HC Deb 21 April 1898 vol 56 cc670-778

Considered in Committee:

[Mr. J. W. LOWTHER (Cumberland, Penrith), CHAIRMAN of WAYS and MEANS, in the Chair.]

(In the Committee.)


When two years ago it was my duty to place before the Committee an account of the financial condition of the country, I had to explain the extraordinary difference between the estimates of revenue of my predecessor and the actual yield of the revenue of the year. I accounted for that to my own satisfaction, and, I think, to the general satisfaction, by dwelling upon what then appeared to be the entirely exceptional circumstances of the year. But I was wrong; we were all wrong. Ever since that time there has been a constant and steady advance in the activity of our trade, the high spending power of our masses, the profits of the nation, and the accumulation of wealth. There is no sign at present that the apex of our prosperity has been reached; much less is there any sign of the beginning of a downward course. It is quite true there were points in the statistics of our foreign trade of last year which are not entirely satisfactory; but on the whole that trade shows an increase, both in value and in volume, and if fair allowance is made for the contraction of business due to temporary causes, such as famine and plague in India, or the failure of crops in countries which are our best customers, like Argentina and Australia, and labour difficulties at home, I do not think anything can be gathered from the foreign trade statistics of last year which would justify a doubt of our ability to compete on fair terms with any of our foreign rivals. Our home trade during the past year has been most active. In certain great industries, at any rate, the profits must have been large. Agriculturists have benefited by a good season and higher prices for corn; staples of trade of great importance, such as cotton and wool, have been cheap; and consumers have also benefited by the low prices of such commodities as tea and sugar. Generally speaking, the revenue returns point to the increasing prosperity of the country, and especially they bear witness to the full employment of our wage earners, and to no falling away from that standard of comfort to which they happily in recent years have attained. The total revenue raised by the State in the year just concluded, including the sum paid to the Local Taxation Account of £9,402,000, amounted to the gigantic sum of £116,016,000, against the sum of £8,249,000 paid to the Local Taxation Account in the year before and a total revenue for that year of £112,199,000. The revenue received by the Exchequer last year was £106,614,000 against £103,950,000 in the previous year, and it exceeded my estimate by as much as £3,570,000. Sir, I make no apology to the Committee for my miscalculation: it would be useless. I do not think I could have anticipated such a revenue as has been received, but I take warning by the revenue returns of the past three years. It is no satisfaction to me to extract more from the pockets of the taxpayers than the necessities of the country require, and I will venture to say that it is detrimental to true economy. I note, in passing, that out of the great increase in the revenue of the year over my Estimates, nearly half has accrued in the last quarter of the Financial Year. I need not detain the Committee very long upon the details of the revenue for the last year. The Customs produced £21,798,000, an increase of £298,000 over my Estimates, and of £532,000 over the receipts of the previous year. Tea and cocoa did very well. Tea produced an increase of £70,000, considerably more than would tally with the increase of population. Cocoa did remarkably well. Of course the receipts for cocoa are small; they were only £183,000, but out of that sum no less than £39,000 was an increase over the previous year. We imported last year three times the amount of manufactured cocoa that we did two years before that time. This increase, I may add, is due, I hope, to some extent to the fact that people are turning their attention to cocoa, which I believe to be an admirable beverage. But not a little of it is due to the remarkable success of a certain well-advertised article which, in gratitude to the manufacturer, I am half tempted to name. The receipts from wine during the past year increased by £29,000. The Jubilee festivities, doubtless, accounted for an increase of more than 22,000 dozen of sparkling wines. I may say, generally, that the Jubilee, in the matter of Customs and Excise, far more than counteracted any falling off in the revenue which may have been due to the unfortunate engineering dispute later in the year. But the great feature of the Customs revenue has been the receipt from tobacco. Tobacco produced last year £11,437,000, an increase of 3.8 per cent. over the previous year. Out of the total Customs increase of £532,000, no less than £419,000 was due to tobacco. Generally speaking, the Customs revenue is buoyant and hopeful for the future, and so is the Excise. The Excise produced last year Exchequer receipts of £28,300,000—£550,000 more than my Estimate and £840,000 more than the receipts of the previous year. The main increase was in beer. The brewers are a very fortunate class, and all Chancellors of the Exchequer should be grateful to them. Beer produced last year £388,000 more than any Estimate and £487,000 more than in the previous year. It showed a steady growth throughout the year and an increase of 4.4 per cent. Home-made spirits produced an increase of £124,000, but that was almost entirely in the first quarter of the year—what I may call the Jubilee quarter—and showed an increase of only 2 per cent. over the whole year. Now, Sir, I come to the most remarkable feature in the revenue of last year—the death duties. Twelve months ago, noticing, as I did, the falling-off of £10,000,000 in the total value of free personalty assessed for death duty, and bearing in mind that it would be necessary for me to consider the interception of £832,000 more for local taxation purposes than had been intercepted in the previous year, I felt myself able to put the probable yield of the death duties at no more than £9,700,000. The death duties, however, have produced to the Exchequer £1,400,000 more than my Estimate. The total yield during the year, both for local taxation purposes and for the Exchequer, has been £15,328,000. In the previous year it was £13,963,000. Of this, the Exchequer has received £11,100,000—only £500,000 less than it received in the year 1895–96, although since that year an additional £1,667,000 has been intercepted from the yield of the death duties to the Exchequer, and devoted by Parliament for the purposes of the relief of local taxation. The main increase, of course, occurred in the estate duty. Since the Finance Act of 1894 the succession and legacy duties have necessarily shown a steady and a large falling off. I am glad to say that I think the bottom has nearly been reached. Last year the legacy duty showed an actual increase of £50,000 compared with the previous year, but that was due to the exceptional circumstances of one particular estate. The succession duty showed a falling off of £97,000; but that compared very favourably with the falling off of £227,000 in the previous year. That great increase in the estate duty may be accounted for by three reasons. In the first place, 4,000 more estates paid duty than in the previous year. In the second place, out of the estates that paid duty, 73 exceeded the value of £250,000 each, as against only 66 in the previous year, and those 73 were so valuable that they paid £1,000,000 more duty than the 66 had paid in the previous year. Out of those 73, nine were the estates of millionaires, valued at £15,750,000, against five, valued at £5,500,000, in the previous year. It is a curious fact that seven of those great estates last year paid among them more than half of the total amount which was intercepted by the Agricultural Rating Act and given to the relief of local taxation. Although I do not know that I have any special predilection in favour of millionaires anywhere, I am glad to say that out of these seven millionaires two were foreigners. They returned what appears to me an adequate amount for the protection and recreation which during their lives they enjoyed in this country. Of course, these great estates have had a considerable effect upon the total amount of property charged. Last year I was a good deal alarmed by the falling off of free personalty by £10,000,000 in total value, and I think my hon. Friend the Member for King's Lynn was a good deal delighted. This year, I am relieved to be able to say, that free personalty shows an increase of £19,000,000, the total amount being £172,700,000. The total value of realty increased from £39,704,000 to £49,406,000. I think the Committee will see that, great as these increases have been in total value, they have not been so great as the increase in the yield of duty, and the reason is obvious. It is due to the system of graduation. £15,000,000 divided among nine persons pays a great deal more death duty than £15,000,000 divided among 150 persons. That, I venture to point out to the Committee, adds immensely to the difficulty of estimating the return which the revenue will receive from the death duties, because the deaths of a very few men on the one side of the line, or on the other side of the line, will make a difference of hundreds of thousands of pounds to the receipts of the revenue during any particular year. I think it has been the fashion rather to attribute the total increase in the death duties in each particular year to the Finance Act of 1894. That, Sir, is a mistake. A large portion of it is unquestionably due to that Act, but we must bear in mind the increased and increasing amount and value of property in this country. My advisers have gone into this matter, and they assure me that if the Finance Act of 1894 had never been passed, and the law with regard to death duties had remained as it was before, the increase in the total amount and value of property in this country since 1893–94 has been so great that the old law would have produced £600,000 a year more now than it did at that time. The total receipts from the death duties have been as follows: £12,194,000 from personalty and £3,134,000 from realty. The total net value of the realty charged during the first nine months of the year was £37,000,000. That was composed of £10,505,000 worth of agricultural land, valued at 16¾ years' purchase of the gross value, and 20¾ of the net value, a decrease in total value on the previous year. Of the rest £19,029,000 represented house property, an increase of £3,000,000 on the previous year, ground rents £2,806,000, and miscellaneous property £4,621,000. I now come to stamps. Stamps produced £7,650,000, or £300,000 more than the receipts of the previous year and £650,000 more than my estimate. The increase was mainly due to an increase of £224,000 on deeds and other instruments, and of £95,000 on penny stamps. It may be interesting to the Committee to know that penny stamps produced no less than £1,400,000 of the revenue. I think both these increases are satisfactory proof of greater activity in the market for land and other classes of property, and also in trade. The stamp revenue has been of a notoriously fluctuating nature in past years, and very difficult to estimate, but looking to the receipts of the last few years, I shall feel myself justified in taking a more sanguine estimate this year than I did last year. The income tax produced £17,250,000, against £16,650,000 in the previous year, mainly owing to the fact that a good year, instead of a comparatively bad year, was included in the three years' average of profits under Schedule D. Post Office and telegraphs gave an increase of £410,000, and that is only a final proof of what every head of the revenue bears uniform testimony to—namely, the increasing prosperity of the country. The expenditure for 1897–98 is not quite so agreeable a theme. The amount provided for in the Budget was £102,541,000. To that must be added the sum of £250,000, which has been issued to the National Debt Commissioners for the purpose of the restoration of the gold coinage under the provisions of the Act of 1891, and additional issues authorised by Supplementary Estimates to the Civil Service and Post Office, after deducting savings, of the net amount of £644,000; and, further, net Supplementary Estimates for the Army, also after deducting savings, of £989,000. But against that we have to put the fact that of the Votes granted by Parliament for the Navy £1,488,000 was not issued owing to the engineering labour difficulties, so that the total expenditure of the year exceeded my Budget Estimate by the net sum of £395,000, and amounted to £102,936,000. That, deducted from the revenue receipts of £106,614,000, leaves me with a realised surplus of £3,678,000. Of that surplus, as the Committee are aware, £2,550,000 will be placed to a separate fund by the Public Buildings Act, which has just become law, and will be devoted to an object which otherwise would have to be provided for by incurring fresh debt; and £1,128,000 remains as old sinking fund, which may be applied in paying off debt or in augmenting the Exchequer balances during the coming twelve months. But to this Exchequer expenditure I must, of course, add £9,402,000, which went to the Local Taxation Account and £2,751,000 capital expenditure for naval and military works, barracks, telephones, the purchase of sites for public offices and the Uganda railway, which makes a total expenditure, for which the State provided, of £115,089,000, the largest expenditure. I will venture to say, a Chancellor of the Exchequer has ever been called upon to provide in 12 months. And yet that has not depleted the Treasure. The Exchequer balances, which on April 1st, 1897, stood at £9,867,000, amounted on the 31st March to £10,918,000. The Committee must understand that that last-named figure included unexpended balances of the surpluses of the two years 1895–96 and 1896–97, which have been devoted to naval and military works. The total amount unappropriated of those surpluses was £3,571,000; and the balance also included £2,550,000 from the surplus of 1897–8, which will, under the Public Buildings Act, be placed to a separate account and bear interest. The great bulk, then, of the money by which the balance has been abnormally augmented will be drawn out in the course of the year. But, on the other hand. I have it in my power, whenever necessary, to increase those balances by the exercise of £2,089,000 worth of dormant borrowing powers. During the past two years Parliament has authorised considerable capital expenditure in barracks, telephones, the Uganda railway, and in the purchase of sites for public buildings. Instead of borrowing the money, and having to pay interest on it. I have taken out of the balances so much as was wanted, and the total amount taken out has been £2,089,000. If necessity requires the balances to be increased, I can at any moment borrow that money, and replace it. I think the Committee will see that the position of our Exchequer balances is very strong, and that if any emergency should arise which is now unforeseen, I shall be able, under the powers Parliament has vested in me, to meet it. Now I turn from the accounts of the year to the general financial position of the country. Our total gross liabilities on the 1st April, 1897, were £644,910,000, and on the 31st March last they stood at £638,305,000. Out of that last figure the Funded Debt amounted to £585,788,000. It has been reduced during the year by £1,911,000, of which £267,000 is due to the redemption of the land tax under the Act of 1896. The estimated capital value of our terminable annuities is £40,553,000, showing a reduction in the year of £4,389,000. The Unfunded Debt amounted to £8,133,000—exactly the same as last year. The debt incurred for special purposes, such as the construction of barracks, telephones, and other matters, not included in the fixed debt charge, amounted to £3,831,000—a reduction of £305,000, as compared with the previous year. The total reduction of the Debt in the year has been £6,605,000. I think that will be satisfactory to the Committee, bearing in view the very large expenditure for naval and military purposes. But I may add further that it would have been increased by about £1,000,000, if the National Debt Commissioners had been able to employ the sum of £1,061,000, which was issued to them under the provisions of the New Sinking Fund, before the close of the financial year, instead of a little after it. Of course, that will be duly accounted for in the reduction of the Debt in the present year. I should like to make one observation to the Committee, with reference to the reduction of our Debt. During the last 10 years, if we debit ourselves with £2,000,000 due to the Exchequer balances, we have reduced our Debt by £66,250,000. But during the 10 years, the last for which I have any account, ending 1894–95, the local authorities of the United Kingdom have increased their debt by very much more than the amount by which we have reduced the National Debt. They have increased their debt by £75,250,000. Now, Sir, I do not want to enter into any comparisons as to the reproductive character of the National Debt and of the local debt. But both are heavy burdens, and both must be ultimately borne by very much the same shoulders, and all I will say is this: in view of this continual increase of our local debt, there is surely an additional reason, if any were required, for perseverance, so far as we reasonably can persevere, in the reduction of the National Debt. I have done something in the course of the year to facilitate loans to local authorities on easier terms than before. Under the Public Works Loan Act of last Session, the rate of interest was reduced on loans made by the Public Works Loan Commissioners to local authorities, and the result has been that, whereas in the six months before the end of March last year only £155,000 was lent by the Public Works Loan Commissioners to local authorities, in the six months ending 31st March this year as much as £1,840,000 has been lent. Now, that is not only an advantage to the ratepayers, but it promises to be a considerable advantage to the depositors in our savings banks, for it opens up to them what is equivalent to a new mode of investment of their funds, and yet retains to them what seems to me very important—the security of the Consolidated Fund. Sir, the restoration of our gold coinage has proceeded. Last year I told the Committee that I had devised a plan, in concert with the banking authorities, by which I hoped to obtain largely increased withdrawals of light gold coin from the districts of the United Kingdom that are more remote from the metropolis, where there was reason to believe that a considerable amount of light gold coin was in circulation. Those arrangements were very successful. In the first six months of their operation nearly twice the amount of light gold was received that had been received in the same time during any one of the three previous years. Of course, since then the withdrawals have fallen off, but the net result has been that we withdrew £2,700,000 of light gold coin in the year up till the 31st March last, considerably more than the amount in the previous year. The total withdrawals have been £34,200,000 since the commencement of the operation, and in the course of last year I have paid for what has been done. In 1891 a sum of £400,000 was invested in pursuance of the Coinage Act for this purpose, and has been allowed to accumulate since. The result has been that I was able with that amount, and with the accumulations, to pay a sum of £539,000 for the loss incurred in the withdrawal of light gold, and as commission due to the Bank of England for their services. That is now cleared off, and the sum of £250,000, to which I have already referred has been issued, under the provisions of the Coinage Act of 1893, to the National Debt Commissioners for future operations of the same kind. Sir, I hope this account of the financial situation of the present moment and of the past year may not be without satisfaction to the Committee. I now turn to the more interesting part of my statement, and that is the expenditure and the revenue of the coming year. Sir, the Estimates that have been laid on the Table bring the total of the charges on the Exchequer Revenue to £106,464,000. To that must be added £365,000, the cost of the Irish Local Government Act, should it become law, to the Exchequer in the current year, and also the sum of £9,178,000, which we estimate will be paid to the Local Taxation Fund in the course of the year. That is a total of £116,007,000. Of that amount I have to provide for in my Budget the sum of £106,829,000, no less than £5,038,000 more than my original Budget Estimates last year. Sir, the amount of the increase seems to me even more formidable than the total amount. Now, what are its causes? First of all, the Admiralty has to make up for lost time. Secondly, the War Office has to provide for an increase in the Army, and better conditions of service for the soldiers. Thirdly, the business of the Post Office is increasing, and involves necessarily increased expenditure. Fourthly, the Education Estimates are always increasing; and, lastly, we have to incur an additional charge of some considerable amount by way of Votes in aid for Colonial Forces in East and West Africa, to protect our interests in that part of the world.

SIR WILLIAM HARCOURT (Monmouthshire, W.)

What is the increase in the amount for education?


