis of his policy would command, he believed, a support in the country which would cause so-called Free Traders opposite no little surprise.

*MR. R. L. EVERETT (Suffolk, Woodbridge)

said, that it was always a pleasure to listen to the hon. Gentleman who had just sat down, because he expressed the honest sentiments of his mind; and, although those sentiments were somewhat out of date, they were received with respect as coming from one of the few survivors of a party which had very nearly disappeared. He was specially glad that the hon. Member had brought before the attention of the House the protest which was recorded by Members of the House of Lords on the occasion of the repeal of the Corn Laws. He would recall to the hon. Member's memory the fact that during the 34 or 35 years immediately following the repeal of the Corn Laws, agriculture in England enjoyed uninterrupted prosperity. But in the time of the Corn Laws there was almost continuous distress. Four inquiries were held upon the subject of agricultural distress between 1815, when they were imposed, and 1836; and tens of thousands of men were out of employment. The workhouses were crowded with able-bodied people, and the gallows were groaning with the weight of the unfortunate creatures who had been driven by want and misery to break the law. The land of the country was of less value, and the labourers were paid at a lower rate than during the 30 years that followed the repeal of the Corn Laws. He had compared the average price of a quarter of wheat, barley and oats conjointly in the 30 years preceding the repeal with the average price in the corresponding period subsequently to the repeal. He found that the average price of the conjoint products was almost exactly the same in the two periods. The difference did not amount to 1s. The price was about 114s. a quarter while the Corn Laws lasted, and it was within a few pence of the same amount during the first 30 years of Free Trade. There was the clearest evidence that Free Trade and agricultural prosperity had run together, and the country's experience of Protection was not such as to make us anxious to return to that system, but at the same time he fully admitted that in the last 15 years agriculture had been going down hill under Free Trade at an alarming rate. He had before had opportunities of explaining what he believed to be the causes of this depression. Ever since the great change was initiated under which one of the precious metals was deprived of its old position, and the currency of the leading Western nations thus became restricted, prices had been gradually falling. Last year the great fall was, in his opinion, the direct result of the closing of the Mints in India and the repeal of the Sharman Act in America. When the closing of the Mints was discussed in the House, he said it would inevitably drive prices here down much lower. These, however, were not the questions which he had risen to discuss. He wished to make a few observations upon the statements that had been made respecting the Malt Tax. Complaint had been made of the repeal of the tax, and a desire expressed for its re-imposition. He remembered the long agitation having for its object the repeal of the tax. It was not until 1880, when the right hon. Member for Midlothian took the matter up that they were successful in obtaining its repeal, which generations of agriculturists in England had earnesly contended for. What the advocates of the abolition of the Malt Tax asked for was the total abolition of the tax; but he was one of those who were glad even that the transfer of the tax to beer was made, and he was still grateful to the Government that effected it. When hon. Gentleman talked about the reimposition of the Malt tax as a beneficial change for the poor, he would not advise them to preach that to the agricultural labourer. In the county to which he belonged the labourers had the good sense to brew their own beer, and they were able to do it now without a farthing of taxation. There was nothing that had been done by Governments in past years which was so thankfully remembered by the agricultural labourer as that which had enabled him to get his malt almost at the price of barley, and to brew good wholesome beer without any taxation at all. He honestly believed County Councils might with advantage use some part of the money provided for technical education in teaching the people in agricultural districts how to make homebrewed beer where they did not know how. In that way, he believed, a great boon would be conferred upon the people. With regard to the effect of this tax upon the farmer, if a comparison was made between barley and wheat, it would be found that they had now changed places. Farmers always used to make the more money out of wheat, but now the case was reversed. To-day, of all the things produced on a farm, that which had suffered least in price was the best barley, Even last year it realised something like 40s. a quarter, and when he compared the fall in the price of barley with that of wheat or oats, or cotton, or iron, or sugar, or any of the great products of the world, he could not find that there was any reason to find fault with the change of this particular duty. He would like to see in the House a greater spirit of economy. He thought the voting of £4,000,000 for the Navy last year a great step to take; but this year £2,000,000 have been added. He went into the Lobby against that great expenditure, and he had thought to have seen some of his agricultural friends opposite going into the same Lobby. If the House insisted on this increased expenditure, the money must be found. It was insane to cry out about taxation while hon. Members opposite urged the House on to increased expenditure. He thanked the House for allowing him to say these few words, but, as one who had worked hard for the repeal of the Malt Tax, and had been gratified by receiving expressions of thankfulness from the agricultural labourers in his own county, he could not allow what had been said about the Malt Tax to pass without challenge.

MR. JAMES LOWTHER

wished, by way of personal explanation, to state that he did not intend to advocate the entire repeal of the Beer Duty, but to confine his Amendment to the increased duty. He believed the word "increased" was in the Amendment of his right hon. Friend, and he now wished to have it inserted in his own Amendment. He did not wish to do anything irregular, but he wished it to be understood that he did not intend to advocate the entire repeal of the Beer Duty.

*COLONEL HOWARD VINCENT (Sheffield, Central)

wished to point out how entirely the interests of town and country were bound up in this question. Depression in agriculture meant depression in the towns. It increased very much competition in the labour market, and, therefore, any Amendment or proposal that would tend to mitigate the present unfortunate condition of agriculture was to the direct advantage of the towns, and so to the constituency which he had the honour to represent. The hon. Member for Suffolk had confined himself to the first 30 years after the introduction of free imports, and he was particularly silent as to the last 20 years, and as to the present condition, not only of the rural but also of the artisan population. The hon. Member drew a harrowing picture of the state of affairs which he believed to exist in 1844 and 1845, but why did he not speak of the state of affairs which authentic documents on the Table showed to exist at the present time? There were now hundreds and thousands in receipt of poor relief and large numbers of unemployed, and although at harvest time, and in other ways, they might be able to make up a fair livelihood, the rate of wages in the winter was falling lower and lower. Although he generally agreed with his right hon. Friend below him, he would forgive him for saying that he cordially preferred his Amendment before it was altered. He would confine himself to the first part of the Amendment, that was the relief from taxation of home-grown barley and hops. When an agricultural question was under discussion the Minister for Agriculture promptly left the House. It was, indeed, astonishing that, when everyone in the country recognised the present distressing condition of agriculture, the responsible head of the Agricultural Department should refrain always from contributing to the Debates in the House when an agricultural question was brought forward.

*THE CHANCELLOR OF THE EXCHEQUER

He spoke yesterday on a Bill.

*COLONEL HOWARD VINCENT

He spoke yesterday on an entirely different subject.

*THE CHANCELLOR OF THE EXCHEQUER

I was defending my colleague from the statement that he was always absent from the House whenever the subject of agriculture came up. Yesterday there was an agricultural subject and to-day there is not.

*COLONEL HOWARD VINCENT

asked what was the question of relieving home-grown barley and hops from taxation but an agricultural question? Was it a manufacturing subject, or an artisan subject? He contended that it was the duty of the Minister for Agriculture to be present in the House when any agricultural question was under discussion. But however that might be, it was perfectly clear to anyone who had listened to the course of the Debate, that although the right hon. Gentleman the Chancellor of the Exchequer had taunted his right hon. Friend with having altered his Amendment and made some arrangement with his right hon. Friend opposite, he had not touched on the salient point of the Amendment, namely, the paramount necessity of doing something to relieve the agricultural depression. Had the right hon. Gentleman studied the facts in this question of barley? If he would look at the last statistical abstracts published he would see that the production of barley, like that of wheat, had gone down year by year. He had taken out the figures from the "Statistical Abstract." In 1884 there were produced in Great Britain 73,000,000 bushels of barley, and in 1893, with a considerable increase of population, only 59,000,000 bushels, being a decrease of 14,000,000 bushels. In the same period the production of wheat fell from 80,000,000 to 49,000,000 bushels. All this time barley produced by foreign labour was imported free into this country. Between 1884 and 1893 the importation of foreign barley increased from 12,000,000 bushels to nearly 23,000,000 bushels. Therefore, in these ten years the importation of foreign barley nearly doubled, while the production of home-grown barley largely diminished. How was the English farmer to live in these circumstances? How was adequate employment to be found for labourers if at every step the farmer was met by this gross and unfair competition? If the Chancellor of the Exchequer refused to make the foreigner bear some portion of our taxation, the only alternative was to relieve English farmers from some of the burdens thrown upon them. The Chancellor of the Exchequer seemed to refer with delight to the depression in agriculture prevailing in France and Germany. He would not pretend that there was not any depression in those countries, but he would say the depression there was not anything like so accentuated as was the agricultural depression in this country. He had been present in the French Chamber of Deputies more than once when the subject had been under discussion. What did the "Statistical Abstract" reveal with regard to the state of agriculture in France and Germany? Did it show that the production of wheat was going down from year to year in France? Did it show that acre after acre was going out of cultivation, and that great difficulty was experienced in obtaining employment? No; on the contrary, we found absolutely a different state of affairs. In 1889 there was 297,000,000 bushels of wheat produced in France, and in 1892 the production had risen to 301,000,000 bushels.

*THE CHANCELLOR OF THE EXCHEQUER

May I respectfully ask what this has to do with home-grown barley?

*COLONEL HOWARD VINCENT

said, it would be in the recollection of the House that it was the Chancellor of the Exchequer himself who introduced the matter, and it was on the right hon. Gentleman doing so that he left the House to fetch the "Statistical Abstract" in order that he might be able to give authentic information. So far from the statement being accurate that the Protectionist countries were in a worse state than free-importing England, the reverse was the fact. The acreage of land under corn in France, and the production of corn in France, increased from year to year. In Germany there was a considerable increase in the acreage under corn, and also in the production of barley. He hoped they would have the advantage of hearing the hon. Member for North West Norfolk, who could tell the House that in the recent Mid-Norfolk election both the candidates advocated the putting of a duty upon foreign barley; and the candidate who at last thought he had gone a little too far for his supporters and withdrew his advocacy of a duty, was ignominously defeated. So far from these being the views of a disappearing party, they were the views of a coming party, and would ultimately be heard on every platform in this country, although he might not live to see the day. Undoubtedly the time would come when both farmers and manufacturers, artisans and agricultural labourers, would recognise the great injury that was being done by the fiscal system that now prevailed, from this free importation of foreign produce and foreign manufactured goods, while we had to bear the heavy expenses of Government, and were heavily taxed through the increased rates on every acre occupied, and on every house inhabited. The Chancellor of the Exchequer, or some one of his successors, would yet have to face this difficulty of agricultural depression and the free import system, which had as much interest for artisans as it had for agricultural labourers.

*DR. MACGREGOR (Inverness-shire)

said he had taken much interest in the Budgets of this year and last year from a national point of view. He had already taken the opportunity to congratulate the Chancellor of the Exchequer upon his present proposals, which appeared to be wise and judicious. There was nothing sensational in the Budget, and, so far as it went, it fitted the occasion exactly. He pointed out last year that the increased tax upon spirits was out of all proportion to that upon beer; and, practically, the Chancellor of the Exchequer had now admitted the fact, for he had said that the weight of taxation upon the cost of spirits relatively to the cost of beer was in the proportion of 700 per cent. on the cost of spirits to from 34 to 40 per cent. on the cost of beer. That showed how indefensible it was that the tax on spirits should have been kept so high, whilst it was so low on beer. As a Scotch Member he felt it was unjust to Scotland that the increased tax should be continued, and the Chancellor of the Exchequer had acted wisely in taking the extra tax off spirits whilst keeping it on beer. Some Members said that if you were taking the extra tax off spirits you ought to take it off beer; but that did not at all follow, because it had been disclosed that, instead of having pure beer, brewed from barley, malt and hops, we are now getting a solution of sugar, which was much cheaper than malt and hops, and that meant a larger profit to the producer. Therefore, it was unfair of the brewers to expect to escape taxation. The Chancellor of the Exchequer had stated the enormous increase in the quantity of sugar used in brewing; and this was a serious matter for the consumer. As a very moderate consumer, and also as a medical man who knew something of the effect of pure beer, as well as the effect of adulterated beer, he warned the public that the beer produced from sugar was a very different article from that produced from malt; and he advised the consumers, that is the public, when they asked for a glass of pure beer, and paid for it, to see that they got it. [Laughter, and cries of "How?"] It was not for him to point out how, but he would go so far as to say it was the duty of the Government to see that an article of diet was not adulterated; it was the duty of the Government to prevent adulteration, which, in other words, meant deceit. To say that a tax on beer depressed agriculture was simply absurd. The depression in agriculture was due, not to the taxation on beer, but simply to foreign competition, and that was due to the Party opposite and their friends who evicted the people from off the land, and expatriated the people until they had become our competitors abroad, and sent home cheaper barley than could be produced in this country. No artificial means would improve agriculture. What was wanted was compliance with the economic laws of supply and demand, that the people should be placed back upon the land, that the land out of cultivation should be tilled. Then we should have consumers on the land, and, instead of paying heavy railway charges to send produce to market, it would be to a greater extent consumed where it was grown. Commodities if overtaxed became unproductive, and it was the same with land. It would not bear a profit for the labourer, farmer, and landlord. Instead of reducing the tax on beer to relieve agriculture, the true solution of agricultural depression lay in the one word, "Rent," which was a tax upon land. To improve agriculture they must reduce rents, to enable the tiller of the soil to make a profit and keep up with foreign competitors. Speaking the other day on the consumption of beer and spirits, he took occasion to say that pure spirits and beer, if moderately used, ought not to hurt anyone. He was not then prepared for the staggering statement that so much sugar was used in the brewing of beer. Adulterated beer or spirits must be highly injurious to the public if they partook of either in any quantity. But while a man or woman either was in perfect health they were better without alcohol in any shape or form. It should be treated as a drug and prescribed by the physician.

