HC Deb 16 April 1896 vol 39 cc1083-134

Out of this margin I have to provide for whatever increased expenditure in regard to education may fall within the present financial year on account of the proposals of the Education Bill of my right hon. Friend the Vice President of the Council. As the Bill will not come into operation until January 1 next, or until the arrangements which cannot be made until after that date between the Education Department and the County Councils are completed, only a comparatively small part of the increased expenditure proposed by the Bill will fall upon the current year. I propose to provide for that, as I have said, out of the remaining £433,000, which will leave a modest surplus for contingencies. I hope that I have not taxed at too great a length the patience of the Committee. [Cheers. ] I have endeavoured to place before them fully the financial condition of the country. I think it is something to be able to say that in a year of great expenditure like the present we are able to meet the demands upon us without having to impose a single penny in additional taxation on the people of the country. [Cheers.] I think it is even more to be able—as I hope we shall be out of the abundance at our disposal—to make some provision from that ever-increasing personal wealth of the country, which until recently contributed nothing to local burdens—[Opposition cheers]—for the agricultural interest, which is at once the most important and the most distressed in the country. ["Hear, hear!"] I thank the Committee for the patience with which they have heard me. I fear I have been able to place before them not much of special novelty or interest, but I hope, in spite of that, that the proposals I have ventured to make will receive their fair and their favourable consider ation.[Loud cheers.]

*SIR WILLIAM HARCOURT (Monmouthshire, W.), rising amid loud Opposition cheers, said: I have to congratulate the Chancellor of the Exchequer upon his fortunate position and upon the signal ability with which he has made his financial statement.[Cheers.] A happier picture of the financial condition of the country it would be impossible to present to the House of Commons; and this I will say, without expressing any opinion—as it is unwise to do the first night of the Budget—as to future proposals, that as to the past in general terms and upon the financial principles which the right hon. Gentleman has stated, I for one am entirely in accord with him. I think the general principles that the right hon. Gentleman has stated, both in regard to the revenue and in regard to the expenditure of the country, are founded upon the basis of sound finance. ["Hear, hear!"] The right hon. Gentleman spoke of the surplus. He has entered, like the children of Israel, upon oliveyards and vineyards which he did not plant—[laughter]— and I congratulate him upon the abundance which he enjoys. It is perfectly true that it is no credit to the Chancellor of the Exchequer to have a great surplus. It is not the Chancellor of the Exchequer but the people that makes the revenue; and, after all, his estimate can only be a guess which is dependent upon the circumstances of the time. I desire to make the amount of the surplus greater even than the right hon. Gentleman has represented it to be. The real surplus of the Budget of last year was not four millions, as the right hon. Gentleman stated it, but if the financial arrangements of last year had been carried out it would have been six millions and a half. [Opposition cheers.] That has been depleted by supplementary estimates amounting to two-and-a-half millions, for which I was not responsible, but which were introduced by the present Administration. These supplementary estimates have been introduced upon a system which the present First Lord of the Admiralty last year condemned as unsound when I brought forward a supplementary estimate of £200,000 in aid of the poor finances of the coming year. My offence may have been a great one, but the present Chancellor of the Exchequer has multiplied it by ten, for the amount that he has brought in in aid of the finances of the present year, which is not a poor year, but a rich year, is two-and-a-half millions. I do not complain of it in the present circumstances, though I agree that it has been carried to a rather extraordinary extent. [Ministerial cheers.] Yes, but then the right hon. Gentleman claims credit for the accident which occurred in June, and for the surplus which it created. ["No,"] Well, he referred to it incidentally.


I said it was a curious coincidence. [Laughter.]


