FINANCE BILL.

HC Deb 06 June 1898 vol 58 cc743-844

Order for Second Reading read.

Motion made and Question proposed— That the Bill be now read a second time.

Amendment proposed— Leave out from the word 'that' to the end of the question, in order to add the words— That any readjustment of taxation should include a remission in favour of clergymen whose income is wholly or in part derived from tithe, and in whose case it can be shown that they are contributing more than their due share of local taxation."—(Colonel Milward.)

* COLONEL MILWARD (Warwick, Stratford-on-Avon)

I wish it had fallen to the lot of someone more in the habit of addressing the House to move the Amendment which stands in my name, but I have the satisfaction of knowing that I shall be followed by others of greater experience on a question which has attracted the attention of the country. I am glad to see that there have been very sympathetic notices in the Press with reference to the case of the clergy. I desire to base my argument upon words which fell from the lips of the honourable Member for Anglesey on this, subject in the course of the Debate last year. He said that the whole question resolves itself into this, whether the clergy do or do not pay more than their fair share of the taxation of the country. That is the point on which I desire to address the House this afternoon. I would remind the House of two principles. One of them is the equality of all men before the law, i.e., that there is no reason why the clergy should pay more or less of the taxes of the country than any other persons; and the other principle is that it is the custom in this country as in every other country to adjust the burden of taxation to fit the shoulders of those who have to bear it. From time to time in this House we relieve a certain class of Her Majesty's subjects who are overburdened by taxation; every Chancellor of the Exchequer who has a surplus takes care that, as far as possible, it shall be distributed so as to relieve the burdens of those who are too heavily taxed. That is the ground on which we take up the position of asking that out of the surplus now in hand provision might be made for the purpose of relieving the clergy, who are overburdened with taxation. This time last year there was a Debate in the House, at the conclusion of which the Chancellor of the Exchequer said that the course open to us was to lay our case before the Commission on Rating then sitting. The Chancellor of the Exchequer recognised the existence of the grievance, and also that the grievance required a remedy. After hearing that opinion a sub-committee of the Church Parliamentary Committee was formed for the purpose of obtaining what evidence we could. We obtained a very large amount of evidence. That evidence forms the foundation of our grievances. That particular branch of evidence contained the circumstances of a number of clergymen; and unless it should be thought that the cases cited in the Report are harder than those of other clergymen, I beg to say that I have seen many other communications, some of which bear evidence of cases worse than those cited in the Report. I am afraid I must quote the statistics contained in the evidence given by the honourable Member for Tunbridge on our behalf. These are with respect to what I may call the larger and smaller livings. In the case of the larger livings the present value of the tithe is £3,110 5s. 2d.; and the rates on the tithe amount to £466 6s. 8d. The total income of the eight livings I allude to is £3,110 5s. 2d., and the total amount of rates placed on these tithes is £466 6s. 8d.; that is to say, that the average tithe rent charge of these eight livings is £392 a year, and the average amount of rates is £58 a year, amounting to no less than the sum of 3s. in the £ income tax paid by these clergymen, in addition to the ordinary income tax. In the smaller livings, in six cases the total value of the rent charge is £704 2s. 2d., and the rates on tithe are £155 1s. 9d. The average tithe rating charge amounts to £117 a year, and the average amount of rates they pay is £26 a year, equivalent to an income tax of 4s. 5d. in the £. That is in addition to the ordinary direct taxation, arising from income tax, and from the taxes on tea, beer, spirits, and tobacco. Contrast that with the position of professional men. I do not cite the case of factories and shopkeepers, because it is rather a different question. It must be remembered that the rating upon shops and factories is part of the expense of the business carried on; it is always put down among the first charges of the business—these being rent, rates, and fire insurance—so that a charge of that kind does not fall upon the income of the person canning on the business, but upon the articles he sells. It is one of the regular business charges. In the case of a professional income, that of a lawyer or a doctor, of £400 a year, such a person who had a family would live in a house of £40 a year, and such a house would be rated at £32 a year. Taking the rate at 6s. in the £, we should have the lawyer or the doctor paying £9 12s. a year, whereas a clergyman pays £58 a year towards local taxation. I do not think it is possible to put in words a stronger case than that. Take the case of a smaller living of £117 per annum, and side by side with it that of a foreman in a works. Such a foreman receiving 45s. a week, would live in a house rented at, say, 6s. 6d. a week, and rated at £13 a year. Taking the rate at 6s. in the £, the foreman would pay £3 18s. per annum in rates, against £26 paid by the clergyman. The question arises as to how this inequality has come to pass. For myself, I do not care how it has come to pass; if it is wrong it is the duty of Parliament to remedy it. I do not propose, neither do I desire, to read the many letters I have received on this subject, but their effect is to show that the rating of the clergy has increased from year to year, while their income has decreased from year to year. I have here a letter from a rectory near Leamington. In 1884 the total income, including the house, was £320 a year, and the rating £16 a year, while in the year 1897 the income had diminished to £240 a year and the rating had increased to £30 a year; so that, while there has been a general increase, no doubt, in the rating of the country, there has been, on the other hand, a diminution of the clergy's income. Now, Sir, the Chancellor of the Exchequer