*MR. SPEAKER,

interposing, pointed out that the hon. Member was travelling beyond the subject before the House.

*DR. MACGREGOR

said, he would only say that all his professional life he had advocated temperance. But while he advocated temperance he did not advocate the total abolition of beer and spirits. If they abolished them a substitute would have to be provided, and substitutes that might occur to hon. Members might be worse, bodily and mentally, for the community than the reasonable consumption of alcholic beverages purely and properly made. It was in adulteration that the mischief and abuse of beer and spirits consisted. It might be in the recollection of hon. Members that St. Paul said to Timothy: "Take a little wine, for thy stomach's sake." Mr. Disraeli once said he was "on the side of the angels." He himself was, in this matter, on the side of the saints. The brewers might thank their stars that, as regards this tax, they were getting off so cheaply. He advised the Chancellor of the Exchequer on the next occasion to make it 8d. instead of 6d., and take the extra 2d. per pound off tea, This would be preferable to the community, and the brewers would not suffer. What was the cause of the imposition of this tax? Why was it necessary? Had not the Party opposite and their friends insisted upon extravagant expenditure for the Navy? He protested against this extravagant expenditure when it was proposed, and he protested against it now.

*MR. SPEAKER

The hon. Member really must speak to the question before the House, which is the Second Reading of this Bill.

*DR. MACGREGOR

said, he would endeavour to keep to the question, but it was only fair to point out that when the Party opposite had demanded this expenditure it came with bad grace from them to grumble about the taxation necessary to meet it. No article of consumption could stand increased taxation better than beer. In spite of the tax the consumption of beer increased, and the brewers had not suffered. They could well bear this tax, and if it were increased he would support the increase by his vote.

MR. WYKEHAM CORNWALLIS (Maidstone)

said that, as a Kentish Member, he wished to ask the Chancellor of the Exchequer on what foundation he based his statement that this was not an agricultural question? It was contrary to the opinion of the agriculturists of the County of Kent. He and others had during the last ten days attended numerous meetings of agriculturists in Kent to protest against this increased duty on beer, and they had found a unanimous feeling against it. It was resented at the present time with particular bitterness, because agriculturists felt they had had very little sympathy from the present Government. The Chancellor of the Exchequer said that if agriculturists were unanimous he would be glad to help them. There were one or two things about which agriculturists were unanimous, and in which he could assist them. Not only in the County of Kent, but throughout the country they were unanimously of opinion that the Minister who represented Agriculture in that House should have a seat in the Cabinet. The Chancellor of the Exchequer spent a large portion of last Session in promoting an Act which, in the long run, must inevitably injure agriculture; and this year's Budget was to try, by acting in time, to help to redress the difference that existed between realty and personalty in their respective payments to the expenses of this country. There were many other things in which the Chancellor of the Exchequer might help agriculturists. For instance, he might ask the War Office to see that the British Army were fed on home-grown beef. He himself did not understand certain remarks that had fallen on the opposite side of the House. How did the Chancellor of the Exchequer reconcile his Local Veto Bill with the fact that in Suffolk he made it possible for the agricultural labourer to brew beer in his own house, when publicans' licences were taken away?

MR. JAMES LOWTHER

Do I understand that the omission of the word "increase" is an omission that could not be remedied?

*THE CHANCELLOR OF THE EXCHEQUER

That can only be put in after the Amendment stands part of the question.

MR. JAMES LOWTHER

Then I withdraw my Amendment.

Amendment, by leave, withdrawn.

*MR. T. GIBSON BOWLES (Lynn Regis) Moved— That no measure for meeting the Imperial expenditure for 1895–96 will be satisfactory which is based on the estimate of an increased revenue of £1,500,000, from duties so variable and uncertain as the Death Duties as revised by the Finance Act, 1894. The hon. Member said he had merely proposed to move this pro formâ, in order to raise the general question of the Budget, of which the Death Duties formed the principal part. He shared the feeling of the Chancellor of the Exchequer, that the national expenditure was growing serious, but he did not share the opinion of the hon. Member for Inverness-shire (Dr. Macgregor) that it was caused by extravagant expenditure on the Navy. The Chancellor of the Exchequer did not fully show how large his expenditure this year was to be—he stated it at £95,981,030. But there was another £1,000,000 for naval works, and £2,400,000 was to be raised from Death Duties by Imperial taxation to go to the relief of local taxation. These made the total expenditure £99,381,000, or nearly a Hundred-million Budget. According to the statement of the Chancellor of the Exchequer, he would get small increases of revenue from various sources, but these were compensated by decreases, and the net result was a net increase of revenue of £1,500,000, the whole of which was due to the Death Duties. The Budget rested entirely upon that, and it was the duty of the House to consider whether the right hon. Gentleman was likely to realise that £1,500,000, because the Chancellor of the Exchequer said that probably this would be the last time he would speak on these matters in his present responsible position. In other words, he proposed to leave the risk of his estimates to the next Chancellor of the Exchequer, and when the next Chancellor of the Exchequer came in, he being then irresponsible, would reproach him with a deficit of his own contrivance. It was necessary to guard the position of the next Chancellor of the Exchequer, by examining the figures, especially those of the Death Duties, so that they might play Hamlet without leaving the Prince of Denmark out. It had always been a tradition to conceal the working of the Death Duties from the public. When the Death Duties were moderate this might have been sound policy, and more or less defensible. But now, with a system of aggregation and graduation, borrowed from Tom Paine and the French Revolution—but which the French had now repudiated—with new and unheard of methods of finance, it was right to know how the system worked. But the old tradition of concealment continued. It was a remarkable thing that neither from the "Statistical Abstract," nor the Report of the Commissioners of Inland Revenue, nor the Budget statement of the Chancellor of the Exchequer, could adequate information be got. Up to November last the practice when wills were proved was to set forth in documents accessible to the public, not only the gross amount but the net amount of the estate. Since November last that had been changed, and the gross amount only had been given. He did not blame the Chancellor of the Exchequer for that. It was not the right hon. Gentleman's doing. It was due to the policy of concealment of the facts in regard to the Death Duties, which might have been defensible under the old system, when the Death Duties were moderate and levied as other taxes were levied; but under the new system of aggregation and graduation—or a system of one law for the rich and another for the poor—the country had a right to clear and adequate information.

*MR. SPEAKER

I think the hon. Gentleman is not in order in criticising the mode in which the Finance Act, in regard to the Death Duties, is administered.

*MR. GIBSON BOWLES

said that, of course, he bowed at once to the ruling of the Speaker. But he might be allowed to say that it was his intention to criticise, not the administration of the Death Duties, but the mode in which their results were published. In the Quarterly Revenue Returns, for instance, Stamps and Death Duties were lumped together. Nowhere was the total of the Death Duties given—neither in the Budget Speech of the Chancellor of the Exchequer nor the statistical abstracts published yearly, nor in the Report of the Revenue Commissioners—nowhere except in the Finance Accounts. He had listened with bewilderment to the Budget Speech of the Chancellor of the Exchequer. The right hon. Gentleman dealt out a tangle of Death Duty figures in three or four places of his speech. He endeavoured to collate these conflicting figures, but failed, and he was indebted to the courtesy of the Chancellor of the Exchequer for some additional figures, and to the Board of Inland Revenue for still further figures, with a view to arriving at some clear conclusion. He would illustrate the tangle by a few facts. The Chancellor of the Exchequer when comparing, in his Speech of May 2nd, the Death Duties of one year with another, said that "the total of those Duties—that is, Probate, Account, Estate, Legacy, and Succession Duties"— was in 1893–4 £7,578,000. Not at all; it was not that sum. The total, as given in the Finance Accounts, was£9,941,855. The right hon. Gentleman again told the House that for 1894–5 the actual yield was £8,727,500. Not at all; it was £10,862,000. The figures of the right hon. Gentleman showed a difference between the two years of £1,149,500, whereas the real difference was £920,145. By leaving out of account the part of the Death Duties which went in aid of local taxation, both the totals of the two years and the differences between them were falsified. The amount paid to local taxation in 1893–4 was £2,300,000; in 1894–5 it was £2,100,000. Formerly the contribution to local taxation was one-half the Probate and Account Duty. Now it was one and a-half per cent. on the value of property that would have been subject to Probate and Account Duty if that Duty still existed. Who settled the exact amount of such property he did not know. It was all done in the secret recesses of the Inland Revenue Office, and no figures were published to show whether it was done on a right or on a wrong system. The Chancellor of the Exchequer claimed that his Estimates last year of the yield of the Death Duties this year were "a marvellous achievement," since they had turned out to be so very near the exact results. But the right hon. Gentleman admitted that four serious disturbing influences had affected his calculations—that whereas he counted on seven months' return he got only five; that there were 75,000 fewer deaths; that the values were lower, and that there had been great delay in delivering the accounts. If those four great disturbing influences which the right hon. Gentleman had not reckoned with had been at work, and that notwithstanding the right hon. Gentleman came out close to the mark, it proved to demonstration that his original estimate was wrong. The truth was that one blunder compensated for another. But let the House consider the figures which were given by the Chancellor of the Exchequer. The right hon. Gentleman said that the Death Duties, as recast by the Finance Act of last year, "were estimated to yield in 1894–5 £8,800,000, or an increase of £1,222,000." An increase of £1,222,000 was the estimate of the right hon. Gentleman. But what happened? As he had already said, the total yield in 1893–4 was £9,941,855, and by adding to that the estimated increase of £1,222,000 they got an estimated yield for 1894–5 of £l 1,163,855, whereas the actual yield for 1894–5 was £10,862,000, or £301,855 less than the right hon. Gentleman's estimate. There was, therefore, a difference between the estimates and the realisation of the Chancellor of the Exchequer, not of the small fraction of £32,000—as the right hon. Gentleman stated in his speech on May 2nd—but of ten times as much, or of £301,855 on a total estimated increase of £1,222,000. The achievements of the right hon. Gentleman were, consequently, not so marvellous as he would have the House believe. And this misleading result had been laid before the House because the Chancellor of the Exchequer had given partial and incomplete figures and made partial and incomplete comparisons. But he would leave the golden, egg and come to the goose herself. The most serious part of the whole matter was the effect which the Death Duties had had on personalty. According to the Returns, about four-fifths of all the property subject to the Death Duties was this personalty. Out of a desire to assist the Chancellor of the Exchequer, he had published in some newspapers, early this year, and before the Budget came on, an estimate that personalty for the purpose of taxation in 1894–5 as compared with 1893–4 would be found to have decreased owing to the influence of the Finance Act, by some £19,000,000. The Chancellor of the Exchequer admitted that the decrease had been "over £18,000,000," so that he (Mr. Gibson Bowles) had made a pretty accurate guess as to the effect of the Death Duties on personalty. But let the House mark the effect of this decrease on the contributions in aid of local taxation. In 1893–4, the amount was £2,363,059; and in 1894–5, £2,153,059, or a decrease of £210,000, so that this new system of taxation which avowedly doubled the charges on land with one hand, with the other took away a large part of the contributions towards the local taxation which land had mostly to bear. This fall in the contribution was not at all anticipated by the Chancellor of the Exchequer. Speaking of the contribution on the 16th April 1894, the right hon. Gentleman said— I propose for the present to continue it by an equivalent which is calculated to brine about similar pecuniary results, through an arrangement which will secure to the local authorities out of the new Estate Duty the same contribution as that to which, under the law, as it at present stands, they are now entitled. And the right hon. Gentleman added— We estimate an ultimate increase upon the Death Duties of between 3¼ and 4 millions. They will then amount to about £4,000,000 of which £2,500,000 goes to local taxation. Finally, on June 22, 1894, in Committee on the Finance Act, speaking on an Amendment moved by the hon. Member for Horsham to Clause 16, the right hon. Gentleman said— The hon. Gentleman has said truly that under the Act of 1888, half the Probate Duty is assigned for the assistance of local taxation. But that amount is preserved exactly as it is under this clause; that is to say, half the probate grant with the increments that may accrue on the growth. The result, however, had been that, instead of similar pecuniary results or the same contribution, there were dissimilar results and a different contribution, for, while the amount of the Death Duties was greater, the contribution to the local authorities was considerably less.