I am going to point out some other curious coincidences in relation to that event. No doubt the time of June was what you might call a very promising season. [Ministerial, cheers and laughter.] And the country, no doubt, was full of expectation and full of hope, and the revenue increased in that quarter by 3½ millions. But then came a period of reflection in the next quarter, and the increase instead of being 3½ millions, was 2½ millions. Then came further experience and reflection on the part of the country with respect to the new Government which they had got, and the revenue fell to 1½ million. And so it appears that the more the Government is known this remarkable coincidence occurs—the more revenue drops and the less they are trusted. [Cheers and laughter.] These are coincidences which seem also to have occurred to the mind of the Chancellor of the Exchequer, for in the later part of his speech he thought it wise to say that he did not think the revenue depended at all on one Administration or the other. That is one of the sound principles on which I am disposed to agree with the right hon. Gentleman. [Laughter and cheers.] This is not the only instance which we have had of these promises of what was to come from the change of Government. We had a similar doctrine from the Under Secretary for Foreign Affairs, who pointed out how "the accident of June" had lead to universal peace. Three-quarters of a year's experience has falsified that prediction—["hear, hear!"] — and three-quarters of a year's experience on the part of the Chancellor of the Exchequer has shown him that, whereas in. year 1895–6 a surplus of 6½ millions might be obtained, when the country has discounted the existing Administration the surplus they have to deal with is 1½ million. So much for the doctrine of surpluses. I am extremely glad that, from whatever cause it has arisen, and what ever the Administration it may be, the Government of the country should have such ample resources at its disposal. The right hon. Gentleman stated that this was the largest surplus that had ever been realised in this country; and that is true. I am speaking of the surplus as it would have stood if the expenditure of the Budget of last year had been adhered to. I am not taking into account the supplementary estimates of 2½ millions which, it is admitted, do not belong to the natural expenditure of last year, but to an accelerated expenditure intended to be in aid of the expenditure of the succeeding year. There have been in previous years two surpluses of six millions and over. One was the surplus which Mr. Lowe had in 1870, out of which the Alabama indemnity was paid, and in respect of which Lord Derby said that we had "drunk ourselves" out of the Alabama claim. The other surplus was the surplus—and perhaps the Chancellor of the Exchequer will allow me to call it a remarkable coincidence—which in 1874 Mr. Gladstone left to a Conservative Government. Perhaps I should be content to err, in company with Mr. Gladstone, in leaving behind a surplus of six millions to a Conservative Government—[cheers]—but I hope the parallel will not be fulfilled, for that surplus left by Mr. Gladstone ended in three years of deficits before the Conservative Administration closed. I trust that, after the serious advice offered to the House by the Chancellor of the Exchequer on the subject of expenditure, such results will not recur. It is no doubt very satisfactory that we should have this enormous sum of money. The possibility of it shows the resources of the country; but I agree that it is much to be deplored that we should find ourselves under the necessity of raising such a sum in order to spend it. I think we may dwell on these figures of the growth of the revenue in order to satisfy ourselves as to what is the real condition of the country. There are gentlemen who go about trying to persuade everybody that the country is in a desperate condition; that every interest is suffering; that low prices have ruined everybody; and that the only remedy is that we shall destroy our commercial system, revert to Protection, and tamper with the currency. [Cheers.] And all this in order to cure that state of prosperity which the Chancellor of the Exchequer has just enlarged upon. [Cheers.] Of course there will be times when you have an advance of trade and a retreat of trade. It is just as you see upon the seashore— the waves at one moment advancing and at another retiring. But what you have to look at is in what direction the tide is flowing, and though you may have alternative advance and retreat of the waves, you may know that on the whole the tide is flowing, and that the condition of the country is one of progress; and you may deduce from that fact that your systems of finance and commerce and currency are sound. ["Hear, hear!"] Let us look at the figures which the right hon. Gentleman has given to us. I speak in the first instance of the Customs, because they are the test of the condition of the wage-earning classes. There is an increase of 10,000,000 lbs. of tea consumed in this country in the last financial year. That means an addition of £157,000 to Tea Duty returns—a larger increase than in any former year. Of the Tobacco Duty the Chancellor of the Exchequer was, in my opinion, unduly disparaging. [Laughter.] That duty is one of the sheet-anchors of the revenue and it ought to be as precious to the right hon. Gentleman as the beer, of which he appears to have a much higher opinion. [Laughter.] Again, upon the Tobacco Duty there has been an increased return of £333,000—a larger increase than in any former year, unless it be the year 1891. Then we come to the great question of beer. There has been an increase there of £616,000 in the revenue— an increase which the right hon. Gentleman has translated into 1,600,000 barrels. I suppose that increase has been principally employed in drinking the health of Her Majesty's present Administration. [Loud cheers and laughter.] When we talk of temperance we are told, "You need not trouble yourselves. The Nation is working out its own salvation. People are drinking less and less every year and becoming more and more temperate." Yes; but not when a new Administration comes in. [Laughter.] What is the ingratitude of the Chancellor of the Exchequer? Has he forgotten 1894, when the sixpenny duty was put upon beer? Then the brewers and the agricultural interest were not dissociated, but united together in order to destroy the Administration of that day. [Cheers.] And they very nearly succeeded, the principal instrument employed by them being the Beer Tax. The sixpenny duty on beer would ruin the farmers by spoiling the market for barley. The brewers and the farmers acted together at that time, and they compeiled me to make it a temporary duty. Now I do not know whether the right hon. Gentleman opposite is going to continue it as a temporary duty, or is going to make it a permanent duty. I was denounced in every part of the country as a wicked person. I remember the speech of the Colonial Secretary. He said:— Here is a man who is taxing the drink of the English people, while he is relieving the Irish from the tax on their whisky. [Cheers.] That was for a single year. But now comes a new Chancellor of the Exchequer who puts a permanent sixpenny duty on beer; and that when there is a great surplus, and not for the purposes of meeting a temporary want. Do not let the Chancellor of the Exchequer think that after these remarks—which, I think, with the recollections of 1894 in my mind, I may be pardoned—I am going to oppose his proposal. I think it a most reasonable proposal—as it was in 1894. [Cheers.] I am not going to heap coals of fire on the right hon. Gentleman's head, but I will heap beer barrels on his head. [Laughter.] I pointed out at that time that the increased profit to the brewers from the fall in the price of materials was two millions at least, according to my information, of which the tax amounted to £500,000, and the £1,500,000 the brewers put in their pockets. Now, since that time there has been this increase of 1,600,000 barrels to the brewers' account, and that has to be added to the profits on which I calculated in 1894; so that the brewers' profits have been still greater. If I had the means the Chancellor of the Exchequer has of forming an estimate of the additional profit which the brewers put in their pockets in the last 12 months from the further fall in the cost of material I should be astonished at the moderation of the Chancellor of the Exchequer in only continuing the sixpence; and if he should find himself in difficulties he will not find any real obstacle in raising a great deal more than a sixpence upon beer. What has been proved is this—that the increased duty upon spirits yielded nothing, and that the additional duty upon beer yielded all that was expected or it, and this year has yielded a great deal more than was expected of it at the time; and the suspicion which was cast upon me was only due to the want of financial knowledge on the part of Gentlemen opposite. [Laughter.] I might also mention wine, though that belongs to a different class, and, above all, one large item of taxation of which the yield this year has been most remarkably satisfactory—the Post Office, to which, by accident, the Chancellor of the Exchequer did not refer. The Revenue of the Post Office and Telegraphs for the first time has augmented to the extent of £900,000, and the estimated expenditure is less than it was. What does this prove? It proves the sound condition of the people of this country. And now let me turn to direct taxation; and here I would refer to what the Chancellor of the Exchequer said as to the great alteration that has been made in the finance of this country in the last 50 years. Ah! Sir, a most beneficial change and a just change. Could there have been a more unjust, I might almost say a more wicked, state of taxation in relation to the classes upon which it was levied than that which Sir R. Peel found and which Sir R. Peel and Mr. Gladstone have transformed? ["Hear, hear!"] Why, at that time the great proportion of the taxation of this country was raised from indirect taxation, as the Chancellor of the Exchequer has shown. ["Hear, hear," from Sir H. VINCENT.] Yes and who paid it? [Cheers.] Why, the working classes. I venture to say that this great increase of consumption of tea, and even of tobacco, is not due to the Member for Sheffield; it is due to the 30 millions of people in this country, and mainly the poorer classes. It has been the object of our finance since that time to diminish the indirect taxation and to increase the burden of direct taxation. There have been gradual advances. Sir R. Peel began them with the Income Tax. It has been carried on by the Stamp Tax and other taxes since that time, and it was one of the great objects of the Budget of 1894 to increase the amount that was levied from direct taxation; but even at this moment the Chancellor of the Exchequer admits that an equality has not been reached. We have been tending to an equality, but have not yet reached it Now, when we are told that there is distress in this country and that we ought to have some alteration in our commercial system or in our currency, how do people account for the constant growth of the yield of the Income Tax? It is said that all the interests of this country are depressed? We know agriculture is distressed and the payments to the Income Tax from agricultural land have diminished, but Schedule A has not diminished. Why? The yield from houses is constantly increasing. And who are the people who build these houses and live in them? Of course, they are the people who have profited by the trade and commerce of this country. I would ask the Committee, upon the figures before us, to consider this. In 1894 great reductions and allowances were made on the Income Tax—there were allowances, for example, under Schedule A, of which the cost was estimated at £800,000, and a further diminution of about the same amount due to the abatements on small incomes—and yet to-day the Income Tax yields two millions for every 1d. in the pound. That certainly is a most remarkable circumstance. I watch very carefully the effect of those reductions, because I should have been extremely sorry to have done anything that should have injured the machinery of the Income Tax, which, after all, must be one of the great resources of the taxation of this country. I think the rate of the Income Tax is much too high for a time of peace. An 8d. Income Tax is one which is almost a war tax; it ought only to exist when there is imminent apprehension of war. The Chancellor of the Exchequer spoke about the dangers of increased expenditure, and it is very right that hon. Gentlemen should take to heart what he said as to the source from which increased expenditure will be paid. You are not going to conquer the Soudan with an 8d. Income Tax. You may depend upon it that if you are going into undertakings of this kind all over the world it is not upon an 8d. Income Tax, nor even upon the Death Duties as they now stand, that you will be able to defray the expenditure which will certainly be incurred. Stamps have largely exceeded the Estimate, and the Chancellor of the Exchequer has pointed out whence that excess has come. One is always glad when one can tax the follies of mankind. If we could only tax them a little more we should have an immense revenue. What has been called, I believe, in the slang of the City, a "Kaffir boom" has yielded to us a million or thereabouts. We have gained that benefit at least from South African speculation, but I think we shall be very fortunate if we do not lose, before we have done, a great deal more than a million out of South African speculation. I listened, of course, with great interest to the exposition which the right hon. Gentleman gave of the yield of the Death Duties. I am obliged to the right hon. Gentleman for the acknowledgment which he made of the accuracy of the calculation which was made in 1894 of the final and ultimate yield of the Death Duties. The figure I gave at that time was £3,500,000, or between that and £4,000,000, and the yield this year is £3,600,000. Now, considering the enormous difficulties of the calculation, the new elements of graduation, of aggregation, and of succession, and the infinite number of unknown quantities in the equation, that the actual yield should have come so near the calculation is what I would venture to call—I do not take the credit, of course, personally to myself—a financial miracle. The reason why the yield fell somewhat short of the calculation last year was, as I pointed out, that the mortality of the previous year had been extremely low. I said it was a bad year for the Chancellor of the Exchequer and for undertakers. And so it was. It is a remarkable fact that in 1894–95 in this country 80,000 fewer people died than in the previous year, and the mortality in the year just expired has within 3,000 returned to the mortality of the year before. Therefore that in itself would, of course, be one of the great elements why the yield was larger this year than it was in the year before. The right hon. Gentleman has given us another and very important reason why the yield was larger than the estimate, and that is that the owners of real property found it possible and convenient to pay up the Death Duties at once instead of paying them by instalments. Therefore I am astonished, like the right hon. Gentleman, that they should have preferred that course; but that shows that they are not ruined—[cheers]—that their position is not so disastrous as we constantly had it represented, and the very small figure that is shown to have been yielded by agricultural land to the Death Duties proved at all events that it has not been extremely oppressive in that direction. There is one other point with reference to the Death Duties I want to mention, because it was referred to by the hon. Member for King's Lynn last year. The hon. Member first of all told us that nothing at all would be gained from the Death Duties. But we got what we calculated. The hon. Member insisted on our contribution to local taxation from the Death Duties having fallen off £200,000, and that represented a falling off of £18,000,000 on the money which came under probate. That was a remarkable circumstance. I showed at the time that it was probably due to the lower mortality and some other causes in retarded collection; and I estimated that the £200,000 which we had lost would be recovered and £40,000 more. But in point of fact the contribution to local taxation from this source has been but £300,000 more than it was last year; so that the loss of £200,000 has been replaced and £100,000 in addition. That is to say, the falling off of £18,000,000 has been more than recouped; and therefore all the conclusions of the hon. Member drawn from his idea that there would be an evasion to such an extent that we would not get the same amount of property subject to probate as in former years proved to be unfounded. Evasions have not taken place; the quantity of property which has come under probate is more than it was in preceding years. There is another remark which I must make about the surplus. I said that the Government of Mr. Gladstone in 1874 left behind them a surplus of over £6,000,000; but when the Conservative Government of that day inherited a surplus of £6,000,000 they did not spend it all. They gave some relief in taxation. [Cheers.] I should like to call attention to what the Budget of Sir Stafford Northcote was in 1874. He had a surplus of about £6,000,000. He gave to local taxation £1,250,000; he took a penny off the Income Tax— £1,840,000; he took £2,000,000 off the Sugar Duty, and finally released sugar from any duty at, all; and he took off the Horse Tax —£500,000. That is something like the way to deal with a surplus. Relief in these circumstances was given to every class in the community, but, as far as I understand, in this Budget there is no relief to be given except to one limited class of the community. In my opinion that is not the best way in which you can deal with a surplus. I am not going to say anything with reference to the plan for the future Budget as opened by the right hon. Gentleman. I have endeavoured to make some remarks with reference to the finance of the past year, for which I had some responsibility. I desire entirely to concur in the doctrine which the Chancellor of the Exchequer has laid down, especially with reference to the payment of the National Debt. I thought that the observations he made on that subject were extremely weighty, and deserving of the attention of the House; and I hope that his doctrine will be strictly followed by him and by his successors. [Cheers.] I am quite sure that there is no greater reserve of national strength than the maintaining permanently the provision for the reduction of the Debt. It must be remembered that in the days of Sir Robert Peel, when the Revenue of this country was about £50,000,000, half of the Revenue went in the discharge of the interest of the Debt. Now we have a Revenue of upwards of £100,000,000 and the interest on the Debt proper is not one-fifth part of the Revenue of the country. That is a most remarkable change, and, inasmuch as we have so much less burden to bear of Debt, so it would be the greater shame if we withdrew from the obligation of contributing to the liquidation of that Debt. [Cheers.] There is one other point I must refer to, and that is what the right hon. Gentleman has said on the subject of the savings banks. He made no definite proposal to the House on the subject and I shall be glad to consider the question carefully. I do not consider that the savings bank fund is now in a satisfactory condition with reference to the interest paid to depositors. Before I left office I appointed a Departmental Committee of the Treasury to consider that subject, and I have no doubt the right hon. Gentleman would derive great advantage from the Report of that Committee. I trust, however, that he will not diminish the amount which is allowed at present to be deposited in the savings banks. The question of interest to be paid for it is a totally different thing. I am of opinion if the State is to undertake the business of banking and to take care of the money of the people to whatever class they belong, the taxpayers ought not to be the losers by that transaction. [Cheers.] The interest on the savings bank deposit, therefore, ought to be accommodated to the financial condition of the time. I hope that persons who may not be the weekly earners of wages, but, nevertheless, persons of small means, will not be deprived of the power they have at present to make deposits in the savings banks. Take the case of domestic servants who are not earners of weekly wages. They are in the position to make deposits in the savings banks, and they do so, I hope, to a large extent. People of that class are apt to lose their money by placing it in the most unsound investments. A man who has £50 to put away cannot go to a bank and open an account with the same advantage as he can in a savings bank, where he can draw out his money in any part of the country he happens to be in. I would therefore enter a caveat against altering the provisions with reference to the amount to be deposited, though I quite agree with the Chancellor of the Exchequer in his view, that you may give to the persons who have the larger deposits a lower rate of interest than to those who have smaller deposits. I think that is a sound principle. But this is not the time to enter into a discussion of the proposals of the Budget for the future financial year. That time will come when the Resolutions are brought forward, and when we have time more maturely to consider the very able statement made by the Chancellor of the Exchequer. [Cheers.]