last year said our business was to lay our case before the Commission which is sitting upon the question of rating, in the hope that they might present an interim Report. I sincerely hope they may do so, and I believe nothing would more tend to a solution of the question as to which the Chancellor of the Exchequer has already admitted that there is a grievance. It is admitted that something must be done if the Royal Commission on Rating should present an interim Report; but if the Royal Commission should not present an interim Report, what position shall we be in? We shall then have to wait for the full Report of the Royal Commission on Rating, and I venture to say that when that Report is laid before this House it will cause more strife, more heart-burning, and more differences of opinion than any question that has ever been brought before this House. If I may, I should like to quote the terms of reference to the Royal Commission on Rating. It is directed to report— Whether, and how far, all kinds of real and personal property contribute equitably to local taxation; and, if not, what alterations in the law are desirable in order to secure that result. Now, Sir, there are on the other side of this House, I daresay, honourable Members who have very strong feelings on the subject of relieving land or landlords from rating at all. There is at least one, the honourable Member for the Market Harborough Division of Leicestershire, who can never speak in this House without introducing the subject of the iniquities of the landlords. If he does not do so at the beginning of his speech, he will, in the middle of his speech, and, at any rate, he is sure to do so at the end of it. In that respect he is like the character of Mr. Dick in "David Copperfield," who could not complete his Memorial because he felt obliged to introduce into it somewhere the head of Charles the First. But, supposing that the Royal Commission on Rating do report that there is an inequality as between real and personal property, as, of course, there is a very great deal, do you not think, Sir, that we shall have a bombshell thrown into Imperial politics, and that there will be a contest throughout the country? It is said that the last thing that you can convert in a man is his pocket, and I am certain, that the last thing you can convert in a man is that particular part of his pocket where he keeps the money that he pays his rates with. Supposing we should have legislation proposing not only to relieve the landlord of a part of the rates which he now pays, but placing them upon gentlemen who derive their income from stocks, shares, or businesses of various kinds—that is to say, if it were proposed to transfer these local rates, as I hope it may be, to every description of property—I am certain an agitation would be commenced in this country which would not subside for many years, and which it would take a very strong Government to deal with; and in the meantime what is to happen to our poor clergy? Their case being mixed up with a mighty case like this, I ask, how many years may be expected to elapse before they get any relief? Sir, I have not appealed in any way to honourable Members on the other side of the House with reference to this question, and I have purposely avoided doing so, because it is quite within my knowledge that already they are blaming the Government for not having dealt with this question. I have in my hand a circular issued by the Gladstonians, at the recent election for East Berkshire, in which the clergy of East Berkshire are distinctly advised no longer to vote for a Unionist Government but to vote for Gladstonian candidates, because of the way in which they have been treated by the present Government with reference to this matter. I do not propose to read the whole of this circular, for one sentence of it will suffice. They say, with reference to local taxation, that the present Government which holds office largely owing to their support, has done nothing for them in that respect, and still refuses to do anything. Why, then, should the clergy support the Unionist candidate at the present election? I mention this circular only for the purpose of showing that honourable Gentlemen opposite, who, I feel sure, will acknowledge that this kind of circular has been issued, sympathise with the clergy, and join in blaming the Government for not having already dealt with this question. Now, Sir, I have endeavoured to bring before the House this case as one of real hardship—I will not gay of real poverty—in regard to the clergy. Suffice it to say that I and other honourable Members have had many letters, proving that this is not only a question of injustice, but of real hardship and of real suffering. There have been cases of illness, and, as I hear an honourable Member say, cases approaching to starvation. Certainly there have been many cases of illness, and many cases in which the clergymen have not known how to meet the rate collector, and in which they have been summoned before the Court of First Instance to meet the demands made upon them. There are hundreds of cases in this land at this moment in which the clergy, with a diminishing income and an enormously-increasing taxation, find themselves unable to meet present demands, without saying anything of future payments. Well, Sir, I might appeal to the House on that ground, but I do not do so. I appeal to it as a matter of justice. I have endeavoured to answer the question of the honourable Member for the Isle of Anglesey as to whether the clergyman, pays more than his fair share of the taxation of the country, and I say, Sir, that he does so by far too great an extent. I do not propose now to deal with the question of remedy, because I leave it to the Royal Commission on Rating or the Chancellor of the Exchequer to find the remedy. It would be perfectly easy to find a remedy, but I do not desire to go further into that question. I do, however, press upon the Chancellor of the Exchequer that this case of the clergy lies as a concrete one in the middle of the whole question of local taxation, and I urge upon the Government that they should deal with the question either by a short Bill or in this or some future finance Measure. I do not urge the Government to deal with this question because of the poverty of the clergy, but because I believe the clergy are overtaxed, and because I believe that their over-taxation ought to be made a ground of appeal to this House.