*THE CHANCELLOR OF THE EXCHEQUER

Local taxation does not get half the Death Duties; but half the Probate Duty. If the hon. Member would try to understand the very elements of the matter he would not make those mistakes.

*MR. GIBSON BOWLES

thought it would be well if the Chancellor of the Exchequer understood the question. He rested his case upon this—that while there had been a large increase of Revenue from the Death Duties, local taxation got £210,000 less than last year. This was no doubt due to the drop in personalty. The right hon. Gentleman the Chancellor of the Exchequer, had given three explanations for this drop in the returns of personalty. In the first place, he had attributed it to a decrease in the value of the securities. That was not the case, however. He had received information from bankers and Stock Exchange authorities that, so far from there having been a decrease in the value of securities, there had actually been an increase in the value during the past year. Therefore, that explanation abandoned the right hon. Gentleman and came over to his side. There should have been an increased instead of a diminished yield under this head. In the second place, the right hon. Gentleman said that there had been a decrease in the deaths. The right hon. Gentleman supported this explanation by stating that in the last three quarters of 1894 there had been, in England and Wales, a mortality of 350,523, against a mortality of 425,667 in the three quarters of 1893, making a difference of about 75,000. But this calculation was incomplete. Why had the right hon. Gentleman taken only three out of four quarters of each year for only two out of the three countries for comparison?

*THE CHANCELLOR OF THE EXCHEQUER

I took the four quarters of each year.

*MR. GIBSON BOWLES

said, that the right hon. Gentleman had only given the figures for the three quarters of each year, and had given reasons for confining his figures to those periods. He, on the other hand, had taken the four quarters ending March 1894, during which the mortality of the United Kingdom was 739,269, and compared them with the four quarters ending March 1895, during which the mortality was 680,867, showing a difference of 58,402.

*THE CHANCELLOR OF THE EXCHEQUER

The hon. Member is only confirming the figures I have already given.

*MR. GIBSON BOWLES

said, that the right hon. Gentleman was again wrong. Here, then, there were, not 75,000, but 58,402 persons who ought to have died but did not do so. But even supposing they were to kill those 58,402 persons in the financial year to please the right hon. Gentleman, was it to be assumed that all those persons were millionaires? Certainly not. Not one in ten of them left any property at all—and a large proportion of those who did left only small properties, while only 2,000 belonged to the wealthy classes. This, however, would only account, at the outside, for some £8,000,000, and what had become of the other £10,000,000? The third reason that the right hon. Gentleman had given for the fall in personalty was that there had been great delay in the application for Probate. He had already said that the right hon. Gentleman was wrong, and that there had been no delay in the application for Probate. He had quoted extracts from the daily newspapers to show that wills were proved on the whole as they were before, namely, within some two months of the deaths, some, indeed, in three weeks. But the damning fact remained that over £18,000,000 less was returned last year of personalty on which these duties could be levied, whereas there should have been through the normal increase some £8,000,000 more, and thus a total of some £25,000,000 had been withdrawn from taxation by the effect of the new duties imposed by the right hon. Gentleman, He had always predicted that that would be the case, and the right hon. Gentleman had always decried it, and the result must have been a surprise to the right hon. Gentleman of no very agreeable kind. Let him endeavour to point out to the right hon. Gentleman what was the real reason of this enormous amount of property being withdrawn from taxation. In the first place, a great amount of English capital had been driven abroad by the financial operations of the right hon. Gentleman; and, in the second place, he had been assured by a well-known banker that large sums of foreign capital which had been left for generations in his hands by foreigners—great foreign families and foreign sovereigns—in the belief that the money would be safe in this country from brigands, revolutionists, and anarchists, had been removed, and because the owners did not believe that England was any longer a safe place in which to leave capital, seeing that the principles of the brigand, of the revolutionist and the anarchist were now professed on the Treasury Bench. It must be remembered that withdrawals, avoidances and evasions had only begun, that every day was likely to add to their effect, and that as yet but few had told upon revenue. The question was whether the Revenue would recover this loss in the return of personalty. The right hon. Gentleman the Chancellor of the Exchequer himself appeared to doubt it, because he had only estimated to pay during the current year £2,400,000 to local taxation, which was 1½ per cent. on the whole personalty, so that the right hon. Gentleman must have estimated the whole personalty at £160,000,000, or less than in 1893–4, a normal year, and less than 1892–3, or 1890–1, or 1891–2. By the normal increase under the old system the amount would have been £180,000,000. But would the right hon. Gentleman even get his £160,000,000? He would not unless his estimates were more accurate this year than they had been last year. Of course the right hon. Gentleman might be saved by an epidemic among millionaires, though even that would not remove the objection to this uncertain and variable duty. He had made some other forecasts to which he would again refer. The right hon. Gentleman was kind enough to keep a collection of his (Mr. T. Gibson Bowles) speeches, and whenever the right hon. Gentleman found himself at a loss he tried to get out of the difficulty by quoting from one of them. The other night the right hon. Gentleman had quoted from one of them that was so old that he himself had forgotten it, and, as usual, the right hon. Gentleman had not quoted even that fairly. His general argument was founded upon a comparison between 1893–4 and 1894–5, as regarded expected increases. In a letter of his which had appeared in The Morning Post of the 25th April last, he had said that probably there would be an increase in the amount of the Death Duties during the June and December quarters of 1894, but that the subsequent quarter would show a diminution therein. Well, while the June quarter showed an increase of £139,786, the September quarter of £311,652, and the December quarter of £440,331, the March quarter only showed £26,332. Was not that a diminution? He admitted having overlooked the effects of the panic in his speech, but so also had the right hon. Gentleman, for he himself, on May 10, 1894, had estimated that there would be a loss of Legacy and Succession Duty (on estates under £1,000) of £100,000, whereas these particular duties had increased by £274,000. This was due to the panic, and to the panic the right hon. Gentleman owed the fact that he had received £274,000 more than he expected. Deduct the amount caused by the panic. The right hon. Gentleman had been wrong in his estimate by £576,000, whereas he himself had been wrong by some £346,000, and this, although the right hon. Gentleman had the official figures before him, to which he, of course, had not had access. The right hon. Gentleman had been kind enough to say that he (Mr. Bowles) was a perfectly foolish person, that he afforded 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. Surely the right hon. Gentleman had forgotten. He had asked the right hon. Gentleman to withdraw the impounding Clause 8 of the Bill, to which the right hon. Gentleman replied that he would not do so. But he had to do it eventually. In that case he should like to know who had made the mistake, and who had formed the sound judgment?

*MR. SPEAKER

The hon Gentleman's remarks are rather remote from questions of finance.

*MR. T. GIBSON BOWLES

thought he might be allowed a little latitude in replying to a personal attack. Then there were the foreign executors, as to which he told the right hon. Gentleman he would have to abandon the attempt to get Duty from them, which he said he would not abandon, but at last had to. Who, then, made the mistake? Who expressed sound opinions? Again, it would be remembered what happened in regard to Clause 15. The right hon. Gentleman, being driven by him (Mr. Bowles) to move a further Resolution thereon, came down and actually had to move, not the Resolution which he had himself put upon the Paper, but a different Resolution, which he (Mr. Gibson Bowles) had suggested. [A laugh.] That was an historical fact, and the right hon. Gentleman knew it. Who made an extraordinary mistake there? Who held sound opinions? It was hard the Chancellor of the Exchequer should attack him after the assistance he had rendered the right hon. Gentleman. Furthermore, the Chancellor of the Exchequer said the Legacy Duty was not touched by the Finance Act. Had he forgotten Sections 1 and 16——

*MR. SPEAKER

Order, order! The hon. Member is now proceeding to refute observations made by the Chancellor of the Exchequer with reference to the Death Duties.

*MR. GIBSON BOWLES

said, he would leave that point; he had no doubt he would have other opportunities of dealing with it. As to the future, if the Chancellor of the Exchequer's estimate was no more accurate than it was last year, he would not get what was anticipated, nor would he get it if the March quarter proved, as it often did, an index for the forthcoming year. In the latter case, instead of getting £12,500,000, he would not get £11,000,000. Still, he might be saved by an epidemic, or by millionaires. So far the Death Duties depended much on the weather, which in 1891–2 sent up the property returned for taxation by £25,000,000, and the receipts of the Revenue by a million and a-quarter. But this only showed the variable nature of these Duties and the risk of relying on them for the foundation of a Budget. It would take several years yet to see the full effect of the new Duties, but he thought avoidance and evasion would largely increase.

*MR. ARTHUR JEFFREYS (Hants, Basingstoke) moved— That no Bill for the Finances of the year will be satisfactory which does not provide for the application of the Land Tax towards the reduction of the local taxation in the counties in which it is levied. He was pleased to hear the Chancellor of the Exchequer say he had great sympathy with the Motion, and that if he had the money he would be glad to remit the Land Tax.

*THE CHANCELLOR OF THE EXCHEQUER

Not exactly to remit it, but to deal with it, and to make it a less unjust tax than it is regarded to be.

*MR. JEFFREYS

said, that what he meant was remit it to the counties. Originally the Land Tax was imposed not only upon land but upon personal property, and at that time it was 4s. in the £ on land and 24s. per £100 upon personal property. Every year from 1798 to 1833 an Act was passed constituting the Land Tax part of the revenue of the country. In 1833 the tax upon personal property was abolished, but the tax upon land was continued. The quota from each period remained exactly the same, and therefore, as the assessment of the parish went down, the rate per £ of the Land Tax increased. The consequence was that in many rich parishes where there was a very large rateable assessment, the Land Tax was a very small matter indeed: it was only 1d., in some cases only a ¼d. in the £ But in some parishes, where the assessment had been considerably reduced, the same amount had to be taken out of the parishes, and therefore the Land Tax was very high indeed. Let him give a specimen of the burden of the Land Tax in a parish in Hampshire. He ought to say this was not personal to himself, because on his estate the Land Tax was redeemed. In the parish he had in mind he found a gentleman's Income Tax under Schedule A, only amounted to £7 14s. 2d., whereas the Land Tax on the same property was no less than 3s. 9d. in the £ and amounted in the aggregate to £48 2s. That showed what a very severe tax this was upon a parish where the assessment was low, and in these days agricultural land was assessed at a low rate in most parishes, and the Land Tax had consequently become a very severe burden. His contention was that if they raised a certain amount of money from the land, and excused personal property, the amount raised ought to be applied to the counties in which it was raised, towards a reduction of local taxation. The Chancellor of the Exchequer said just now there was one point upon which he wished to be assured, and that was what the agriculturists wished. They did not agree on some points, but he was quite certain they unanimously agreed with the proposition that the Land Tax should be applied in the counties in which it was levied towards the reduction of local taxation. Almost every Chamber of Agriculture in the country had passed a resolution to that effect. In April the Central Chamber of Agriculture unanimously resolved:— That all land devoted to agriculture should be assessed to local rates at one fourth its annual value. and:— That the Land Tax levied in the respective districts be handed over to the local authorities to be applied towards the deficiency caused by the previous sub-section. He believed 600 parishes had redeemed the Land Tax, and therefore, it would be very unfair to remit the tax altogether. He did not ask for entire remission. Another argument against his proposition was, that many counties would get a large amount, whereas others would get a very small amount; but that was only a matter of accident. The same thing might be said in respect to licences. Some counties received a large amount from licences, and others only a small amount. In Hampshire, for instance, the proceeds from Local Taxation licences amounted to £58,000, while in Herefordshire they only came to £38,000. That was merely a matter of accident and was not a proper argument to use against his proposal. He hoped he would be allowed to read the opinions of former great authorities in the House on the subject of this tax. In the Debate in 1798, Mr. Pitt said:— I am ready to admit that I consider it to have been an original defect in the present plan of re-partition, that no periodical revision was fixed. I think it would have been wise to have made such a provision. Sir Robert Walpole in the Debate of December 1732, said:— There is no tax that ever was laid upon people of this nation that is more unjust and unequal than the Land Tax. The landholders bear but a small proportion to the people of this nation, yet no man contributes to this tax but he that is possessed of a landed estate. The Land Tax is the most grievous, the most unequal, and the most oppressive tax that was ever raised in this country, That only showed what former Members and high authorities in the House thought of the Land Tax, and he was astonished that, year after year hon. Members had acquiesced in this tax being put into the Imperial Exchequer, because, if it was a tax at all it was a local tax and ought to be applied locally. There was another matter on which he desired to ask a question. He noticed that, whereas the amount of the tax last year was £1,015,000, it was put down this year as £1,020,000. But the tax was a fixed quantity.