MR. ARTHUR JEFFREYS (Hants, Basingstoke)

thought that the thanks of all those interested in agriculture were due to the Chancellor of the Exchequer for the benefit he proposed to confer on the agricultural industry. It was the first time he could recall that any money had been voted for the relief of agriculture by the House. Many Chancellors of the Exchequer had expressed sympathy with the agriculturists, but no step in this direction of relief had been attempted. He thought that the money to be voted for the reduction of rates on agricultural land was the best way to afford relief, because it would affect every acre in the country. He was also grateful to the Chancellor of the Exchequer for what he proposed to do in respect of the Land Tax. Last year the Leader of the Opposition expressed great sympathy with a Motion as to the Land Tax, and said that he thought it ought to be altered because it pressed heavily on certain parishes. But, according to the present measure of relief indicated by the Chancellor of the Exchequer, not only the great landowners but the small landowners would benefit by the proposed change. No class would feel the benefit of the proposed reduction more than the clergy, who had to pay the Land Tax on the whole of their tithes. The poorer clergy would certainly be very grateful to the Chancellor of the Exchequer. He also wished to thank the right hon. Gentleman for his proposal to relieve private collections of works of art from the incidence of Death Duties. Many people had been compelled last year to sell their most valuable pictures in order to meet those duties. The nation, he believed, would be glad to know that these private collections, which were a source of so much enjoyment, not only to the owners, but to countless others, would no longer have to be broken up. The right hon. Member for Monmouthshire had not said that he objected to the application of the surplus to the relief of agriculture, and he therefore took it for granted that hon. Members opposite agreed that it was the best way to use the surplus. There were in Hampshire, the county in which the right hon. Member for Monmouthshire lived, many farmers and landowners who were reduced to great straits, and these men, when they read the newspapers to-morrow would rejoice and set about their work buoyed up with brighter hopes than they had known for many years.

SIR JOSEPH PEASE (Durham, Barnard Castle)

said he had listened to a great many Budgets, and without wishing to draw comparisons between one Chancellor of the Exchequer and another, he certainly thought it right to thank the right hon. Gentleman opposite for his clear and lucid statement and for the many sound doctrines which he laid down in the course of it. He hoped that the right hon. Member would print a revised edition of his speech in order to distribute it among Members of the House. That course had been taken on more than one occasion in the past, greatly to the advantage of those who wished to study a nation's accounts. But after all this Budget must be looked upon as a very melancholy Budget. It was melancholy when considered from the point of view of the general state of Europe and its tremendous armaments. We were now spending 12 millions more on the Army and Navy than we spent 20 years ago, and 15 or 16 millions more than it was usual to spend when he first had the honour to take part in the discussion of the Estimates in that House. He had read speeches made by the present Leader of the House in which he advocated earnestly and straightforwardly a system of international arbitration which would do away with the necessity of these large armaments and this enormous expenditure. He wished to urge the Government to make strenuous efforts to bring-about the general acceptance of the system of arbitration, so that an end might be put to this terrible military competition and this constant increase of costly armaments. In the course of that discussion they would probably hear many references to the distressed state of agriculture. He came from a district where there was no derelict land, and where no farms were unlet. The local Chamber of Agriculture had declared recently that any farm in a well managed estate in the district was sure to let and at perhaps more than its present value. His own belief was that what was wanted in the interests of the farmers was a general revision of taxation, not piecemeal revision. What the Chancellor of the Exchequer proposed to do in regard to the Land Tax might prove to be a present to the landlords. The whole of the surplus was practically going into the hands of one section of the community. He did not say that the agricultural interest was not a very large and important one, but there were other industries that had suffered far more than the farmers had and yet no part of this surplus was to be applied for their relief. The whole question of the incidence of taxation ought to be reconsidered and dealt with by a Royal Commission or in some other authoritative manner. He would take that opportunity to remind the Chancellor of the Exchequer that most of the prophecies which were made by the right hon. Gentleman's supporters in the Debate on the Budget in 1894 had not come true. He remembered his right hon. Friend the Member for Wolverhampton saying— that the burden of the alteration of the duties would fall most heavily upon personal property. That view had been borne out by the facts. The £850,000 which had fallen upon agricultural land seemed to have been paid almost at once. That might be accounted for to some extent no doubt by the low rate at which money could be procured from bankers on land security. It had been made plain, however, that the Duty had not fallen so heavily upon agricultural property as was expected by right hon. and hon. Members opposite.

*MR. CUTHBERT QUILTER (Suffolk, Sudbury)

desired to add his meed of approval to the proposals of the Chancellor of the Exchequer and he thanked him for the sympathetic manner in which he had spoken of agriculture and art. As an agricultural Member and as a humble worshipper at the shrine of art, he thanked the right hon. Gentleman warmly. This was almost the first occasion on which he had heard sympathy for art expressed in high quarters in that House, coupled with something more tangible than sympathy. He believed that the possessors of art treasures who had been dispersing them during the last year to the loss of this country and the gain of others would now be induced to hold their hand, and that men who had made fortunes on the Stock Exchange and in other ways would be encouraged to form new collections. Art lovers who spent their money in the formation of collections which gave pleasure to so many people ought not be singled out for increased taxation. He did not now attempt to discuss the proposals made for the relief of agriculture, but would simply say with regard to the county he had the honour to represent, those proposals would give great satisfaction as an earnest of practical sympathy.

*MR. J. W. LOGAN (Leicestershire, Harborough)

said, he was also an agricultural Member, but he could not help expressing his surprise that the whole of this surplus was to be given to one class in the country. When he heard the Chancellor of the Exchequer tell of the continued prosperity of this country he could only regret that some portion of the surplus was not allowed to find its way to the relief of the indirect taxpayer, and that no portion was set aside for the purpose of providing old-age pensions for the deserving poor. The whole of the surplus was to go to the landlords of the country. There was no good mincing the matter. The relief was not to be given to those who were suffering from the agricultural distress, but to the landlords. He had it on the authority of the President of the Local Government Board that any relief in the rates on agricultural land must eventually find its way into the pockets of the landlords. He would remind the House and the country, and he thought it was time the country realised the figures, that to day the agricultural rentals of Great Britain were £2,000,000 sterling in excess of what they were 50 years ago. That sum capitalised at 20 years' purchase amounted to no less a sum than £40,000,000 sterling, which represented the increased selling value of agricultural land in England to-day. Taking the whole of the land of England, agricultural or otherwise, during this century, since the time his father was born, its selling value had increased by no less than £2,000,000,000 sterling. It was not fair to the rest of the community that when there was a surplus it should be used exclusively for the benefit of one of the wealthiest and best-to-do classes in the community. He was anxious to see what was known as the free breakfast table, and when the Chancellor of the Exchequer talked of the prosperity of the country and of the increase in the consumption of tea and other luxuries, he would like to remind him that in London at the present time 30 out of every 100 of the people were in a state of poverty. Notwithstanding the enormous wealth of this city, the entire upper and middle classes in London to-day did not number above 18 out of every 100; and in 37 districts in London, the richest capital of the richest country in the world, the proportion of those in absolute poverty was 40 in the 100, and in many cases rose to 60 in the 100. He contended that this money ought to have been used to benefit the poorer classes in the country. The working man in England paid much more taxation in proportion to his income than the rich man. Every fortnight from his place on a Board of Guardians he saw agricultural labourers who had toiled faithfully and well all their lives for a wage which never allowed them to put anything by—he saw these men come forward as mendicants for public charity. That brought a flush of shame to his cheek as an Englishman, and he only wished the Chancellor of the Exchequer had enabled his Party to carry out the pledge they gave at the last General Election that old-age pensions should form a part of their programme. He had seen the whole country placarded "Vote for So-and-So (the Conservative candidate), the toiler's true friend." Was he the toiler's true friend that evening? Whilst he must apologise to the House for having spoken at such length, he desired to refer to another class of persons who should have derived some benefit from the surplus. He would plead in favour of the old soldiers of this country. As an Englishman, he had felt ashamed the other night when he heard the right hon. Gentleman the Under Secretary for War state that the number of old soldiers in the workhouses of England and Ireland was so great that it was utterly impossible to entertain any proposal for pensioning them. He was sorry that it had not been proposed to spend some portion of this large surplus in establishing a system of old age pensions. He had no doubt that the Government, with the great majority they had at their backs, would be able to force this Budget through the House. The artisans and the working classes of this country had made their beds by giving the Conservatives a majority, and, therefore, they would have to lie on them. The taxpayers and the ratepayers of the country would have to find this money that was about to be handed over to the landowners. En conclusion, he thanked the House for the courtesy with which they had listened to him.

*SIR HOWARD VINCENT (Sheffield, Central)

said, that the Budget of the right hon. Gentleman the Chancellor of the Exchequer was, of course, a brilliant one, because trade was always flourishing under a Conservative Administration. He was not going to attempt to analyse the causes of such a state of affairs, but the chief reason might be found in the confidence which the present Government inspired in the country. The point to which he desired to draw the attention of the right hon. Gentleman the Chancellor of the Exchequer was the prospective increase in the burden of direct taxation in the future. He could never understand why the members of some professions and trades should be compelled to pay licences for leave to carry on their business. Again, why should people be compelled to pay a licence because they employed a male servant, a helper in the stable or the garden. If that system were to be maintained, however, he thought that, where a foreign servant was employed, the duty should be largely increased, if not-doubled. But the point to which he was most anxious to call attention was that which related to indirect taxation. The right hon. Gentleman the Chancellor of the Exchequer proposed to raise £21,000,000 by the Customs Duties. No nation in the world, with the exception of the United States, raised such a Revenue from Import Duties. Those duties were raised practically upon four classes of articles, namely, tea and coffee, cocoa, dried fruits, and tobacco. With the exception of tobacco, the whole of the Revenue was raised by an ad valorem duty of from 6O to 70 per cent. Both the right hon. Gentleman the Chancellor of the Exchequer and the right hon. Gentleman the Member for Monmouth had referred to the fact that these articles were mainly consumed by the working classes of the country. He joined with the hon. Gentleman who had just spoken in expressing regret that the right hon. Gentleman the Chancellor of the Exchequer had not seen his way to reduce the Customs Duties upon these articles of consumption which had become of paramount necessity in every home throughout the country. These articles had not to meet with any internal competition. The Customs Duties upon these articles amounted to £4,000,000 per annum, and he agreed that no one had a right to propose to strike that amount off the Revenue of the country unless he could show how the money might be otherwise obtained. His suggestion was that the £4,000,000 should be obtained by putting on an import duty upon foreign wholly manufactured and partly manufactured goods. In 1855 the value of foreign manufactured goods was £109,000,000, and in 1893 that value had risen to £312,000,000. The value per head of the population of such imported manufactured goods had risen from £3 19s. 1d. in 1855 to £8 2s. l0d. in 1893. He did not hesitate to say that this enormous increase in the value of imported foreign manufactured goods was a great danger to the country, which the Government of the day ought to watch and guard against by every possible means.