I am afraid I have not got the details. Sir, I do not know whether anyone will find fault with that increase. At any rate, I think that he has had fair warning of it. In the Gracious Speech from the Throne, at the commencement of the Session, in that delightful English which is due to many authors, but for which Her Majesty herself is certainly not responsible, Parliament was told that the Estimates of expenditure were beyond "former precedent." That was an absolutely true promise in Her Majesty's Gracious Speech, and I think it will be admitted that it has been completely realised. Sir, I do not mean to preach economy. I tried a little sermon on economy two years ago, and I remember with gratitude that it was received with a solemn and authoritative response from the right hon. Gentleman the Member for West Monmouthshire; bur it had no more effect on the rest of the House, and especially on my own colleagues, than if it had been delivered in church. But now, Sir, if the Committee will permit me, I should like to detain them for a short time while I try to show them what has been the increase in our estimates of expenditure during the three years of the life of the present Parliament, and why it has been incurred. About this time of the year in 1895, the right hon. Gentleman opposite (Sir William Harcourt) proposed the last Budget for which he was responsible. His estimate of expenditure then, including the amount necessary for the Local Taxation Fund, amounted to £103,243,000. My estimate this year, on similar figures, amounts to no less than £116,007,000, an increase of £12,764,000 in three years. Sir, I make a present of that text to hon. Members opposite, but before they dilate upon it in the country I hope they will remember that that vast increase of expenditure has been paid for without any increase of taxation, and that, besides providing for it, we have been able to make some small alleviation of the Death Duties and the Land Tax, and to initiate some useful postal reforms. I have attempted to divide the amount of this increase of twelve and three-quarter millions under the headings to which the main part of it belongs. First of all, we have devoted, since the year 1895–6, an additional sum of £2,380,000, including what is required by the Irish Bill of this year, to the relief of local taxation. Now, Sir, in view of the favourable manner in which that Measure has been received by the House, I hope I may imagine that, in spite of strong differences of opinion in the past, the House is, generally speaking, agreed on the necessity of that policy. [Sir W. HARCOURT: Except the Agricultural Rating part.] The sum granted in additional relief to local taxation includes not only the amount granted under the Agricultural Rating Act, but also the amount proposed to be granted under the Irish Bill, and what I may call the automatic increase of the old local taxation grants before the Agricultural Rating Act became law. The next head, Sir, is what I may call—I hope I may call—reproductive expenditure. First of all, there is an increase of £1,500,000 for the expenditure of the Post Office. That has been directly reproductive—at any rate, to a large extent—because the Post Office revenue has increased by £2,000,000 in the last three years. Then, under the same head, I thought it right to class the increase of £1,773,000 for education. That ought to be reproductive, but after the debate on Tuesday I do not feel absolutely sure that it is, and I am living in hopes, though I may be too sanguine, that the Vice-President of the Council, after due discussion with that august body the Committee of Council, will tell me next autumn that he is able to propose a large reduction in the Education Estimates, because he does not get value for the money. Now, the next head is the largest of all the increases which the House has deemed necessary, that for the defence of the country. In the three years there has been an increase of £5,077,000 in the Navy Estimates, of £1,237,000 in the Army Estimates, and of £250,000 for Colonial forces charged on the Civil Service Estimates, a total increase of £6,564,000, or more than half of the £12,750,000 increase. Well, Sir, I hardly know who is responsible for this large increase. Her Majesty's Government may be supposed to be responsible. But with regard to the head to which I have just alluded the duty of the Government has certainly been—and a very unpleasant and responsible duty it is—rather to curb the desire of Parliament than to extend it. In other countries we see Governments finding difficulties in inducing their Parliament to vote the money which they propose for naval or military services. What do we see here? Why, Sir, every year we find constituencies, through their Members in this House, asking for more ships, for more guns, for more men, for better conditions of service, and for more expenditure in naval and military works. There is hardly a protesting voice on the other side, except the hon. Member for Northampton (Mr. Labouchere) and the hon. Member for East Mayo (Mr. Dillon). Expenditure is piled on expenditure, one service vies with the other, and I do not know where it is to end. But now, Sir, why is it? Have our people lost all sense of economy? Have they become absolutely improvident and reckless of expenditure, without regard to their means? I think not. Sir, I believe that the reason is that our people have begun better to realise the extent, the value, and the necessities of their Empire. Sir, if I am not wearying the Committee, I should like to make a little comparison of our Empire with the Empires of Germany, Russia, and France in regard to naval and military expenditure, and in regard to extent and population. Sir, I have taken with regard to our own country the estimates of the present year. I have taken with regard to the Colonies and India the latest figures available, and also with regard to foreign countries, and on that basis what I find is this: In the British Empire we spend £26,000,000 on our Navy, and £37,500,000 on our Army, a total amount of £63,500,000. France spends £11,485,000 on her Navy, and £24,902,000 on her Army, a total amount of £36,387,000. Germany spends £6,083,000 on her Navy, and £29,143,000 on her Army, a total of £35,226,000. Russia spends £7,990,000 on her Navy, and £30,579,000 on her Army, a total of £38,569,000. The Committee will see that our expenditure in our whole Empire is largely in excess of that of those three other countries. But, then, let us turn to the other side of the shield. It is estimated that we have in our Empire 365,000,000 of population scattered all over the globe, or 80,000,000 more than the three other Empires which I have named put together. Our territories extend to eleven and a quarter million square miles of the inhabitable world. Their territories, all put together, are only thirteen and three quarter millions. For every thousand square miles of Empire we spend in defence £5,664; France spends £9,523; Germany £28,654; and Russia £4,454. For every thousand inhabitants of the Empire we spend £174, France £399, Germany £560, and Russia £298. Well, Sir, of course there are differences. We owe a great deal, as regards the kernel of our Empire, to our insular position; but, remember, on the other hand, our possessions are scattered all over the globe. We owe something to the freedom of our colonial system, and to the comparative freedom of our subject races. I have no doubt myself that the colonial expenditure in these matters, both in Canada and Australia, is small because the people think they can trust to distance to secure them from the possibility of any serious invasion. On the other hand, we have to pay a greater increase of direct expenditure, due to our system of voluntary service. But, allowing for all the differences, I do not think, having regard to the figures which I have attempted to place before the Committee, that it can be said that our expenditure, great as it is, is unnecessary, having regard to the great interests which we have to defend, and to the expenditure for the same purposes of other countries. Now, Sir, I come to a more simple comparison with regard to the Navy. I have to eliminate from the comparison the colonies and the foreign possessions of each of the Powers that I have named, as well as our own. I find that our naval expenditure this year, including what we anticipate will be the cost of the Naval works during the year, is about £25,528,000, and that the naval expenditure of France, Germany, and Russia combined is, according to the last Return that I have got, almost the same—£25,558,000. Now, Sir, what have we got to defend? Why, assuming as I do, that the first duty of our Navy, or of the navy of any country, is to defend the commerce and the shores of the Mother Country, the tonnage of our mercantile marine is three times as great as the tonnage of the mercantile marine of France, Germany, and Russia combined; and the annual value of our sea-borne trade is 50 per cent. more than that of the total sea-borne trade of those countries. Sir, I do not think that the action of Parliament in these matters can be said to outrun the necessities of the case. But there is one point, to which I have already referred, which certainly deserves consideration. Many people say, and I think with a great deal of truth: "Oh, it is easy for you to bear this great expense in times of prosperity, but if you look back to past history you will find that, quite irrespective of wars or rumours of wars, and equally irrespective of any causes which we can with certainty define, times of prosperity alternate with times of adversity, and the pinch will come when the time of adversity comes." Sir, we ought never to lose sight of that consideration; but there is this to be said on the other side, that, with our responsibilities, so also increases our power to bear them. Our expenditure in pushing and promoting our trade throughout the world—I mean our naval and military expenditure, for that is the real object of it—succeeds in extending our trade, and with extended trade comes increased wealth and greater capacity to bear taxation. And further, I think it should be remembered that our progress throughout is steadily maintained. With each recurring time of prosperity our barometer rises higher than before, and in each recurring time of depression it sinks to a less degree than it did before. For the present, Sir, I own that I am sanguine of the future. We have full employment for our people if they will only take it. We have good prospects for the coming year for our foreign trade, for any disturbance in the Western hemisphere will, I think, be more than compensated for by the improvement—the happy improvement—in the condition of India, and by the result of events which have recently occurred in the Far East. And, Sir, bearing in mind that the actual revenue of last year was just about sufficient to meet the anticipated expenditure of the coming year, I am hopeful for the future, and think myself justified even in anticipating a slight increase in that respect. I must remind the Committee that when we are dealing with a revenue of £100,000,000 a slight percentage of increase amounts to a considerable sum. Now, I will give my estimate of the revenue for the coming year. I expect, taking the existing basis of taxation, the Customs to produce £22,200,000—an increase of £402,000 on the Exchequer receipts of last year. I estimate the Excise to produce £28,950,000, an increase of £650,000, part of which, however, is due to a change in the law relating to spirits, which I shall shortly have to mention to the Committee. I estimate the estate duties to produce £10,950,000, a decrease of £150,000, because I do not think we can reasonably expect as many large estates as we had last year. I estimate stamps to produce £7,600,000, a decrease of £50,000; land tax, £930,000, a decrease of £10,000; house duty, £1,570,000, an increase of £60,000; income tax, £17,800,000, an increase of £550,000, making a total tax revenue of £90,000,000. I estimate the Post Office to produce £12,600,000, an increase of £430,000; telegraph service, £3,140,000, an increase of £130,000; Crown lands, £430,000; Suez Canal Shares and other Loans, £715,000; miscellaneous revenue, £1,730,000; total of non-tax revenue, £18,615,000; a total revenue of £108,615,000. On the other side, I have estimated the expenditure at £106,829,000, and deducting this amount from the revenue, I am left with a surplus of £1,786,000. But I must warn the Committee that they must not reckon on the whole of that surplus as being capable of being devoted to the purposes to which they might desire to devote it, for I expect that should the Irish Local Government Bill become law, I shall have to meet a demand from Scotland for an increased grant for local purposes; and, further, my right hon. Friend the Secretary for the Colonies has already warned the House that it will be necessary to ask for a Vote in aid of the West Indian Colonies during the coming year. Therefore, I may consider that I have, to some extent, a mortgage upon the sum which I have named. But, Sir, there is enough left to allow for a reasonable, reduction of taxation, and my difficulty is what that reduction shall be. Now, Sir, I do not think it has occurred to very many people to anticipate that I should be able to reduce taxation at all. I have had plenty of suggestions for the increase of taxation. One gentleman, a grocer, desires me to impose a duty on matches, and, possibly having in mind Mr. Robert Lowe's experience, on foreign matches only. Another gentleman, writing a very illegible hand —and I think he writes anonymously—has suggested what I believe is dear to the hon. Member for Northampton, that there should be a heavy tax upon titles. Well, I prefer to leave that to my successor, because I do not think it will be very popular with the more prominent Members of his own Party. Another correspondent, perhaps connected with the turf, suggests to me a heavy licence duty on bookmakers, racehorses, and jockeys; and lastly, someone, evidently writing from the Board of Agriculture, tells me that dogs are a decided nuisance, that there are too many in the country for life to be pleasant, safe, or comfortable. Well, Sir, I am happy to say that I am not in a position in which I require to impose new taxation. But I have received very few suggestions for reductions, because evidently it has been anticipated that my colleagues will be ready to spend all my surplus. Certainly one gentleman has been good enough to tell me what I ought to do in redemption of the promises of the Government, and that is to give a State grant by way of relief in aid of wages, by guaranteeing a minimum wage to all skilled and unskilled labourers. But that is beyond my means. Another gentleman was more modest, and merely wished me to subsidise the Salvation Army; and another wrote me a very touching letter, in which he describes himself as a member of a Presbyterian congregation whose church is burdened with a heavy debt, and he begs me to bear this in mind in dealing with my gigantic surplus. But, seriously, there is one claim which I dare say will be named, and that is the claim of the income-tax payer for a penny reduction. Now, I have this to state: in the first place, that I have not sufficient means for that now. Each penny on the income tax produces £2,150,000 a year, and I have at the outside only £1,500,000 to deal with; and, secondly, I do think that, in view of the great increase which has accrued in the last three years in the receipts from indirect taxation, the indirect taxpayer ought to be considered as well as the direct taxpayer. There is, however, one class of income taxpayers who appear to me to be entitled to special consideration, and that is the class just below and just above the present limit of abatement. The present law is that all incomes not exceeding £160 are entirely free from income tax; that an abatement of £160 is allowed on incomes above £160 and not exceeding £400, and an abatement of £100 on incomes above £400 and not exceeding £500, after which the full duty is paid. The result of that is, Sir, that, taking the tax at its present rate of 8d., incomes just under £400 pay at the rate of 4d. and a little over in the £, incomes between £400 and £500 pay a little over 6d. in the £, and incomes just over £500 pay 8d. in the £. Now, I think this is rather hard on incomes between £400 and, say, £700, and what I propose is this: Up to £400 a year it will remain the same as it is now—an allowance of 40 per cent; above this I propose to make an abatement of £150 on incomes above £400 and not exceeding £500, which means an allowance of 30 per cent.; an abatement of £120 on incomes above £500 and not exceeding £600, or an allowance of 20 per cent.; and an abatement of £70 on incomes above £600 and not exceeding £700, which means an abatement of 10 per cent. Above £700 the full duty will be charged. The effect of that will be that, with an eightpenny tax, incomes just under £400 will pay 4.8d.; incomes just under £500 will pay 5.6d.; incomes just under £600 will pay 6.4d.; and incomes just under £700 will pay 7.2d. There will be a more regular gradation and considerable relief to the smaller payers of income tax at a cost of no more than £100,000 a year to the revenue. Now, Sir, I come to another form of direct taxation, because it should always be remembered that the income tax is by no means the only form under which direct taxation is paid. I said two years ago, for reasons which I then gave, that I did not feel justified in making any proposal for the repeal of the Finance Act of 1894, or the alteration of any of its material principles. That is my position still. But for that very reason, I have felt all the more bound to watch the working of that Act, and to note any points in which it seemed to me to inflict hardship on the subject. I dealt with some of those points in 1896; others have since been settled by actions in the Law Courts in favour of the subject, and some important ones are still before the Law Courts and are not ripe for the consideration of Parliament. But there are two points in the death duties with which I shall ask Parliament to deal this year. The first is this: it relates to the legacy and succession duties. As the law at present stands the payment of estate duty frees lineals from succession or legacy duties, but gives no similar relief to collaterals or to those who are included in the remaining classes of the Succession and Legacy Duty Acts. The addition of the legacy or succession duty to the estate duty may make the total death duty payable very high indeed—so much as 18 per cent.—in the case of a great estate passing to a very distant relation or to a stranger. Now, I do not, of course, wish to place such persons, or even brothers and sisters, on the same footing with regard to the legacy or succession duty as lineals. That would be contrary to the whole principle of the legacy and succession duties, which have now been law for a great number of years. But I think they may fairly be granted the same allowance of 1 per cent. from those duties when the property has also borne estate duty, which is now made to lineals. So that, practically, in such cases the legacy and succession duties will be reduced by 1 per cent. My second point is the postponement, and not the remission, of duties. I propose that in the case of devolution from husband to wife, or from wife to husband, as the case may be, of successive life interests in property settled on the marriage, the payment of the duty shall be postponed until the death of the survivor of the two married persons. Take the familiar case of a jointure created under a marriage settlement. Under the law before the passing of the Finance Act of 1894 no duty was payable on a jointure until by the death of the widow it fell into the estate, so that the widow herself paid nothing. Now she has to pay duty at her husband's death on the capital value of her interest in the jointure to which she succeeds, at a time when she is very likely least able to bear it. This is often in practice a real hardship, and the effect of my proposal will be that the jointure will be valued for duty as now with the rest of the estate, but that the payment of the duty chargeable on it will be postponed until it falls in, so that the widow will pay nothing, and the reversioner will only pay when he succeeds. I think this will be a boon to the subject, while it will be only a temporary loss to the revenue. I have also a small proposal with regard to the land tax. The year before last the maximum limit of the land tax was reduced from 4s. to 1s. in the £, with the result of a great relief to the districts where the tax was most burdensome, at a loss to the revenue of only £80,000 a year. But the effect of this reduction was to necessitate fresh land tax assessments in many parishes where there had been no fresh assessment for very many years; and in making such assessments the local Land Tax Commissioners have frequently had to charge, for the first time, property that had not been assessed before, but could not prove its exemption. Of course, this was only fair to the land tax payers of the parish, who, under their old assessments, were often bearing taxation, which ought to have fallen on their neighbours. But, in some cases, it has led to the imposition of land tax for the first time on properties of very small annual value, such as cottages occupied by small freeholders, which very possibly might in the past have formed part of an exempted estate, though their exemption could not be proved. The old Land Tax Acts contain a provision exempting small properties under 20s. in annual value, which was, doubtless, intended to apply to such cases. But, in view of the rise of rental values in the last 100 years, I propose to carry out the spirit of that provision by extending it to all properties under £5 annual value which were not assessed before 1896. In such cases I propose to treat as redeemed any land tax which has become payable owing to new assessments actually made since 1895–96, and to prevent any such properties from being brought into assessment for the future. I think that, to some extent, meets the point which was raised at Question time this evening by an hon. Friend behind me. The total estimated cost of these changes in the death duties and the land tax, for the current year, is £285,000. Now, Sir, I come to the question of indirect taxation. But, in the first place, I wish to say that I shall have to ask the House to strengthen the law with regard to the spirit duties, so as to prevent an evasion of the law. I do not know whether the Committee are aware of what is meant by "grogging." When duty is paid on a cask of spirit, an allowance is made which has the effect of exempting from duty the spirit which is absorbed by the wood of the cask; and "grogging" means that, after a cask is empty, astute persons take the cask, soak it in water, extract the spirit from it, and sell that spirit without paying any duty. So far as casks emptied in bond are concerned, that has been stopped by a regulation made some years ago; but it is, I am afraid, still done in the case of casks emptied in the ordinary course of trade, and there is actually a considerable importation into this country of empty spirit casks for the purpose of dealing with them in this way. The importance of the matter may be estimated when I tell the Committee that the authorities inform me that in one town, in the course of a single year, the rectifiers of spirit received as much as 124,000 gallons of proof spirit which had been obtained in this way, and would, of course, be sold in the market without paying any duty at all. [Mr. MACNEILL: Where was it?] Well, it was not in Ireland. I believe that all legitimate traders suffer by this practice, and will be glad to see it stopped, and in the interest of honesty and fair trading I hope the House will give me stringent powers to put it down. Now, Sir, I come to the question of the reduction of indirect taxation. I say reduction, because I think the only way to deal with indirect taxation is by reducing the tax upon an article of large consumption, with regard to which we may reasonably hope that the consumption will be increased by the reduction of taxation to the ultimate gain of the Revenue. The list of articles on our tariff is now very small. I do not think it wise to reduce it, and therefore I do not think it wise to wholly abolish any indirect tax. Now, what are the four articles to which my proposition applies? First, beer; second, spirits; third, tea; and fourth, tobacco. I have waited vainly for some indication from the Committee, as to which of these articles they would prefer to see relieved. Well, with a tear for the brewers, I must put aside beer. I hope hon. Members below the Gangway opposite will pardon me if I also put aside spirits. The choice to-day, I think, is between tea and tobacco. Both are articles which are largely consumed by the people, and especially by the poorer classes. Both are very valuable stimulants when taken in moderation, especially by those who are insufficiently fed. Both are injurious when consumed to excess, as I am afraid they are by a great many people. I can conceive myself listening to an alternate strain of poets, perhaps of different sexes—though I am not quite so sure of that at the present day—singing the respective merits of tea and tobacco. There could be no more impartial umpire than myself, for I am a total abstainer from both. I claim that, like all total abstainers, as my solitary virtue, but unlike some total abstainers, I am only anxious that the articles from which I abstain should be more and more consumed by everybody else. On the whole, I give my vote in favour of tobacco, and I do so for these two great reasons. Tobacco is not only an article of large consumption, but imported as it is, to the extent, I think, of more than seventy million pounds, 95 per cent. of this importation gives most valuable employment to British and Irish industries. In the second place, although no doubt the duty on tea is considerable in proportion to the value of the article, yet it has been frequently reduced to its present point. The tobacco duty has remained the same as now, 3s. 2d. in the pound on unmanufactured tobacco, for a period of 56 years, except during the short interval in which it was attempted to raise it by 4d. in the pound, an attempt which, I think, practically failed. The tobacco duty is so high in proportion to the value of the article that I believe it actually increases the prime cost of the unmanufactured article by as much as 500 per cent. Well, Sir, for these reasons I prefer tobacco, and I have a reason also with regard to the revenue. There is no doubt that the consumption of tobacco in the country is very great, and it is very largely increasing, and in spite of the high duty, I believe that the adulteration of tobacco has largely diminished. [Sir W. H. WILLS: Hear, hear!] I am delighted to receive the approval of my hon. colleague in the representation of Bristol. I believe there is a tendency in the country, as in the case of wine, to prefer a lighter class of tobacco to a stronger class. Therefore, I do not at all say that the present duty, high as it is, has prevented the consumption of tobacco, but when I consider what the consumption of tobacco per head of the population per annum in other European countries is I do think there is room for an increase here. The consumption of tobacco in France, where it is a Government monopoly, is 2lb. 5oz. per head per annum; in Austria it is 2lb. 13oz.; in Germany 4lb.; and in Belgium it is as much as 4lb. 12oz. per head per annum. Here, although we are unquestionably a far richer country, although we are not averse to spend our money in personal indulgences, and although the working classes are certainly in receipt of better wages than on the Continent, our consumption of tobacco per head per annum is only 1lb. 13oz. I think I see in a reduction of the cost, of tobacco, which will reach the consumer, the greatest probability that the consumption will so increase that before long the revenue will be recouped for the reduction. But now, Sir, what I propose is that the duty on unmanufactured tobacco shall be reduced by 6d. per pound, and on other classes of tobacco proportionately, with the exception of cigars. I do not propose to reduce the duty on cigars, for this reason. I have very carefully inquired into this matter, and my advisers assure me that homemade cigars do not really compete with the foreign article—that the taste for foreign cigars is a taste, as it were, by itself, which will be satisfied with nothing else but foreign cigars, and that therefore any change in the relative cost of foreign cigars and home-made cigars will not have the effect of stopping the importation of foreign cigars in any way. I know that this is contrary to former theories. I know that it is contrary to great authorities, who have thought it necessary that there should be a correlative duty always established between cigars and unmanufactured tobacco. But, Sir, holding this view as I do, and believing that if it be true that the consumer of foreign cigars can just as well afford to pay a little more for his luxury as the consumer of sparkling wine, I do not propose to reduce the duty on cigars; and I think also it is to be considered that we should, at any rate, have time to see what the effect of the change in the duty on unmanufactured tobacco is before we touch foreign cigars, especially as any such change cannot but cause some trouble and disturbance to our home trade. Sir, I daresay the Committee would like to know how much I think the consumer will benefit by this reduction of the duty. Well, I think the consumer will benefit in two ways—he may either get more tobacco for the same money as at present, or he may receive the same amount of tobacco as he at present buys for less money. But really that is not so absurd as, perhaps, it may seem, because in all these things you must trust to the competition of trade to adjust the prices to the duty. I believe that in some classes of tobacco the same amount of tobacco will be sold considerably cheaper than it is at present. In other classes we have to consider the question of moisture; and in proposing this reduction I shall also propose a change in the law in that matter. The natural amount of moisture in tobacco is 14 per cent., but in former days that used to be enormously increased, and it used to be said that it took threepennyworth of matches to consume threepennyworth of tobacco. I hope we have improved things since that time. The present legal limit of moisture is 35 per cent., but only the other day I saw a circular in which retailers were cautioned not to buy too much at one time of the cheapest class of tobacco, because it would lose by evaporation as much as 3d. per pound in any single day of ordinary temperature. Therefore, I am bound to say that, in justice to the consumer, there is reason for an alteration in the legal limit of moisture. I propose that the limit should be reduced to 30 per cent., and, if that be done, I believe the consumer of all classes of tobacco will get the full benefit of this reduction of duty. He will, in all likelihood, also obtain a drier tobacco for his money. A drier tobacco is more quickly consumed, so that I see there is a prospect of advance to the Exchequer in the future. I should add that, in fixing the date at which the reduction of duty shall take place, it is necessary to bear in mind the conditions of the trade. Some kinds of tobacco—such as cigars and Irish roll—take much longer to manufacture than others; and unless the manufacturers are allowed time to work off stocks of tobacco which have paid duty at the higher rate, there is a danger, as was proved in 1887, that the workmen may be temporarily discharged. I propose that the reduction of duty shall commence on May 16th, and, as was done in 1887, I shall be prepared to consider claims for an allowance of rebate on the withdrawals of unmanufactured tobacco during the time between now and that date. I anticipate that the cost of the reduction of the tobacco duty will be in the current year £1,120,000. Adding to that the £385,000 to which I have already referred, the total reduction which I propose is £1,505,000, and the final balance sheet will be as follows:—Customs revenue I estimate at £21,080,000; Excise revenues at £28,950,000; estate duties, £10,670,000; stamps at £7,600,000; land tax at £925,000; house duty, £1,570,000; and income tax, £17,700,000. The total tax revenue I estimate at £88,495,000; the non-tax revenue at £18,615,000—amounting to a total revenue of £107,110,000, against a total expenditure of £106,829,000, leaving a margin of £281,000 to provide for the possible additional grants to Scotland and the West Indies, to which I have already alluded, and for a small alteration in my own estimates. I have now completed my task. I trust I may anticipate a favourable consideration by the Committee of the proposals I have laid before them. But there is one matter which I think we can all view with satisfaction, and it is that in a year of unexampled expenditure we have been able to provide, not only for the whole of that expenditure without any increase of taxation, but we have also been able to make some remissions to the taxpayers. I feel that in troubled times like these a financial forecast is both doubtful and difficult. With our commerce on every sea, with our trade in every land, no event that can happen in any quarter of the globe, however remote, can be indifferent to us. And an event, so important and so untoward, as a probable war between two members of the great family of civilised nations, must be a cause of anxiety to us, however remote it may seem to be from anything connected with our own immediate interests. If that war should come, we must all pray that it may be brief. I have carefully considered the matter from the point of view from which it is my special duty to regard it, and I see no present reason to consider that we need anticipate anything that will injuriously affect in any material degree either our revenue or our expenditure. But, if my anticipations should not be realised, if difficulties are in store for us in the course of the coming year, is there not something in the picture which I have attempted to draw to-night, of a great and wealthy nation meeting necessities far greater than before, from a revenue larger, more buoyant, and more easily raised than at any previous period of its history, which may strengthen our belief in the soundness of the financial policy which this country has so long pursued, and justify the conviction that, whenever the time of trial may come, thanks largely to that financial policy, we are possessed of resources which will enable us to bear successfully any strain, however great, that may be imposed on the patriotism and the endurance of our people?

SIR WILLIAM HARCOURT (Monmouthshire, W.)