*THE CHANCELLOR OF THE EXCHEQUER

explained that the difference arose because there was sometimes a retardation in the collection.

*MR. JEFFREYS

said, the explanation was quite sufficient, because the Chancellor of the Exchequer agreed with him that the tax was a fixed quantity. He wished the Land Tax to be applied towards the reduction of local taxation, which had become such a heavy burden on the counties that unless some relief were given by the Chancellor of the Exchequer he did not see how agriculture was to hope at all. It was true that the rates in the counties were low compared with the rates in town. But, on the other hand, a man who farmed a large extent of land and paid £200, but lived in a house that was rated at less than £20, did not pay rates on the house alone, but on every single acre that he occupied. He was supposed to make £200 a year, and had to pay rates upon practically the whole of his income. The tradesman or doctor who lived in the same parish, and who might be making an equal income, paid not on his income, but on the rateable value of his house. Thus, if the rate were 2s. 6d. in the £ and his house was rated at £24, he would pay £3, against £25 paid by the farmer. He agreed, however, that contributions to the whole local rates were not of much benefit to agriculturists, because occupiers of houses and the railways got a large share of them. What he proposed was, that agricultural land should only be rated at a quarter of its value instead of the whole. That would be a direct remission to agricultural land. It might be said that would be a very unusual thing to do. But there was already a precedent for it. Land only paid a quarter of the sanitary rate. The same thing held good with regard to municipal rates, in cases where there was agricultural land within a municipality. The precedent was also carried out with regard to the Income Tax. The Income Tax levied on the farmer was only 3d., instead of 8d., but no remission was made in regard to the great bulk of rates—the Poor Rate, the Police Rate, the Highway Rate, and the School Board Rate—rates which were of no use whatever to the actual acres cultivated. He would also like to point out that land already paid a double Income Tax under Schedules A and B. It might be said that his proposal would require a very large amount of money, but the amount was not so large as was thought. The total assessment of agricultural land in England and Wales was £33,000,000 sterling, and the average rate, excluding the School Board Rate, was 2s. 3d. in the £ the amount yielded thus being £3,800,000; therefore, if they reduced the assessment to one-fourth the present amount, there would be a deficiency of £2,850,000, but towards that the Land Tax would give £1,020,000, so that the Chancellor of the Exchequer would not have an immense amount to find. If they were to do any good to the land, it must be by reducing the taxation upon it. He was not one of those who advocated protective duties—he did not think the country would stand that, and he did not know that it would be for the benefit of the country—but by reducing local taxation they would help every single man who farmed an acre of land in every single county in England and Wales. It seemed to him that was the only true way of giving any relief to agriculture, and therefore he hoped that the Chancellor of the Exchequer, if he could not see his way to give that relief this year, would, at any rate, be able to do so next year.

*MR. HENRY LOPES (Grantham)

desired to enter his most emphatic protest against the Budget which had done nothing to remedy the unjust incidence of local taxation as between realty and personalty. He considered it the imperative duty of those who sat on the Opposition side of the House to show, not only that no additional burdens should be imposed on the land at the present time, but, that the question with regard to the incidence of taxation as between real and personal property had become a much more serious question since the passing of the Budget of 1894. The Chancellor of the Exchequer had always expressed great sympathy with the distress in agriculture, but that sympathy had always been confined to words, and had not been put into practice; it had been confined to this House, and had not been mentioned outside. They had, nevertheless, hoped that when this Budget was introduced some steps would have been taken to re-adjust those burdens which, at the present time, fall entirely on the land. He ventured to say that the entire omission of agriculture or of the incidence of local taxation from the Budget might be characterised as showing an amount of callousness and entire want of appreciation of the severity of the distress now being endured by the agricultural interest, which was almost incredible. He regretted to find that the Government had no experience of the gravity of the situation. The Royal Commission appointed in order to relieve the Government of any responsibility, had naturally failed to open their eyes. He hoped he would not be accused at the present time of belonging to a class which was anxious to avoid taxation. Last year, night after night, the Chancellor of the Exchequer taunted him and his friends with the fact that the agricultural interest was unwilling to be taxed in a rational and reasonable manner. He ventured, however, to say that the landed interest had never raised such a contention as that. Every penny derived from land ought to contribute its just quota to local and Imperial purposes. All that they had ever contended was, that they should not be compelled to contribute more than their just share. Land ought not to be rated or taxed, either out of proportion to the real value of the land, or out of proportion to the amount paid by other property. Whenever the relief of local taxation had been broached, the Government had always replied that no remedy could be applied so long as the gross anomaly between real and personal property in respect to the Death Duties existed. That answer was no longer valid, and their claims for a reconsideration of this question had become alsolutely irresistible. Personal property ought to be assimilated to real property in regard to local taxation. It was not, at the present time a question as to whether rates had been increased or decreased: it was now merely a question of fairness in the matter of equalisation between one description of property and another. It was not a question of subvention. It was no longer possible for the Chancellor of the Exchequer to say that £7,000,000 had been given to relieve of local taxation, and that they had no right to demand any more; because that was given on the old basis which the Government had upset. The Government had destroyed the settlement of 1853, and, in their Budget of 1894, had done away with the concessions which the right hon. Gentleman the Member for Midlothian had made in favour of land. Those concessions had been granted because in his opinion land was more heavily taxed at that time than personalty, both with regard to local taxation and also with respect to the Income Tax. Those concessions were valuable. A successor to real property over £10,000 value paid only 2½ per cent., instead of 4 per cent. He was taxed upon the life interest, and not upon the capital value, and was given 4 years to pay in without interest. The Chancellor of the Exchequer had taken these advantages away, and what had he given in exchange? A reduction in the Income Tax Assessment, one-eighth in regard to land, and one-sixteenth in regard to houses. For those small advantages they were extremely grateful to the Chancellor of the Exchequer, but they were not equal to the advantages which they had previously enjoyed, and which were so ruthlessly abolished by the passing of the Budget of last year. His complaint was, that the Chancellor of the Exchequer had not carried out the principle of equalisation as a whole; and if the right hon. Gentleman did not see his way to carry out the equalisation in its entirety why did he take it up piecemeal in 1894? He agreed with the right hon. Gentleman so far that it would be unwise to give any further subvention—to give any further sum from the Imperial Exchequer to local taxation. They were told that only one-fifth of the £4,000,000 granted from the Imperial Exchequer for the relief of local taxation went to the land, in this state of things it was high time that the question of subventions was left alone altogether, and that agriculturists looked for relief from another source. He agreed with that. There was another reason for this than that just given. He rather fancied that the agricultural community—the farmer and the labourer—drank as much beer, smoked as much tobacco, and consumed as much tea as the rest of the community, and therefore that they furnished a very fair proportion of that money which was afterwards allocated for the relief of local taxation He thoroughly agreed with the Chancellor of the Exchequer in that matter, but he would point out to the right hon. Gentleman that there were other means of relieving the land, and one was that the Imperial Exchequer might take over entirely the education of the country, which was a national object, or the relief of the poor, which had already been recommended by a Royal Commission. It was because he felt that, at any rate, the agricultural interest would receive some slight relief from local burdens if the proposal of his hon. Friend was carried that he cordially supported the Amendment. So far as he understood the Chancellor of the Exchequer, the right hon. Gentleman had himself admitted that the Land Tax was an unjust and unfair one. There was no doubt that its incidence was more severe in England than in Scotland. He hoped that although the Chancellor of the Exchequer might not be inclined, or might be unable to do anything in the matter this year, he would give a promise that, if the unexpected should happen and he occupied the same position next year, he would at any rate consider the question and do what he could to meet the request of his hon. Friend.

*THE CHANCELLOR OF THE EXCHEQUER

said, the hon. Gentleman had asked him what he would do in the next Budget. He felt no difficulty in giving a promise that he would do his best to reconsider the question of the Land Tax, because, as he had said before, he thought it was one of those taxes that could least be defended. All taxes were odious, but he admitted that there were greater inequalities with some than with others. The Land Tax was one of them, and he had no hesitation in saying that it required to be recast and revised. The Mover and Seconder of the Amendment had, however, raised a much larger question, and he could not answer for the action of those who might happen to follow him in his position. The hon. Member who had just sat down had opened up prospects that might or might not commend themselves to those who might have charge of the finances of the country. Imperial taxation was already sufficiently heavy. The hon. Member raised the point as to where the money required to relieve agriculture was to come from. It would come in a very large degree from those whom it was intended to relieve. That was the fact, and he wished hon. Members would only reflect, when they made those demands, how the gap was to be filled. It was his firm belief when he heard the great additional demands that were made upon Imperial taxation, as had lately been done day after day and night after night, that people seemed to imagine that there was a sort of artesian well called the Consolidated Fund, which came out of the bowels of the earth and sent up an inexhaustible supply of money to be poured into the Exchequer. That was really the basis of all those demands. But where did that fund come from? It came in a very great degree from the pockets of hon. Gentlemen opposite, as well as from those of other people. In making fresh demands on the Consolidated Fund, the money, in his opinion, must inevitably come in the largest degree from direct taxation in one form or another. There were great complaints, and he did not wonder at it, of the high rate at which the Income Tax stood. It certainly stood much higher than he wished to see it. But they might depend upon it that the more they piled up those demands upon Imperial taxation, the higher they would find the Death Duties grow, the higher they would find the Income Tax become, and the very persons who were seeking to relieve in pennies would inflict on themselves fines in pounds. Hon. Gentlemen opposite would do well to reflect that the relief they obtained from local taxation would be trifling compared with the burden they would cast upon themselves in the shape of Imperial taxation, and of this they would, in the long run, have to bear their share. The Amendment before the House had reference to the Land Tax, and required that it should be reconsidered and recast. He had already admitted that this ought to be done; he had thought so for some time, and should have been prepared last year to reconsider the question, but he had to deal with larger matters. This year he could not deal with it because he had not a sufficient margin at his disposal to enable him to do so. He hoped that the assurance he had given would satisfy the hon. Member, and that he would not, at all events, compel him to vote against the Amendment by going to a division upon it, because he would then have the judgment of the House against a revision of the land tax. The adoption of the Amendment would practically be the defeat of the Budget, and, holding the opinions he did, he should be very sorry to be compelled to vote against the Amendment and to have recorded in the journals of the House a condemnation of the Amendment in the sense in which he did not wish to see it condemned.