Order, order! I think the hon. and gallant Member is going outside of the subject under discussion.


said, that of course he should bow to the ruling of the hon. Gentleman, but he was anxious to draw attention to the enormous increase that had taken place in the importation of foreign manufactured goods into this country, and to show the right hon. Gentleman, the Chancellor of the Exchequer, that instead of the £4,000,000 which he now obtained from the import duties upon tea and similar articles he could obtain a revenue of £7,000,000 by imposing a duty upon foreign manufactured goods. Ten per cent. upon £60,000,000 worth of foreign wholly manufactured goods would produce £6,000,000, and five per cent. upon £20,000,000 worth of foreign partly manufactured goods would produce another £1,000,000, making £7,000,000 in all. This would not only give an increased Revenue, but would be in the interest of the British artisan. The returns of trade for the past thirty years would, he maintained, explode the theory that putting a duty even upon foreign manufactured goods would have a tendency to decrease the export of British goods to foreign countries. Year by year the disproportion between the import and export trades became greater, and while the import trade was increasing to such an enormous extent it could not be contended that imports were paid for by exports. A tax on foreign manufactured goods would not in the slightest degree, he believed, decrease the export of goods from this country, and if the Chancellor of the Exchequer would adopt this course he would improve his Revenue, relieve the working classes, and further the policy of the Secretary of State for the Colonies of developing trade within the British Empire.

On the return of the CHAIRMAN, after the usual interval,

MR. J. CALDWELL (Lanark, Mid)

said he would not follow in detail the hon. Member for Sheffield with regard to the taxation of foreign goods entering the country. But the answer to him was simple. It had been shown repeatedly that any taxation on foreign imported goods meant taxation, not of the foreigner, but of the users of the goods. It had also been demonstrated that if we exported manufactured goods to other countries we must on the principle of "give and take" allow their goods to come in on the same footing, otherwise they would not take so many of our manufactured goods as formerly. No doubt our export trade was increasing. But it was chiefly in machinery, and when China, Japan and other countries had obtained the best machinery they would become formidable competitors with us. [At this point the hon. Member's remarks were interrupted by an unsuccessful attempt to count out the House.] He was glad the Chancellor of the Exchequer had alluded to the proportion of direct and indirect taxation in this country. Taxation should be borne by those best able to bear it, and it was unreasonable that the working man should pay such an enormous proportion of the taxation of the country in the form of indirect taxation. During the last fifty years, owing to the extension of the franchise and the increased power of the working classes, the proportion of direct and indirect taxation had almost been equalised. But the Government proposed by this Budget to go back on the policy which had been followed for the last fifty years. With regard to the Death Duties, he submitted that when a man succeeded to works of art which he could sell and convert into cash he should pay Death Duty in respect of those works of art.


My proposal is that duty shall be payable whenever works of art come into the possession of the person who sells them or is competent to dispose of them.

MR. CALDWELL (continuing)

said that with regard to the Land Tax, which was to get £100,000, the Chancellor of the Exchequer had stated that those parties who had purchased land in recent years had purchased it with the burden upon it, which was really a rent charge, and there was a difficulty in giving relief to those parties who had purchased with a knowledge of the burdens existing on the property. For his part he could not see how they could give State money for the reduction of the Land Tax without violating the principle that they were giving the money of the State to people who had purchased property well knowing that it had this burden upon it. Then came the question of the application of money to agriculture. In Scotland the local rates were payable, one half by the landlord and one half by the tenant, and the effect of this Bill would be that whatever proportion of the subsidy went to Scotland, one half of the money would go directly into the pockets of the landlords. [The CHANCELLOR of the EXCHEQUER: "No, no!"] It would depend, then, upon the way in which it was allocated. There was this further objection: Suppose they gave it entirely to the tenant. When he made an offer for his farm the tenant made it with a knowledge of what the local taxes were at the time. Of course if the tax was to be higher the tenant would give a correspondingly lower rent, and if the rates were reduced perhaps during the existence of the lease, the tenant might, to some extent, reap the benefit during those years; but whenever the lease came to an end the land would be in the open market, and the rates being less the landlord would expect a higher rent for his land. Thus, at the end of the lease, the money would go into the pocket of the landlord and the landlord alone. As to the proportions that were to be allocated to England, Scotland and Ireland, he had always thought it a strange matter that a Unionist Government should be the first to establish a Separatist principle with regard to the finance of this country. Up to the last Unionist Government the country had been treated as one Imperial whole without reference to nationality. The distinction was first raised in the last Parliament by the present First Lord of the Admiralty, who separated the United Kingdom into the three nationalities of England, Scotland, and Ireland, and then gave Scotland, England and Ireland each her share of the Probate Duty. The Government were going to perpetuate that system of breaking up the United Kingdom into nationalities in their proposals with regard to agricultural taxation. How did that work out? In the case of the Probate Duty, the percentages were 80 per cent. for England, 11 per cent. for Scotland, and 9 per cent. for Ireland, these being the proportions in which each country contributed to that duty. There was some reason for that course then, but here they were not dealing with the Probate Duty at all, but with a totally different subject, namely, the relief of agricultural distress. The matter had nothing whatever to do with the Probate Duty or the proportion in which each country subscribed to it, and the relief should be governed by the necessities of each country irrespective of nationality. Look at the absurdity of the Government proposal! Everyone must admit that the agricultural interest was greater in Ireland than in Scotland; and yet, while Scotland was to receive 11 per cent. Ireland was only to receive 9 per cent. Was there ever a more insane proposal brought before the House of Commons? Instead of taking the basis of the Probate Duty, which had nothing whatever to do with the matter, the Government ought to take as their basis of distribution the relative proportions which each country paid to the Imperial Parliament.

*SIR ALBERT ROLLIT (Islington, S.)

observed, that no one could have listened to the statement of the Chancellor of the Exchequer without admiring both the matter and the form of it, and he thought the Committee was greatly indebted to the right hon. Gentleman for the manner in which he had placed the subject before them. He desired to say a word or two on not the least important of both the Chancellor's and ex-Chancellor's observations, viz.: The matter of the Savings Banks. The Chancellor of the Exchequer had said that the question of the payment of the current rate of interest was undoubtedly arguable, and had intimated that he might possibly initiate legislation on the subject. He rose to make an appeal to the right hon. Gentleman, which had also been made by the right hon. Member for Monmouthshire, that any such legislation should not take the form of a reduction of the limit of deposits. The extension had only recently been made, and as Chairman of the Inspection Committee of the Trustee Savings Banks he had special opportunities of knowing how valuable that had been to the saving portion of the people. It must be remembered that the people who saved saved not only for themselves, but also for the State. He did not hesitate to say that even some slight loss in interest was, in the end, for the economic benefit of the State, because these habits of thrift undoubtedly prevented many ultimately coming upon the rates and from being a burden upon local taxation who, under other circumstances, might be in that position, and he was therefore glad to hear the Chancellor's readiness to make such sacrifice as to interest, while the ex-Chancellor was quite opposed to this. He believed the Chancellor of the Exchequer was wrong in the inference he drew that the savings banks, as a whole, did not benefit generally the class for which they were intended. He thought the right hon. Gentleman inferred that, because deposits had been made of large sums up to the extreme limit, the class who were depositing were not the class of very limited means for whom the banks were specially intended.


said he thought his hon. Friend had misunderstood him. What he said was that unquestionably they benefited the class for whom they were intended, but also that they benefited a very large number of other persons who deposited in the banks the annual limit of,£50 in a single sum, and who did not, presumably, belong to the working classes.


accepted the qualification of the right hon. Gentleman, although he did not think he had misunderstood the general bearing of the Chancellor's remarks. He thought the inference was unfounded, and one possible cause of the fact that deposits of large sums were frequently made in one sum was indicated by the late Chancellor of the Exchequer when he said that one great advantage of their savings banks was that if people removed from one part of the country to another, they always had them immediately accessible. He believed that a large number of these deposits in single considerable sums was due to this very facility; for though deposits could be transferred, they were frequently, upon removal from one town to another, withdrawn, through ignorance of the regulations, and redeposited, just as the stock investment regulations were not generally understood, and so not greatly used. This subject of class-investments had been very carefully studied by the Inspection Committee, and very valuable and striking figures were placed before them with reference to Aberdeen and Glasgow, and they came to the conclusion that these figures showed that the Trustee Savings Banks continued to serve very generally the needs of the working classes, both in the skilled and unskilled branches, and especially domestic servants, who were much liable to be plundered. The result of his own observation was that these banks were still serving essentially the class for which they were intended, and he desired to pay a tribute to the trustees and managers who, for nearly a century, had devoted their time and thought to the interests of these depositors. By the Act of 1891 the House, very properly, imposed upon them stringent obligations as to the mode in which accounts should be kept, the audit made, and excessive expenses of management reduced, and the like, and they had been almost universally conformed to, and also without great difficulty. The Inspection Committee had, under that Act, specially examined these banks, and they found that, almost without exception, they were in a condition which merited the confidence which had been reposed in them, and that they were even safer and sounder than they had been, and he thought that, under these circumstances, reducing as they were their expenditure, and doing their duty thoroughly to the community, they were entitled to very great consideration. He hoped, therefore, that when legislation was proposed, great care would be taken to retain their advantages for the benefit of the saving public. He heard with interest, and also with welcome, the statement that Chinese teas were being replaced by teas from India and Ceylon. But, while this was good, he hoped that it did not indicate a transition which would be disadvantageous—viz., that we were losing our hold on China, with its consuming millions, for exports and imports were correlative terms. Politically there had been difficulties in the Far East, and to-day they had not, in his opinion, nearly the commercial representation they ought to have there. For his part he welcomed the enterprise of the Blackburn Chamber of Commerce in sending out to China a commercial mission, as Lyons had done. He thought he might venture to say that the reception which had been given that night to the question of the graduation of the Death Duties, and the absence of any change, indicated that those of them who supported that change were justified in the course they took, but he was glad that the Chancellor of the Exchequer had taken the opportunity of remedying some of those inevitable difficulties which had arisen in the administration of a new law. He thought in that respect he had done a public service. He heard with interest what he said about works of art. He thought that in the case of heirlooms there was great reason for consideration, but he did not quite follow the right hon. Gentleman when he spoke not of the interest of the old family but of the collector. Collecting was one of the most profitable forms of investment, and while they should give every consideration to those who collected in the course of ages, through their families, and to whom such works as portraits, etc., had i a pretium affectionis, and were of priceless value, he did not think they ought to extend that consideration to those who made it simply a business to collect. The appropriation of the surplus was a subject upon which there might be some differences of opinion, but he thought that there would be none as to the appropriation of a considerable portion of it to education. To his mind, education was the most economical expenditure which they incurred, and he ventured to hope that when they came to discuss that appropriation, while the interests of one class of schools, viz., the Voluntary ones, would not be lost sight of, on the other hand they would not overlook the supplementary national system in our Board Schools. All of them deeply sympathised with the difficulties and relief of agriculture, but the proposal with regard to differential rating—he meant the reduction of agricultural rating, and the maintainance of urban rating, possibly in two absolutely contiguous holdings—raised a question of the very gravest importance, and one which would require very serious consideration. He trusted that when that subject came before the House that consideration would be given to it, but he was bound to add that he felt that the first step in dealing with this gravely important question should, he thought, be the appointment of a Select Committee to consider the whole subject in all its bearings—not only the incidence of taxation as between the various forms of land and other property, but the possibility of bringing other forms of property into rating and to take their share of public burdens as well as of public benefit. Meantime, he shared the opinion expressed from these Benches, and also from the Benches opposite, that the time had come when some of them must appeal for the redemption, if not the pledges, still of the strong views which they expressed on the subject of pensions for the aged poor. One hon. Member referred to the condition of the rural labourer. He would refer to the condition of the London industrial working-man at an advanced age. The Committee might not realise that one out of three of the working-classes of London found their way to the workhouses after 65, who had never received relief before they were 60. This showed that they were among the industrious and deserving poor up to the period of old age, and he could not help hoping, when so much was being done in other countries, though the German system was not quite an example to be followed, that the time was not far distant when, with these increasing surpluses, the Chancellor of the Exchequer would find some means of providing for the industrial poor of this country that which would give them not only hope for their old age, but encouragement and inducement to devote themselves to the industrial interests of their country.