It would be superfluous on my part to endeavour to express the sentiments which I entertain, in common with Gentlemen on both sides of the House, of respect and admiration for the ability of the right hon. Gentleman, and the clearness with which he has placed before the House and the country the financial position in which we stand. I have a great admiration for all the gentlemen who sit upon the Front Bench opposite, but I may be permitted, perhaps, to have a personal preference, and I have always liked to hear the Vice President of the Committee of Council on Education and the Chancellor of the Exchequer on Finance. Their convictions are so entirely in accordance with those of us who sit on this side of the House that we hear their sentiments with agreement, though we do not always contemplate their actions with satisfaction. I regret to learn from the right hon. Gentleman that the admirable sermons which he delivers find only deaf listeners, and especially among the colleagues by whom he is surrounded. That is, perhaps, not an unusual consequence in the case of the established and endowed Minister of Finance when he is preaching to his orthodox congregation. I do not intend now to enter upon a discussion of many parts of the interesting and instructive speech of the Chancellor of the Exchequer, neither that part in which he has made his financial proposals nor that in which he has dealt with the important subject of expenditure. During the short time I shall occupy the attention of the Committee I would rather address myself to the remarks in the early part of the right hon. Gentleman's speech which dealt with the subject of the prosperity and growth of revenue of the country, and to which, in his eloquent peroration, the right hon. Gentleman referred. I shall not do that in any critical spirit, but rather in a tone of entire accordance with the observations he has made. I shall not even criticise the excess of the revenue over the Estimates. It would be cruel to remind the right hon. Gentleman of the criticism he passed on his predecessor when he told him that the excess of revenue over the Estimate was not a feather in the cap of the Chancellor of the Exchequer, but that the true triumph of the Chancellor was when the Exchequer receipts agreed with his estimate. I shall not repeat that criticism. Perhaps, like the lady in the play, we may say, "Sister, we were both in the wrong." The excess this year—I congratulate the right hon. Gentleman upon it—over his estimate was £3,600,000—£4,200,000 above the produce of last year. The Estimates are beyond calculation because the resources of the wealth of this country are incalculable; because the depth of that wealth has got already beyond our sounding, and—for the right hon. Gentleman will allow me to say so—it is because we have sunk new wells in the wealth of the country, of which the produce has been beyond expectation. In old days there was a celebrated sentence, I think, of Lord Castlereagh, who talked of the ignorant impatience of taxation among the people. There is no longer an ignorant impatience of taxation. If there were anything to be said upon that subject, some people might be disposed to say that there was an ignorant patience of expenditure, which, I think, perhaps, is rather the defect of the present time. But this annual Budget is a time at which we take stock of the condition of the country, and of the people in all classes. There survive—whether they are present here to-night I do not know—people who believe that the trade and the prosperity of the country are, year alter year, going to the bad; people who tell ignorant persons throughout the country that we are being starved by abundance of everything, that we are being ruined by cheap commodities, that free trade is bringing us to destruction, that we are, through the appreciation of gold—although gold was never so abundant—being driven to ruin. We are told that if we could only export everything and import nothing we should make our fortunes, and that the more we get for our labour the less we have. That is a doctrine which is extremely popular. I do not know if the hon. Member for Sheffield is here to-night. We are told that the fall in prices, which is advertised constantly in Index Numbers, is a certain "evidence of the decadence of our prosperity"; and that, if we only paid more for everything we should be richer than we are. That is a doctrine which is preached in this country, and it is one which we should do well to examine by the light of the revenue of the nation. The whole world is exercising its ingenuity in trying to produce more with less labour, and to make things cheaper, and they have had great success in that pursuit. The result is an abundance of commodities at cheap prices, but when the ingenuity of the world has been spent in that direction, we are asked, by fiscal regulations, to destroy the work that has been accomplished. But is that doctrine consistent with the growth of the revenue of which we have had an account to-day? The Imperial revenue from taxation in 1894–95 was £85,600,000; in 1895–96, £92,500,000; in 1896–97, £94,200,000; in 1897–98, £98,000,000, including local taxation. Comparing that with 20 years ago, when it was £66,000,000, the House will see that there is an increase in revenue from taxation of £32,000,000. Just let us ask ourselves what that represents to the different classes of the community. First of all, as the right hon. Gentleman stated, you have to consider the condition of the working classes, as represented by that revenue. You have had in the last 10 years an increase of £2,000,000 upon Customs, and that notwithstanding the reduction of the tea duty and the tax upon tobacco. This great increase in the consumption of tea and tobacco shows that the working classes have greater means of consumption, that they have better wages, and more of the comforts of life; and if you look at the other returns of non-taxable commodities you will also find a much larger consumption on the part of the industrial classes in this country. If you look at the savings bank and insurance returns, you will see that the working classes are increasing their power of saving, which, perhaps, is a still more important matter. It is sometimes said that the fall in prices is a bad thing for the working classes and a very good thing for the wealthier classes. Lord Farrer published recently a pamphlet of very great importance on this subject. He shows that a man now who receives a sovereign in wages gains all the advantage of the lower prices he has to pay for his commodities compared with what he did 20 years ago. I am referring to that ridiculous Protectionist argument that the working classes have suffered from the fall in prices, which is said to be due to the appreciation of gold. The fall in prices upon these commodities is to the great advantage of the man who gets £1 a week, but to the man who has 10,000 or 100,000 sovereigns it is no advantage, or hardly any, because his 10,000 or 100,000 sovereigns are either invested in luxuries, which have not diminished, but have increased in price, or if it is invested, his investments yield less than before. We come now to direct taxation. We are told that we have adopted a false system of commerce in maintaining what we call, nowadays, "open ports." But there are hon. Members of this House who do not wish ports to be opened. But what has been the consequence of the principle of open ports in this country? We are assured it has injured trade; we are told that it has injured the classes who pay income tax; we are told it has injured the wealthy classes who accumulate money in savings. Now, Sir, let me deal first with the accumulated wealth of this country. I was a little amused, if the right hon. Gentleman will permit me to say so, at his endeavour to show that the great increase in the Death Duties was not due to a particular Measure introduced in 1894, but to the natural growth of the wealth of the country, independent of that Measure. But the result of the right hon. Gentleman's arithmetic, as I found it, is that the actual increase since the Measure of 1894 has been £5,000,000, and the figures he gave showed that the Death Duties would, without the Measure of 1894, have increased by £600,000. Therefore, that Measure is at least responsible for an increase of £4,400,000. That Measure, when it was introduced by myself, was estimated to yield at its fullest amount £3,500,000, with a possible increase to £4,000,000. I remember the prediction of the hon. Member for King's Lynn, who at the time said the effect of the Measure would be that the revenue from the Death Duties would be less than it had ever been before. [Mr. GIBSON BOWLES: I said in due time.] Well, that due time has not come yet, because the Death Duties have already yielded a million and a half more than I ventured to calculate upon. The hon. Member also said that the result of that Measure would be to abolish millionaires, but the Chancellor of the Exchequer in 1896 said that I had "created millionaires, who previously, if they did not blush unseen, at any rate were unknown to the tax-collector." But so far from blushing unseen, every year they have increased in number, and, in fact, this new mine we have opened proves to be a higher-grade mine than any prospector ventured to predict. In 1896 the right hon. Gentleman said we had reached the maximum of £14,000,000 suggested in 1894, and must expect a decrease. Sir, what does this prove? It proves that the accumulated wealth of this country is increasing to a degree and in a ratio that nobody would have ventured to anticipate. That is a very satisfactory state of things with regard to what you may call the wealthy and saving classes of this country. Now, Sir, let us turn to the income tax-paying classes of this country. When in 1894 an additional penny was put upon the income tax, it will be in the recollection of the Committee that reductions were made that were estimated to amount to a loss of £1,600,000 out of the £2,000,000 which the income tax might be expected to reach. A sum of £800,000 was given to land under the reduction in Schedule "A," and abatements in small incomes were estimated at £840,000; that is to say, an estimated reduction of £1,640,000. Well, Sir, it is a most satisfactory thing to know that almost the whole of the loss due to those reductions has been replaced and recouped by the increase in the yield of the income tax, and that to-day, as the right hon. Gentleman stated in his speech, the income tax now for a penny yields £2,156,000—that was the exact figure—which is very nearly the high water mark which it ever reached before these reductions were made. What does that prove? It proves that the trading and professional classes, as well as other classes, are increasing greatly in prosperity; and that, so far as our system, whether it be in commerce or whether it be in finance, or whether it be, above all, our monetary system, has not been unsound. Otherwise would these have been the symptoms—would you have had your accumulated wealth increasing to this extraordinary degree, would you have had your trade increasing, as is evinced by the income tax returns? Of course, the large growth in this yield is due, in a great degree to your having raised the rate. But if you look at the yield per penny, that shows the increase in the wealth from which it is obtained; and, if you look at the assessment, what do we find? I take the assessment under Schedule "D" as the best test, because that is a tax on the trades and professions, and the increase of the trades and professions under Schedule "D" in 1894–95, as compared with 1895–96, is an increase of £15,000,000. That shows that the trade of this country is far from being injured by our present financial and commercial systems, But, Sir, if you compare the growth in ten years of the assessments under Schedule "D," that is on trades and professions, you will find that the assessments have increased from £285,000,000 to £351,000,000, an increase of 23 per cent., or £66,000,000, in the 10 years. And yet we are told that on account of the gold standard in this country the trade of this country is being destroyed, and that the professions and trades are suffering therefrom. Yet this amount has increased at the rate of 23 per cent. in those very years when the greatest fall in prices has taken place that has ever been known. Well, Sir, do not let us hear that nonsense talked of any more about the fall in prices having diminished the accumulated wealth, or the profits derived from the trades and professions in this country. Let us take one other test to be derived from the revenue accounts, and that is the stamp duty. Now, the right hon. Gentleman will remember that in the year 1895–96, as compared with 1894–95, there was a very remarkable increase in the yield of stamps. That was at the time of what was called, I believe, in the slang of the City, "the Kaffir boom." The right hon. Gentleman thought, not unnaturally, that that was an increase which could not continue. It was a sort of spurt on the stamps, and he said it was due to Stock Exchange gambling; he therefore put that down in the Estimate for the next year to the amount of £650,000. And yet the remarkable fact was that in the next year the yield was as great as it was in the year of the extraordinary increase, and though the Stock Exchange yielded less, what is called the regular stamp market upon deeds and instruments increased. The amount estimated last year by the right hon. Gentleman was £350,000 less than the receipts of the previous year, but the receipts, in fact, have been £650,000 more than the estimate, and £350,000 more than the receipts of last year. What does that mean? It means, of course, in regard to stamps and instruments, that there is a great increase in the prosperity of the transactions represented by those stamps and instruments. Therefore, test it as you will, test it either by the working and industrial classes of this country, test it by trades and professions, test it by the accumulated wealth of this country, as shown by the death duties, you find that the results are beyond all expectation, showing the universal prosperity in the condition of this country, which is a conclusive evidence of the soundness of your fiscal system, the soundness of your commercial system, and, above all, the soundness of your monetary system. Well, Sir, but there is another lesson to be derived from an examination of these revenue accounts. You should take them not merely year by year, for they may vary and fluctuate; but if you take them over a reasonable tract of time you will find that we are making progress not only in the figures but in the principles of our finance, which are, in my opinion, still more important than the figures themselves. The right hon. Gentleman, in his Budget speeches of two succeeding years, has referred to the very important question of the ratio between direct and indirect taxation at different times. Why, Sir, in the old days—in the good old days, as I think my right hon. Friend the Member for Thanet considers them—three-fourths of the revenue of the country was raised by indirect taxation, that is, upon the poorer classes of the country, and only one-fourth was raised upon the wealthier classes in direct taxation. That was in the period of Protection. Now, Sir, that is going back 50 years; but looking back only 20 years—to the year 1878—the revenue raised by taxation was £66,000,000; and, if you divide that—I am speaking in round numbers—between direct and indirect taxation, you will find that indirect taxation was £44,000,000, and direct taxation was £22,000,000. So you got down from a proportion of three-fourths to a proportion of two to one, even 20 years ago. Sir, in making this calculation, I would point out that the Excise returns at the former period included the licences, which must be treated as direct taxation. I only mention that because otherwise these figures might puzzle some people who will look at them. Now, Sir, in the year 1898 the revenue raised by taxation, as I have already said, is £98,000,000, of which £51,000,000 is indirect taxation, and direct taxation is £47,000,000, so that from a proportion of three-fourths to one-fourth you have nearly arrived at an equality between the two classes of taxation. This shows the great moral progress which has been made in the principles of finance in this country. Sir, the revenue from taxation, as I pointed out before, in these 20 years has increased by £32,000,000. The increase in indirect taxation, due mainly to the greater consumption of the people, is £8,000,000, and the increase in direct taxation has been £24,000,000; so that in that period you have increased your direct taxation throe times as much as you have increased your indirect taxation. Those, I believe, are sound principles. They add not merely to the prosperity of the revenue, but to the contentment of the people and the solidity of our social system. Now, Sir, I am not going to offer any opinion at all upon the reforms in finance which the right hon. Gentleman, in his speech, has proposed to-night. It was a maxim laid down by Mr. Gladstone that the discussion upon the proposals of the Chancellor of the Exchequer ought always to be reserved until the House has had time maturely to examine them, and I am sure the right hon. Gentleman will not complain of that. The observations that I have been making are only upon the indisputable facts of past finance. Sir, the only thing I will say with reference to the proposals of the right hon. Gentleman is that I am glad to see that they are in accordance with previous proposals. We have had the question of a graduated income tax, and I have ventured on former occasions to point out that, while it was difficult to carry out that principle, you have it carried out in the abatements below £400 a year. The right hon. Gentleman has had the courage—and I am not going to blame him for it—to carry out the principle of graduation of income tax up to the point of £700 a year. I do not see the First Lord of the Admiralty here, and I suppose he is one of the converts to this principle, but he condemned me strongly for carrying out the graduation to the point of £500 a year. I believe this principle of exemption and abatement to be a sound one, and certainly I do not think the right hon. Gentleman will find on this side of the House any objection to dealing with the income tax as we have endeavoured to deal with other taxes; that is, to lay the heaviest burden upon those who are best able to bear it. As long as he proceeds upon those principles he will certainly receive the support of those who have always advocated that principle of financial policy With regard to the death duties, I have always said, and I repeat it again, that in regard to the alleviation of any hardships that experience has shown to exist I shall only be too happy to join in removing them. The right hon. Gentleman has declared—and I heard it with satisfaction—that he adheres to the general principles adopted in that Measure, and is prepared to support them. I think that the result which those death duties have produced has been entirely in conformity with the object for which they were introduced. At that time I was in the trough of the wave, and I congratulate the right hon. Gentleman on the fact that he is riding on the crest of it, and I hope he may continue to do so. But, at, all events, it was necessary at that time to make provision for a greatly increased expenditure for the defence of the country. I will not refer to the opposition—I am glad to forget it—which that Measure encountered. We hoped it would produce a result of adding to the resources of the country, out of the pockets of those who are best able to pay it, some £4,000,000. And mind, Sir, when it is represented that it was a very great hardship, it should be remembered that it imposed no greater burden upon people who left £25,000 in free personalty than they paid before. The greater burden was laid entirely upon property above that figure, or, at all events, mainly upon property above that figure. The right hon. Gentleman has implied that the greater part of the amount was due to graduation. Of course it was. The basis of that proposal was graduation, but he did not mention the equally important principle of aggregation, and it is owing to those two principles that £5,000,000 has been added to the annual resources of this country. I am happy to think that in his proposal with reference to this matter the right hon. Gentleman has, at all events, adopted, to a certain extent, the principle of the graduation of the income tax. Now the right hon. Gentleman has made another proposal with regard to indirect taxation. He offers to the House a choice of commodities. I will not comment upon that at present, but I am happy to think that there also he has followed, and is prepared to follow, the principle to which I have referred; that is to say, that when relief is given in respect of taxation the proportion shall be much larger in indirect than in direct taxation. If I gathered his figures aright, what is to be for the relief upon tobacco is £1,100,000, and the relief upon direct taxation is to be £400,000. That is following the policy which has been pursued, as I mentioned, in recent years, that there shall be a diminution three times as much upon indirect taxation its there is upon direct taxation. [The CHANCELLOR of the EXCHEQUER: I said so.] I am not blaming the right hon. Gentleman. I am only showing that, as I believe, he sincerely holds those principles, and, at all events, as Mr. Disraeli did in the old days, he is educating his Party in the principle, which we believe to be thoroughly sound in regard to taxation in this country, that when you want more money you ought to raise it mainly upon direct taxation, and not upon those who are least able to bear the burden—by indirect taxation. I am glad that the right hon. Gentleman takes so sanguine a view of his future revenue that, in spite of his great expenditure, he is able to give some relief of taxation, upon the principle that if you give relief it ought to be much larger on indirect than on direct taxation. I do not hear any approval of that sentiment from my right hon. Friend the Member for the Isle of Thanet. Well, now, Sir, I only desire in these observations to call public attention to the really sound condition of the prosperity of this country in all its branches, and to deduce from that the moral that the fiscal, commercial, and monetary principles which we have adopted have produced these results. Upon the question of the expenditure of the country I will reserve what I have to say until we come to the real controversial Debate upon this subject. I only desire now to refer to the revenue. I am extremely glad that, after we have had surplus after surplus without any relief of taxation, the right hon. Gentleman has found it in his power to give us some relief of taxation, although it is only a little one. Considering that the accumulated surpluses have amounted to something like £12,000,000—£6,000,000 in the first year, and about £3,000,000 or £4,000,000 in each of the succeeding years—we might have hoped for a larger reduction of taxation. As it is, I understand that the reduction is to be about £1,500,000. When we come to the discussion, while rejoicing in this vast revenue of £116,000,000, we shall have to ask ourselves whether we do the best we can with that enormous sum. Sir, we ought to consider not only the great resources that we have, but the manner in which we expend them. The fact is that the English people are, perhaps, the richest, but the least thrifty, people in the world, and when they have got a great deal of money they spend it very carelessly, and are very indifferent as to the results which it produces. That I say rather by way of illustration. But, Sir, there is one great element in this revenue which we shall have to consider, and that is the fact, which has hitherto been more or less concealed in the account, £12,000,000 or nearly £13,000,000 of that Imperial revenue is handed over to purposes which are not Imperial. The right hon. Gentleman to-night said that the increase of the grants for local taxation had received universal approbation. Why, the greater part of the increase of those grants was under the Agricultural Rates Bill, and if the right hon. Gentleman imagines that it meets with universal approbation, especially when wheat is selling at 43s. the quarter, I think he is greatly mistaken. When we consider that out of this Imperial revenue £13,000,000 is bestowed upon subsidies to local taxation, I think we shall have to ask ourselves whether the Chancellor of the Exchequer could not have done better for all classes of the community with this £13,000,000, and whether the advantages which have been derived by the ratepayer from this great sum are equal to the advantages which he would have derived from a general reduction of taxation to that amount. This is too large a subject to enter upon to-night, but when the Second Reading of the Bill comes before this House these are matters into which we can enter. All I can do now is to offer to the Chancellor of the Exchequer, who represents the country in this matter, my congratulations upon the prosperity of the country as evinced by the stupendous revenue which he has to administer.

MR. JAMES LOWTHER (Kent, Isle of Thanet)

I think my right honourable Friend the Chancellor of the Exchequer can have little doubt in his own mind as to how far his Budget statement is acceptable to those who hold the principles of the Party which the right honourable Gentleman represents in this House. Now, Sir, I am not going to criticise the Budget in detail, for I quite agree with the right honourable Gentleman who has just spoken that the Budget ought not to be criticised until it has been duly considered. But what I would beg to point out is this: that both the Chancellor of the Exchequer, his predecessor in office, and the Leader of the Opposition have both bemoaned the fact that economy is no longer a virtue practised by this House. The Chancellor of the Exchequer appealed in a most earnest manner to his predecessor as perhaps the oldest economist in this House, with one exception. Now, I would like to ask, does it occur either to the present Chancellor of the Exchequer or his predecessor that the mode in which a large amount of the main portion of our revenue is raised is accountable for the disappearance of economy from this House? The right honourable Gentleman must realise that when the person who calls the tune no longer contributes to any appreciable extent to the payment of the piper, the music is apt to be odd. The Chancellor of the Exchequer has told us that the income tax is to be reduced in the way of allowances and deductions in respect of certain clashes of voters. That, to my mind, is a very decided further step in the direction which has always been strongly deprecated from these Benches—namely, a graduated income tax. The Chancellor of the Exchequer has informed us that this is the only practical method by which that principle can be carried into effect. Therefore, of course, those who are in favour of a graduated income tax will welcome his proposal, but I venture to say that the principle is unsound. The removal of their share of taxation from the increasing number of voters is certainly not likely to act in the direction of economy, and the same remark, I think, must be applied to the reduction in direct taxation which has been announced to-night. I must own that I approved of the selection which the right hon. Gentleman has made for tobacco as the commodity to be relieved in preference to tea. I am neither a smoker nor a drinker of tea, although I am a participator in the luxury and benefit of cocoa. Impartial as I am, I confess that I agree with the right honourable Gentleman in thinking that the reduction of the tobacco duties is by far the best that could be made, provided any was to be made at all, because if you materially reduce the tea duty you remove from a large class of taxpayers any inducement to counsel economy on the part of Parliament. On this account I am not disposed at all to join in the congratulations which have been addressed to the Chancellor of the Exchequer with regard to the further reduction of indirect taxation. There is another point we must remember. We have heard to-night that periods of great national prosperity are apt to be succeeded at no great interval of time by periods of depression. Does my right hon. Friend think that he can put the sixpence on to tobacco again with the same facility as that with which he has taken it off? He knows perfectly well that the increase of indirect taxation presents a difficulty which makes it by no means an easy subject to deal with. He would have been far better off had he selected some other channel in which to have exercised his benevolence. That being so, I think we have some right to regard with alarm the doctrine which has been reiterated by the Leader of the Opposition, that the proportion between direct and indirect taxation is to be observable as a guiding principle in our finance for all time, and I was glad to hear the Chancellor of the Exchequer repudiate participation in that opinion—namely, the opinion that there must be three times the reduction in indirect taxation that there was in the reduction of direct taxation whenever any reduction was capable of being made. If we are to go on reducing indirect taxation in the proportion of three to one there will very soon be no direct taxation at all, and I do not really think that the House views with sufficient seriousness the great danger there would be if such a thing were to come to pass, because the working classes, which are really the controlling power in England, would have no share or interest in keeping down our national expenses. The Chancellor of the Exchequer, I remember telling us last year, or the year before, that the classes who might be classified under the general heading of the income tax-paying class contributed a proportion of the revenue of 52 per cent., the remainder of the revenue being borne by the consuming class. I pointed out that mistake at the time to my right hon. Friend, but he has never corrected the impression which his speech then made—namely, that he considered that the income tax-paying classes and the consumers are to be classified for that purpose, and that the same classes only contributed, I think he said, 48 per cent., whereas my contention is, and I think the figures will prove that I am right, that when you take them in their capacity as consumers the class he refers to pays a very much larger proportion than he has stated. Now, my right hon. Friend spoke of the enormous national prosperity, but I must own that I expected he would have made some reference, however slight it might have been, to the alarming increase of imports, and the very serious diminution of our exports. The Leader of the Opposition did not say a word about that either. The Leader of the Opposition dilated upon our increasing national prosperity, but he did not say a word about the serious diminution of the export, trade of this country, and I think that, taking the circumstances altogether, it would very much bear the appearance of this matter not having been fully considered by the framers of this Budget. When we talk about the prosperity of this country, and have not a word to say about the serious diminution of our exports, and the effect that that must have upon our manufacturing industries and our industrial population, it appears that the matter has never been even partially considered by my right hon. Friend. I do not wish to detain the House upon this occasion, but I cannot associate myself with the expressions of congratulation which have been given to the Chancellor of the Exchequer upon our national prosperity, nor can I associate myself with any expressions of approval as to the principles which appear to have guided him in viewing indirect taxation as a source of our revenue, in which, of necessity, the greatest diminution must take place, and I must again repeat that I think he might have taken somewhat into his calculations the very serious increase in our imports, and the very serious diminution in our exports.