MR. GOSCHEN

congratulated his hon. Friends on the fact that a distinct assurance had been extracted from the Chancellor of the Exchequer—a pronouncement in favour of some remission of a tax which bore hardly upon agriculture. His hon. Friends must consider whether it would be better to hold the right hon. Gentleman to the views he had expressed than to compel him to register his vote against the Amendment. He thought that if he were in the place of his hon. Friends he should prefer to see the Chancellor of the Exchequer bound by the declarations which he had made in favour of dealing with the Land Tax rather than that those declarations should be modified by compelling him to vote against the Amendment. But that was a point for his hon. Friends to decide. All he could say was that he thought they had cause to be satisfied with what had been said by the Chancellor of the Exchequer, who at one time was disposed to attack every kind of concession made to the land as favouring to what he used to call Tory landlords. He had now come round to the position in which he would gladly do something for the agricultural interest. He was afraid that in former times to have proposed a repeal of the Land Tax would have been treated as if it had simply aimed at the landlords' as against other interests, but now they had got a new departure. The Chancellor of the Exchequer, speaking with the greatest authority, had now come to the conclusion that agriculture demanded some recognition. As misfortunes had fallen upon that interest, it was right that the House should take its claim into recognition. He was glad to be able to say that they had now got it on record that both Parties in the House were pledged in the direction of a reconsideration of all questions relating to the taxation of land, inasmuch as agriculture stood at present in such an exceptional position. It had been too much the custom of hon. Members opposite, in regard to his own previous declarations, to quote what he had said 20 or 25 years ago with regard to the land as if it were applicable at the present time. When he had had the honour, 20 or 25 years ago, of submitting a Report to the House upon taxation on land, everything was in an entirely different position to what it was now. Rents had fallen, and the country was alive to the distress of the three classes—landlords, farmers, and agricultural labours—whose interests, as was becoming more and more recognised, were solid and identical. Last year the Chancellor of the Exchequer had taunted the landed interest with wishing to escape from the burdens which he placed upon them with regard to the Death Duties, and had been disposed to think that the country gentlemen of England did not wish to contribute their fair quota to the increased expenditure necessary for the defence of the country. He looked upon the present attitude of the right hon. Gentleman as a changed attitude; the events of the last year had shown him that all classes interested in agriculture required to be treated with more tenderness than he was disposed to show last year. The concession of opinion which he had made with regard to the Land Tax—and he admitted that the right hon. Gentlemen could not make a concession of an actual presentation of money—was a very valuable indication, not only in regard to the tax, but because it acknowledged that there had been force in the demands of the agricultural interest to be treated somewhat leniently with regard to Imperial taxation. He could quite understand that the right hon. Gentleman could not permit the vacuum which would be made in his Budget by the remission of this tax, which, as he had said, would be difficult to replace. He submitted to his hon. Friends that it would be wiser to accept the declaration of the right hon. Gentleman in favour of the remission of the Land Tax rather than to go to a Division; but in either case they had won a success.

MAJOR RASCH (Essex, S. E.)

said, the question of the Land Tax was of extreme importance to those in the agricultural districts. He had long thought that the Chancellor of the Exchequer was by no means hostile to the agricultural interest, and he believed he meant well by them, and would carry his words into effect if he could. In the reduction of local taxation in general, and of the Land Tax in particular, lay the only chance of agricultural salvation. Hon. Members on the previous day had seemed to think that by a Land Tenure Bill the Millennium might be brought about, but he was perfectly certain they were wrong. It was not by introducing the dual system which they had in Ireland, or by making things somewhat unpleasant between landlord and tenant that any relief could be found for agricultural ruin. Whatever the Chancellor of the Exchequer might promise to do for them he was afraid he would not take certain hon. Gentlemen below the Gangway into the Lobby with him. He remembered that, in the Parliament of 1886–92, the hon. Member for Northampton led a very considerable body of Gentlemen into the Lobby solely for the purpose of increasing the Land Tax, and putting a fresh burden on agriculture. He wished the hon. Member for Northampton had got half-a-dozen farms in Essex out of cultivation; if he had he would have a more intimate knowledge of the question. What was the Land Tax? It was imposed in the Middle Ages entirely as a war tax, because agricultural property was then the only thing of real value, whereas now it was the only thing which had no value at all. Property which existed in land was now practically valueless, and surely that was a reason for a readjustment and reconsideration of the Land Tax. The local taxation upon the farmer was much heavier than it was upon the professional man, and he thought the Land Tax in each county should be given in aid of the reduction of local taxation. They were not ungrateful for the efforts of the late Chancellor of the Exchequer to give them aid, but he had always thought that the system of grants in aid was to put 1s. into one of a man's pockets and to take 2s. 6d. out of another. The agricultural interest generally, however, did not, he believed, take that view. The other day he had asked the Chancellor of the Exchequer what he would do when the whole of Essex went out of cultivation, and the right hon. Gentleman made no answer, but the situation in Essex and in other parts was so serious as to justify the tone which the right hon. Gentleman had now adopted. Hon. Members representing agricultural districts would now feel that, like the importunate widow, they had got something by continual asking.

*MR. F. S. STEVENSON (Suffolk, Eye)

expressed satisfaction that no single Member had risen to defend the existing Land Tax. The right hon. Gentleman the Member for St. George's, Hanover Square, had twitted the Chancellor of the Exchequer with having changed his attitude on this point, but those who heard the speech delivered by the Chancellor of the Exchequer in the March of 1893, when he (Mr. Stevenson) brought forward a Resolution on this subject, could have made a forecast of the speech which the right hon. Gentleman had made that night. On the former occasion the right hon. Gentleman raised certain objections, on points which could be easily remedied, to the Resolution, but there were no objections raised by him to the principle that the tax was unfair in its assessment, and the mode by which it was levied and inflicted a great hardship upon the smaller cultivators especially, owing to the decrease in the value of land, and the fact that, while the valuations of the large properties had been reduced, the necessity for levying fixed quotas from the parishes led to heavier contributions being exacted from the smaller owners. He believed that the system of a fixed quota lay at the root of the whole difficulty. The proportion raised was enormously greater in some counties than in others. In proportion to population and valuation Lancashire and Yorkshire paid scarcely anything, whilst an enormous amount was paid by the Eastern Counties in the shape of land tax. Although he fully recognised that the Land Tax was grossly unfair at the present time, he was by no means satisfied that the remedy proposed in the Amendment was the best. No doubt it was the simplest, and could be most quickly brought about, and in the absence of any other mode of dealing with the Land Tax, would probably be the most satisfactory. But if it were possible for the Chancellor of the Exchequer, with the aid of the Board of Inland Revenue to effect a revision of the Land Tax by reducing the amount payable by agricultural parts of the country, as compared with such Counties as Lancashire and Yorkshire, that would be an infinitely better plan. In March of 1893 the Chancellor of the Exchequer gave a promise that the Board of Inland Revenue would not only endeavour to examine into the hardship of the quota system, but would also direct their attention to devising some mode by which the system of levying the Land Tax could be altered. He did not know to what extent those inquiries had made progress, but if the speeches delivered that night, and the declaration of the Chancellor of the Exchequer led between this and next year in that direction, he thought that a good object would have been served by that Debate.

*MR. ABEL H. SMITH (Christchurch)

drew attention to the case of certain small freeholders in the New Forest District of Hampshire, who felt the present Land Tax press very heavily upon them. Many of these small holders had never been called upon to pay the Land Tax until January, 1894, and they found the burden almost more than they could bear. He regretted very much that the Chancellor of the Exchequer had not found himself able to give any relief this year in the direction suggested by the Amendment, but he could assure the right hon. Gentleman that should he occupy the same position he now filled another year, he would not be allowed to depart from his promise. The right hon. Gentleman had stated that the relief given to local taxation by subventions from the Imperial Exchequer had not been of much benefit. He would, however, point out that the payers of Imperial taxation were far better able to pay these burdens than the payers of local taxation, because person property had to bear its share of Imperial taxation. He was very sorry that no relief was given this year to local taxation, because it was really becoming a serious question, in a great many parts of the country, how long the land was going to be kept in cultivation at all; and if the present low prices continued it was inevitable that enormous quantities must go out of cultivation. If that unhappily should prove the case it would be nothing short of a national disaster. In these circumstance he was sorry nothing had been done to give relief to those who were so sorely pressed at the present time, and they should look forward to the next Budget to give assistance in this direction.

MR. WINGFIELD-DIGBY (Dorset, N.)

expressed satisfaction at the words of comfort to the agricultural world which had fallen from the Chancellor of the Exchequer. He controverted the argument that grants in aid were simply putting into one pocket what had to be paid out of the other, and were no real help to the agricultural world—pointing out that there were some people who paid Imperial taxation who did not at the same time pay rates. As the rates fell entirely on real property, he failed to see how grants in aid could be said to be payments paid out of one pocket and put into the other pocket of the same taxpayer. He was glad to hear from the Chancellor of the Exchequer his definite statement that the Land Tax was one of the least defensible taxes there was. On behalf of his agricultural friends, he thanked the right hon. Gen-very much for his good intentions. He was going to say he hoped the right hon. might have the opportunity of putting them into effect, but he hoped in the interest of the agricultural world, that, at any rate, somebody would put these good intentions into effect on the first available opportunity.

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

called attention to the fact that, on the east coast of England, there were parishes which had been largely washed away by the encroachments of the sea, and urged that it was a great injustice that the inhabitants should have to continue to pay Land Tax fixed for a whole parish, one half of which had thus disappeared. A legal friend, to whom he had mentioned such cases had told him he ought to persuade the Treasury to charge that part of the land which had been washed away upon the foreshore. Obviously it was a monstrous thing that his constituents should have to pay taxes on land that did not exist, and has not existed for a long time. He hoped that the question, about which he had had correspondence with the officials of the Inland Revenue, would really receive the right hon. Gentleman's attention.

MR. P. A. MUNTZ (Warwickshire, Tamworth)

said, that for along period it had been imagined that there was very little sympathy in the heart of the Chancellor of the Exchequer towards agriculture; and it was, therefore, all the more gratifying that they had obtained from him an expression of sympathy. There were differences between different sections of the agricultural community, with regard to the causes of the depression and the remedies that ought to be applied. One of the weaknesses of the agricultural community was, that you never could get them to act together. If they would only realise the enormous influence they would have by being united, probably agricultural depression would not be the urgent question it was to-day. But whatever divisions of opinion might exist, upon one thing all sections of the agricultural community were agreed, and that was the relief of local taxation. Therefore, they could all, with singular unanimity, support the Amendment of the hon. Member for Basingstoke. He hoped that, while continuing the Debate for a short time, they would rest satisfied with the expression of opinion they had elicited from the Chancellor of the Exchequer, and not go to a Division.

MR. R. W. HANBURY (Preston)

said, the reply of the Chancellor of the Exchequer was so fair and so unexpectedly encouraging that he agreed it would be wiser not to go to a Division, but rather to keep the right hon. Gentleman tied to his declaration on the possibility—remote, as the right hon. Gentleman himself seemed to indicate—of his being Chancellor of the Exchequer next year. It was something that they had got an authoritative declaration that the Land Tax was an unfair one. That being the case, there was less reason why it should be made more unjust by the manner in which it was assessed and collected. That was in the power of the Chancellor of the Exchequer to remedy this Session. It would not require additional legislation, because the matter was under the control of the Inland Revenue Commissioners. He wanted to call attention specially to the enormous expenses of assessment and collection in connection with the Land Tax. In the parish in which he lived, according to the Return for the year 1893–94, the Land Tax amounted to £76 18s. 3d., and upon this the Assessor, as that officer himself had informed him, was allowed by the Commissioners a sum within a few pence of £6—that was to say, the Assessor was actually paid about eight per cent. for assessing that tax. That was apart altogether from the charge for collection, which was a separate charge, and the eight per cent. was actually added to the Land Tax and collected with it.

THE CHANCELLOR OF THE EXCHEQUER

These persons are not officers of the Inland Revenue.

MR. HANBURY

True, but it is done with the sanction of the Inland Revenue Board. The instructions sent out by that Board were very clear, but what did the Inland Revenue Commissioners do? When it came to paying this man for his services, they actually allowed him the surplus Land Tax which he had levied as a reward for his work. No system could be worse than that, and therefore he asked the Chancellor of the Exchequer to try to reform it at once, because it added enormously to the burden of a tax which was admitted to be unjust, and it induced the Assessor to raise as much surplus Land Tax as he could.

SIR RICHARD TEMPLE (Surrey, Kingston)

did not rise to prolong the Debate, but to remind the Chancellor of the point made, earlier in the evening, by the hon. Member for King's Lynn, with regard to the subvention to local taxation out of the new Death Duties. It appeared that whereas under the recent arrangement no less than 2½ or 2¾ millions sterling were afforded to the agricultural interest in relief of local taxation, that provision was now diminished by £210,000. That was a serious loss to the agricultural interest, if the figures were correct, and the point deserved the serious consideration of the Chancellor of the Exchequer. It appeared there had been sudden drop in the sum allocated to local taxation. According to the hon. Member for King's Lynn, the new Death Duties, in respect to personalty, were being largely evaded, the arrangements made under the Finance Act being such as to tempt people to be guilty of evasion. The result was, that the fund from which local subventions came was being reduced, and so an injury was inflicted—he did not say intentionally—but accidentally, upon the suffering agricultural industry. If the hon. Member for King's Lynn was wrong in saying that this loss was suffered, they would all be glad to be told so authoritatively.