*SIR SAMUEL MONTAGU (Tower Hamlets, Whitechapel),

said he differed somewhat from the last speaker with reference to the deposits in savings banks. He thought it must be generally agreed that the interest they paid on the savings banks deposits was excessive. The loss was far greater than was at first sight apparent. The yield in the State funds was barely 2⅜ per cent. Therefore, it was not only the loss of 2s. 6d. per annum on every £100 deposited, but they had to add to that the heavy loss for administrative charges. And, again, if very bad times occurred, or even very good times, with activity in trade, and money was withdrawn from the savings banks, a loss of 5 or 10 per cent. on the capital might be incurred in having to sell out stock to pay for these deposits. By attracting more money and investing it in Consols they would do much towards artificially raising the price of stock and damaging the operations of the State in regard to the sinking fund. During the past few months he had made inquiries in the City and elsewhere and there was only one opinion—that the interest should be reduced. They would all wish, of course, to encourage thrift, but he thought it might be done without a waste of money. He did not think that in any other country a greater interest was given on savings banks deposits than the rate paid on the State's own funds. In Belgium, where this description of business was admirably conducted, the Government paid on savings banks deposits 3 per cent. on sums up to 3,000 francs, and, when that limit was exceeded, the whole interest sank to 2 per cent. In that country the savings banks were administered by a separate Department, with good resources and reserves, so that there was provision to meet every possible contingency, and, besides this, the deposits were guaranteed by the State. He would suggest that Her Majesty's Government should continue to allow 2½ per cent. on deposits not exceeding, £50, and that for any higher sum the interest should go down to 2 per cent. There was undoubtedly a great advantage in having a multitude of small depositors; 20 depositors of £10 each were far better than one depositor of £200. If the rate of 2½ per cent. was only continued for sums under £50, the number of depositors would not be materially decreased, and a loss would be avoided. The Chancellor of the Exchequer, however, had promised to consider the matter at a later period, and he trusted the right hon. Gentleman would find some mode of satisfactorily dealing with it. He much regretted that the Budget did not include some proposal for the regulation of stamps on bills of exchange and stocks, for he believed reform might be introduced in this matter which might prove advantageous to the revenue and to the trade of the country. He suggested that the Chancellor of the Exchequer should appoint a Committee—either a Departmental Committee or a Committee of experts—to consider the subject. ["Hear, hear!"]

*Mr. GIBSON BOWLES (Lynn Regis)

said that in common with the whole House he listened with admiration to the most perspicuous statement made by the Chancellor of the Exchequer. ["Hear, hear!"] Rarely had a statement so long—necessarily so long—been so plain or left such little doubt as to its meaning. The statement was maintained throughout at a high level, and it enunciated principles of a very important character. He was sorry, however, that the right hon. Gentleman used the phrase, "the old man of the sea" as though the Navy were an incubus upon the nation.


That was not my meaning ["Hear, hear!"]


said he did not think the right hon. Gentleman did mean to use the term in any objectionable sense, but people did sometimes use unfortunate expressions. ["Hear, hear!"] However, without "the old man of the sea" the old man of the land would be in a perilous and dangerous condition. ["Hear, hear!" and laughter.] The right hon. Gentleman proposed to give the old man of the land £1,000,000, and he did not complain of his doing so, but he trusted the right hon. Gentleman was not under the impression that "the old man of the sea" was getting more than his share. He was surprised to hear the Chancellor of the Exchequer attribute the payment of direct taxation to the propertied classes and the payment of indirect taxation to the unpropertied classes alone; for the fact really was that the greater part of the indirect taxation as well as of the direct taxation was paid by the propertied classes of the country. ["Hear, hear!"] The right hon. Gentleman had complimented his predecessor for having been correct in his estimate that £14,000,000 would be derived from the Death Duties. But the compliment was uncalled for, because the late Chancellor of the Exchequer did not estimate or expect that amount. He estimated the duties at £12,500,000, but said that what he expected was that in the course of years the final and ultimate and highest amount of the Death Duties would be £14,000,000. Then, again, the late Chancellor of the Exchequer said that of this £14,000,000 the sum of £2,500,000 would go to the Local Taxation Account. Now they had over £14,000,000, and instead of £2,500,000 going to the Local Taxation Account an appreciably smaller amount—£50,000 less—would be so devoted. The late Chancellor of the Exchequer, therefore, was wrong not only in his statement with regard to the £14,000,000 relating to the Death Duties, but also in his statement of the proportion to be paid to the Local Taxation Account. The Chancellor of the Exchequer said the results of actual revenue for 1895–6 amounted to a falsification of Estimates. He did not like strong language, and would prefer to say a mistake, a blunder, a miscalculation. But it was a very notable blunder or mistake, because up to this point the Estimates of the Inland Revenue Department had been so very remarkable in their approximation to the results. Last year, the ex-Chancellor of the Exchequer said the Death Duties had realised within £32,000 the sum estimated. It was not £32,000, but over £300,000. But that was a small blunder compared with those made this year. First of all the, Inland Revenue Department made a blunder of £1,500,000 in the Death Duties; and, secondly, a blunder of another £1,500,000 on Stamps; total, £3,000,000; which was pretty good in a grand total of £15,800,000. He only hoped that, in making his calculations for next year, the Chancellor of the Exchequer had borne in mind the mistakes made in the year just past. He did not greatly blame the Inland Revenue Department for its miscalculations, especially with regard to the Death Duties. Those Duties were casual in their nature; they depended upon the number of deaths, and upon the state of the weather, and their yield depended upon the kind of deaths—upon whether the deaths were those of paupers or of millionaires. Their incidence, too, was extremely unequal; and that, in his opinion, was a strong argument for them being mild and moderate in their amount. Only one other small point. Last year there was a falling-off of £18,000,000 in personalty. The ex-Chancellor of the Exchequer said last year, and he had repeated it to-night, that that was due to the number of people who sent in their accounts being much less. Yes; but when he looked at the return of the Inland Revenue Commissioners he found, to his surprise, that they had omitted a very large class, the largest of all the classes —those of under £100. The number of the accounts omitted was no less than 16,009. When they added those 16,000 omitted accounts they found that the difference between the year before last and last year was practically nothing at all. He admitted that the revenue from the Death Duties was more than he expected; it was a great deal more than the Inland Revenue expected. But he reminded the House that when dealing with the probabilities of this year's revenue he said the ex-Chancellor or the Exchequer might be saved in his calculations by an epidemic of deaths of millionaires. That epidemic had occurred. But it was not only that actual millionaires had died; it was that artificial millionaires had been created; that men had died who, under the old system, would not have been millionaires, men who did not leave a million of actual property, but who were created millionaires by notional and constructional property being added to the property they really left. This year the deaths of millionaires had been remarkable for their number. For the last 33 years they had averaged three a year; the largest number was five and the lowest number one. This year, he understood, there had been no fewer than eleven deaths of actual and artificial millionaires, whose property had paid duty. Almost that alone would suffice to account for the increase in the duty obtained. He had always held that the principles upon which the Act was founded were fiscally false; that they must finally defeat themselves, and finally result, not in an increase, but in a decrease of revenue. His justification lay in the statement the Chancellor of the Exchequer had made to-night on the authority of the officials of the Inland Revenue. The right hon. Gentleman had told them that next year, in spite of the prospect of increasing prosperity, they were to expect, not a further increase, but a decrease in the Death Duties a very large decrease —a decrease of £650,000. As to that, he would say this—that if the Estimates of the Inland Revenue were not more accurate next year than this, instead of a diminution of £650,000 they might have to add a million to it. It might be a decrease of two millions. His opinion was that sufficient had not been allowed for the various diminutions that might take place. They were now beginning; he believed they were increasing, and his opinion was that after three or four years' action of this Act it would be found such a fiscal failure that the Chancellor of the Exchequer would be driven to repeal it. He rejoiced that the Chancellor of the Exchequer did not propose to apply any part of the surplus to the purchase of workmen's dwellings, without any cost to themselves, or to suppressing of voluntary friendly societies by initiating a State system of old age pensions. He was glad his right hon. Friend had not frittered away any part of the surplus on these Socialistic experiments of the "policy of construction." He rejoiced greatly that he had given his attention to the Death Duties. The hardship which had been wrought by these duties was well within his knowledge, because it so happened that he had been the recipient of complaints from all parts of the country. [A laugh.] It was a fact that people had written to him at great length from every part of the country. ["Hear, hear!"] The complaints he had got were not from the rich, but from the poor and persons of moderate means and small means, who had suffered under what he ought to call the extortions, which he should call the exactions—the legal exactions—carried out under this Act. It was the poor people who had suffered most. He instanced the case of a poor old washerwoman who, on a cottage left her worth £50, had to pay £5. ["Hear, hear!"] Then, again, what could be more unjust than to charge a man on property which returned to himself? He thought the Amendment by which payments might be made by instalments good in principle though he feared it would lead to complications. Finally, with regard to works of art and heirlooms here, the Chancellor of the Exchequer was only reverting to the old principle of the Legacy Duty Act. It was perfectly monstrous that a man who had works of art and got no profit out of them, only looked at them and was merely their custodian should be charged. These Amendments, however, were not all that were required; he hoped to show him that there were other cases in which the Act required amendment. He should commend these matters to the sympathetic consideration of the right hon. Gentleman. On the whole he thanked him for the nature of his Budget. He believed it would be popular in the country.