VISCOUNT CRANBORNE (Rochester)

Mr. Speaker, I rise to second the Amendment, and I do so because I believe that this is a subject of very great importance, and because I believe that it has moved most profoundly the feelings of a very large section of Her Majesty's subjects. Sir, it is clear that this is not an opportunity for considering every phase of this question; but perhaps I may say, as to taking action in the matter, that we must take what we can get, and avail ourselves of whatever opportunities we have for raising those subjects which are so very important to those whom we represent. But, Sir, we could not have raised this question before, because, as my honourable and gallant Friend has pointed out, the evidence on which his case is founded is not in our hands. It has only been recently presented to Parliament, long after those opportunities which are usually afforded by the House to private Members have passed by, and therefore we are in the position that we must raise it upon the Finance Bill, or not raise it at all. I am sure that the Government will understand in what spirit we are asking the House to discuss this subject. The poverty of the clergy cannot, of course, be denied. My honourable and gallant Friend has said a great deal upon that point. I know that some people think our Church is a very rich Church. In one sense that is true, for it has a great deal of money at its disposal, but it does not possess anything like what it ought to have for the work it has to do. Those who know the Church understand why this bitter cry is raisad, in view of the actual financial position of many of the clergy, who have to endure so much poverty and misery in order to meet these rates. The right honourable Gentleman the Lender of the Opposition has been unjust to the clergy with reference to this question, and others have followed his example. But when it is known that these demands affect the clergy to the extent of a fifth, or a fourth, of their gross income, and a third, or even more, of their net income, I confess I think it will be seen to be a case which calls for the instant attention of the House of Commons. The case is the more pressing because the clergy are not fairly represented on the Assessment Committees. Of course, I cannot go into that subject now, but it is clear that, if you have upon the Assessment Committees those who do not represent the clergy themselves, you put a great strain upon them by asking them to act impartially as between themselves and the clergy. As a matter of fact, and as my honourable Friends are aware, in many districts, the Assessment Committees represent the farming class a good deal more than, perhaps, ought to be allowed. Consequently, the farmer is often rated, I will not say too low, whereas the clergy are rated too high, for in many cases matters which ought to be taken into account are not taken into account at all, although, if they were, they would seriously diminish the amount. There is the evidence in the Blue Book of a witness who explained that he had the collection of the tithe in many parishes, and had often offered to allow the tenant to take, over the tithe. But they never got an offer. No one would think of taking it on those terms. Then I come to the much wider and more difficult question of the large outgoings which the obligation of the cure throws upon the incumbent. Those outgoings are sometimes in the shape of pensions to past incumbents, but more often in the shape of salaries to curates, whom the incumbent is bound to maintain. Not only is he bound to pay a curate, but he is compelled by law to maintain a curate in order that the work of the parish might be efficiently done. We have a Bill now before Parliament which provides that where the work is not done efficiently, the incumbent shall be compelled to keep a curate and pay him a stipend which is frequently not in his power to pay. In some cases Parliament has set up a separate parish, endowing it out of the living, and though that was done by Act of Parliament, the incumbent of the mother church is compelled to pay rates on the whole sum, notwithstanding that it had passed out of his hands by an Act of this House. We shall be very pleased to hear what the Royal Commission have to say on that point. It is said by some that this is res judicata—that we ought not to go back upon it. As a matter of fact, no Member of this House who is acquainted with the methods in which laws are made will have absolute respect for their accuracy and their aims. For a great many years it was the law that the claim for the payment of a curate was made the ground for a reduction of the assessment, and that obtained down to 1867; but the superior court upset what had been hitherto the settled law of the land, and to say that we should not go back upon that because it is res judicata, appears to me to be straining the argument beyond all reason. Even before that decision had been given it was held that the rating of the clergy was very unfair. It is quite true that in recent years the protests have not been so loud. The reason for that is found in the fact that the country was so prosperous up to 1878 that the clergy could be independent; but since the value of the tithe has fallen the grievance has become more