*MR. EVERETT

said, that the only remuneration which an assessor of Land Tax received was the surplus amount which he collecetd in addition to the quota, and that amount was limited to £5. In many cases the surplus which he took was less than £5. Having regard to the trouble to which an assessor was put, to the repeated calls which often had to be made, to the liability to personal disbursements, to the work that had to be done with reference to the Rate Book, and to other matters, the remuneration was certainly not excessive.

MR. JEFFREYS

asked leave to withdraw his Amendment.

Amendment, by leave, withdrawn.

MR. BRODRICK (Surrey, Guildford)

hoped the Chancellor of the Exchequer would make some reply to the observations addressed to the hon. Member some three or four hours ago by the hon. Member for King's Lynn.

*THE CHANCELLOR OF THE EXCHEQUER

said, that he would gladly have replied, but the hon. Member for Kings Lynn had prevented him from doing so by not moving his Amendment. Upon the last Amendment it would have been out of order to reply to the hon. Member. If the hon. Member for King's Lynn had had the courage of his opinions and had moved his Amendment, he certainly would have answered him.

*MR. T. GIBSON BOWLES

said, that he had already explained that he had only put the Amendment down as a formality.

MR. BRODRICK

said, that the hon. Member for King's Lynn asserted that there had been a heavy lossin consequence of the financial arrangements of the Chancellor of the Exchequer. The right hon. Member shook his head; then let him dispose, if he could, of the figures of the hon. Member for King's Lynn. If the hon. Member did not admit the accurracy of the figures he ought to refute them. According to the hon. Member for King's Lynn, in the year 1894–95 the sum paid in relief of local taxation was less by £210,000 than the sum paid in 1893–94. The difference could only be accounted for in one or two ways. Either it was due to a change in the mode of collection, or, to a decrease in the amount of property assessed for duty. If it were due to the latter cause they had some right to complain of the falsity of the expectations held out by the right hon. Gentleman last year. Time after time was the right hon. Gentleman's attention called, during the discussions on the Finance Bill, to the probability of evasion on the part of those who held large sums in personalty. It was pointed out that the result of evasions would be to reduce the profits to the Exchequer, and consequently the sums paid over for the relief of local taxation. He hoped the Chancellor of the Exchequer would make some re-assuring statement. He did not profess to be so great a pundit on this subject as his hon. Friend the Member for King's Lynn, nor would he put his official knowledge against that of the Chancellor of the Exchequer, but he thought that when his hon. Friend assured the House that the Chancellor of the Exchequer was taking too bold a line in reckoning on a further increase of £1,500,000 from the Death Duties next year, his hon. Friend very likely over-estimated his statement. It was towards the close of the present year that this operation would begin to bear fruit. The Chancellor of the Exchequer smiled, but he would tell the right hon. Gentleman of three operations which had come within his knowledge within the last month. One man sitting by him the other day told him he had, in the month of March, out of a total personalty of just over £1,000,000 given out right to his children £500,000. If that man died next March, the actual amount which would be assessed to duty would be about half a million sterling, and actually less would be paid under the new duty than under the old. The second case brought to his notice was that of a lady who was possessed of a considerable income, and also of some £400,000. She had two daughters, and she gave £200,000 to one, and £200,000 to the other. If the lady died next year £400,000 would escape duty, and the Chancellor of the Exchequer would get less than he would have got before the Finance Act. There was another form of evasion with which the Chancellor of the Exchequer could not deal. It was that of persons who possessed small property, and not being able to alienate it in their lifetime went to an insurance office and purchased an annuity, distributing what remained amongst their descendants. He could cite the case of a person who two months ago made away with £80,000 in that way. He thought his hon. Friend was right in warning the Chancellor of the Exchequer that this particular tax was going to prove a highly speculative one.

*SIR JOHN LUBBOCK (London University)

said, the main feature in the present Budget was, of course, the reduction of the Spirit Duties, and he could not but regret the course taken by the Government. What was the position of the Chancellor of the Exchequer? He was happily able to grant some remission of taxation, and what tax did he reduce? He told them that, in his judgment, the Land Tax was the worst of all taxes. He said:— 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. I cannot do it this year because I have not the funds at my disposal to enable me to deal with it. The right hon. Gentleman might at least have remitted a part of the Land Tax; but instead of that he applied the whole of his surplus to reducing what appeared to be the very best of all taxes.

THE CHANCELLOR OF THE EXCHEQUER

I have not got a surplus.

*SIR JOHN LUBBOCK

said, that no doubt technically the Chancellor of the Exchequer had not got a surplus, because technically the Spirit Duties lapsed. If, however, he had continued the Spirit Duties at the same rate as last year, he might have reduced the Land Tax, which he (the Chancellor of the Exchequer) said was the worst of all taxes. Instead of doing so he did not touch the Land Tax, but he reduced the tax on spirits. He continued the worst tax, and reduced that which was perhaps not only no evil but a positive benefit to the country. The Chancellor of the Exchequer reduced the tax on the favourite drink of Scotchmen and Irishmen, and left that on the Englishman's beer as high as ever. It was, indeed, astonishing that this should be the main feature in the Budget of a great temperance reformer. The Chancellor of the Exchequer drew a distinction, indeed, between himself as a temperance reformer and as a Chancellor of the Exchequer. In his Budget statement he said— But I venture to say that my character of temperance reformer I except 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. The right hon. Gentleman poured some ridicule on the first Amendment that evening as a composite Amendment; but he was a composite statesman. As Chancellor of the Exchequer he reduced the duty on spirits; as a Member of the Cabinet he introduced the Local Veto Bill. As a Chancellor of the Exchequer he took steps to increase the consumption of spirits; as a temperance reformer he attempted to reduce it. A German Prince Bishop was said to be very exemplary as a Bishop, but to be very tyrannical as a Prince; but it was pointed out to him that, if the Prince went to the lower regions, it would be very hot for the Bishop. Unfortunately, as Chancellor of the Exchequer, the right hon. Gentleman gave practical effect to his wishes. Reducing the duty on spirits would tend to increase the consumption, whereas his programme as temperance reformer was likely to remain a matter of theory on paper, and they were not likely to see anything practical done. Although he did not think the Local Veto Bill the best way of dealing with the question, he yet sympathised with the wish of the Chancellor of the Exchequer to reduce the consumption of intoxicating liquor; and from that point of view he greatly regretted the course taken in the Budget. They could not technically challenge the reduction of the Spirit Duties, because the extra amount came off automatically; they must, therefore, content themselves with a protest, and by pointing out how surprising it was that the only duty singled out for reduction should be the duty on spirits, and how inconsistent such a course was on the part of a temperance reformer.

*MR. BENJAMIN COHEN (Islington, E.)

said, his right hon. Friend who had just sat down, called the Chancellor of the Exchequer a composite statesman, because, while he reduced the spirit duty he introduced a Local Veto Bill. The right hon. Gentleman certainly deserved the sympathy of the House, because he was obliged—such was the irony of fate—to introduce a Budget in which he quoted figures which seemed to furnish convincing arguments against the necessity for the Bill which he had introduced only a fortnight before. He told the House that the consumption of tea had increased by 5,650,000 lbs. and the taste for brandy was declining; that it required a frost to induce people to drink rum, and that the extra spirit duty had not yielded a return at all corresponding to his expectations. The facts seemed to furnish the strongest reasons why the right hon. Gentleman need not have spent his valuable time on the preparation of a Bill, which the figures showed to be less and less wanted each year, instead of devoting it to the subject of local taxation, which he admitted last year was urgently in need of reform. The subject had been so amply dealt with that he would only say that he had studied the figures which the right hon. Gentleman gave in his lucid, but in some respects rather disappointing, statement, and he could not get over the fact that the amount given to local taxation appeared to be £210,000 less than last year. They were naturally a little disappointed that it should be so, and all the more because the Chancellor of the Exchequer told them last year that the arrangement was one which he had "at present" made—and he emphasised the "at present"—because he had not the opportunity last year of reforming the system as he admitted it ought tube reformed. He hoped the right hon. Gentleman would still give that extension of aid which to their minds seemed to be so necessary, or that he would clear up the doubt they still entertained as to the amount given to local taxation. He passed next to that portion of the right hon. Gentleman's statement which referred to the Post Office Savings Banks. The right hon. Gentleman referred with great satisfaction to the growth of the amount of the deposits in these banks. He shared the right hon. Gentleman's satisfaction. He thought, with some qualifications which he would proceed to state that those returns afforded evidence not only of the prosperity of the masses, but, of what was equal importance, of their thrift, and he would go a little further. He rejoiced that the prudence of the depositors induced them to place their savings in such safe—such absolutely safe—keeping as the Post Office Savings Bank. The right hon. Gentleman would recollect that several hon. Members, he believed his right hon. Friend the Member for St. George's was one, expressed a doubt whether some of these large savings were not attracted to the Post Office Banks by the higher rate of interest allowed by the Government, compared with that obtainable during the last two or three years at the private and great joint stock banks of the country. He confessed he was inclined to this opinion himself when he listened to the right hon. Gentleman's statistics, but an examination of the subject led him to think those influences had not been operating as much as one would imagine. He regretted they had no figures showing the number of depositors in the Post Office Banks, and the approximate amount of each account.

*THE CHANCELLOR OF THE EXCHEQUER

I have them. The increase in the number of depositors is extremely large. I have the figures since 1885. I will not give them all. They are too long. But in 1885 the number of depositors was 3,500,000; in 1894, 6,100,000. Persons of larger means put in large sums, and persons of small means small sums. Taking 1893 as compared with 1894, the number of depositors in 1893 was 5,748,000; and in 1894, 6,100,000.