said there were some points to which he wished to draw the attention of the Committee. The Chancellor of the Exchequer had become heir to an enormous surplus — a surplus unparalleled in this country. He had a surplus of £6,500,000. He thought that they in Ireland might naturally have expected that some consideration should have been shown to the Irish people in view of this enormous and extraordinary surplus, because as the Chancellor of the Exchequer truly pointed out, the condition of prosperity in Great Britain had been almost unparalleled; but the prosperity had accrued at the same time with an unparalleled depression in agriculture. No language was too strong on his part to express their sympathy with and show compassion for agriculture. A considerable portion of the surplus had been applied to agricultural interests. What he desired to point out was this—that in Ireland they had not shared in that prosperity in any way whatever. They had only got practically one industry in Ireland, if he excluded one small district in one corner of the country, and that industry was agriculture. He, therefore, held that the people of Ireland were entitled to claim a much larger proportion of the surplus than would go to them under the plan proposed for the relief of agriculture. What did he announce? He had announced that Ireland was to share only in this sum of £975,000 which was to go in the relief of the local rates. The right hon. Gentleman stated that the sum in relief of distressed agriculture must be apportioned between the three countries in the old proportion of 80 per cent. for England, 11 for Scotland, and 9 for Ireland. The Irish Members protested years ago against those proportions when they were first set up as being most unjust to Ireland, and they would protest with even greater vehemence against them on the present occasion. Ireland had been hit to an enormously greater degree by the agricultural depression than England. [Ministerial ironical laughter.] There could be no controversy on that point. He was taking each country as a whole. It had been admitted that in England, in spite of agricultural depression, the year had been one of unparalleled prosperity in the towns. That could not be denied. In Ireland they had not got the trade or manufactures, the prosperity of which had redressed the balance in in England. Ireland was a purely agricultural country, and, therefore, in that country the full weight of the depression in agriculture had been felt without anything in the way of prosperity in trade to relieve it. And yet the, principle underlying the distribution of the portion of the surplus allotted to the relief of agriculture was not that each country got its share according to its necessities, but that Ireland, because she was poor, should get less, and England because she was rich should get more of the relief. In other words the relief was to be given, not in proportion to the necessities of the people to be relieved, but in proportion to the wealth of the different countries. That was a vicious, a wrong and an unjust principle, and a principle against which they would fight in that House to the fullest possible extent when it came to be applied in the Agricultural Land Rating Bill, not because they wished to deny to English ratepayers a fair proportion of the relief, but because they thought the proposed arrangement was grossly unfair to Ireland. The Chancellor of the Exchequer in accounting for the surplus referred to the great increase of the Revenue from the Tobacco Tax which was the main instrument by which Ireland was compelled to bear an unfair proportion of Imperial taxation. Ireland paid about one-eighth of the whole of the Tobacco Tax, whereas its fair proportion would probably be one twenty-fifth, which was another reason why Ireland was entitled to a larger proportion of the relief than it was proposed to give her. The brewers all over the kingdom had denounced the late Liberal Government and the Irish Members who supported that Government because they proposed to sacrifice the interests of that great trade. But now they had got in office a Unionist Government in an unassailable position of power and in possession of an enormous surplus, and he begged to draw the attention of the great brewing interest of Ireland to the fact that this Government which floated into power on the beer of the brewers had deliberately abstained from giving relief to the brewers. What had the Government done with their surplus? He believed that no Government had ever faced the taxpayers of the country with a surplus so large as the present Government. At any rate, here was a Government in possession of a surplus which was not of their own creation, but which came to them as a legacy from their predecessors through the working of that just and far reaching Measure, the Finance Act of 1894, which they hated, but dared not destroy; and yet with that enormous and unprecedented surplus they deliberately faced the taxpayers of the country without any proposal for the relief of taxation. Without appropriating more than one-half of the surplus it would have been possible to redress all the financial grievances of Ireland, But the Government actually had the audacity to face the country with a surplus of 6½ millions and without any proposals for remission of taxation. That surplus had in part been handed over to the landlords, but by far the greater proportion had been seized upon to meet the enormous and insatiable demands for armaments. This system of monstrous and bloated expenditure on armaments was unfortunately in the ascendancy in England now; but he should continue to protest against it; and the time would come when a great reaction would set in.

*MR. B. L. COHEN (Islington, E.)

said that he wished to pay his tribute to the lucidity with which the Chancellor of the Exchequer had explained his Budget. He should have thought nobody could have misunderstood that statement, but the hon. Member for East Mayo had evidently done so. The hon. Member spoke of a surplus of 6½ millions, while the Chancellor of the Exchequer explained that the surplus at his disposal was £1,715,000.


I was speaking of the surplus of last year.


said that that surplus was absolutely beyond the control of the Chancellor of the Exchequer. The right hon. Gentleman had expressed adherence to the principle heretofore the law of the land that the surplus of a past year should be applied to the reduction of the funded debt of the country. He shared the hope that that practice would not readily be departed from. He himself did not distinguish between the old and the new sinking fund. Both were equally applicable to the extinction of debt. He did not deplore the expenditure on the Naval defences of the country; but he believed this expenditure would remain normal for a great number of years; and it ought to be met out of the money raised within the year, and not out of such haphazard sources as a surplus in a time of prosperity, which, by law, was appropriated to the extinction of debt, and by which alone debt could be extinguished. As to the extremely important subject of the Post Office Savings Bank, he had thought till that day that the Chancellor of the Exchequer was disposed to make too light of the serious consequences to the taxpayers and to the Exchequer from the altered condition of the money market. The right hon. Gentleman's attention had been called to the gradually diminishing margin and growing deficit resulting from the falling-off in the income and resources of the Post Office Savings Banks to meet their interest. Not only that, there was a source of considerable danger and loss resulting from the high price of Consols. On the 10th February he called the right hon. Gentleman's attention to the fact that the law provided—to meet depreciation in the price of the Funds —only a grossly inadequate sum of 5 per cent. on the excess of the yield of the assets over the liabilities. His right hon. Friend informed the House that the deposits in the Savings Banks and Trustee Banks now amounted to the enormous total of 141 millions sterling. The provision for depreciation in the value of the stocks held by the Department against these savings amounted to £200, just £2 per million. His right hon. Friend informed him that he thought it was premature to inquire into the question. In that he differed from his right hon. Friend. He did not regard the price of the Funds as in any way a test as to the provision to be made for depreciation, except indeed he should say that the higher the price of Consols the greater the necessity for making provision against loss. And more, it was quite certain that, as the Commissioners could only invest in Government, stock and as they were obliged to invest at 109, 110, and 111, if, and when they were obliged to sell stock because of the withdrawal of a portion of the deposits, because there was a pressure in the money market at home, because there was some political disturbance on the Continent, or perhaps—which Heaven forfend!—even at home, their paper margin—for it was all on paper—would at once disappear, and they would incur, in addition to the loss which was annually being incurred from the high rate of interest, a further loss on the price at which the Department invested the capital. The right hon. Gentleman the Member for Monmouth rather threw in the teeth of the Ministerial side of the House what he called the proper appropriation of the surplus inherited by Sir S. Northcote from the Government to which he succeeded. The right hon. Gentleman said that Sir S. Northcote remitted taxation, and that that was the proper way of dealing with a surplus. But that was precisely what the Chancellor of the Exchequer was doing; he was appropriating it in relief of an industry with which he believed the House was most deeply sympathetic. With regard to the increased consumption of beer he did not, as the late Chancellor of the Exchequer suggested, regard it as an evidence of drunkenness that the people drank to the health of the Government and, as regarded drinking, he had before him a return of the consumption of beer per head of the population for the last ten years, and it did not show that the consumption of barrels had varied very much between 1890 and 1894. On the other hand tea had gone up, and it was an injustice to the population to attribute to them greater intoxication. There was less drunkenness, only the consumption was more widely distributed. He hoped his right hon. Friend would look carefully into the point about the Savings Banks.


regretted that the Chancellor of the Exchequer had given the Committee no intimation of any provision for the superannuation of teachers. In disposing of a million of his surplus to relieve the agricultural interest, he thought that the right hon. Gentleman was giving it to a purpose which would raise considerable dispute in the House; but if a portion of the money had been devoted to the purpose he recommended he believed that the right hon. Gentleman would be supported by both sides of the House. Earlier in the Session he asked the First Lord of the Treasury whether the Government intended to introduce a Bill for the superannuation of teachers. He was told that it was the wish of the Government to introduce such a Bill this Session. He hoped the Chancellor of the Exchequer would make provision for carrying into effect the desire, of the First Lord of the Treasury.