I do not wish to detain the House long, or to criticise at too great length the proposals which my right hon. colleague in the representation of Bristol has made to the House this evening. I have been aware for a long time that he has had his attention directed to the question of the tobacco duty, as he has told me on more than one occasion that, in his opinion, the duty upon the manufactured article is very excessive when compared to the cost of the raw material, and, therefore, I am not altogether surprised, though I did not think it would come this year, because I thought his financial responsibilities would have been too great for him to attempt to do so. I did not think that he would care to meddle with the goose that was yearly laying for him so many golden eggs. Theoretically, I have nothing to complain of in his proposals, but theoretically I had nothing to complain of years ago, when Sir Stafford Northcote, who was then Chancellor of the Exchequer, put on fourpence. That, however, turned out to be practically a very great misfortune, both for the manufacturer, for the revenue, and for the consumer. I always have a tender place in my heart for the right hon. Gentleman the present First Lord of the Admiralty, because he came to the rescue of the tobacco industry, which was at that time greatly depressed, and which has been in a comparatively healthy condition ever since he administered his physic. The reduction of the duty which the right hon. Gentleman the First Lord of the Admiralty then introduced has worked very admirably and successfully, and I think the House will believe me entitled to speak on the point when I say that there never was a time when the British working man got so good an article for his threepence or his fourpence as he does at present. I do not mean that he may not get a better article in the future, but he gets a better one to-day than his father or his grandfather got before him. I was very glad to hear the expression of the Chancellor's belief that adulteration was now reduced to a minimum. The only adulteration I am aware of is that some manufacturers run a little too closely to the limit of 35 per cent., but it is really a question which cannot be settled offhand, and requires a great deal of consideration as to how the new limit of moisture, and how the reduction in duty, will affect the retail price. If it will fit in with the views of the retailers, and they can sell the articles which will be produced under the new regulations at threepence, threepence halfpenny, or fourpence per ounce, consistently with a decent profit, everything will go well, and I daresay the right hon. Gentleman will reap the advantage of his somewhat heroic policy. I think it will be thought in the country to-morrow that he has been bold, but perhaps has not been rash. I have no doubt he has duly consulted those who are best able to advise him on the point. Possibly, when the matter is again discussed at a later stage, I may have some criticism or some suggestion to offer.

SIR JOHN A. WILLOX (Liverpool, Everton)

I desire to speak upon the matter to which the hon. Baronet the Member for Bristol has just alluded—that is, with regard to the tobacco duty. Personally, and with some knowledge of the matter in question, I do not hesitate to say that the duties which have been reduced by the Chancellor of the Exchequer will prove beneficial to the community, both in distributing more equitably the range of prices and in assuring to the consumer a better and more genuine article. The limit of moisture, formerly fixed at 35 per cent. and now reduced to 30 per cent., will pretty nearly assure to the working classes, who are large consumers of tobacco, an unadulterated article, because the artificial moisture will practically be no more than is necessary to work the article up for manufacture. With reference to a question which might, perhaps, be regarded as somewhat invidious, he leaves untouched the duty upon foreign cigars, while the duty upon foreign manufactured tobacco remains unaltered, and I should like to call the attention of the Committee to the fact that when the tobacco duty was fixed in 1842 by Sir Robert Peel the duty at that time upon foreign cigars was 9s. per pound, and it was not till 1863, when Mr. Gladstone was Chancellor of the Exchequer, that the duties were altered. Mr. Gladstone reduced the duty on the rich man's cigars from 9s. to 5s. per pound, and he added twopence—from 3s. to 3s. 2d. per pound—to the poor man's pipe, so that now we are only returning somewhat to the condition of things which prevailed before, and which I think was a condition of things upon a more equitable basis than that which is now in existence. I think there is one special recommendation made as to the amount at which the duty is fixed, because sixpence taken off the present duty would make the tobacco duty henceforth 2s. 8d. per lb. We all know that in the sale of tobacco the ounce is the great denominator, so that the working man, in paying threepence for his ounce of tobacco, will understand that twopence of that amount goes direct to the Exchequer. How far he may be satisfied with that proportion I do not presume to say, but he will also know that the rich man who pays sixpence for his Havana cigar only contributes one penny to Her Majesty's Exchequer; so that, although the conditions may be somewhat changed, they still appear to be very striking in favour of the consumer of foreign cigars. But there is another reason, I think, why this change will be advantageous. It will enable the British manufacturer to employ a very large number of female workers, thus enabling him to compete with something like equality with the foreign manufacturer, who at the present time sends into this country enormous quantities of cigars, not because they are better, either in material or manufacture, than the English cigars, but because they are manufactured under more favourable conditions as regards duty. There is just one point, however, upon which I feel disposed to be critical—namely, the date at which the duty is proposed to become operative. The Chancellor of the Exchequer has said that the 16th of May is the date at which, probably, the present stocks of manufactured tobacco will be exhausted. I am quite sure that anyone with practical experience of the trade will know that, while it is quite possible to clear out stocks of manufactured tobacco, it is wholly impossible that manufacturers and dealers who have large stocks of manufactured cigars can possibly exhaust those stocks within that period. Another thing is that the very contingency which the Chancellor of the Exchequer sought to avoid will be precipitated by this delay, because the instant the Budget is proclaimed to the public the manufacturers will hesitate to employ their cigar-makers, because they know that the stock cannot be cleared out in the limit of time; so that to-morrow I am satisfied that there will be throughout the country almost a complete cessation of work in that industry. How far it will be possible to remedy that state of things I hardly presume to advise, but I am certain of this, that it would be more equitable and more to the interests of the industrial population that some well-regulated system of rebate should be allowed upon the manufactured article, so that there will be no inducement on the part of makers to stop production in the meantime. There are other points upon which I am sure it will be necessary to examine with a critical eye the details of the Budget as affecting the tobacco trade, but I may say that the general operation of the Budget will be in the general interests of the community, and I may say, also, ultimately beneficial to the Exchequer from a revenue point of view; and although there may be, perhaps, some complaint that it is unfair to deal with one class—that is to say, the unmanufactured article—on a different basis to the imported manufactured article, I think, when it comes to be considered, it will be found that it will only serve to bring the two classes to something more approximate than appears to be the case at the present time.

MR. A. BILLSON (Halifax)

I have no special complaint in regard to this proposed reduction of the tobacco duty which has been spoken of by the two hon. Members who understand it so well, but if I had to choose between taking off the duty on tobacco and taking off the duty on tea, I should have preferred it being taken off the tea. I welcome it, however, because I look upon it as a step in the right direction. But I should like to see the Budget framed in a different manner, so as to get rid of a still larger amount of indirect taxation. I acquiesce in the view that the country as represented in this House seems indifferent to the pressure of taxation, and yet I feel bound to say that whenever I have been to meetings in the North of England the subject is talked about in a very different manner from what it is talked about here in the House of Commons. All through the year you will find the working men grumbling about the burdens they have to bear, and yet, in each Parliament, as the spring conies round, we have Members of the House of Commons congratulating the Chancellor of the Exchequer upon the enormous revenue he has received, and it is taken too easily for granted that the burdens are placed fairly upon the population, and that everything is for the best in this most prosperous of all countries. We overlook too often the fact that, wherever it comes from, the burden of this £116,000,000 falls upon all trades and industries, and to that extent we are handicapped in relation to foreign countries. I have looked to see how the proportion we have to pay compares with that which is paid by Germany. The Chancellor of the Exchequer anticipated some objection of that kind, because he points out that the Englishman ought to be content to pay more, since he has a world-wide Empire with which that of Germany cannot compare. But let us look at it from the point of view of £ s. d. We raise about £55,000,000 of taxation upon our commodities through the means of customs and excise. That is upon our population of 40 millions, and, taking five to the family, £6 18s. 9d., or 2s. 8d. per week, per family. By the same means Germany raises £30,000,000, which is £3 0s. 9d., or 1s. 2d. per week per family. So that our families pay 2s. 8d. in taxation, as compared with the German payment of 1s. 2d. Now, if there is this great burden upon England, as compared with Germany, I think we must look beyond the educational superiority of Germany, about which we are now hearing so much, and consider also this additional handicapping which is laid upon our industries by the greater burden of taxation. Moreover, as the Chancellor of the Exchequer has shown, this burden goes on increasing. I make out from the figures given us to-night that there is a sum of £15,000,000 more spent now than there was in the year 1895, the last year of the Liberal Government. That £15,000,000, divided amongst the families, creates an additional burden of £1 16s. 10d. per family, compared with 1895, when, as I said, the Liberal Government was in office. The consideration of this great burden, falling as it does upon the whole of the country, leads one to dwell on the source from whence it is derived. I have had the fortune to fight two contested elections in the West Riding of Yorkshire in the last 18 months, and I can assure the House that the intelligent artisans of those districts care very much indeed to ascertain where the burden principally rests. There is nothing that more commends itself to their judgment than the principle that the burden of taxation should be laid upon the shoulders of those who are best able to bear it. Out of the £85,000,000 of our taxation there is £49,000,000 which is indirect taxation, and £36,000,000 which is direct taxation. We have no statistics to tell us accurately as to the class from which this £49,000,000 of indirect taxation comes—what the proportion is between the well-to-do and the struggling classes of the population—but I saw a Return the other day which seemed to me to have a great deal in it. That Return was based upon the payments already made for death duties. Up to the present time there has not been sufficient experience to enable us to obtain from these statistics of the death duties anything of a very exact nature; but this Return shows that of all the persons now living those who will die worth over £100 number 365,000, and that all the rest of the population—say 37,000,000—will die leaving less than £100. If that is correct, it is not unfair to assume also that this burden of indirect taxation falls practically upon that 37,000 000 of the population—that is, eleven-twelfths of the population—who cannot be looked upon as well to do, but who belong to the struggling classes. We do nothing to relieve the burden of taxation in that respect upon the very poor. Of course, in regard to the income tax, we do take off up to £160, and the Chancellor of the Exchequer, I think, has very happily increased the relief given in that respect; but there is no sort of relief of a similar kind given to the minimum payments of the very poor in respect of the taxation derived from Customs and Excise. I read the other day a report of a speech or a reference to a suggestion once made by the right hon. Baronet the Member for the Forest of Dean, in which it was suggested that the minimum payments by the very poor should be excused. But, as I think he admitted, there is no possible machinery by which this can be done. And everyone will see that if these struggling classes of the country bear a proportion to the well-to-do classes of 11 to 1, then any attempt to relieve them of the burden of taxation would practically take away all the proceeds of the taxation, and you may as well therefore at once get rid of the whole of the indirect taxation, and by one stroke relieve the burden which is now placed upon the struggling classes. The Chancellor of the Exchequer says, if yon are going to take away that, how are you to replace it? I put aside the question of the tax upon liquor, because, so long as the drink traffic is a monopoly it is reasonable enough that it should be highly taxed: and with regard to the taxation of tobacco, that also is a revenue which is collected without much hardship. And the Chancellor has to-night announced some relief from it. Take, therefore, the rest of the duties, which come to £4,500,000, how are you going to replace them? I cannot help referring for a moment to the fact that £2,000,000 has been squandered upon the agricultural rates in England and Ireland which might very well have been devoted to some purposes of the kind I have mentioned, and we may hope that some wise Chancellor of the Exchequer in the future, whether the present occupier of the post or somebody else, will see his way not to renew that gift to the landlords, but devote it to the abolition of the indirect taxation. There is, however, another source to which I should like to direct the attention of the Chancellor of the Exchequer. There has been, as he must have seen, a movement growing in the country for the rating of unoccupied lands in towns for the relief of local burdens. Two hundred town councils have passed resolutions in favour of such a scheme; the London School Board passed a resolution in its favour; the London County Council approved of it; and two or three weeks ago the Association of Municipal Corporations, consisting of mayors and town clerks, aldermen, and members of various corporations, assembled at the Guildhall, in London, passed by a very large majority a resolution in its favour. Reference was made in that day's Chronicle to the matter, and it wais pointed out that we have not realised how public opinion has ripened upon this subject in the great industrial centres. At present the movement is apparently confined to the relief of local rates, but it is evidently a point in which the Chancellor of the Exchequer might intervene; because, if this unoccupied land ought to be rated for the benefit of local resources, it ought also to be taxed for the benefit of the Exchequer, either by income tax or some tax in lieu of inhabited house duty. I should not confine myself to asking for either the income tax or the house duty, or anything of that kind, because I think you might dead with it directly by way of a tax upon ground values, and my opinion is that such a tax would bring in a revenue which would very soon enable you to dispense with indirect taxation altogether. Everybody must have seen land in towns which is continually growing in value, while the owner does nothing to facilitate that growth or increase that value. I saw, a day or two ago, that in the town of Stockton it was stated there were no less than 700 acres of unoccupied land of that description. In Bradford, and other towns in the North of England, you frequently come across ugly, desolate-looking pieces of land in the midst of large warehouses and other prosperous buildings, and when you ask why is this land in this neglected and desolate state, you get the reply, "Oh, it belongs to Mr. So-and-so, and he is waiting for his price." Yes, he is waiting for his price; and all the while the town goes on paying out its rates, and by its paying, its gas, and its electric light adding to the value of this land, and thus bringing it up to the value for which Mr. So-and-so is waiting, and towards which enhanced value that fortunate gentleman has not done one single thing, because the whole of the increasing value in the land is due to the energy and enterprise of the community around. It is nothing the owner does that gives it the new value, and surely the community which thus confers the value has some right to a share of it in the shape of taxation. In London, from the last valuation, it appears that what has been called the unearned increment of the property already built, that is, apart from expenditure on new buildings, shows an average increase of £300,000 a year—that is our annual addition to the capital value of the owners' property, at 15 years' purchase of 4½ millions. This growth represents a rise in rent due to increasing demand for increasing buildings owing to increasing population, the advance of London as an industrial centre, and also unfortunately the helpless condition of the London poor. What is wanted is some form of taxation which will intercept a portion of this unearned increment. The case of London, indeed, is especially glaring by reason of the present state of the income tax arrangements for the assessment of reversions. Everyone knows that reversions of immense value are falling in year by year to the great London ground landlords. It was stated before the Town Holdings Commission that Lord Portman had reversions falling in in a very short time worth upwards of 1¼ millions. Now perhaps it has escaped the observation of many that on the value of this reversion the lucky landlord actually pays no income tax. Look what they are. A ground landlord lets his land for a perhaps moderate rent on the condition that at the end of the lease the land, with all the buildings on it, reverts to him. What is this value which he gets but an added rent—a further income from his property. One can imagine a great estate when the leases are so arranged that they fall in year by year, and the sums paid yearly for renewals are as much income as the original rent. Yet no income tax, so far as one can see, is paid upon them. It is true that by the original Act it was contemplated that they might be chargeable; but there is the curious provision that if the owner can satisfy the Commissioners that the prices for renewal are re-invested in productive property, they are not to be charged. I wish the Chancellor of the Exchequer would give the information to the House of the proportion that is charged and the proportion that escapes. It is a curious thing how very few cases seem to have been contested in the courts, from which one gathers that questions are not raised upon the point. But see how differently other kinds of annual profits are treated. A coalowner who out of his profits sinks new pits to maintain his output, the manufacturer who extends his machinery, are declared to have merely invested fresh capital, and are allowed no deduction of income tax on their profits. It is only the landowner, always jealously protected by the Legislature, who is allowed to deduct from his profits that part of it which he invests in new undertakings. It is a striking illustration of the way in which our laws, made by Parliaments of landlords, have been in the habit of legislating in the interests of landlords, and have disregarded the equal claims of industry. It is almost superfluous to urge what has now been so often pressed, that any form of taxation which leads to bringing more land into the market will tend in the direction of great social benefits. Dear land means overcrowding: overcrowding means sickness: sickness brings loss of wages and pauperism. It was happily stated the other day by my Friend the hon. Baronet the Member for Northwich that nowadays rich men as a rule live on cheap land, poor men on dear land. When land in town gets too dear for rich men to live there, they move into the suburbs, where land is cheap, but the poor have to remain in the towns to be near their work. Whatever tends to bring land more readily into the market helps to get rid of this unsatisfactory state of things. And there is this further advantage in taxation upon land values, that, unlike taxation on industry, it does not affect the value of what is taxed. You tax industry and you tend in extinguish it; tax savings and you tend to decrease savings; but however much you tax land it is still there; you cannot tax it out of existence. You only make it necessary for the owner to employ it in a more profitable manner, and such employment results in benefit to the whole community. I cannot believe that it is beyond the power of the Chancellor of the Exchequer and his advisers to devise some mode by which such a source of revenue could be made available, to the extent of enabling him to relieve the industry of the country from some of the charges now laid upon it, and especially upon the necessaries of life. If he could do this he would secure a triple advantage. He would relieve the very poorest among us from a burden which presses terribly upon them; he would do much towards setting the serious social problem connected with the housing of the poor and the pressure of population in our large towns, and he would place the finances of the country upon a more secure and satisfactory basis.