*MR. COHEN

said, he hoped that valuable Return might be laid on the Table. But it did not quite touch the point to which he wished to draw attention, namely, that the deposits in the private and joint stock banks had grown instead of diminishing. He knew of no returns which gave the total amounts of deposits in the Joint Stock and private Banks of the country. The total must be something prodigious. But he had extracted some interesting figures from a very useful publication by Mr. H. W. Birks, which gave an analysis of the accounts of 12 very large Banks whose head office is in London, but most, if not all, of which had several large and important branch offices in the Provinces. He found that in only these 12 Banks the total of these deposits, which included current accounts—it was most important to bear that fact in mind—was on 31st December, 1894, £151,924,000, and on 30th June, 1893, £137,638,000, so that in those 18 months the deposits at these 12 Banks had increased about £16,000,000, or very nearly 10 per cent., which was a far larger rate of increase than he could trace during any similiar period as far back as he could search the records. And the same result was shown by a reference to the Government statistical abstract. The total deposits in the Post Office Savings Banks increased from £30,411,000 in 1878 to £75,850,000 in 1893, but while the rate of increase in the first ten years of the period he had named rarely exceeded £2,000,000, in the last three years it was about £4,000,000 or £5,000,000 each year. He ventured to trouble the House with these figures because they seemed to him to bring out very forcibly the point he wanted to press on the right hon. Gentleman's attention. In the Joint Stock and private Banks the deposits included, as he had said, current accounts, and he thought the figures he had quoted established conclusively that a considerable portion of them, certainly a large part of the increase, was due to the stagnation and depression of trade which had characterised the last two or three years under review. And he pressed this point on the right hon. Gentleman, because, if he was right, as he was pretty sure he was, in tracing the cause, we must look for the withdrawal of a portion of these deposits from the private Banks and from the Post Office Savings Banks as soon as trade revived, and as soon as those engaged in trade could get better use for their money, than the rate allowed by the Joint Stock Banks or even than the rate offered by the Post Office Savings Banks. This seemed to him, he would not say serious, but a very important point, worthy of the attention of the right hon. Gentleman, especially in view of what he hoped were signs of a revival of trade. The right hon. Gentleman referred the other day to the high price of Consols. He had been too long in the City to make even an attempt to foretell the course of the money market or the prices in the City. But it was absolutely certain that the price of the funds had risen to its present record level because of the purchases of the Government and the Banks to employ these large deposits, and because of the purchases of those who sought an investment of their capital while the money market was so easy and the capital needs of their own business so small. But let the money market get a little dearer, which would itself cause Consols at once to drop, and then in a market with a drooping tendency ex-hypothese, the Government would be obliged to realise some of its Consols, bought at a much higher level, in order to meet the withdrawals of deposits which would assuredly follow from an activity in trade. This situation would of course not touch—it would not concern—the depositors, but it would affect very directly the imperial Exchequer. He could appeal to the great city experience of the right hon. Gentleman, the Secretary for India, to consider what would be the effect on the market of large Government sales of stock. And it would be from the Post Office Banks that the withdrawals would primarily be made, because their rate of interest was stationary while that of the joint stock banks would advance with the rate of the money market. While on this question of the rate of the money market he would like to congratulate the Chancellor of the Exchequer on the reduction of the unfounded debt. He could appreciate the temptation to increase the unfounded debt, or at least not to diminish it, which was offered by the low rate at which the right hon. Gentleman could place his Treasury Bills; and he thought the right hon. Gentleman was entitled to great credit for having reduced the total of this debt from £36,000,000 in 1891 and £21,000,000 in 1893 to £17,400,000, of which only £10,272,000, as he had told them, was in the hands of the public. He complimented the right hon. Gentleman also on the reduction of the funded debt by the handsome sum of over £12,500,000 in the last two years. He regarded these gradual and automatic reductions of our funded debt as the great reserve of the country which he believed would be more powerful, as it certainly was less wasteful than the colossal armaments of the great Continental powers. He rejoiced, therefore, to hear that after this year both the old and the new Sinking Funds will be free from the temporary purposes to which they were diverted, and he hoped it would not be necessary again to alienate them. The right hon. Gentleman referred in his Budget to the sound and thriving condition of the masses of the population. He hoped and he believed the right hon. Gentleman had not overstated the case. But the prosperity of all classes of the people depended, he was, sure, on the soundness of the national finance. That soundness in its turn was built up on our carrying out the Acts of Parliament which in times of less wealth and of less prosperity in all classes of the population, were passed by our ancestors for the reduction of our National Debt, and for the maintenance of the national credit. He apologized to the House for the length at which he had detained it, but he should like to say one word, before he sat down, on the Death Duties, in regard to which the right hon. Gentleman betrayed some disappointment because the proper number of persons did not die when it was expected, and he supposed hoped, they would leave this world, and because of the decrease in the value which the right hon. Gentleman told them had taken place in securities which are not gilt edged. As to the inconvenient time at which the people died he had not the same means as the right hon. Gentleman to pronounce an opinion, but he thought the right hon. Gentleman ascribed too much to this cause. The present year would enable us to judge better. But the right hon. Gentleman did not refer at all to a force which he fancied must have been, to some extent at least, at work—he meant the transfer of property by wealthy parsons in their lifetime in consequence of the new duties imposed last year. But on the subject of the value of securities, he ventured very respectfully to differ from the right hon. Gentleman. He quoted from a list given in The Economist of 16th February, based on the table in the Bankers' Magazine, giving a review of last year. That interesting table gave the increase in the value of 334 very representative securities as £129,163,000 on a total nominal value of £2,747,000,000, or something over 4½ per cent. In that table were included British, Indian and Colonial Government securities, Corporation Stocks in the United Kingdom, and English railway debenture and preference shares. These are what are known as gilt-edged securities, and deducting, therefore, the increase in value on those, which was in round figures £55,000,000, they found that instead of the decrease in value of which the Chancellor of the Exchequer spoke, there was an actual increase in value of no less than £74,000,000 sterling on a total nominal value of £1,456,000,000, or about 5½ per cent. He made these corrections, not at all with the view of criticising now what was done last year, but while joining in the well-deserved tribute paid to the skill of the right. hon. Gentleman's advisers, he thought he was a little hasty in attributing a falling-off in his anticipations to a depreciation in the value of securities which, in fact, has not taken place. At any rate, in Suez Canal shares, we know there has been no depreciation of value, and the right hon. Gentleman will be fortunate if his successor in years to come had as good reason to look back with gratitude to his great Budget of 1894 as we all have, from a financial and Imperial point of view, to rejoice at the sagacious and statesmanlike purchase of the late Lord Beaconsfield and the Conservative Government, of which he was the chief.

*SIR JOHN LENG (Dundee)

said, the hon. Member for East Islington, speaking as a financial expert with accurate knowledge on the subject, had rendered a valuable service by putting an end to the fallacy that an increase of deposits in the Savings Banks necessarily led to a decrease in the deposits in joint stock banks. The Chancellor of the Exchequer of the late Conservative Government was unwilling to accede to the demand to extend the amount of the deposits that might be placed in the savings banks on the ground that it would be competing with the other banks of the country, but it was now established by the figures quoted by the hon. Member for East Islington that the increase of the deposits in the Savings Bank had not affected the business of the other banks of the country. He wished to make a suggestion which he was surprised had not been already made to the House. He thought that it was quite unnecessary on the part of the right hon. Gentleman the Chancellor of the Exchequer (Sir W. Harcourt) to have proposed the renewal of this impost, seeing that there was a source open to him whereby, without adding to the taxation of the country in any form, he might have met this comparatively small deficit. It had been stated upon high authority that the total deposits in the banks of this country equalled, if they did not exceed, the National Debt. A large amount of these deposits remained in the hands of the bankers as dormant capital in the shape of unclaimed balances belonging to deceased persons, or to those who had left the country. The right hon. Gentleman the Chancellor of the Exchequer, by taking a very small percentage of those unclaimed balances, would have obtained far more than would have been sufficient to meet this small deficit. This really trumpery tax of 6d. per barrel upon beer had been a source of much controversy, and had the right hon. Gentleman appropriated the unclaimed balances in the hands of the bankers, it would have been unnecessary for him to have imposed fresh taxation upon the country for many years to come. The time had come when, in his opinion, this subject could no longer be blinked. Of course, it would be a distasteful one to the bankers, but financiers had been directing their attention to it for a long time, and had been pointing to the vast sums of money which certainly did not belong to the bankers. In justice and in equity, the country ought to take charge of this money. In view of the privileges that were conferred upon them, the banks ought to be called upon to render a return of their unclaimed balances which had not been claimed for a certain period, say 10, 14, or 20 years, he did not care which. That had already been done in our own Colonies, in the United States, and in Continental countries with the most satisfactory results. In Canada Blue Books were issued every year which showed that considerable sums of money were claimed by persons entitled to them as next-of-kin, while large sums remained unclaimed. After a certain period the latter were transferred to the Treasury and State. He had brought this subject before the House on this occasion in a very imperfect manner, but it appeared to him that in future Sessions the question would demand and would receive more attention than it had done in the past, because the House certainly would not agree to the imposition of fresh taxes upon the country. He rather regretted that as this impost upon beer was to be renewed, that upon whisky had not been also continued. At the same time there would have been no necessity for the re-imposition of either of them if the Chancellor of the Exchequer had only been bold enough and courageous enough to grapple with this question of unclaimed balances. Whoever held the office of Chancellor of the Exchequer in future would find himself obliged to deal with this subject, first in the interests of those who directly or indirectly were entitled to the money, and secondly, in order to take care that these millions of money should be applied to the relief of the taxpayers of the country.

*MR. HARRY FOSTER (Suffolk, Lowestoft)

referred to the statements that were so frequently made to the effect that the increase of deposits in the Savings and other Banks was an indication of a corresponding increase in the prosperity of the country. Both in Ireland and in this country there had been for many years past a gradual increase in the amount of the Post Office and bank deposits, but he contended that instead of that fact being an indication of the increasing prosperity of the countries, it was, on the contrary, a proof that there was not sufficient profitable enterprises in which to invest money, and that capital was a drug in the market. There was one other question which he thought was worthy of the attention of the House, and that was how far their policy of encouraging the increase of the deposits in the Post Office Savings Bank tended to the general prosperity of the country? What became of those deposits? Undoubtedly, by the policy pursued, the Post Office had become a competitor with private banks. If private bankers accepted money on deposit, they used it by helping traders. The money went out by way of loan to customers in pursuit of legitimate trade enterprise, and brought in profit to the bankers and the traders. But money in the Savings Bank could not be used in that way. Those who had custody of the money had not the local knowledge possessed by private bankers. There was an appreciation in Consols to-day, and he believed that was largely due to the fact that the Post Office Savings Bank, being restricted in its field of investment, was a large purchaser of Consols. It had been pointed out that if there were a revival in trade, and greater inducement for the employment of capital in trade where larger interest was to be obtained, the capital value of Consols would decrease, and so the capital in the hands of the Post Office would show considerable reduction. They all rejoiced to see any measure which would induce thrift among the people, but he did not think that they ought to draw the inference from the fact that the Post Office Savings Bank deposits were increasing, that, therefore, the prosperity of the country was increasing, or that it was necessarily a matter for congratulation.

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

I do not think that anyone will be surprised that the greater part of the evening has been occupied with matters which concern agriculture. I think it is acknowledged in all parts of the House, and not least by the Chancellor of the Exchequer himself, that the agricultural interest has some title and right to come before the House and state its case. It is not unnatural, I think, that not only the question of Imperial Taxation, but also the question of Local Taxation, has occupied a considerable part of the discussion. That matter has been dealt with pretty freely by my hon. Friend and by the Chancellor of the Exchequer. I will not allude to the Land Tax, which occupied us at an earlier period of the evening; but the Chancellor of the Exchequer has, I think, himself repeated that if he saw his way to assist the agricultural interest he would gladly do so, and the question has been raised several times whether the contributions which have been raised have really given to the agricultural interest that assistance which they desire. Under the late Government it is known £4,000,000 went to the ratepayers, and the right hon. Gentleman the Chancellor of the Exchequer thinks he could have done better, in some different form, for the agricultural interest than by giving them these £4,000,000. But only a portion of these £4,000,000 went to the agricultural interest. A great part went to another class who, we thought, had also a fair claim upon the Imperial Exchequer—namely, the ratepayers in towns. I do not know whether the younger Members of the House of Commons are aware of the pressure which is always put on successive Governments, not only by the ratepayers of the country, but also by the ratepayers in the towns. They made common cause, and defeated the right hon. Member for Midlothian. An hon. Member who enjoyed very much the respect of this House—Sir Massey Lopes—and who took up the question with great ability, established, to the satisfaction of the majority, in a House in which Liberals were predominant, that there was something more to be done with reference to local taxation, and that assistance should be given to the ratepayers. A charge was brought against me by the Secretary of State for India and the Chancellor of the Exchequer, that I had assisted the landlords unduly. The reply to that was, that the towns also had a claim which was considered to be a good claim, and that claim the late Government endeavoured to satisfy. I pointed out myself earlier in the Session that if any more assistance were to be given to the agricultural community it ought not to be done by the same system of contributions which had prevailed hitherto. We have satisfied the towns, and now the agricultural community have a special claim, and it is perfectly clear that a different system must be adopted if the agricultural community are to be assisted. The Chancellor of the Exchequer on that occasion replied that I was anxious to assume the crown which at present rests upon his head. Historicus, if I may so call the right hon. Gentleman for the moment, on that occasion confused Hotspur with Prince Hal. I can assure the right hon. Gentleman that I do not wish to pose in the character of either of these distinguished historical personages. I have been too long in this House not to know how uneasy lies the head that wears the crown; and I expect it would be the younger or more ambitious Members of the House who would think that the one great object to be striven for would be the Chancellor-ship of the Exchequer. The Chancellor of the Exchequer has known some of the drawbacks of having to impose taxation. I can assure him and the House there is another anxiety which is almost greater and involves greater cares, and that is the disposal of a surplus. The right hon. Gentleman has given himself, and any successor who may come after him, an indication of the first step which ought to be taken—the abolition of the Land Tax.

THE CHANCELLOR OF THE EXCHEQUER

I did not say abolition.

MR. GOSCHEN

The transfer of the Land Tax.

THE CHANCELLOR OF THE EXCHEQUER

No, no; "recasting'' was my expression.