expressed to the Chancellor of the Exchequer his warmest thanks for what was intended to be done in relief of agriculture. He regretted that from the other side of the House some remarks had been made which showed little sympathy with the agricultural interest. Hon Members could not know the straits to which agriculturists had been reduced in Norfolk and East Anglia, nor could they apparently realise the present position of affairs. The relief that had been, asked for had been supported by all the Chambers of Agriculture in the country, the majority of which were composed of farmers; and it had been asked for also by the labourers in the rural districts. It was no mere relief proposal for the landlords. It was really whether agriculture in many districts could go on at all. Most of the landlords were in the last straits at the present time; they had been obliged to leave their homes [ironical laughter], and the villagers and the labourers in the district regretted the circumstance as acutely as anyone could do. Land must go out of cultivation in East Anglia, and if it did what would be the position of the farmers and labourers? If the relief was not given many additional labourers would have to leave the rural districts and flock into the towns, thereby increasing the burdens of the ratepayers there. Some hon. Members spoke of landlords in a disparaging way; but a great deal of the land in this country did not belong to private individuals at all. He was a Governor of Guy's Hospital. Twenty years ago that hospital had landed property worth £50,000 a year, and all this money was spent in carrying out a great. work for the benefit of the poor. The income of the hospital body to-day was £20,000a year; and thus the poor suffered from the distressed position of the landed interest. He was glad that his right hon. Friend had brought the question of savings banks forward, because it was one that could not but cause considerable anxiety. Looking at the question from a business point of view he saw a sum of £149,000,000; and with this amount of deposit how was the State to carry on its business of buying Consols to-day at 111, and being liable at very short notice to be heavily called upon for they knew not how large an amount. Times of panic, external or internal difficulty might give rise, to a heavy demand; and he hoped that the right hon. Gentleman would take into consideration whether the whole system of carrying on the savings banks did not require some alteration. He agreed with the Chancellor of the Exchequer that they could not carry on the business at a heavy loss. He was prepared to incur some loss in order to encourage thrift among the working people if need be; but the state of the money market would soon be such that 2 per cent. would be difficult to obtain by the savings banks. It was, therefore, important to consider how £200,000,000 were to be invested and kept in such a way that a sudden drain or demand could be met without a tremendous sacrifice of securities. He was glad that his right hon. Friend had suggested that the Death Duties were open to revision, and he trusted that the right hon. Gentleman would find it possible to exempt insurances effected for the express purpose of paying these duties from aggregation with the rest of a deceased person's property. It was hard when a man, whether rich or poor, insured his life in order to provide for the payment of his Death Duties, and ear-marked the policy for that purpose, that the amount for which he was insured should be added to his other property which must thus be brought within a higher grade, with the result that the duty payable would be larger. When asked to agree to this exemption the late Chancellor of the Exchequer said it would be impossible to make a distinction between different kinds of savings, between money invested in Consols or other securities and money payable on a life assurance. To meet that objection he might point out that the Government had already assented to the principle that life assurance ought to be encouraged by allowing a rebate of Income Tax on premiums paid for life assurance. He wished also to suggest that libraries should be given the same exemption as art collections were to have. There were many private libraries, which it was very important to keep together. In conclusion he wished to say that he believed that the line the Government were taking in connection with agriculture would be exceedingly popular in the country. In Norfolk certainly the inhabitants of the towns would rejoice to hear that something was to be done to improve the condition of the greatest of all our industries, for they knew that the unemployed labourers of rural districts were being driven into the towns, and they knew also that the more agriculture flourished the better every trade in the country flourished.

*MR. T. P. WHITTAKER (York, W.R., Spen Valley)

said the hon. Member had referred to the straits in which the landlords and the agricultural interests were placed.


I said landlords, farmers, and labourers.


Yes, but the hon. Member specially referred to the great straits the landlords were in. [Ministerial cries of "No, no!"] He did not understand hon. Members to contend that the landlords were not in great straits—and he himself believed they were. He was going to point out that in the hon. Member's view this proposal would not give relief to the landlords, while he and those around him believed that it would relieve the landlords and that it was part of the policy of taxing the manufacturing districts of this country for the purpose of enabling the landlords to obtain their rents. He gathered from the statement of the Chancellor of the Exchequer that the position of the landlords was not quite so bad as had been represented in some quarters. They had been told, for example, that the Death Duties on 22 millions out of 25 millions in respect of realty were put down in a lump sum, although they might have been spread over a considerable period of time. As to the agricultural labourer he ventured to suggest that a free breakfast table would give him far more relief than the proposed reduction of rates. But he rose especially to call attention to the rate of interest on deposits in the Post Office Savings Bank. He felt that the high rate of interest on those deposits, and the large amount of deposits which that high rate attracted, resulting as it did in the purchase by the Government of a large amount of Consols, increased the price of Consols, and increased it when, in order to reduce the National Debt, the Government were in other directions also purchasers of Consols. That it seemed to him raised a very serious question. It could not be doubted that the interest paid was far too high. The Chancellor of the Exchequer said they could only now invest to realise slightly less than 2½ per cent. But on Consols they could not get 2½ per cent. If they made allowance for the reduction in the rate of interest in 1903, and for the redemption of the debt at par in 1923, it would be found that the present rate did not exceed 2 1/16 per cent. Then the working expenses of the Savings Bank Department were from 8s. 6d. to 9s. per cent., so that the net return was only about 32s. 6d. or 33s., and yet on that basis they paid depositors £2 10s. per cent. That was a very unsound and dangerous policy. It was true that the account showed a surplus, but that was purely a paper surplus, obtained by taking Consols at their market value today. But those Consols would be paid off at par in 1923, and that represented a very serious loss, and if, by the high rate of interest, they continued to attract deposits at the same rate that they were being attracted at now, the loss must be very serious when the redemption took place. The large London Banks put Consols in their balance sheets at 90; and the Government ought to put them at no more than 100, the price at which they would be redeemed. The large purchases which for redemption purposes the Government had necessarily to make, as well as the purchases of the Postal Department were continually sending up the price of Consols. It was very satisfactory to our pride to see Consols at 111, but it was a rather expensive luxury to the nation. The Government were now by their policy really forcing up the price against themselves. He was afraid that the high price which had to be paid for Consols for debt redemption might soon raise an outcry against the debt redemption itself—which in his judgment would be a very serious evil. He was strongly of opinion that the Government should lower the interest on deposits in the Post Office Savings Banks, and lower it very substantially indeed. Such a step might cause withdrawals and might depress the value of Consols, and thus place the, Government in a little difficulty. He did not think it would do more than check the continual rise, but even if it did, the longer such an operation was put off the greater would be the difficulties, because until it was done Consols would continue to advance in price. No one could tell what might happen in time of war or distress. Consols might fall to 95 or even to 90, and if they did, the balance sheet of the Government would look very curious. The Chancellor of the Exchequer referred with satisfaction to the fact that the amount of the unfunded debt had been very materially reduced; but the liability on Post Office deposits was a very large unfunded debt which the Government owed. He understood the late Chancellor of the Exchequer to state that when he was in office, a Departmental Committee was appointed, and he gathered from that that the Treasury was fully alive to the difficulty and danger. He hoped the present Chancellor would face the problem soon and would deal with it. The suggestion merely to limit the amount which could be deposited at one time did not meet the case. The rate of interest should be reduced, so as to put the whole matter-on a sound and businesslike footing. Any other proposal would merely touch the fringe of the question.

COL. KENYON SLANEY (Shropshire, Newport)

said, that at the risk of being monotonous, he must join in the chorus of gratitude to the Chancellor of the Exchequer for the way in which he had treated the agricultural interest. His reason for rising was not only that, but also to answer to the best of his ability one or two speeches that had been made from the other side of the House. The speech of the hon. Gentleman who had just sat down, naturally divided itself into two parts. The one relating to the subject with which the hon. Gentleman was familiar—namely, finance, and the other relating to agriculture, of which he knew little or nothing. The hon. Gentleman prefaced his speech by one or two disparaging remarks with regard to landowners, and his observations re minded him of the view usually taken by an ignorant recruit when he first joined his regiment, which was that the colonel was his worst enemy. When, however, he came to know a little more about regimental life, he found that the man he abused in the day of his ignorance was really his best friend. No doubt a somewhat similar experience was awaiting the hon. Gentleman opposite, and with his increasing knowledge there would be a diminution of his disparaging remarks with regard to landowners. In reply to the remarks upon agriculture which had been made by the hon. Member for East Mayo, who led some portion of the Irish Nationalist Party during this Session— [Mr. DILLON: "The whole"]—the hon. Member said that he led the whole of the Nationalist Party, and, therefore, he congratulated him upon a position in that House which he had not been able to assume in Ireland. The hon. Member had spoken disparagingly of the agricultural provisions of the Budget as far as they affected the Irish agriculturist. He could not understand how the hon. Gentleman could assume such a position as that. The hon. Gentleman spoke of agricultural depression in Ireland as being far worse than in England. The hon. Member knew very little about; agriculture in England, but he himself did know something about agriculture both in England and in Ireland, and he thought that the Irish agriculturist had considerably the best of the bargain as matters stood at the present moment. But going beyond that he know that there was a great deal more land in Ireland that was valuable from an agricultural view than there was in England, if the land in both cases were properly and zealously managed. Only the other day a Measure had been introduced into that House by the right hon. Gentleman the President of the Board of Agriculture, which would operate more beneficially in favour of agriculture in Ireland than in England. Certainly, therefore, it was a peculiar position for the hon. Gentleman to take up when he opposed the Budget on the ground that Irish agricultural interests would not be benefited by it. The hon. Gentleman had entered a protest against the proposed Naval expenditure which hon. Members on the Government side of the House were not likely to forget, because if the hon. Gentleman were serious in what he had said he must be taken as inveighing against Measures which were proposed to be taken for the protection of the interests of the Empire. Of course the remarks of the hon. Gentleman upon that point were merely intended for platform consumption and to amuse the Irish people. The hon. Gentleman had asked what had been done with the surplus, a full share of which he demanded should go to Ireland. If he rightly understood the proposals of the right hon. Gentleman the Chancellor of the Exchequer, Ireland would get her full share of the surplus for her agriculture as compared with that which would go to English agriculture. The hon. Gentleman went on to say, with the usual sneer, that the present Government was benefiting by the action of their predecessors. When taunts of that kind were levelled at hon. Members sitting on the Government side of the House, it was only fair to remind hon. Members opposite that the foundations of the surplus appeared to have been laid when the last Conservative Government ceased to hold office. He did not put that forward as a valuable argument by any means, but at all events it was a perfectly fair retort to the remarks of the hon. Gentleman. The hon. Gentleman having asked what had been done with the surplus proceeded to echo the remarks of the right hon. Gentleman the late Chancellor of the Exchequer, and to complain that no remission of taxation had been made in favour of the working classes under the provisions of the Budget. If any hon. Gentleman ventured to make such an assertion he would take him down into the rural districts and ask him to repeat that charge in the face of the agricultural labourers. The fact was that the proposals of the Budget would benefit in the first degree the labouring classes. He should have thought that hon. Members opposite would have known that it was a mistake to think that they could play upon the ignorance of the working classes. His hon. Friend had referred to the case of Guy's Hospital, and shown how clearly, in cases such as that, his proposal would work directly for the benefit of the working classes. Hon. Members opposite seemed to have forgotten the existence of the Friendly Societies, which were large owners, in the aggregate, of property that would be affected and benefited by the suggestions of the Chancellor of the Exchequer. A very foolish attempt was being made to make a split between borough and rural constituencies, and it might perfectly well be that the larger cities and towns would not benefit directly from the propositions of this Budget—[Opposition cheers]—but when hon. Members opposite Had secured a Chancellor of the Exchequer who was able in any one Budget to touch the interests of every class in the country they would have produced a sort of financial archangel which they had not begun to breed at present. There were, at all events; large boroughs whose interests depended on the fortunes of the agricultural districts round them, and they were very directly interested in the propositions of the right hon. Gentleman. There were, of course, industrial communities whom these Measures would not affect, but the great bulk of our rural boroughs would be affected beneficially by the suggestions which the right hon. Gentleman had laid before them. He maintained that the interests of Irish and English agriculture could not be divorced, and therefore protested against Irish Members opposing this Budget, when it was universally approved by the agricultural interest in Great Britain.