The interesting speech we have just listened to does not appear to me in have an enormous reference to the Budget, but it was interesting even as a lecture. I congratulate the right hon. Gentleman the Chancellor of the Exchequer upon the manner in which his statement as to the diminution of the tobacco duties was received from such critics as the hon. speaker who has just sat down. New, I have no interest in the tobacco trade, but I think that the Chancellor of the Exchequer has made a most excellent choice between tobacco and tea. They are both luxuries, and if indulged in too freely are both vices. But for my part I think that the vice of smoking tobacco is infinitely less injurious to the community at large than the swilling of tea; and when the Chancellor of the Exchequer had to make a choice between these two, I think he conferred a benefit upon the human race by the choice he made, in giving relief to the vice of tobacco. But he has not given to the persons who pay at this time of day, with all the increases put upon it from time to time, what was originally a war tax. The person who is most entitled to the consideration of the Chancellor of the Exchequer is the payer of income tax, and knowing that the Chancellor of the Exchequer had some surplus money to dispose of, I did certainly expect that he would have given the first consideration to the payer of income tax. But let us look and see what the right hon. Gentleman has done. He has told us that there are certain remissions made to the payers of income tax on incomes under £500 a year. Now, my idea has always been that these remissions are false in principle, because every income, until you get down to so small an income that you are bordering on poverty, should pay its proportion of this tax. When the income gets down so low as, say £100 a year, I could quite understand that a man should be excused from paying a tax, because he is on the verge of poverty, but everybody who has an income over that sum, I think, should be made to pay his small proportion of direct taxation. It seems to me, and the Chancellor of the Exchequer knows perfectly well, that little fish are the sweetest, and are also the most numerous in the sea, and he must be perfectly well aware that, if you tax, say, only the top of the pyramid, and leave the base untaxed, you get a much more unsatisfactory result than if you tax the whole of the pyramid equally. Now, the right hon. Gentleman the Chancellor of the Exchequer, so far as I can understand, intends to extend this vicious principle of exemption of small incomes. He is going to extend it up to incomes of £700 a year. I do not know whether he thinks that that is going to benefit the poor man in the future, but I can inform him that the man with an income of £700 a year is looked upon by the poor man as a millionaire. If he was going to extend the principle of exemption at all, he should have increased the exemption up to, say, incomes of £500 a year, and not have extended it from £500 to £700; but what he is doing is to give exemptions to incomes between those two sums, £500 and £700 a year. Well, that means villadom. Now, I think those people are not entitled to any special exemption from direct taxation. I believe, if there is to be any exemption at all, it should rather be given to those at the lowest end of the scale than be extended so as to embrace so high a figure as £700. Now, there is another objection which I have to this proposal, and that is the increase of the graduated duties which have now been adopted into the income tax, and which were proposed by the right hon. Member for Monmouth, and which, as I understood, were always repudiated by the Chancellor of the Exchequer. It is the adoption of this principle, which is introduced into the income tax to which I object. The right hon. Gentleman the Chancellor of the Exchequer will not always sit on the same Bench. There are other right hon. Gentlemen who will and are prepared now to take the position which the right hon. Gentleman now occupies, and when they come to take his place they may also take a leaf out of his book, and increase the graduation of the income tax. ["Hear, hear!"] Honourable Members say, "Hear, hear!" but we who sit on this side of the House, who are Tories, and who believe in a gold standard and repudiate bimetallism, did not expect to see this adoption of the principle of graduation promised by the right hon. Gentleman the Chancellor of the Exchequer. My belief in this matter is that every class should pay. The man with a small income would, of course, only pay a small amount, but still all classes should pay. Now, I wish to make one or two remarks with regard to the death duties. The Chancellor of the Exchequer has told us that there was a very large increase in the death duties, which realised £172,000,000, but in 1892 the revenue from the death duties was £193,000,000. It is quite true that that was the influenza year, but then this is a millionaire year. Still, if an influenza year gave a larger number of people who died, and whose estates have to pay, one would rather suppose that a millionaire year would be better than an influenza year. Therefore, I say, the free personalty has not yet recovered itself. But I have something more to say upon this subject. The nominal amount of this free personalty is some £160,000,000, and I think it was said it would be found that it increases about five per cent. per annum, with the annual increase of the wealth of the country. Now, if that had been so, it would now be more than the £172,000,000 it has reached. I am well aware, and have always said, that the financial results of this duty are yet to be seen. I have always pointed to the end of the century as the time to judge the result of this panaccaic legislation. I am astonished at the increase of millionaires; this year the number, I believe, is nine. They are millionaires, I should think, of speculation, with relative degrees of personalties, but I must confess that I am astonished at the rashness of millionaires dying at all under this system. There must be an enormous increase of them, or else they cannot enjoy the health of millionaires of other days. Now I come to the alterations which the Chancellor of the Exchequer intends to make in the death duties, which, in my opinion, are not any good at all. This Act is full of defects which cry aloud, and we have asked for the removal of those defects, but the right hon. Gentleman put us off by saying that some of them were the subject of proceedings in the law courts. With regard to others, there is the assumption that a man is dead a year before he dies, and then there is a case of extreme hardship, illustrated quite recently in the case of a noble lord, once a Member of this House, who went from this House to the other, owing to repeated deaths occurring close upon each other. I quite admit that you cannot alter the death duties in cases like that, and if you pay on one death you must pay on all; but it is an unanswerable reason for keeping the death duties within moderate dimensions. With regard to the legacy and succession duties, the right hon. Gentleman has altered them. Now, if there were any duties that were good in themselves, and levied upon just principles, the principles of which ought to be extended, surely it is the legacy and succession duties. Those two duties are models of what the death duties ought to be, and, instead of whittling away at them, the Act to which the right hon. Gentleman should turn his attention is the Act of 1894. What he proposes to do is to abolish one per cent. of those duties; but what advantage will be derived from that? It would be reasonable enough if he got rid of the legacy duty altogether, and left it there; but why should the stranger pay nine per cent. instead of 10 per cent., or why should the five per cent. man only pay four per cent? There is no advantage to be derived from that. There was an advantage in the principle adopted by the right hon. Gentleman opposite, because he got rid of a lot of small duties, and slipped them all into one duty; but I see no advantage in taking this one per cent. off the legacy and succession duties. Now we come to the second remission. I am not quite sure whether I understood the right hon. Gentleman correctly, but, as I understood him to say, this is no remission at all—only a postponement of duty which was proposed in the case of settlements, and only in the case of those settlements where the first life-interest was given to the husband or to the wife, with remainder to the children. What the right hon. Gentleman proposes to do is this, in the case of a settlement, first to the husband, then to the wife, with remainder to the children, he says in the case of the death of the first life tenant, the duty shall not be paid—that it shall not be paid until the remainder comes in. Now, why are you going to adopt this particular method for this particular class of settlement only? There is, as it appears to me, a want of principle in it. If seems to me that it further illustrates a habit which I am afraid the right hon. Gentleman has contracted of dealing with the death duties, not upon principle, but with the view of meeting hard cases; but if that is so, I can bring thousands of harder cases than this. Now, I do not think those who do not approve of those duties have much to be thankful for to the right hon. Gentleman. I have nothing further to say with regard to the land tax, but I must say this; that the right hon. Gentleman preached a sermon on extravagance—a homily on economy—but it had no more effect upon his colleagues than if preached in church. They never go to church, and therefore cannot be expected to be affected by a sermon. But the more I consider the expenditure of this country, the more I am shocked at the way in which it is growing, and the more I am surprised at the way in which the Chancellor of the Exchequer has opened his hand to every applicant for the million or so that he asks for, and the way he continues to open his hand; because he foreshadows that we shall, in all probability, next year be called upon to pay a very large subsidy to the West Indian Islands. I understand from the right hon. Gentleman the Colonial Secretary that that was abandoned, and I must say that I am rather shocked to hear now that we shall be called upon hereafter to pay a sum approaching a million and a quarter for the relief of the sugar planters in the West Indies. [The CHANCELLOR of the EXCHEQUER: I never said so.] I fancied the right hon. Gentleman foreshadowed that, [The CHANCELLOR of the EXCHEQUER: What I did say was that I had to reserve something for an additional grant in relief of the West Indian Colonies, but I never spoke of a million at all in connection with it.] No doubt the right hon. Gentleman did not speak of a million, but that was the sum mentioned on a former occasion. However, I hope it may be only £10,000 or £2,500, but we shall find out when it comes. As I have said, I have been shocked at the way in which the expenditure of the country is growing, and I hope that in the future the right hon. Gentleman the Chancellor of the Exchequer will gird up his loins and make some resistance to the extravagant demands of his colleagues, who are all extremely able men. There are 19 of them, all men of genius, and many of them men of ambition, with projects in their minds for which money will be required. We look to the Chancellor of the Exchequer to exercise a modifying influence over the expenditure, and, however desirable the policy of his colleagues may be, he must impress upon them the necessity of cutting their coat according to the cloth which he has in his hand. I believe that this period which we are now passing through is a period of almost inflated prosperity, and I am afraid it will be succeeded by a period of—I will not say poverty—but of diminished prosperity. It behoves us, therefore, to believe that we are not always going to revel in these large surpluses that we have had during these last few years, and that the possibility of diminished prosperity, seriously affecting our taxation, will have to be reckoned with.

SIR S. MONTAGU (Tower Hamlets, Whitechapel)

I must say a few words with regard to this matter. I listened with great attention to the remarks which fell from my right hon. Friend the Leader of the Opposition, and, although I approved of his points, I think he made a very unfortunate remark when he said there was no scarcity of gold, and that if was never more abundant. I think the Bank of England would tell him a different story. The scramble for gold is keener than ever, and the Bank of England has thought fit to follow the example of the banks if Germany and other countries, where you cannot get full weight gold if you want it for the purposes of export. If I took a £1,000 bank note to the Bank of England, and asked them to give me 999 full-weight sovereigns, I think they would prefer to give me a £1,000 bag of their export gold which they keep in the corner. Now I do not think they would do that if gold was so very abundant. What I rose particularly to say was that I did think the Chancellor of the Exchequer, out of his abundance, might have done something towards reviving what is now an almost vanishing trade—the negotiation of foreign bills. I thought he might have given us some small relief there. Foreign bills, negotiated in Holland or Germany, pay no ad valorem duty at all, whilst those in France only pay half the duty which is imposed in this country, with the natural consequences that the trade passes over this country, and few foreign bills come here for negotiation at all. It may seem rather a small matter, but, at the same time, it rather affects our foreign trade, because the effect of sending a remittance through the Empire of Germany is that there is a great tendency to take the return of that remittance in German goods. I did think that the right hon. Gentleman would have done something to have put this trade once more upon a business footing. There ought to be a great many changes made in the laws regarding bills of exchange. The right hon. Baronet the Member for the London University did a very great deal of good by having the laws relating to bills of exchange codified, but we want something more than codification; we want reform. If the Chancellor of the Exchequer cannot immediately give the relief that is needed, perhaps he might, by means of a Select Committee, get an opinion with regard to bills of exchange, regulating them and making them suitable to modern requirements. Bills of exchange are really international instruments of credit, and they ought to be regulated under an international agreement; and I think it would be a very wise thing to ask the Great Bowers to confer together in order to regulate bills of exchange under one uniform system. I will mention one fact, which is very little known, that bills drawn upon Russia may, in some instances, have 12 days' grace taken, while in other instances they do not take any, and notice of dishonour can be delayed in Russia for a whole year without loss. In France it is 15 days. This notification is exceedingly important to our merchants, because if they knew promptly of the notice of dishonour they would not send further goods to the same man, and great loss would be avoided. Those are the reasons why I think that a Select Committee should be appointed to consider this question of bills of exchange. We have a ridiculously inadequate system of taking three days' grace in this country, and we have other regulations which are no longer suitable, because our communications are now so rapid. I trust the Chancellor of the Exchequer will see the advantage of having an inquiry. A Select Committee could not be better employed than by endeavouring to put those international instruments of trade on a proper and satisfactory basis.

MR. J. HEYWOOD JOHNSTONE (Sussex, Horsham)

I think the Chancellor of the Exchequer has every reason to be satisfied with the reception of his proposals this afternoon. I think we should watch very jealously any increase in the income tax. There is a matter arising from the alteration of the land tax which has given a considerable amount of dissatisfaction to the small owners of property. In consequence of recent assessment, they have been made to bear a considerable burden. Let me say in connection with this land tax question that there is a want of uniformity and simplicity in the assessment. I may say, as a Land Tax Commissioner, that it has been brought prominently before us. No land tax can ever be satisfactory that is not based upon a more simple and though system of assessment than prevails at the present time. I may say I think the income tax payers have a strong claim. That has been urged year after year in this House and elsewhere. Whenever the Chancellor of the Exchequer sees his way to make any reduction whatever, the claims of the income tax payers are admittedly strong. But the right hon. Gentleman tells us, as those in his position have told us before, that at the present time he is not in a position to reduce it, because if he took a penny off the income tax the whole of his surplus would immediately disappear. Yet there is a certain class of income tax payer whom he might usefully and beneficially relieve, and hardly touch the surplus to which he has alluded. That is the class of payers of income tax under Schedule if—the occupiers. It cannot be suggested that it is the owners who are taxed; it is primarily the occupiers. The amount last year was only £155,000. That income tax, levied upon the occupiers of the land, is a mere flea-bite. One cannot help being struck by the unsatisfactory nature of the actual working under Schedule B. I find that the gross assessment amounts to something over £55,000,000, but the abatements and deductions allowed from this assessment amount to no less than £35,000,000, leaving only £20,000,000 not charge. That shows very plainly what an unsatisfactory tax this is. [Sir W. HARCOURT: Nobody pays it under a rental of £600 a year.] It leaves only a net charge of £20,000,000. Now, that must involve an immense amount of book-keeping and clerkage out of all proportion to what is swept into the Exchequer. I have always understood that one of the principles of taxation is that taxes should be easily and cheaply collected. When you consider that out of £55,000,000 more money has to be dealt with by way of exemption and abatements than the net charge, does it not show that there is an immense amount of unnecessary book-keeping and going through figures which might be avoided? A good deal of this money is collected from small taxpayers in small sums. It is not worth while. I am convinced of this, that there is a great deal of this income tax which is not really payable, but which is paid in small sums, people thinking it better to have done with it than to have to go and interview the Surveyor of Taxes, and thus waste a portion of the day. There is another reason why I think this income tax ought to be taken off the shoulders of the occupiers of the land. It is a form of tax which will fall probably on the shoulders of farmers almost entirely. When the Agricultural Rating Act was passed—for which we are grateful, which, we understand, and which, in spite of what gentlemen on the opposite Benches may think, is understood and appreciated in the country—the estimated grant under that Measure was to have been £1,560,000; but according to the Budget speech of the right hon. Gentleman himself, last year the actual grant was £1,332,000, so that there was £227,000 less than he expected. That sum would have amply covered any possible loss caused by the abolition of the tax under Schedule B, and would have left a sufficient sum in his pocket. It was as if the Chancellor of the Exchequer, wishing to give a schoolboy friend a tip of half-a-crown, found that he had only given a florin. I think we are justified in asking him to make up the additional sixpence. These are my reasons for suggesting to him that he will really seriously consider the advisability of relieving the occupiers of land by abolishing the income tax under Schedule B. I will indicate to him very shortly another source of revenue. I have no doubt the suggestions as to new forms and new species of taxation have been overdone; but I think he will say that this is a tax which can be fairly put. It will certainly be very easy to collect and very easy to raise, and it will bring in a reasonable amount of revenue. I suggest that he should take advantage of that extraordinary yearning which people have nowadays to secure popularly elected positions. We are continually meeting people who are yearning to be Parish Councillors, members of School Boards, District Councillors, and County Councillors, and I would suggest that we should take advantage of their desire to be elected to some body or other by the imposition of a small tax on every nomination paper that is handed in on nomination day—say a £5 stamp on the nomination paper of a Member of Parliament and a penny stamp on that of the Parish Councillor. Well, Sir, you would find, I take it, that there would be a considerable revenue produced in that way without any cost of collection. Sir, I make you a present of that suggestion, and it may be well worth thinking out. I would only say, in conclusion, that I heartily congratulate the Chancellor of the Exchequer on being able to make some sensible and valuable reductions in taxation this year. I hope it may be his good fortune to do so on more than one future occasion, and that he will some day have the satisfaction of being able to announce some equally valuable, equally useful, and, at the same time, far more certain changes in the system of the death duties, which, I am convinced, are at present very much against the true interests of the country.

MR. H. BBOADHURST (Leicester)

Mr. Lowther, I entirely regard the Budget which has been laid before the House to-night as a rich man's Budget. Now, I recognise at the same time that in he matter of the reduction of the duty on tobacco there is much to be said for it as being in favour of poor people, inasmuch as it will create, probably, considerably increased employment in the tobacco factories of this country. I represent a borough where there is a very large industry in tobacco, and I believe that the reduction of the tax will be welcomed there by the manufacturers and the operatives. But I very much doubt whether the reduction of 6d. in the £ on imported tobacco will find its way, or any share of it, to the poor man who purchases the tobacco. I do not think he will get very much benefit from it. Now, on the other hand, if the Chancellor of the Exchequer had reduced the duty on tea, that would have come as a direct benefit to all classes of the community. When the right hon. Gentleman said that tea was a matter of no importance to the working community, or that it was a matter of luxury, I entirely disagree, and I cannot but assure him, and anybody who may be influenced by his statement, that it is not an article of luxury with the poor. It is an article of necessity, and is every year being used in larger quantities by labouring people. It is a common thing now for labouring men to take their can of cold tea away with them in the morning, and it lasts them in the main until they return at night. It is pleasant, it has a flavour, and it is sustaining to a degree which very few can realise unless they themselves have tried it. I am myself a considerable drinker of cold tea at other times of the day than at the morning or afternoon meal, and I can assure the Chancellor of the Exchequer that had he been able to have given some reduction to the drinkers of tea in this country it would have been immensely more popular than even his reduction in the case of tobacco. Now, it must not be understood that I am against, or in any way undervalue, the sixpenny reduction on the raw material of tobacco, for, as I have stated, I believe it will increase the employment of British labour, and will do a great amount of good in that direction both to the manufacturers and to the operatives. I am myself a consumer of tobacco—many people think to a degree which is unreasonable and not to my benefit—but I can assure those who think so that it is not beyond the pleasure I derive from it, Now, with that exception, I think it is a rich man's Budget. I cannot see why the Chancellor of the Exchequer, with £116,000,000 at his disposal, could not have taken off at least a part of the duty on tea, as well as make this reduction on tobacco. In other directions the relief granted is, in the main, in favour of those who least need it. I do not attach much importance to the proposal with regard to the readjustment of the land tax. The hon. Gentleman opposite (Mr. J. Heywood Johnstone) takes, I am very glad to hear, his share in local duties in connection with the Land Tax Commissioners. I also take my share in that portion of local work, and I can bear witness to the fact that under the late readjustment many hardships were imposed upon very poor and very meritorious people; and the Commissioners, feeling that great injustice has been done, have in many cases evaded the duty of imposing that tax as prescribed by law. With regard to the income tax, I think the Chancellor has also been exceedingly weak. I do not at all complain of the reduction he has promised on incomes of between £500 and £700, but those people who have incomes below £500 need a further reduction to a greater extent than those with incomes of between £500 and £700. Now, I have no doubt that there are hon. Members here who also take part in commission work with regard to appeals on income tax questions. I can say, from experience as a Commissioner, that we have constantly before us appeals by small traders and people in a small way in the professions, which show that it is a great injustice and hardship that income tax should be imposed upon them at all. I have seen many cases where struggling tradespeople have had to pay income tax which, in all probability, was beyond the income realised. I am entirely in favour of the full system of graduated income tax, but I should like to have seen it further reduced on the smaller incomes. Now, people with incomes of between £500 and £700 are comparatively rich compared with many of the poor creatures who have to pay income tax below £400. Surely, the Chancellor should have given some consideration to this class of income tax payer. I hope that he will, between now and the succeeding stage of the Budget Bill, reconsider some of these points. If he does not I shall avail myself of the right of a private Member to place down an Amendment on the Paper both with regard to the tea duty and with regard to the small taxable incomes of the people of this country. As to the question of general economy, I am glad to hear the Chancellor to-night directing our minds to the necessity of holding aloft the flag of greater national economy. It was a righteous rebuke that has been hurled on this side of the House that there is no longer a Party sitting on these Benches to challenge the continuity of this increasing annual expenditure. I can assure him that if he would join us in going into the midlands, and into the north, and attend the meetings that we attend, he would find plenty of encouragement for resisting the inroads on the national wealth which his co-Ministers seem incapable of resisting. Well, perhaps that is too strong an interpretation of what the Chancellor said, but I certainly understood him to say that his advice on economy had no more effect upon his colleagues than if he had preached it in church. I do complain most strongly that the Chancellor has not given some share of this great prosperity to the poorer classes of the community. I know of no more direct way in which he could have conferred a benefit upon the most deserving poor than by reducing the duty on tea from fourpence at least to twopence. I shall certainly take an opportunity to move that Motion, and I sincerely trust that between now and then the Chancellor will be able to see his way to accept some modification of the Budget in that direction.


returned after the usual interval.

MR. LAURENCE HARDY (Kent, Ashford)

I am glad to join in the congratulations which have been offered to the Chancellor of the Exchequer on the speech he has given us on the finances of the country, and I must confess that I am rather surprised at the criticism made in a speech by an hon. Member on the other side that this is a rich man's Budget. The statement of that hon. Member is, however, somewhat, and, indeed, to a considerable extent, modified by the fact that he immediately afterwards alluded to two of the chief remissions of taxation in this Budget as those which had been made for the first time for the poor man. I think no one can doubt that the remission on tobacco is one which does help the poorer classes immensely; and, personally, I am extremely glad that, if the choice lay between tea and tobacco, tobacco was the favoured article. With regard to the land tax, so far as the remission goes, I think nobody can doubt that it is entirely in favour of those who are least able to pay the tax. I know, myself, that owing to the excessive bearing of the land tax very great hardships have been inflicted upon small owners. In one or two cases that I know of, in regard to building societies, some who were paying a merely nominal amount of a few pence suddenly found the land tax raised upon them to a very considerable amount. I do not quite understand the present proposal, and I should like to ask the Chancellor of the Exchequer, if he were present, whether the limit of £5 allowed now is to be in relief of those cases which have not paid land tax before. What do we find in cases throughout the country? I should understand, from what the right hon. Gentleman said, that he only intended this remission to be applied to those who had not paid the land tax before. But if there is to be a new anomaly, although it is only a small matter, I hope it may be considered to apply to all cases where the assessment is below £5. So far as this remission is concerned, undoubtedly it is in the direction to which I alluded in a question which I addressed to the Chancellor of the Exchequer to-day, and I should certainly like to ask him to carry the principle which he is adopting in this small remission a little further. I notice in the printed Paper which we have before us that while, in his Estimate to-night, the Chancellor of the Exchequer only reckoned to get £900,000 under the land tax, his actual receipts were £940,000. The land tax is not a tax that varies, for it really is a fixed tax, limited by the quotas from the different parishes; and it is evident that the remission which, as it seems to me, he intended to give two years ago in his Budget does not apply to the extent that he expected. And if that is so, I think there is all the more reason why we should ask him to consider whether he cannot carry forward this small remission so as to remedy the hardships which have arisen since the last re-assessment of the land tax was taken in hand. There is one case to which I alluded in my question, and I can give the Chancellor of the Exchequer the particulars, where property belonging to a great institution of this country, the University of Oxford, had been exempt for 200 years, but which is now brought under the land tax. There are other cases where land has been exempt for 60 or 40 years, and which has now been brought into the land tax. And at this moment, when this Legislature has seen fit to cut off half the rates on agricultural land, it is felt to be a great hardship that large extents of agricultural land, while being relieved from one tax, should have another tax put upon them. Therefore, if the right hon. Gentleman has found out that the remission he made two years ago has not extended to the full amount that he intended, I think he might be asked now to consider those special cases that are constantly being brought forward in the hope of some remedy for the inequalities in the remission which has been granted. I may say that I can give an instance to show these inequalities as connected with a purely agricultural constituency in my own division. The land tax, before the remission two years ago, was at 4s., and it was then reduced, as we all know, to 1s.; and yet the amount raised at that lower rate from the parish, owing to the re-assessment, came to within £5 of the old assessment, which contributed the quota of 4s. Therefore, we come to the peculiar position that the parish had to contribute the same quota at 1s. as it had before at 4s., although, naturally, the tax came from a different set of taxpayers from those who had contributed before. This was owing entirely to the fact that the assessment had not been carried out. Well, in a case of that sort, naturally a sense of hardship arises, for they found that, although a considerable remission was given to the country generally, yet in regard to the actual quota there had been no remission at all. I would say, if we are considering these remissions, and if, as I infer, the Chancellor of the Exchequer has actually received from the land tax more than he expected, there is another class of the community which I think has a very strong claim upon the attention of the right hon. Gentleman. I refer to a class which has been specially dealt with under the land tax in times past. Early in the century there was a special exemption in connection with the land tax given to small livings, or, rather, to small tithe-owners. I believe it is well known on both sides of the House that there is probably no more over-rated class of persons in this country, in the sense of paying rates, than those clergymen with a small amount of tithe. If it was necessary in the early part of the century to make an exemption in favour of them—an exception, I believe, which also extended to certain charities which are equally deserving—I think that at this moment it would have been it gracious act, if it had been possible, to provide that, where in a parish the income has fallen below, say, £150, or £200 to put it at a fairer amount, in those cases the land tax should be taken off the parishes as it was early in the century. An Amendment was proposed two years ago on the Budget in connection with this matter, and I hope that, as the Chancellor of the Exchequer has taken in hand the remedy of inequalities in the land tax, if this matter should again be brought under discussion when the Finance Bill is before us, he will be able to see his way to meet, to some extent, the great hardships which now fall upon this particular class. And whilst I am saying a few words on this subject, and as we find that the Chancellor of the Exchequer will remedy actual defects which have been found in the Finance Act, and on such points as the land tax, I would ask whether it is not time to consider also a defect that arises under another Measure—the Agricultural Rating Act. When that Act was passed, the effect which it would have was not known. There was one class which was exempted from the operation of that Act. It has been found, I believe, that the exemption of the tithe from the advantages which were given under that Act has inflicted a very great hardship upon country clergymen. I believe that cases have been brought before the Royal Commission which are of such a striking character that they must have some effect whenever we get the report of that Commission. I know that the Government will now answer that the Commission is still sitting and has not reported, and, therefore, they are unable to deal with this matter. But I believe that the facts are known quite apart from any report from the Royal Commission, and whenever remissions of taxation are taking place, the class whose claim we put forward in this House, and which this House supported last year, in favour of some relief of the taxation which falls so heavily upon the clergy, has a right to raise its voice. I do hope that the Government, in their anxiety to relieve taxation wherever it falls heaviest, will not forget that class which, I believe, by the consent of the House and by the evidence given before the Commission, has the very strongest claim upon the Chancellor of the Exchequer. I trust that the right hon. Gentleman will consider this matter.