MR. GOSCHEN

I am afraid I congratulated my hon. Friends too early on the intention of the right hon. Gentleman. But I will leave the point. I must say I do not think the right hon. Gentleman is entitled, when this question turns up, to say that the issue is between an immense income-tax or some form of direct taxation and the relief of local taxation. But I wish to come to the point touched upon by my hon. Friends behind me with reference to the loss which local taxation has experienced during this year through the smaller amount which the old probate duty would realise. The relief given to local taxation through the Death Duties is less than it would have been, because the amount of personalty on which duty has been paid has been less than in previous years. I do not agree that the Chancellor of the Exchequer held out the hope that, because there would be a large increase in the Death Duties aggregated, therefore the share of local taxation would be greater. My impression is, that he said they would receive precisely the amount they would have received before on the personalty which was brought under taxation, and on which the old probate duty would have been paid. That amount has been less by £18,000,000, and the amount received has been £250,000 less than it would otherwise have been. Therefore the Chancellor of the Exchequer said:— It is not my Finance Act which has diminished the amount; it is the fact that less personalty has been brought under taxation. But then I ask: "Why has less personalty been brought under taxation?" And there I am afraid I must agree with my hon. Friend the Member for King's Lynn, that less property has been brought under taxation in consequence of the changes which have been made in the law—that personalty has found means to a greater extent than was to be expected of escaping from these taxes which would formerly have been imposed. I am certainly of opinion myself that that has happened which we expected would happen—that the amount of personalty which had been brought under tax has diminished for the first time for a considerable number of years. As to the Death Duties altogether, I will not go into detail as to whether the Chancellor of the Exchequer has or has not been disappointed in his calculations, and as to what compensating causes there may be. But we have not yet arrived within the year when evasions, if they are to take place, could be very operative. The donatio mortis causû would appear later, if at all. Public comments have been made on the way in which the Death Duties were coming in. It has been said, "Everything is as the Chancellor of the Exchequer expected." But we could not expect to see any considerable change only a year afterwards, although we have this astonishing fact of the diminution of £18,000,000 in personalty. Then as to the Stamp Duties, and the increase there has been in the receipts from deeds and instruments. I hope that the Chancellor of the Exchequer will be able to carry out the suggestion that in future the amounts received from Death Duties and Stamps should be kept separate in the published accounts. The increase was attributed by the Chancellor of the Exchequer to greater activity on the Stock Exchange. No doubt that has been the chief reason, and has accounted for half the increase. But was there not a considerable increase in those deeds and instruments which are compiled by lawyers, and which may have occupied them very much during the last three months of last year? We know they have been very active, and that evasion—or, perhaps avoidance, is the more complimentary phrase—has been going on to an extraordinary extent. Estates are being given away and money is being divided during lifetime to an extent which is quite unprecedented. Of course, I know that the right hon. Gentleman has most vigilant watch-dogs, and that the Inland Revenue will do their best. I return to the point of the sources of Revenue, with regard to which the Chancellor of the Exchequer has spoken in a somewhat hopeless manner. The right hon. Gentleman thinks that we have reached the limits of tolerable taxation, if not of possible taxation, and that no fresh imposts can ever be devised or can tolerably be borne. That is a very delicate matter to discuss If there be this possibility, it is largely due to that which I should wish to see avoided—the difficulty of both Parties uniting with regard to any point of financial policy. The difficulty is political rather than economic. There certainly are new taxes which might be imposed, and which would not in the slightest degree weigh with any hardship on any particular class in the community. There are means by which the revenue could be recruited, but which become impossible on account of the political question—the misrepresentations which would ensue, and the political use to which any such suggestion would be put. If we look at the remissions of taxation which have taken place, it will be seen that it is untrue to say that any changes in the present fiscal system would be in tolerable. It is undesirable that the country should think that there are no new sources of revenue whatever except increase of the Income Tax or further duties on realised property. With respect to those duties the limit has almost been reached—that is, the limit where still further avoidance would take place. I protest against the idea that we are entirely at the end of our financial resources, and that no recasting of our fiscal arrangements is possible at the present time. The right hon. Gentleman made use of words in connection with expenditure with which I cordially concur, on the whole. But he spoke of the increased expenditure as if he were almost the only economist in the House. He and I have been a long time now in Parliament, and we shall be agreed on one point, I think—namely, that the attitude of the Radical Party has changed extremely with regard to economy and the general expenditure of the country. The Conservatives have sometimes been taxed with being extravagant, and certainly retrenchment was for many years the cry of the Radical Party. The Radicals, it seems, would still be glad to retrench with regard to the Army and the Navy. They do not in that view share the convictions of Lord Spencer, Lord Rosebery, and those who have insisted, most properly, upon the expenditure which is now taking place. They believe, to judge by their cheers and their speeches in the country, that therein retrenchment can take place; but otherwise in what direction do we see that the Radicals now wish to economise? We see no trace of it whatever. There is a sum of £800,000 which must be added to the expenditure—£300,000 for Payment of Members and £500,000 to start Ireland, if Home Rule should be passed. Those are two items which are in the background, for which provision would have to be made if hon. Gentlemen opposite remained in power. With regard to expenditure otherwise, however, is not this the situation? There are two reasons why the Radical Party cease to be economical. One is the great and increasing functions which are assigned to the State—the idea that the Nation itself must do more to raise the comforts, and the amusements even, of the people, that more public money should be spent for the social advancement of the Nation at large. That is the idea which has arisen during later years, which is making enormous inroads, as the Chancellor of the Exchequer will admit, on the finances of the country. Much good may be done by this means, but it will have to be paid for. There is another reason which must increase the expenditure of the country. That is the growing view that while—to use a phrase which I detest—the "classes" should pay, the "masses" should have the power to alter the expenditure—the view which insists that payment should mainly be made by those who have the means, and the more pressure necessary for expenditure on which the rate will not fall on the people at large. In the discussions on the County Councils and Parish Councils Bills, hon. Members strained every nerve to secure that the men who were not rated or interested in the expenditure should be on the councils to determine the expenditure of those who paid the rates. So long as that feeling exists, so long as it is recognised that the expenditure should fall mostly, almost exclusively now, on the wealthier classes, no doubt expenditure will increase by leaps and bounds. I view, therefore, with very considerable alarm this increase of every form of expenditure in every Department of the State from year to year. With regard to the actual proposals in the Budget, there is really only one proposal which initiates any change in taxation—that is the question of the spirit duties. I thought that the right hon. Gentleman made use of a somewhat dangerous argument when he justified the choice he made. He dilated upon the heavier burden placed on spirits as compared with the burden placed on beer. Yes; but the right hon. Gentleman should have remembered that that has been considered in the taxation of the various countries; and if Ireland pays this heavier duty on spirits, Ireland is free from a number of taxes paid by the English people. I think that the Chancellor of the Exchequer was on stronger ground when he spoke of the tax not yielding the necessary amount. That was a sound financial argument, provided that that falling-off in the tax is not due in the main to spirits having been kept back because the duty was a temporary one. On that point I hope that the Chancellor of the Exchequer will give us some further information. It appears that during April of this year there was an enormous falling-off in the spirit duty, which seems to show that there has been a holding back in the hope of a reduction in the duty. If that be the main reason I think that the Chancellor of the Exchequer has no ground for the choice which he has made. But that is a matter which we can further consider when we come to discuss the spirit duties. I enter my protest at present against the assumption that, because spirits are more heavily taxed than beer, this would justify the choice which the Chancellor of the Exchequer has made.

THE CHANCELLOR OF THE EXCHEQUER

I must begin by acknowledging the extremely fair and candid tone in which the right hon. Gentleman has criticised the proposals which it has been my duty to lay before the House. There is so much in what has been said, especially on expenditure and revenue, with which I agree that there is very little with which I have to express dissent in connection with the right hon. Gentleman's remarks. I am glad that he is able to be more sanguine than I am as to the facility of imposing new taxes. I am not young enough to entertain the hope of the disappearance of political difficulties. I do not expect to live to see any great revenue from new taxes; and if you cannot have new taxes, we come to the other point, cannot you have a little more economy? I think that the right hon. Gentleman and I are pretty well agreed upon that, because, in old days, the great expenditure was upon the naval and military services. But that has ceased to be the only demand, and I think we may foresee that, in the future, it will not be the largest item of increased expenditure. I foresee demands in every direction—demands that the State shall undertake duties and expenditure which it has not been in the habit of undertaking in the past. That is the future danger of finance. That is the enormous difficulty that will press upon the generation that is to come with reference to the expenditure of the country. The right hon. Gentleman spoke of the feelings and opinions of the Liberal Party in former days. I see no distinction between one Party and another in the rivalry of increased demand for every possible object; and, unless there is some disposition from some quarter—and I see none—to economise, I foresee grave danger in the future. But, Sir, I have been asked to deal with several points. First, with reference to the diminished contribution to local taxation, it is a very great subject of regret to me that in this particular year the sum should be smaller than in some former years.

*MR. GIBSON BOWLES

In all.

*THE CHANCELLOR OF THE EXCHEQUER

Not all. The hon. Gentleman has said that I have a great advantage over him in stating facts, but the advantage lies in no merit of mine, but in the fact that I possess more accurate information than he has. He gives information without facts, and though he has taken enormous pains to prove that he ought to have been right, in fact he is wrong, and he has demonstrated that I ought to have been wrong, while in fact I am right; and the real solution of these two circumstances is that I have the means of knowledge and he has not. He predicted that the revenue would not derive any advantage from the new Death Duties, whereas, in fact, I have derived within a few pounds of what I expected. The reason of that difference in calculation is that I had good advisers and full knowledge, whereas the knowledge of the hon. Member was the creation of his own brain. He evolves his figures and predictions from his own consciousness, and the man who predicts on that ground, though he may be an acute person, is sure to turn out to be wrong in the end. The hon. Member for King's Lynn referred to the falling off in the contribution to local taxation. That is easily accounted for. It has been said that people have been giving away their property in their lifetime and are thus seeking to evade the duties. Even were that so, the time when evasion could operate has not arrived, and perhaps the hon. Member will be surprised to learn that nearly twice the amount has been received in this quarter over that received in the corresponding quarter last year. The real history of the falling off in the contribution to local taxation, in our opinion, is that fewer people have died. The number of people who have sent in probates have been much less than in the year before. That accounts for a considerable falling off. I willingly accept from the hon. Member for Islington the statement with reference to the value of securities. No doubt I was mistaken in using that as one of the elements of the case, but if fewer people die, there will be less probates, and if there are less probates there will be less probate duty. I am convinced, on trustworthy information, derived from the Inland Revenue, that the contribution to the local funds out of the probate duty will be as great this year as it was the year before last, and that any loss from the exceptional circumstances of last year will be covered. We believe that these circumstances will not recur next year, and that it is likely that the contribution, as we estimate it, will next year be an average one. The only other point upon which I need touch is in regard to what the right hon. Gentleman said on the subject of the Spirit Duties. I have no means of knowing the extent to which the falling off in the Spirit Duties is due to holding back; I fully admit that it is an element in the diminution of the yield of the tax. but how much it is I am unable to say. I believe that a main element in this failure is the height to which the tax had risen. There is no doubt that a tax of 700 per cent. upon the cost of an article is a very heavy tax indeed. I believe there are spirits imported from Germany at less than 1s. a gallon, and a tax of 10s. 6d. upon that is a very high tax. There is a point which taxation may reach at which it will cease to yield an increased amount of revenue, as was shown in the case of the tobacco tax of Sir Stafford North-cote. We put this increased amount upon spirits and upon beer, but in the case of beer only did it produce the whole of what we expected from it, and but for exceptional circumstances it would have produced more in the case of beer. There is one refreshing feature in this discussion; at all events, we have not the opposition or the hostility of the brewers. Sixpence extra has been put on the beer and the brewers are content, and they have every reason to be content with the condition of things. They have made a very handsome contribution to the service of the country and to the defence of the country in this 6d., and I am very glad to know that they have not suffered by the operation. I hope, therefore, I shall not be thought to have been wrong in the selection of the tax I am obliged to make in order to meet the deficit which was found in the revenue. I have good reason to thank hon. Members for the very great courtesy and indulgence with which I have been treated in the discussion of the Budget. I am strongly sensible of it, and I hope that, though this is not a Budget which professes any great performances, the House will see that it is founded on reason and common sense, and will now allow the Bill to be read a Second time.

CAPTAIN BETHELL

said, that last year, on the Finance Bill, they were told that the English farmer in regard to the Income Tax should be placed on the same footing as the Irish and Scotch farmers. The formula sent out by the Inland Revenue Department charged the English farmer Income Tax upon half his rental, whereas the Irish and Scotch farmers paid on only one-third of their rentals. The Chancellor of the Exchequer would readily see the inequality of this. It was also proved in the higher incomes where they got a partial abatement. He had had some correspondence with the Board of Inland Revenue about the matter, and they evidently recognised it as being an oversight in the Finance Bill of last year, but informed him that it was the formula sent out by the Board for declaring the amount of the tax in accordance with the law, and could not be altered by the Department. It was obviously not carrying out the promise of the Chancellor of the Exchequer last year, and this was unfair to the English farmers. He hoped the right hon. Gentleman would make such a change in the law as would admit of the Paper sent out by the Inland Revenue Department being altered in regard to this point.

*THE CHANCELLOR OF THE EXCHEQUER

replied that this was a very complicated question. There were some particulars in which the English farmer had the advantage, and others in which he had the disadvantage. It was difficult to make arrangements which were suitable to all, but when they reached the Committee stage he would endeavour to give the hon. Gentleman full information on the subject.

Bill read 2°.