MR. R. B. HALDANE (Haddington)

said the Chancellor of the Exchequer might no the the most eloquent speaker in that House, but there was no Member who was a more thorough Parliamentary man, or who had a more complete mastery of what the House of Commons liked. They had listened to a statement which was an admirable and perfect one from a Parliamentary point of view —["hear, hear!"]—and he doubted if they had ever listened to a more lucid explanation of a complicated subject. When the right hon. Gentleman referred in grave language to a crisis which we were approaching, when there would be an increase of expenditure, and when we might reach the limits of direct taxation, he had wondered whether that was prophetic, and could not help thinking of a remarkable speech which was made by a colleague of the right hon. Gentleman's the other day upon an Imperial Zollverein. If they ever came face to face with that crisis, and if there was a question of departing from principles which had become the tradition of all Parliaments of the last half-century, he hoped they would then have the assistance of the right hon. Gentleman. He could not help thinking, notwithstanding what the right hon. Gentleman said about the extreme desirability of not embarking on new forms of expenditure, that his practice was not quite equal to his precept, for he proceeded to inform them that Her Majesty's Government were about to embark upon a wholly new expenditure of £2,500,000— £500,000 differential bounty to Voluntary schools, and £2,000,000, one in the current year, and £2,000,000 every year afterwards—in the form of subsidies in the relief of rates. No one could realise more keenly than he did the pressure felt by the agricultural or landed interest; they all sympathised with the difficulty in which it was placed; but there might be other industries equally oppressed; and one could not help thinking it rather rash to embark on this new expenditure in relief of that industry, because it was evident that that £2,000,000 would not be forthcoming out of existing sources of revenue, at all events, if our expenditure kept up to the level now reached. The great fight would be over the grants for Voluntary schools and in aid of rates; the rest of the Budget did not raise any questions of principle. As to the Death Duties, the new proposals did not amount to much; and he was not quite sure he accurately apprehended the fourth of these. In the case of works of art and other objects of national interest, which he trusted would include valuable libraries, it was proposed that Estate Duty should be paid upon them only when and so soon as there came into existence a person capable of disposing of them, or who actually did sell these objects, and that they would not be subject to aggregation. But suppose the case of a man who took advantage of this rule to declare that his pictures were not to be sold until two or three years after his death. In that case there might be a sale, and duty be paid on the amount realised, but the estate would have escaped aggregation in respect of the pictures. That would be making use of the rule to escape the payment of full duty. [The CHANCELLOR of the EXCHEQUER: "That would not be so."] Of course it was impossible to discuss the matter without the text of the Bill. He was glad the Chancellor of the Exchequer had recognised the great financial value of the new system which came into operation under the Act of 1894, and he was glad to thank the right hon. Gentleman for propounding sound and admirable financial views, not only to night, but also on previous occasions.

DR. CLARK (Caithness)

said, that while he concurred in what had been said on both sides of the House in reference to the clearness and ability of the financial statement, he regretted he could not agree with what had been said as to the fairness of the new proposals. They were inequitable, and, indeed, this might well be described as a landlord's Budget. It proposed to give the landlords £100,000 directly through the Land Tax, and indirectly £975,000 through the reduction of local rates; and this was going to be done on the lines laid down by the Probate Duty Grants. He protested against this, and appealed to the sense of fairness of the right hon. Gentleman opposite because he had always been one of the fairest men. His predecessor, when he first began the system, introduced a clause by which one half of the Probate and Licence Duty would be paid over to each county, to be used by the County Councils. But immediately afterwards the Scotch people, having used their money not to reduce local taxation, but to have free education, a demand arose for free education in England, and it was granted, not from the Probate Duty or the Property Duty alone, because, as far as the terms went, England paid more for property and less in direct taxation than any other part of the United Kingdom; but there was to be a grant of 10s. for every child that went to school. The present Government were treating England, Scotland, and Ireland alike, and giving 10s. per head per child. With regard to Ireland the hon. Member for East Mayo was correct in saying Ireland had more agriculture and less commerce than England. Where was the market for Irish produce but in this country? Where the boon proposed was wanted most it was least given. In Scotland the system was different from England. Until 50 years ago all the taxes in Scotland were paid by the landlord. But by the Act of 1845 one half were to be paid by the occupier and the other by the landlord. By the Act of 1888 the landord's rates were consolidated. The Land Tax at the present time was fixed by an Act passed two centuries ago. It was made perpetual at 4s. in the pound on a valuation of two centuries ago. There were some poor agricultural parishes in which the rate, he believed, was even as high as 4s. in the pound upon the actual rental. In some parishes, again, it was 1s. and 2s., and in others it was as low as 1–12th and 1–16th of a penny in the pound. They had parishes which had been poor but which, owing to mineral and industrial development had become rich, and which yet only paid l–12th of a penny, whilst other parishes which were formerly centres of the wool-growing industries, but which had now become poor, were paying on a grossly unfair assessment, based upon their previous prosperity. As far as he understood it, the Government wanted to prevent this unfair assessment of poor and purely agricultural parishes, which were not to pay more than 1s. in the pound upon the present or Income Tax valuation. Something could be said for that, but why they should not make rich parishes pay in the same proportion he failed to see. Some rich parishes about London, unaffected by agricultural depression, where the Land Tax was a mere flea-bite, and where the land rents were a hundredfold greater than when this tax was imposed, were still only paying l–12th of a penny in the pound. If they were going to lessen the tax in rural parishes because there had been depression in the value of land, why not increase it in urban parishes where there had been this great appreciation of value? In any change of this kind, the only thing to do was to make the Land Tax, like every other tax, payable upon the present valuation. As the Debate would terminate for that night at 12 o'clock, he did not intend to prevent the Chancellor of the Exchequer replying to the different speeches, but he would notify the right hon. Gentleman that when this question came to be dealt with, he would require to go much further than his proposals indicated in order to secure a fair taxation of the land values in this country. He should be glad to see the Chancellor of the Exchequer so tackling the whole subject as to put the burden fairly on the agriculturists on the one hand, and on the great town landlords on the other.

*THE CHANCELLOR OF THE EXCHEQUER, who was received with cheers on rising to reply, said: I really feel I owe a debt of gratitude to hon. Members on both sides of the House for the far too kind and flattering observations made with respect to my financial statement. I have no greater wish than to discharge such work as I have to do in a way that will commend it to both sides of the House, and I am really very deeply grateful for what has been said by the right hon. Gentleman opposite and by many hon. Members who subsequently followed him. ["Hear, hear!"] There have been many suggestions made in the course of this Debate to-night which I will carefully bear in mind, particularly upon the question of the Savings Banks deposits. This matter has been referred to by the hon. and learned Member for Islington—to whom the country is greatly indebted for the care and trouble he has taken in regard to Savings Banks—and also by the right hon. Gentleman opposite. I wish to say that I never intended to lower the limit of the Savings Banks deposits, but the point I wished to press upon the House had relation to the question of the amount of interest we were paying, and especially with regard to deposits above a certain amount. It is not necessary to go further into this matter until I am able to make some proposals to the House. I think that the general Debate has turned upon the question of the grant we propose to make out of the proceeds of the Estate Duty on personalty, amounting in the current year to £975,000, in aid of agriculture. That grant will be proposed to be allocated in England, Scotland, and Ireland according to Bills which will be presented to the House by my right hon. Friend the President of the Local Government Board, by the Lord Advocate, and by the Chief Secretary for Ireland, Complaint has been made that this is a mere question of the position of the landlords. I think it has been shown in the course of the Debate that it is not now in the distressed districts of England a question of the position of the landlords at all. The real question is whether the agricultural labourers, at any rate in the south and east of England, are any longer to find employment in the cultivation of the land. ["Hear, hear!"] I do not want at all to argue the question to-night, because it really does not arise at the present moment; nor do I touch on the other question that has been raised— whether the proportions of 80, 11, and 9, in which it is proposed that this grant shall be allocated to England, Scotland, and Ireland, are fair to Ireland and Scotland, or are not fair. I should say that they were advantageous to Scotland and to Ireland rather than otherwise, because it is my belief that agricultural depression has been far greater in England than it has been in either of those countries, but that is a matter for further consideration when we come to deal with the grants. What I would ask the Committee now is whether we might not be allowed to take, at any rate, some of the Resolutions, none of which deal with this controverted question or with the question of the Land Tax, and thus to make some progress with our work this evening—["Hear, hear!"]—the Resolutions relating to the duty on tea, the duty on beer, a slight alteration in the Stamp Acts, relating to companies, by which it is proposed to make companies certified by the Board of Trade or by an Order in Council pay the same stamp duty as ordinary limited liability companies, the Resolution relating to the Income-tax, and the general Resolution relating to the Inland Revenue. If there is any desire on the part of the Committee for further Debate before the Resolutions are passed and leave is given to introduce the Budget Bill, of course we must provide another occasion. I would venture to suggest that, if there be no such desire, we might now be allowed to take the Resolutions, and then I should be able to bring in the Bill If it is desired to reserve any Resolution for discussion, perhaps the Income-tax Resolution might be reserved and discussed on a future occasion. ["Hear hear!"]


I think that what the right hon. Gentleman proposes is reasonable. The tea and beer Resolutions and the other minor Resolutions might be taken to-night. It has always been usual to reserve one Resolution, at least, on the Budget night, and I under stand the right hon. Gentleman reserves the Income-tax Resolution. That would be a very proper arrangement.


supposed the right hon. Gentleman would give them that other opportunity for discussion.


Oh, yes. I understand my right hon. Friend the Leader of the House will let the discussion be taken on Thursday, but he will state that.


said that more money was to be spent on Scotland in connection with the agricultural interest than was to be spent on Ireland. That was manifestly unfair.

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