MR. T. LOUGH (Islington, W.)

I hope the Chancellor of the Exchequer will not think I am wanting in appreciation of his admirable speech if I direct attention for a few moments to two or three defects in the statement he has presented to the Committee. I am sorry to say, Mr. Lowther, that it appears to me that the Chancellor of the Exchequer has again under-estimated his surplus. If the Committee will recall two or three matters, I think this charge will be justified. One subject to which the Chancellor of the Exchequer alluded was the amount of spirit extracted out of casks, and he spoke of a single city in which he knew that 120,000 gallons of proof spirits had been so produced in one year. This would seem to prove that in that single instance the revenue might secure something like £60,000. If that is the case, a very large amount will be secured for the revenue by the change which the Chancellor of the Exchequer proposes to make in this matter. But in the Budget statement we have no estimate of how much is expected to be saved by this more strict enforcement of the law with regard to evading duty by extracting spirit from the cask. That is only a single illustration, Sir, of my argument. The Chancellor of the Exchequer has estimated that the death duties will produce £150,000 less than last year, and he also estimates that stamps will produce at least £50,000 less. I think that these calculations rest on most solid foundation; probably both taxes will produce next year quite as much as they have done this year. I conclude from these calculations that the surplus has been greatly under-estimated. It was estimated at £280,000 last year, but it has turned out to be £3,600,000, and I think the Chancellor of the Exchequer has fallen into the same sort of mistake as he made last year, and greatly under-estimated the surplus he will have out of the taxes. Now I think that is a great pity. It has been done for the last two or three years, and we ought to protest against it in Committee, and endeavour to induce the Chancellor of the Exchequer to take a fair view of the amount to be expected, and possibly he will be able to greatly decrease taxation if he will do so. The Chancellor of the Exchequer seemed to me to repeat the fallacy of which we heard a great deal when the Agricultural Rating Bill was before this House. The right hon. Gentleman called attention to the fact that the duty which had been received on the estates of seven millionaires alone paid half the amount which had been allowed under the Agricultural Rating Act, and he seemed to infer from that that the object of the Act had been secured, and that this amount had been paid for the purpose of relieving agricultural rates. If the Agricultural Rating Act had not been passed, all duty paid on the property of these seven millionaires would have gone into the general taxation of the country. Therefore, the cost comes directly and clearly out of the general taxation of the country. I did not think that at this time of day we should have had that fallacy repeated to the House. There were certain principles laid down with regard to the National Debt on which I would like to make one or two remarks. The Chancellor of the Exchequer called attention to the great reduction in the debt which had been made during the past 15 years. He told us that £66,000,000 had been taken off the National Debt, which had been reduced to £585,000,000. While the Committee should approve of this policy of reducing the debt, I think there are one or two other considerations in connection with it which ought to be borne in mind. In the first place, the amount of the Budget and the wealth of the nation are far greater now than they were when the arrangement was made with regard to the present sinking fund. The sum of £585,000,000 is a great deal less for this nation to owe now than it was for the nation to owe, say, in 1884 or 1885, and I think, therefore, when you consider the great wealth which the country has been accumulating in many ways, the debt has become a great deal smaller than it has been in past years. I see the right hon. Gentleman who represents the Postmaster General in his place at this moment. Vast property has been accumulated in the country by this department, but this property has not been estimated as of any value to the nation. The only balance estimated is its National Debt, and this National Debt has now sunk to the lowest point to which it has ever fallen, while the wealth of the nation, and its capacity to bear the debt, has risen to the highest point to which it has ever attained. I think we ought to consider this aspect of the question in estimating the amount of the National Debt. The Chancellor of the Exchequer set, as it were, against the decrease of the National Debt the increase of debts of local authorities. The right hon. Gentleman stated that the debts of local authorities had increased by £75,000,000. Now, this must be estimated not only with regard to the number of the population, but with regard to the value that the population have obtained. For instance, these local authorities have bought up their waterworks, gasworks, tramways, parks, open spaces, and other valuable property; and therefore the debt, although it appears large when stated in this way, is remunerative in itself, and very easily borne. I therefore think that in these considerations connected with the National Debt we ought to have regard to the great wealth of the nation, and to its increasing capacity to bear such an amount of debt. The National Debt at present is a mere bagatelle. If the country, for any reason, wished to pay it off, it could dispose of it in a few years, but I think that world be a very foolish thing to do. We are doing much at the present moment for posterity, and it is quite right that some burden in respect of it should be carried forward for posterity to bear. I am glad that we have had a new departure in the Budgets of this Government, and that some reduction in taxation has been made. The Chancellor of the Exchequer laid down one or two principles in approaching this subject of the reduction of taxes with which I cannot agree. He stated that there were only four taxes that he could touch—namely, spirits, beer, tea, and tobacco. He cannot have forgotten that there are a series of small taxes all of which might have been swept away if I am right in the suggestion I threw out that the surplus has been under-estimated. I refer to the taxes on cocoa, coffee, and dried fruits, which produce little revenue. The Chancellor of the Exchequer himself told us that the tax on cocoa only produced £180,000. I think the right hon. Gentleman might very well, with the ample margin which he has got this year, have swept away all these small taxes. Perhaps he will think of them next year, when, no doubt, he will have a surplus again if he has underestimated the revenue, as I think he has. If he would sweep them all away it would do a great deal of good to the various trades interested, and be a great boon to the people. With regard to the changes that are to be made in the income tax, these do not commend themselves to my judgment altogether. They are of a niggling character. I do not know whether the Chancellor of the Exchequer has promised us to-night to accept one or two Amendments on this point. Several speakers, who have alluded to it, stated that they would rather have seen something done for the lowest payers of income tax—men with incomes of £200 or £300 a year. I wish the right hon. Gentleman had raised the limit of total exemption to £200, and adopted a broader scale up to £700. I am glad to see the Government adopting and extending the very important principle of a graduated income tax. We fought hard to secure this, and we are glad the Government have adopted the principle. I do not find fault altogether with the proposals of the Chancellor of the Exchequer, but his buoyant tone with regard to the prosperity of the country is a subject to which the Committee might well direct its attention. The Chancellor gave us the most rosy account of the finances of the country that we have ever received in this House, and although a private Member has very little opportunity of knowing the facts of the matter, I do not think he overstated the case. We have had a remarkable era of prosperity which is not likely to come to an end. Everything at present looks as if it is going to continue for some time, and I think the Committee may well remember the concluding words of the Chancellor of the Exchequer, who said that if war broke out he did not think it would in any way affect the future of the country as regards its finances. While this great prosperity exists in one part of the country the same condition of things does not exist in all parts. I am sorry the right hon. Gentleman did not make the slightest allusion to Ireland. He spoke of the country all through as one Kingdom, and as if the conditions which he has described applied to the two islands into which the country is divided. This is absurd, because a Return issued since our last Budget discussion, and which in effect constitutes the Irish Budget, shows that the growing prosperity and the increasing revenue on which the Chancellor of the Exchequer prides himself, in Great Britain, does not exist in Ireland. I will give the Committee one illustration of this most important and weighty fact. In the Return to which I have referred, and which was issued when Parliament was not sitting, a statement is made with regard to the amount of income tax collected in Ireland. The Chancellor of the Exchequer told us last year that the total increase in the income tax was something like £960,000, but when the Irish Return came out we found that this statement was inaccurate in two respects. The increase in the income tax in Great Britain was nearly £1,000,000, but there had been a decrease of £40,000 in Ireland. That seems to be a most extraordinary thing. So far as the Budget statement was concerned, one would naturally conclude that all parts of the country shared in the prosperity which the Chancellor of the Exchequer described, but anyone who refers to these Returns will see that Ireland does not share in that prosperity, and that the income tax, though levied at the same rate, produced £38,000 less in Ireland than in Great Britain. Now, what does this mean? I ask the Committee to try and realise what an increase of £1,000,000 in the income tax of Great Britain really means. The income tax is only levied on half of the wealth of the country, and, therefore, the increase of £1,000,000 in the income-tax receipts meant, in the first place, an increase of wealth to the amount of £29,000,000 on the part of the income taxpayers. But, if this represents only half the nation, it represents a total increase of £58,000,000 in the country. Therefore we had in Great Britain an increase of £58,000,000 according to the statement made by the Chancellor of the Exchequer last year. What does the decrease of nearly £40,000 mean in Ireland? It means a decrease of £2,000,000 in the income of Ireland. Therefore, while there is the greatest prosperity existing in one island, there is a decay of prosperity in the other. A decrease in the population also goes on, and this fact becomes more momentous every year. The population has now sunk to 4,500,000—half of what it was 40 or 50 years ago. It is still sinking. Forty thousand subjects of the Queen have gone out of Ireland since the last Budget. Then we have famine devastating a large portion of Ireland. We have these three facts—a decrease in the income tax returns, a decrease in the population, and a famine raging in Ireland. Now, I say that those are circumstances which ought to have received some attention from the Chancellor of the Exchequer in his Budget statement. But not a single allusion of any kind was made to Ireland. If the prosperity of one country was mentioned in such glowing terms, then the suffering of the other country should at least have drawn some passing allusion from the Chancellor of the Exchequer. Well, now, what does this illustrate? It illustrates a defect in our financial system. Our financial system has been made by Chancellors of the Exchequer like the right hon. Gentleman to whom I am appealing. They don't care how the system suits Ireland; they never talk of Ireland—never mention it. I do not mean anything offensive, but I say that it is never discussed from the Irish standpoint; they never ask whether this system that suits us so well here will suit Ireland as well. The Chancellor of the Exchequer told us what the system consists of. He says there are practically only four indirect taxes, and the late Chancellor of the Exchequer explained that the indirect taxes of this country have fallen to only one-half of the total taxation. Have they so fallen in Ireland? No; the indirect taxes in Ireland are still 74 per cent. of the whole; so that the very merit boasted of, particularly on this side of the House, as a distinct feature of our system of taxation, does not exist in Ireland at all, for 74 per cent. of the taxes are still indirect, and only 26 per cent. are direct taxes. I think the Chancellor of the Exchequer should have made some allusion to this matter, for it is evident that the system does not suit Ireland as well as it suits this country. I will not elaborate the question; but just let me state what the system is. The system is to tax a few articles. What are those articles? They are the articles used in the poorest cabins in the west of Ireland. No Chancellor of the Exchequer thinks of putting heavy taxes on anything used in the luxurious houses of the rich in England. ["Oh!" and a Voice: "What about champagne?"] Certainly, it is quite true. I can excuse my right hon. Friend; he is more familiar with naval matters than with this. It would not be in order to ask him how much champagne pays, but I know it is very little. Whisky and tobacco pay a great deal, and those are the articles used in the cabins of the poor people in Ireland. The first principle is to tax only the articles used by the poor people in Ireland, and the second principle is, when you want more money, not to bring in a new subject of taxation, but to raise the taxes that are already placed on those few articles. I say that this system of selecting only a few subjects of taxation may be fitted to promote the growth and prosperity of the British people, but it is exceedingly well fitted to secure the ruin of the Irish people. I am sorry that these melancholy facts, which mark the condition of Ireland, did not receive the slightest notice from the Chancellor of the Exchequer. I wonder what my Irish friends are going to do or say in regard to the Budget. I am sorry to see so few of them present. I have heard that some negotiations have been going on with regard to the arrangements for the discussion of the financial relations on some future date to be arranged by the Leader of the House; but I think it is on the Budget that we ought to have a statement of the Irish claim—if there be an Irish claim—and I firmly believe there is an Irish claim. What is the Royal Commission, of which we have heard a good deal? The Report of the Royal Commission in 1894 was merely a summary of the bad Budgets that have been passed for 94 years. If these Budgets were bad, this is the worst of all, because it contains all the faults which previous Budgets contained so far as Ireland is concerned. We ought to have the Irish case stated in the Budget. We ought to have it clearly pointed out where the grievance is in Ireland. The Commission pointed out that £3,000,000 a year too much taxes are paid by Ireland, and yet the population and the wealth of the country have diminished. There is no subject so easy to discuss as finance. We owe it, perhaps, to the wisdom of our ancestors that every facility for discussing the Estimates and for discussing every tax is given in this House, and I really think that my hon. Friends from Ireland might devote their attention to this question. Having said so much, I must make an acknowledgment to the Chancellor of the Exchequer with regard to the precise proposal he has made. The Budget practically contains nearly £1,000,000 relief of taxation for Ireland, and that is something, but my theory is that what Ireland needs is to have £6,000,000 taken off the taxation. Poverty is the curse of Ireland, and that poverty has been produced by Ireland being taxed in common with a rich country like Great Britain, which can bear the burden more easily. I am glad to see the present Government making a little progress towards meeting this evil, and that there is going to be something like three-quarters of a million provided under the Agricultural Rates Bill. I wanted to begin with Imperial taxes, but the Government did not choose that way; they begin with local taxes: I desire to acknowledge that it is something that the Irish local taxes are, to a large extent, to be remitted. I should like to see that principle carried the whole length. If you cut down the Imperial taxes in Ireland, which are now £8,250,000 to £4,000,000, your Irish Government would become for the first time an honest Government. I do not think any other Chamber in the world would think of levying more in Ireland than £4,000,000. Why should Ireland pay £8,250,000 when we have there famine, depopulation, and a decrease of wealth? I must acknowledge the reduction in tobacco, and especially the way in which it is made—a reduction on unmanufactured tobacco of sixpence in the pound. The tobacco tax in Ireland is £1,200,000. The reduction amounts to one-sixth of this tax, and therefore it is a substantial relief to the Irish taxpayer. The Government has gone some way, and I am bound to acknowledge that so far their proposals are just. Still, I should like them to go a great deal further. The conclusion I desire to draw is that the phenomena in Ireland are so different from those in Great Britain that from mere humanity the Chancellor of the Exchequer might be expected to make some allusion to it in his annual statement. I hope the policy of secrecy and silence, which has continued so long, of which we have had another illustration to-night, will not continue any longer.

MAJOR F. C. RASCH (Essex, S.E.)

I rather regret that the Chancellor of the Exchequer, in his singularly lucid and able speech, did not make some allusion to the burdens borne by the industry in connection with land. Perhaps we are too sanguine in the eastern counties. The Rating Bill two years ago we accepted on the principle that half a loaf is better than no bread. We do hope that hon. Gentlemen on both sides of the House will help us in the eastern counties and make some reduction in the burdens on land. Much of the land is now out of cultivation, a fact which I am sure the Chancellor of the Exchequer regrets as much as we do. I regret that the right hon. Gentleman has not been able to say something in regard to the rating of tithes. As the Member for East Kent said just now, this is an exceedingly hard case. It would be impertinent on my part if I were to venture to make any suggestion with reference to finance in presence of such an expert as the Chancellor of the Exchequer. I think, however, that I could show him, without imposing any unpopular burden on the community, and at the same time doing more good than harm, that he could raise a considerable sum. The Chancellor of the Exchequer said he desired to get the assistance of the Committee with reference to dealing with the manufacturers of spirits. There is another class of manufacturers of spirits with whom it would be well for the Chancellor of the Exchequer to deal. I allude to the manufacturers of what are plausibly called temperance drinks and British wines. These drinks are sometimes alcoholised to the extent of 17 per cent., whereas ordinary port and sherry are alcoholised to the extent only of something like 16 per cent. Two million gallons of these mixtures are made every year at a very considerable profit. What I would venture to suggest is that the Chancellor of the Exchequer should insist that the manufacturers of these deleterious drinks should purchase for the alcohol with which these drinks are qualified duty paid spirits, and in that way a large sum of money would be produced which the Chancellor of the Exchequer might use in relief of local taxation. Some time ago, an ex-Chancellor of the Exchequer, the present First Lord of the Admiralty, spoke, in one of his Budget speeches, of those who drink rum, and, of course, it is open to those who prefer these British wines, to consume them, although, no doubt, they would be much better off if they did not do so, while the country would be much better off if the right hon. Gentleman would give his mind to this subject. Of course, we know perfectly well that gratitude is only an anticipation of favours to come, but I hope the right hon. Gentleman will attend to this matter. We know perfectly well that the agricultural interest is one which does require to be relieved from taxation, and although we got two millions two years ago, yet we are perfectly entitled to another couple of millions now if the right hon. Gentleman can give it. Of course, in my remarks, I do not wish to comment very seriously on the right hon. Gentleman, but I hope he will do me the honour to think over what I have said before he makes his next Budget speech.

SIR H. H. FOWLER (Wolverhampton, E.)

I recognise the force of the definition of the hon. Gentleman opposite that gratitude is often a lively sense of favours to come, and I know that some hon. Members are always finding fault with us on this side of the House because, as they allege, we do not appreciate the agricultural claim, but I wish the Chancellor of the Exchequer would speak of the urban claim. I think that if the Chancellor of the Exchequer has any more money to give away, as to which I shall have something to say another time, some provision should be made for those who live in towns, as well as for those who live in the country. Sir, I am not going to transgress the rule laid down by financial authorities, and alluded to by my right hon. Friend to-night, by entering into anything like a critical discussion of the Chancellor of the Exchequer's figures or proposals upon this question, as to which we shall have ample opportunity to speak when the whole scheme comes before us in the shape of a Bill. There is no doubt that this scheme, whatever its merits may be—and I should be the last to underrate it—is open to a great deal of criticism, which no doubt it will in due course receive. But when I heard the Chancellor of the Exchequer dealing with the story of our enormous income, and our enormous expenditure, which was £115,000,000 last year, and is estimated at a correspondingly large amount for next year, and with the large sums which the Chancellor of the Exchequer has given, and will continue to give, to local taxation, and colonial claims, and Irish claims, and to various other objects for which applications have been made to him, I could not but think for the moment of the case of our largest and greatest dependency, which has passed through such a troubled year as the past has been, in reference both to famine and to war, for which no proposal is made by the Chancellor of the Exchequer, who seems to have closed his ears against any application which may be made on behalf of India. I know that we are referred to the discussion of the Indian financial statement, and I think the Debates on that occasion will throw a great deal of light upon the mind of the House of Commons, and upon the mind of the country, as to the position of Indian finances in this most disastrous year. If I can understand the matter—I do not profess to be an expert—in the absence of documents which have now arrived in England, and which, I hope, will be in the hands of Members in a few days, the long and short of Indian finance this year is that, in order to make both ends meet, the Indian Government will have to borrow £6,000,000. Now that, I think, does not justify the Indian Government for saying, as they do say—and I do not blame the Chancellor of the Exchequer for taking them at their word—"We do not want any further relief from Imperial funds." I think that, as a matter of justice, it would be the right thing, as I am sure it would be the right thing as a matter of policy, for this country to have shown more consideration and sympathy. The only other matter to which I wish to allude must, I think, have occurred to the House in the course of the Chancellor of the Exchequer's speech. His speech was a remarkable speech in many ways, but it was exceedingly clear, and intelligible even to the most ignorant financial student. Nevertheless, the Chancellor of the Exchequer had again and again to explain that a portion of what he called the revenue passed, not into the Exchequer, but into the local taxation account, and in regard to what he called his home Budget, he had to deal with the various grants made in aid of local taxation. Now, Sir, I want to put to him, not on any Party ground, but simply on financial grounds, the question whether the time has not arrived for the financial accounts of the Chancellor of the Exchequer and the Treasury to be intelligibly placed before the public week by week, quarter by quarter, and year by year, in order to put an end to this extraordinary confusion which arises out of the local taxation accounts, as distinguished from Imperial taxation. Sir, there is no such thing as local taxation revenue with reference to these items. The Chancellor of the Exchequer is obliged, in the statement he had circulated in the House, to speak of the "aggregate revenue raised by the State." That is a perfectly true statement, for it is the aggregate revenue raised by the State, and there is no separate revenue raised by the State for local taxation purposes. The State levies 10s. on every gallon of spirits, and 6s. 6d. per barrel upon beer; it raises certain duties upon the property of persons who die; but it is all paid into one common account, and the payments to the local taxation account are as much payments out of that money as payments for the Army and Navy. Now, the Chancellor of the Exchequer reminded us that the revenue this year was £116,000,000. That is the sum which was raised by taxation. No matter how that sum was to be appropriated hereafter, £116,000,000 was paid into the Exchequer, whether from customs, excise, income tax, or death duties. Well, Sir, we have to put down about £9,000,000, which is intercepted on its way to the Exchequer by what is called the local taxation account, and the people of this country believe that the taxation is only £103,000,000 or £104,000,000, when it is £116,000,000. I will give the Chancellor of the Exchequer an illustration from the most capable authority we have, in the Press of this country. The Chancellor of the Exchequer may say it is perfectly clear in the quarterly and annual accounts what amount is paid into the local taxation account, but I see that the Times newspaper, on the day after the accounts were printed for the year, and the day on which the statement appeared, stated in its summary that the Revenue Returns showed that the receipts had been £116,000,000. That was correct; but now let us go to the leading article, which the bulk of the people would read. The leading article says— From the point of view of those who look at the revenue returns as furnishing a measure of our national resources, the public accounts for the financial year just closed show that the receipts actually obtained have reached the immense total of £106,614,000, showing an increase over the last year of £2,664,000. Now, Sir, that article is incorrect. The actual amount raised for the revenue for the past year was £116,000,000, as stated in another column of the same paper; and the actual increase, instead of being £2,600,000, was £3,817,000. I could go through the whole of that article, and show confusion upon customs and excise and death duties, and as to the transfer to the Local Taxation Account; but I merely wish to show that, when a high authority like the Times newspaper is actually confused by the manner in which these accounts are presented to the public, the ordinary man in the street, or, rather, the ordinary intelligent man in the country, must be equally confused. I am not going to enter into that controversy now, but I think that the Chancellor of the Exchequer should issue a correct and business-like statement of the gross amount paid into the customs and the excise, the gross amount paid for the death duties, and the gross amount paid to the Local Taxation Account. Then we should have a clear and definite understanding of what the true position of the accounts is. I very much dislike the principle of intercepting money on its way to the Exchequer. It was considered to be a very dangerous thing in times past, and Mr. Gladstone abolished it when he altered the law and practice, with reference to the collection of the revenue. Before that time the collection of the revenue was conducted in a different way, but then it was provided that every shilling paid into the revenue must be accounted for by the Exchequer. The Exchequer is now called upon to show what it has paid and collected. The Chancellor of the Exchequer has said—I think with great justice — that there is nothing to prove that this tends towards economy; but I think it is better that the country, which is paying £116,000,000, should know that it may expect to pay more, as I have no doubt it will. I really would press this matter. I mentioned it tentatively last year, and now we have had another year's experience. The Chancellor of the Exchequer has proposed great and important remissions, and he has spoken of the correct revenue being shown in the quarterly accounts, but I ask him to state, week by week, what is the true amount raised by the Exchequer. Those who understand these matters have to make some sort of calculation to find out what the death duties and the customs and the excise are really producing, and they find that there has been a considerable amount intercepted between the taxpayer and the Exchequer. The Chancellor of the Exchequer says that this form of account is justified by public opinion and the circumstances of the case, but the payment to the Local Taxation Account is rapidly increasing. I think that the public generally and the taxpayer ought to know what they pay for local taxation, as well as for the Army and Navy. Now, Mr. Lowther, I have only one other remark to make, which I will address to hon. Friends behind me. It is whether a year in which we can raise funds to meet expenditure to the extent of £116,000,000 sterling, without the imposition of any additional taxation, and, in fact, without levying any tax which is in any sense oppressive to any section of the community, and when, in addition to that, the Chancellor of the Exchequer can rely upon a surplus of £1,700,000, and take off taxation to the extent of £1,500,000—I would ask whether, in view of those facts and the circumstances of the time, to which the right hon. Gentleman very properly alluded, this is a time when we ought to relax our efforts for the reduction of the National Debt? If ever there was a time when we should rigidly adhere to the principle of reducing the National Debt it is the present, especially in the view of possible emergencies arising, such as war, and I am glad to hear the Chancellor of the Exchequer say that he intends to adhere to that principle.

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

Mr. Speaker, I must say I fully agree with all the right hon. Gentleman has just stated concerning the Local Taxation Account. There are various ways in which this sum is allocated for local purposes, and I think it would be useful if we were reminded in the accounts as to how this amount is spent. I am one of those who look with very great suspicion and doubt as to the wisdom of this very large increase in grants from the Imperial Exchequer to local funds. Of course, it is a very popular thing at the moment to make these grants, but I must say that, as they now amount to this large sum of £12,000,000, the question has arisen in my mind whether we could not do better with the money than lend it out in this haphazard way for the relief of local rates. The statement of the Chancellor of the Exchequer, to those who have made finance and the condition of the people a study for a great number of years, shows that there is an enormous amount of prosperity in the country, not only amongst the richer class, but amongst all classes, and, with due respect to my hon. Friend opposite, I venture to assert that some of this prosperity is also to be found in Ireland. A great deal of material prosperity exists in this country to-day which did not exist 20 or 30 years ago, and I think the statement of the Chancellor of the Exchequer shows that this prosperity has been practically universal throughout the whole of the United Kingdom of Great Britain and Ireland. Although an hon. Member opposite compared the expenditure of Germany and other countries with that of England, still, if you compare the taxation of the various countries of Europe, you will find that the taxation of Great Britain is lighter than that of most other countries, especially considering the rate of wages, the prosperity and the income which the great bulk of the people in this country enjoy. The same hon. Member said that if we were to tax land more we could do away with all indirect taxation. That is a statement which might do on a platform, but it cannot be regarded as of a practical nature in the House of Commons. To think that we can get £50,000,000 or £60,000,000 a year out of land and do away with indirect taxation is an absurdity. The object of all taxation should be to enable the burden of taxation to fall as evenly as possible upon the different classes of the community; that is to say, to make the burden fall more lightly on those who have little, and more heavily on those who have more. The real difficulty of getting a theoretically just basis of taxation is the tax upon alcohol, from which we derive an enormous revenue. It is quite clear that it is impossible to have a strictly accurate adjustment of this tax for all classes. So long as a man of small means will drink more alcohol than his means will allow, he will naturally spend more of his income in taxation than a man of larger means, who does not spend so much on alcoholic drink. There is nobody on either side of the House who will suggest that the taxation on alcohol should be largely reduced, and therefore we have to meet it by adjusting the different systems of taxation which have obtained during the last 30 or 40 years. It is now 12 or 15 years ago that I ventured to refer to the large burden of taxation which poor persons had to bear, as compared with that borne by rich men, who enjoy a much larger income. That was true then, and I am not quite sure that it is not true at the present time to a certain extent. I think the poor man still pays the larger share in the pound than the richer man. The tendency for many years on the part of Chancellors of the Exchequer has been to reduce this difference, and I am glad to see that the Chancellor of the Exchequer, in this Budget, has been able to go a step further in this direction, and has, I think, perhaps not very materially, reduced that anomaly, and made the amount of taxation payable by direct taxation larger, and the amount payable by indirect taxation rather smaller than before. I cannot agree with my hon. Friend below me that this is a great evil. I think it is a fairer system, and I am sure the great material prosperity of this country, which, after all, is a great test of our fiscal system, tends to show that this has been a just basis of taxation. Among other proofs, the growth of the income tax returns points to a gradual extension of well-being among the people. We continually see a larger and larger number of persons, not swept into the net, but voluntarily, by their own Success, gradually enabling themselves to be raised to that position by which they become eligible to participate in the privilege of paying income tax. Millionaires, after all, are not the real source of the enormous growth of the income tax. You will find that the great prosperity which that growth indicates shows that a larger number of persons are continually becoming eligible to pay their taxes, which proves, ipso facto, that they are in a better, more prosperous, and happier condition than they were before they came into the meshes of the income tax. I resent altogether the idea that the proposal of the Chancellor of the Exchequer, with regard to the income tax, is in the nature of a graduated scale. I think those persons who pay income tax at the bottom of the scale are heavily taxed, and this slight relaxation which is proposed will affect a large number of very deserving and hard-working people, and is a step in the right direction. I do not wish to go into the question very largely, but I should just like to say one word upon the subject of lending money to local authorities. I am glad the Chancellor of the Exchequer has been able to do this. Although a great deal must be said against a very large increase in local indebtedness, we must recollect that local indebtedness is not the same as Imperial indebtedness, because we have nothing to show for the enormous debt we still have of £600,000,000. It is the result of wars and, generally speaking, disastrous events, but the debts of local authorities are, for the most part, productive. The idea of largely lending, at reduced rates, this money to local authorities does seem to me to be one means of relieving the Chancellor of the Exchequer of the enormous sums of money which he has to devote to the Post Office Savings Bank. I agree most heartily with the remarks of the hon. Member for Wolverhampton in repudiating the idea that the National Debt is not to be reduced rapidly. I regard the National Debt as a great evil, and I am sorry that in these days of great prosperity we have not reduced the debt even more than we have in the last year or two. I am sorry we have not had the boldness to stick to the old rule of paying off the debt with the whole surplus for each year. The system of appropriating the balance to other works is a rather extravagant and dangerous system. It is very tempting at the moment, and saves trouble to the Chancellor of the Exchequer, but still it is, after all, a system of receiving money without the direct responsibility of Parliament, and I think myself this is a habit which is better not encouraged. I do not wish to dwell upon the great subject of taxation referred to in the Budget, as it is not usual on this occasion to do so. All I can say, in conclusion, is that, although the country is at the present time very prosperous and very successful, I think the House should be extremely careful about adding to the already enormous burdens. Inasmuch as the time will, without doubt, come when we shall not be so prosperous, I sometimes look with apprehension at the enormous growth of taxation, because it must be remembered that the bulk of it is drawn from the masses of the people who are overburdened with the means to pay it. I trust we shall not run away with the idea that we can much longer increase our burdens, and I hope that in the next three years we shall not add another £12,000,000 to our Imperial taxation.


No one who has listened to the statement of the Chancellor of the Exchequer, or has taken any interest in the condition of the people of this country, can doubt that the right hon. Gentleman merited the triumphant congratulations he received. But it is worth the consideration of the Government and of the House that Ireland does not in the slightest degree share in that prosperity which the statement of the Chancellor of the Exchequer indicated. When we Irishmen were invited to join the Union it was a commonplace in the mouths of the statesmen of that day that, if the Irish people would only consent to come into the union with Great Britain, they would enjoy to the fullest extent the prosperity of this country. Now, after 98 years' experience, we have found that all those pledges have been broken, all those promises have been completely falsified, and that Ireland has not in the smallest particular shared in the prosperity of this great Empire. I do not wish to go into figures—it is quite unnecessary that I should; but there is one fact that cannot be contradicted—a fact which, in my judgment, overthrows all the assurances made by the Secretary for Ireland, and by the Chancellor of the Exchequer himself, as to the increased prosperity of Ireland—namely, that, while the death duties and the income tax returns in this country have increased by leaps and bounds in a most extraordinary fashion, in Ireland they have diminished. I do not see how any hon. Member can get over that fact. In addition, there is the fact alluded to by the hon. Member for Islington, that at the present moment we are enduring, over a considerable district in Ireland, all the horrors of famine. There cannot be a doubt that, at least for 50 years, the system of finance in this country has been shaped and framed—and properly shaped and framed—to promote the prosperity of a great trading and manufacturing community; and it is impossible to deny that in that process the wants and interests of a community, which is neither a manufacturing nor a great trading community, but purely an agricultural community, have been lost sight of. That financial policy had resulted, to an extraordinary degree, in the prosperity of Great Britain, but it had sunk deeper into the slough of poverty the agricultural community of Ireland. What we claim, and have a right to demand—and I trust the demand will always be put forward from the Irish Benches—is the right to manage our own affairs in accordance with the requirements of our people. As long as you maintain the Union, as long as—being the vast majority of this United Kingdom—you insist on modifying your financial system to suit the wants of England, you ought to consider the condition of Ireland, and remember that your financial system presses upon the people, and that the repeal of the Corn Laws and those great reforms which have brought prosperity to the corn and cattle producing countries, and to the manufacturing towns, have not benefited Ireland. I feel bound to make that protest, and, having made it, I wish to refer to two points in the speech of the hon. Member for Islington. The hon. Member said that this was the worst Budget he had ever heard introduced by an English Chancellor of the Exchequer. I do not agree with that opinion. I feel bound to recognise that, having frittered away the greater part of his surplus—or having allowed his colleagues to fritter it away for him—the right hon. Gentleman has made a good use of the balance for the remission of taxation this year. So far as that goes, I think that if the right hon. Gentleman had asked me what tax I should have liked the surplus applied to, I should have selected the very tax he has selected. There is no tax, the remission of which can give so much relief to the poor of Ireland as the tobacco tax. It is the tax by which, above all other taxes, injustice has been done to Ireland; it is the tax to which, more than any other tax, is due the unfair proportion contributed by Ireland to the Imperial Exchequer. Therefore, I cannot say this is the worst Budget from the Irish point of view I have ever heard introduced. On the contrary, from the Irish point of view, I think it is a very good Budget. I differ also from the statement of the hon. Member for Islington that the agricultural grant given to Ireland under the Local Government Bill is a boon. I was rather surprised to hear the Chancellor of the Exchequer state that the principle of the grant in aid of agricultural rating had been accepted as satisfactory by both sides of the House. On the contrary, I have not the slightest hesitation in saying that I have never, by a single hair's-breadth, departed from the position I took up with the Radical Party two years ago, when, upon one occasion, I was suspended for resistance to the application of that grant to England. I think a more mischievous, more wasteful application of public money could not be imagined; but if you make such a grant to England, Ireland, being a country which relies almost entirely on its agricultural interest, is entitled to demand at least an equal grant to its agricultural interest. But when we come to the disposition of that grant, the question of principle arises. Does the House suppose for a moment that, if the Chancellor of the Exchequer said, "There are £730,000 a year," that we would make the use of it he proposed to make? No; what the Government are doing is this: they are saying to us, "We feel at last compelled to give Ireland what she ought to have had two years ago, at the time the agricultural grant was given to England, but we will not allow you to distribute it in a way that will serve the people of Ireland; we will hand it over in great part to the landlords of Ireland as a bribe, and you will get local government in return, if you agree to this system." There is no doubt about the opinion I have entertained on this matter. When the proposal was put forward last year I said it was, in my judgment, a shameful bribe, but that, as we saw no other chance of getting a system of local government in Ireland, except by condoning that bribe, we were willing to pay the money and get local government. That is my attitude, and I believe it is the attitude of the people of Ireland in regard to that question. I was not surprised, but considerably disgusted, at the statement of the Chancellor of the Exchequer that he had provided in his Estimate £365,000 for an agricultural grant to Ireland. That is only one-half year's due. In other words, Ireland should receive £750,000 a year from the date at which the agricultural grant was given to England. I cannot understand on what principle that can be denied. We are entitled to our full share of that; and now, instead of receiving £750,000 a year, which was our fair share from the time of passing this Bill, we are to be left with a million out of pocket. I think that is a most monstrous injustice, and for my own part I will continue to protest against it. It does not follow that the whole of that £1,000,000 will be handed over to the landlords. There are many other purposes to which it might be devoted. If it was just and the principle was established that the agricultural interest of England was entitled to this relief, then Irish agriculture was entitled ten-fold to a greater relief. We all remember when we claimed equal treatment for the agricultural interest in Ireland to that which was given to the agricultural interest in England two years ago, the statement from that Bench was that the agriculture of Ireland was totally different to that of England, and was not suffering to an extraordinary degree, and this, although the agriculture of England is within reach of all the markets of the country, and a large part of the agricultural land in England was, in the nature of market gardens, lying close to the large towns, while the Irish agriculturist has to send his produce across the Channel, and over the Irish railways, in order to get it to the markets at all. Hon. Members here, in my own hearing, during the last two days, have said that English agriculture is now flourishing, and that all they wanted was to be left alone. I came down here yesterday to listen to a Debate about corn sales, and I heard one agricultural Member after another say things are prosperous, prices are rising, and all we ask is to be left alone. While that is the testimony of the agriculturists of this country who have pocketed their two millions, we in Ireland, who have pocketed nothing, because the small modicum of relief which was given to us, is still looked up in the Bank of England, are sunk in distress and starvation, which has involved 200 families in the west of Ireland. It has not been the result of the failure of the potato crop this year, but a succession of bad seasons, which has reduced the people—the last straw upon the camel's back, as it were, which has reduced them to the last degree of despair. Outside the famine-stricken district the farmers are insolvent, and if sold up to-morrow would be unable to pay their debts. That is the state of the agriculture in Ireland, and yet the Chancellor of the Exchequer speaks of this as a boon to Ireland, to give us £750,000 a year and defraud us of £1,000,000, to which we are entitled in common justice. Now, there is one word more which I desire to say upon this point. The hon. Member for Islington spoke as if this grant was in some measure in compensation for the financial grievances of Ireland. I cannot admit that it can be viewed in any such light, it is on a totally different basis. If all these grants were swept away to-morrow the financial grievance of Ireland would stand just where it does now. It is not a grant in aid. It is a form of finance which I regard as a gross abuse. If you give a grant in aid of a distressed interest, by what logic can you refuse it to another distressed interest? When you give a grant to one interest, you are not entitled to inquire as to where—in what part of the country—that interest is situated. That is the principle we heard laid down; and therefore it is that. I say, that the grant to the agriculturists of Ireland, and the grant to the agriculturists of England, does not affect in any way the taxation grievances in Ireland. In my judgment, it has not the shadow of effect. When you come to look at it from another point of view, you find that this Government has taken the money out of the pockets of the industrious population, and shovelled it into the pockets of the landlord. Who, in the long run, are the men who will get it all? It has been taken out of the pocket of the labouring people, the income tax payers, and, therefore, it does not do anything towards redressing the grievances of which we complain: the undue taxation of Ireland, the unjust pressure of Irish taxation. I do not wish to say anything as to the expenditure, because, as the Chancellor of the Exchequer will admit, my voice is always heard as "the voice of one crying in the wilderness" against the increase of expenditure of every available kind. I am glad to be in a position to offer my hearty congratulations, as an Irish Member, to the right hon. Gentleman for his having taken a substantial step, which, however, only goes a short way on the road to applying relief to Ireland.

ADMIRAL FIELD (Sussex, Eastbourne)

This is the first time that I have ever ventured to intrude on a Debate on the Budget. I notice some small reductions have been made, especially the reduction of the tax on tobacco. Now, I remember when the paper duty was reduced, that the father of the present Lord Derby in the House of Lords made use of some very strong expressions upon it. He said that the policy of taking off that duty was a policy of gambling with the future. Now, I say, with all seriousness, as regards the reduction of this tobacco duty, that this is a policy of gambling with the future. These are not times, in my humble judgment, to take off any duties at all. I hear hon. Members laugh, but, possibly, some years hence they may have cause to regret their laughter. I say this is not a time, when we see nations about to go to war, and when we have had great difficulties ourselves, and when we see the great defects in the naval and military services that there are at present, to take off any duties at all. Although I admit that large sums of money have been paid by the Chancellor of the Exchequer to remedy those defects, we are not by any means perfect. Indeed, we are far from it, and I think to take off the duty from this luxury, in which people who want to indulge can afford to pay, is wrong. The Chancellor of the Exchequer was very clever to select that commodity for his reduction, but I say we want the money now for naval purposes, and if I am the only one in the House. I will still stand up and protest against the reduction of a tax on a perfectly unnecessary luxury like that of smoking tobacco, because I think it is gambling with the future. [Mr. DAVITT: What do the sailors think about it?] I think the country would have been perfectly satisfied if there had been no decrease of taxation at all in times like these. I am a very mild smoker myself, but, in my humble judgment, a great many other people smoke a good deal too much for their own good. I wish to support the remarks which fell from the hon. Member for South Kent with regard to the unjust pressure upon the clergy in connection with the tithe rent-charge. [Laughter.] I do wish hon. Members would discuss these matters seriously; it is not a matter for laughter, but one which should receive serious attention. Pressure was brought to bear upon the Chancellor of the Exchequer with regard to this matter two years ago, on the introduction of the Agricultural Rates Bill. It was pressed upon him then by individual Members, and the answer they received was that there was no money in hand to deal with it at that time. We were led to hope that when there was the subject would be dealt with. There is money in hand now, and how have they dealt with it?—reduced the tax on tobacco. That is the last article which I would have dealt with. You tax spirits as high as you can to prevent the people taking too much for themselves, and I should certainly do the same with tobacco. The country to-morrow will be surprised that the Chancellor of the Exchequer should have reduced this tax. I only want to enter my humble protest against this system of finance in these dangerous times in which we live, and when the Services, as everybody knows who knows anything about them, are far from being perfect.

DR. G. B. CLARK (Caithness)

congratulated the Chancellor of the Exchequer upon being able to reduce the tobacco tax, and he could not support the strong disapproval of the hon. and gallant Gentleman who spoke before him. He would rather that the right hon. Gentleman had seen his way to have taken something off the duty on tea, because in that case the women also would have derived some benefit from it. He thought the right hon. Gentleman would also make his Budget popular, because when the working man got a halfpenny off his tobacco it would probably bring votes to the Conservative Party. There was one small fault with regard to the graduation of the income tax he thought. It did not much matter whether they got it by remissions or by increase of taxation. They had a principle for which they had contended for many years, and the Chancellor of the Exchequer was the fifth to whose Budget he [Dr. Clark] had moved Amendments, and they had now obtained three concessions. He regretted, from a Party standpoint, that they had all been conceded by a Conservative Government. They had it conceded that incomes up to £160 per annum should pay no tax at all, whilst for incomes ranging from that to £400 there was a remission of 30 per cent.; on incomes from £400 to £500, 20 per cent.; and now they had another remission of 10 per cent. He thought those very fair, and he could not agree with the hon. Member for West Islington that the Chancellor of the Exchequer had adopted a desperate method. He would like to have seen it carried still further; he would have liked to have seen 50 per cent. taken as the commencement, and starting at £300, and he might move an Amendment with the object of suggesting a method by which that could be done. What he desired from the Chancellor of the Exchequer now was to hear what he intended to do. He [Dr. Clark] also desired to state the Scotch case to the right hon. Gentleman as to what they ought to have. He had listened to the hon. Member who championed the claims of Ireland, and he should like to see the Chancellor of the Exchequer spend money in Ireland, especially as there was starvation and famine in the country, but if Scotland was to get no equivalent, then he objected to Ireland having more than her fair share. The Government was going to give Ireland a considerable sum of money, because they had made out a claim that they were very much overtaxed. They would not have given this money but for the fact that the Report of the Royal Commission which dealt with the subject showed that to be so. But Scotland was in the same position; they were just as much overtaxed by indirect taxation. The taxation of alcohol both in Scotland and Ireland differed from the tax in England. In England it was 2s. a gallon proof spirit, but in Scotland and Ireland it was 10s. So far as he could see, the only way to equalise the matter was either to level up the English tax to 10s. or level the others down to 2s. The Government, however, would not do that, because they knew they could not live if they levelled up the tax on beer to that of Scotch whisky. He did not believe the high taxation of alcohol decreased the consumption; in fact, the raising of the duty by Mr. Gladstone from 8s. to 10s. per gallon had shown that. High taxes did not produce any moral result. He thought drunkenness was caused just as much by poverty as poverty was caused by drunkenness. With regard to the grants the Government were going to make to Ireland, if they were going to give them rather more than £500,000, then Scotland, who suffered more and paid more per head, was far worse off, and they ought to have an equivalent for the grants for the local rates and education. When the Bill was passed giving grants of 5s. a head for each Voluntary school, Scotland wanted an equivalent grant, and if she had been given a similar sum it would not have been equivalent, because four-sevenths of the English school children were in Voluntary schools, whereas the proportion of Scotch children was only one-seventh. If Scotland had got a fair equivalent, she would have received £100,000, but she only got £40,000. Scotland wanted £60,000 under that grant alone. Then there was the land tax; so there were three grants from which she required an equivalent—the local rates, education, and the land tax. The last was a very important matter, because a Unionist Government had gone counter to the Treaty of Union between the two countries. Scotland, by that Treaty, made an arrangement by which she took upon herself the burden of the land tax; she had no equivalent tax for that at the time, and the arrangement was made that so long as a certain proportion was paid by England a certain proportion should be paid by Scotland. That was the commencement of equivalent taxation at the time of the Union. He appealed to the Members of the House not to take advantage of their numerical preponderance to tax Scotland unfairly, for that was what had been done in the past.

MR. H. LABOUCHERE (Northampton)

It appears to me that the House has been bolting a camel and quarrelling over a number of gnats. I object totally and entirely to this Budget on account of its profligate character. One hon. Gentleman has just said that it is the worst Budget that he ever heard of. My hon. Friend from Ireland contested that view. [Mr. DILLON: Only from an Irish point of view.] Well, from an Irish, Scotch, Welsh, English, and every point of view I regard it as the worst. Budget I have ever heard of, because it is the biggest Budget. I was somewhat surprised to hear the right hon. Gentleman congratulate me upon being the last radical Conservative in this country. I am Conservative in standing up for the old traditions of Parliament in this country. I have always been in favour of peace, economy, and reform. I had very great hopes of the Chancellor of the Exchequer. I thought he was an Elisha come to follow the Elijah from Monmouth when he said he made a speech three years ago advocating economy, but so far from restraining expenditure, he has encouraged the spending departments of the Government to spend more. ["No, no!"] Hon. Members say no, but I say yes. He told us he had to reason with his colleagues, and that they had been too much for him in this royal race to ruin. But I must contest that point, because we all remember that he made a most belligerent speech from that Bench, and, so far from doing what is the duty of a Chancellor of the Exchequer to do—namely, curtail expenditure as far as possible—he advocated and encouraged his colleagues in the great spending departments to spend more. He comes forward now proud of his Budget, perfectly elated with it, with a sort of boast that he had taken a far greater amount from the English taxpayer than any Chancellor of the Exchequer has had the effrontery to seek to take in any previous Government. He boasted that the Government had raised the expenditure of the country by £12,000,000 during the time they had been in office. He asks us to be grateful for this. When this Parliament, which is not nearly so good as many others of which I have been a Member, assists the Government in their wild policy of adventure—and there are even some gentlemen upon this side of the House who assisted—I know it is a difficult thing to reduce expenditure; but if the right hon. Gentleman thinks that the country is grateful to him for spending more money, he is very much mistaken. I casually heard the other day that the hon. and gallant Admiral was not going to stand for the next Parliament, but even if I had not heard so, I should have gathered that it was the fact from the speech he made to-night, because I do not think, if he had contemplated sitting again, that he would have said what he did in reference to the country not wishing for a reduction of taxes. The country is always glad when taxes are taken off, and always very angry when taxes are put on. Now, what has the Chancellor of the Exchequer done since he has been in office? He makes a boast that he has given certain money towards education. He gave certain money, it is true, but the major part of it he took off the rates, and charged to the general expenditure. He met what he called the distress in agriculture by giving a large amount to the landlords, and those who are not landlords will not be thankful for that. How is it that expenditure has gone up like this? It is the enormous increase in armaments. I could not catch exactly to what amount it had gone up to, but I think the right hon. Gentleman said it was £5,000,000. I should say, in all probability, the right hon. Gentleman spent £8,000,000. [An HON. MEMBER: £6,000,000.] Well, say, £6,000,000. But whether £6,000,000 or £8,000,000, it is really very difficult to get at the figures, but the point is this: this unhealthy appetite for expenditure on the part of the naval and military gentlemen in this House for armaments is increased by pandering to it, and if you continue to spend in this manner, both inside and outside this House, we shall be turned out of house and home. I was astonished at some of the statistical arguments which the right hon. Gentleman brought forward in favour of this expenditure on armaments. With regard to the Navy, he said, in looking at what we required for the Navy, we ought to consider the amount of tonnage of this country as against the tonnage of other countries. That has nothing whatever to do with it. When you have an Empire spread over the whole world, and you have to keep the road, you have to have the same number of ships whether they be large or small. It has nothing whatever to do with tonnage, and if hon. Gentlemen would only find some man of light and leading upon this matter he would tell them that tonnage was not a special ground for the maintenance of the Navy. Then the Chancellor of the Exchequer said, in arriving at the expenditure, we must consider the area of the British Empire against that of other Empires, and if we divide the areas into square miles we should find that we paid less per square mile than other countries; but that is a fallacious argument, that is an area of taxation which is of no use. What is the use of putting in Australia or Africa, or any of these spheres of influence or protectorates? If you are to take the square miles, you ought to divide square miles of Great Britain. Then he went further, and favoured us with another sum. He said, Look at the population as against that of France or Germany; but in taking the population, who pay all this money, are we to add all these Afridis and Africans and God knows what? We introduce them into the British Empire, and we not only have to pay for defending them, but, generally speaking, for defending ourselves against them. Who does not remember the newspaper homilies on foreign countries in connection with the reckless expenditure which they made, and what is the fact? We have not only equalled them in their expenditure, but we have exceeded them. We have spent more in naval and military expenditure than any nation in the world. We spent last year £42,000,000, and Germany £38,000,000; but if we include India, then we spent £63,000,000, or nearly twice as much as Germany. Sir, I quite admit that if you intend to convert all the oceans of the world into an English pond, you must have a very large Army and Navy. It is a necessary consequence of expansion, and that is one of the reasons why I am opposed to this expansion. But the Chancellor of the Exchequer is not even satisfied with this. He seems to look round the world, and if he can find a colony that can spend our money, he thinks he is called upon to allow them to spend it. As if we had not enough to spend here in acquiring new colonies and annexing new protectorates, which are to bolster up old rotten colonies in the West Indies that are not able to support themselves. I see it often stated that since the Roman Empire existed there has been no Colonial Empire equal to our own. Well, the Romans were very much wiser than we are. When they made conquests they did not tax themselves to support the conquered country—they taxed their colonies. In our case, on the contrary, it is the British taxpayers who have to bear the burden of payment, because the affectionate professions of loyalty, about which we hear so much on the part of the Colonies, never take the form of £ s. d. The right hon. Gentleman admitted that lean years will follow fat years, but he is of so sanguine a temperament that he hopes and believes the lean years will not come in his time. He apparently will have no regard to the example of Joseph, that intelligent Chancellor of the Exchequer of old Egypt. Did Joseph, during the fat years, go in for a "Forward" policy? Not a bit. According to the right hon. Gentleman, we are to spend recklessly during our fat years, with no thought of the lean years to come. £44,000,000 sterling per annum is what we pay at the present time, putting aside India, for our armaments, whereas in the first years of Her Majesty's reign £12,000,000 sterling sufficed. The Duke of Wellington thought he could do the thing for £12,000,000 per annum; his successors at this day require £44,000,000. No doubt, our Empire has extended since Wellington's day, but, making all allowance for increase of Empire, we spend in proportion an excess of £20,000,000 sterling. What could we not do with that £20,000,000? We hear of the urgency of meeting the exceptional distress in certain districts of Ireland; we hear of the desire to give meals to poor starving children in our own towns; we hear of the desirability of reducing indirect taxation—I might go on all night instancing better ways of spending this £20,000,000 to the great advantage of this country, instead of spending upon armaments twice as much as was spent in the first year of the Queen. Then, the right hon. Gentleman tells us he is reducing taxation in the coming year. Whenever a Chancellor of the Exchequer says he is going to reduce taxation, people always say they are very much obliged to him. I do not say that I am obliged to the Chancellor of the Exchequer. It is not his money that he is dealing with; it is my money, he is dealing with the money of the taxpayers. As a matter of fact, he has got no real surplus at all; this £1,500,000 is a spurious surplus. How is it arrived at? By not fulfilling the obligations of the law; the right hon. Gentleman has this sop to give to the public by reason of his violating the law and not paying off that proportion of the National Debt, which, by law, he is bound to pay off. The right hon. Gentleman reduces the tax upon tobacco, although he explains that he himself is not a smoker. I am a smoker, but I hold that this reduction would have been better applied to tea. As to the remission of the income tax, the people who will benefit by the right hon. Gentleman's proposals are those with incomes of £400 to £700 a year. This is a mere sop to villadom—to the very class who least require relief. Sir, I am bound to say— and I say it with great regret—that the Chancellor of the Exchequer has disappointed me. His colleagues in this House and his supporters in the newspapers have been perpetually telling him that he was a firm man. There is nothing more dangerous to a man's moral fibre than to be told that he is a firm man. I had hoped that the right hon. Gentleman would stand as a barrier against the expensive fads and fancies and follies of some of his colleagues. Instead of that, he has positively encouraged them; and now he says he believes that the Army will cost more next year, and that we shall have even a higher Budget next year. The country has really gone military-mad, so far as I can see. I know perfectly well that in holding that view, I am in a minority in this House—the Chancellor of the Exchequer says I am the only man holding that view; I do not know that it is quite so bad as that, but, still, I am no doubt in a minority. But I believe that this temporary craze of militarism will, like many others, pass away, and that we shall eventually revert to our old friends, peace, economy, and reform.


We have had to-night a Debate of the desultory character usual upon these occasions, and I think it has been a very good example of the peculiar difficulties of the Chancellor of the Exchequer. The hon. Member who has just sat down has expressed opinions which I still believe are somewhat peculiar to himself, and which, I am very glad to find, differ in almost every respect from my views. I never professed to agree with the hon. Member, and if he can find in any speech of mine anything which is in contradiction to my action with regard to this Budget, or anything else, I should be very much obliged if he would quote that speech.


The right hon. Gentleman cited it himself when he spoke of the excellent speech he made two years ago.


I was not referring to that at all. The hon. Member was talking, as I understood him, of the military expenditure, and he said that I had stated this evening that the military expenditure would probably be larger next year than this year, and suggested that I had done something contrary to some views I had expressed in the country. I entirely deny that, and I challenge the hon. Member to find anything to prove it. The reason why the military expenditure will be larger next year than this year is because, necessarily, when a definite programme has been adopted, it must cost more in the second year than in the first, just as in naval construction the second year will always cost more than the first year in which the programme is begun. That was what I had in my mind in referring to a probable increase in military expenditure next year. But, Sir, the whole speech of the hon. Member was a reassertion of views which, I am glad to think, have lost their popularity in the country and in this House. He would strike off £20,000,000 of our expenditure on defence. I am very much afraid that if we followed his advice and struck off £20,000,000 from our national defences no very long time would elapse before it would become a very grave question whether we had any nation to defend. But, then, one of my hon. Friends, the hon. and gallant Member for Eastbourne, takes an entirely different view. He thinks that we have not done nearly enough from his point of view, and that I have been mad in suggesting any reduction of taxation this year, when every penny of the estimated surplus should have gone to increase the expenditure on the Navy. I only refer to this to show the extremely difficult position which the Chancellor of the Exchequer occupies between the advocates of such different views. Her Majesty's Government have provided in the Estimates of the year the expenditure which we believe to be necessary for the defence of the country. If we had thought that further expenditure was necessary we should not have shrunk from incurring it instead of reducing taxation. Sir, many points have been raised in the course of this discussion, and I will endeavour to deal with them as briefly as may be. The right hon. Gentleman the Member for Wolverhampton dwelt upon the way in which the Local Taxation Accounts were presented to the country. He admitted that I had done a great deal to simplify a complicated matter; and though he fully understood the mode in which the accounts were presented, he desired that they should be entirely merged in the Exchequer Account, and, practically, that the Chancellor of the Exchequer should budget for the whole of the expenditure in that way. I will consider whether it is possible to make any alteration in the accounts which will simplify them and make them more intelligible. I have no desire to conceal in any way from the House or the country our total expenditure, whether it be from the Exchequer or whether it be paid into the Local Taxation Account; but I do not think it would be an easy matter, and I doubt indeed whether it would be proper to do what the right hon. Gentleman suggests; and for this reason, the Exchequer account relates to expenditure, all of which comes directly under the cognisance of this House, while the Local Taxation Accounts consist of payments to the different local authorities, made, no doubt, out of certain taxes levied by the State, but made according to rules which are laid down by statute. This House has absolutely no authority either over the amount of those payments, or over the times at which they are made, or the purposes to which they may be devoted. Those matters are settled, first, by the statute, and, secondly, by the local authorities themselves; and, therefore, I do not think that you can properly place such expenditure exactly on the same footing as expenditure which is under the control of the House. The hon. Member for East Mayo and the hon. Member for Islington accused me of not having entered into the condition of Ireland. I spoke generally of the whole of the United Kingdom. I am perfectly well aware that Ireland is not as rich a country as Great Britain, and that some parts of Ireland, like some parts of Scotland, are very poor. I spoke generally, and that is the only way in which the Chancellor of the Exchequer can possibly deal with the accounts of the year. But I would venture to say that I have not been forgetful of the case of Ireland. The hon. Member for East Mayo himself said that in selecting the tobacco duty for reduction I had selected the very one which would be most acceptable in Ireland. Then the hon. Member for West Islington referred to the grant which is proposed to be made in relief of Irish local taxation under the Local Government Bill, and he stated very fairly that this, together with the reduction of taxation, would amount to a grant of £1,000,000 to Ireland in the course of a normal year. The hon. Member, having made that admission, I do not think can accuse Her Majesty's Government of having treated Ireland unfairly in these matters. I do not agree with his views on the subject of Irish taxation, and I am not inclined to think that many Irish Members agree with him either. But, at any rate, by his own admission we have taken the circumstances of Ireland into consideration, and are dealing with them in the particular way which, in the Debate last year on the financial relations of the United Kingdom, was suggested by those speakers of most authority on his side as the only practicable way in which those relations should be remedied.


My point was that the Income Tax Returns were decreasing in Ireland as compared with England.


However, Sir, I do not think this is an occasion for anything like a Debate on the financial relations of the three kingdoms, and I will content myself with noting that the hon. Member himself admitted that we had not omitted the case of Ireland from our consideration. Then, the hon. Member for East Mayo said that, with regard to the grant under the Irish Local Government Bill, instead of giving half the grant for the current year, we ought to have given the whole, as well as the arrears, for some years past. I do not want to argue that to-night, but this I will say, that we have never agreed with the contention that Ireland had an equitable claim, on account of the English Agricultural Rating Act, to the grant which is now proposed to be made to her. That contention was debated last year, and negatived by a large majority. Then came up the question, as the desire had been so strongly expressed by Irish Members that this large sum should be devoted to the benefit of Ireland in this particular way: was it not possible to utilize the grant of that sum to Ireland so as to secure by it a measure of Irish local government reform which we had long desired to carry? That was considered, and the result was the statement made to the House last year by my right hon. Friend the First Lord of the Treasury. In our view the two subjects, this additional grant and the reform of Irish local government, are inseparably connected. That is our position. Of course, it is not a position which is likely to commend itself to the hon. Member for East Mayo, and those who agree with him, but that is the position we are prepared to defend when the proper time comes. I am afraid I cannot hold out any hope of being able to give additional aid for the relief of agriculture in England, as suggested by the hon. Member for South East Essex. We have done what we could, and the whole question of local taxation is now before a Royal Commission. I am quite aware that the position of the clergy with reference to local rating is in many cases a very difficult and painful one. There is no doubt that in many cases there has been much suffering, but it is impossible for me, for the reasons I explained last year, to take this particular question of the rating of the clergy out of the whole subject of local taxation, which is referred to the Royal Commission, unless we had a report from the Commission recommending that it should be dealt with separately, and obviously any question of rating could not be introduced into the Budget. It may be that the clergy are suffering from some form of taxation with regard to which they may claim relief. If that be so, there will be an opportunity for hon. Members who may hold that view to bring the subject under the consideration of the House, and I shall be very glad personally if it be possible, with justice to others, to find some way of remedying any injustice that has been done to the clergy in the matter. I have been rather surprised at the view taken by some speakers as to the proposals I have made with regard to the income tax. I am told I have introduced the principle of graduation. I have done nothing of the kind. The principle of graduation has been in the income tax long ago, because you begin with exemptions on the lowest incomes, and you then proceed by abatements on different amounts, and all I have attempted to do is to make those abatements bear some fairer relation to each other than they do at present. That appears to me to be a very modest proposal, and I do not think it deserves the hostility of the right hon. Member for Thanet, on the one hand, or the mistaken eulogies of hon. Members opposite, on the other. The hon. Members for East Bristol and for the Everton Division have spoken with knowledge and authority on the question of tobacco. I can only say that I shall be very glad to receive any statement that may be made to me as to the mode of carrying out the change in the duties in a manner that will be least inconvenient and burdensome to the trade, because I can assure the Committee that I am anxious to deal with this matter in the fairest way to all concerned. The hon. Member for Caithness asked me what I proposed to do in regard to an additional grant for local purposes in Scotland, and he pressed upon the Committee various reasons why, as he considered, a much larger additional grant was deserved by Scotland than any which, I confess, I have it in my mind to propose. I am afraid I can only tell him that I have not yet even made up my own mind either as to the amount of the grant or the precise purpose to which it should be applied. That is a matter on which I am in communication with the Secretary for Scotland, and it is not possible to make any statement with regard to it until we see how the House deals with the Irish Local Government Bill. But I am not prepared to admit that there is any claim with regard to the Education Act of last year, or the other matters referred to by the hon. Member. It seems to me that any change in the land tax which has been made is also applicable to Scotland, if, in any case, the circumstances of the land tax payer in Scotland come within the proposals. Therefore, I do not see that there is any claim on the part of Scotland for any grant on that account. Sir, I have only now to thank the Committee for the kindly references which have been made to myself, and for the manner in which the proposals have been received. Of course, when one proposes changes, one expects criticism, and I quite feel that some of the changes I have proposed may, from one point of view or another, be criticised; but I think I may gather from the general tone of the discussion, that, on the whole, the Committee are disposed to approve the proposals I have placed before them. We shall have ample opportunity for considering these proposals in the shape of a Bill, and I venture to ask the Committee now to be good enough, as is usual, I think, on the first night of a Budget Debate, to allow me to take, at any rate, some of the resolutions, particularly the tobacco duty resolution, which it is necessary to take to-night, and the resolution with regard to the income tax, which it is also necessary should be taken as early as possible in the year. If there is a desire to raise a debate on the next night on which the proposals come up for discussion, it will be possible for hon. Members to do so on the remaining resolutions.


We shall not be precluded from further discussing the tobacco duty?



MR. J. CALDWELL (Lanark, Mid)

If we agree to this Resolution we shall practically be cut out from moving to reduce the tea duty. It is obvious that if the House disposes of the money by voting it for the reduction of the tobacco duty it will be useless to move a reduction of the tea duty. The Chancellor of the Exchequer will at once turn round and say that, this Resolution having been passed, an Amendment of that kind would be nugatory. It cannot make much difference whether this Resolution is carried to-night or on the next occasion, and I beg to move, Sir, that you report progress.

Motion made, and Question proposed— That the Chairman do report progress, and ask leave to sit again."—(Mr. Caldwell.)


I hope the hon. Gentleman will not press his Motion. It will put the Treasury to the greatest inconvenience unless some decision is arrived at by the Committee on this subject to-night. I understand that what the hon. Member desires to do is to run tea against tobacco. He will not be at all precluded from doing that by the passing of this Resolution. I can remember that on the occasion of the Budget of 1885 a Resolution was passed on the first night, which was practically rendered inoperative by the subsequent Vote of the House on the Second Reading of the Bill. If the hon. Gentleman can convert the House to a reduction on tea instead of on tobacco, it will be quite open to him to do so, notwithstanding that this Resolution is passed.


Upon that understanding I will not press my Motion.

Motion by leave withdrawn.

Original Question put, and agreed to.


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