pressing. I think that, under those circumstances, we must recognise this question of outgoings as a very important one. I do not want to bore the House with quotations, but a case came under my notice in the evidence given before the Commission which I think will illustrate my point. In the case I refer to, the income of the clergyman was only £60 a year, but he had to pay £46 a year in rates, and £225 a year as salary to a curate. He paid away, therefore, considerably more than he received. I think such a case as that demonstrates to the House how thoroughly inequitable the system is under which the clergy are at present rated. I may be told that these outgoings are not to be considered. Well, Sir, what outgoings are to be considered? It is said that only outgoings which ought to be considered are those which are incurred in the ordinary oases of land. In other words, they say that tithe is only part of the rent. That may be so. I am not concerned to prove the contrary at the present moment, although I shall be interested to hear what the Commission have to say on the point. Even if it is part of the rental it ought to be relieved. Under the Agricultural Rates Act rent has certainly been to some extent relieved, and it follows that tithes ought to be relieved likewise. I do not go into the question as to whether the Agricultural Rates Act relieves the tenant or the landlord. I presume it relieves both; and to whatever extent it relieves the landlord, to that extent there is a claim on the part of the tithe-owner for similar relief. It appears to me that since the passing of the Agricultural Rates Act, the claim for relief has become intensely stronger than it was before. Not only has the Agricultural Rates Act not relieved the tithe-owner, but it has increased his burden. It has brought this subject to a head. Here you have a class of ratepayers who really were entitled to be considered, who really were very badly treated, and the Government have passed an Act which relieves another class who are in very much the same position. Not only does this Act not relieve the tithe-owner, but it positively throws an extra burden upon him. I know it was done inadvertently, but it is none the less a great hardship. The tithe-owner gets no relief under the Agricultural Rates Act, but has to pay towards the relief of those who benefit under the Act. And as the contribution under the Act increases the position of the tithe-owner will become harder. I am not saying for a moment that land ought not to be relieved. What I say is, that the tithe ought to be relieved too. The three grievances are the general inability to pay on the part of the tithe-owner, the fact that they are not treated similarly to other landlords, and that they are not relieved from the active operation of the Agricultural Rates Act. Under the circumstances, what have we got to look to? We have got to look to the Report of the Royal Commission. I am fully alive to the fact that that is a very fair answer. But when is the Report going to be issued? I confess, that when I look at the evidence and the scope of the inquiry, I am almost dumbfounded at the enormous number of subjects which have to be considered, and there is no doubt that the presentation of the Report is in the dim and distant future. I cannot see how it is possible for the Commission to report before the year 1900 at the very earliest. I have made inquiry, and I cannot see the possibility of its being presented earlier. Well, the year 1901, when legislation would be possible, will be the sixth year of the present Parliament, and I think honourable Members know that that is not a favourable time for the consideration of difficult matters of rating. In my judgment, if the Commission does not report till 1901, it is not likely that the House will be asked to consider the question of rating in the present Parliament. That means that we must look for relief to the next Parliament. But, even so, shall we be the first to be considered when the Government of that year come to consider the Report? There are, as my honourable and gallant Friend says, questions concerning real and personal property to be considered. Are we to wait until these matters have been adjusted? If so, I am afraid that the relief of the clergy tithe-owner will not be brought about for ten years at the very least. Under these circumstances, Sir, I think honourable Members will see that we have not been unreasonable in bringing our case before the House to-day. I can assure the House and the Government that the feeling on this subject is most intense and widespread. It is not a question of dividing the House this afternoon. I know what the result of a division would be. Besides, I believe that in their desire to relieve the clergy, the Government are quite as strong as we are, and I should like some opportunity of showing how strong our feeling is. I think if the Government would be good enough to receive a deputation on the subject, they would be astonished at the number of Members of this House, and the influential persons all over the country, who would wait upon them to urge that any readjustment of taxation should include a remission in favour of clergymen whose income is wholly or in part derived from tithe. I do net, of course, desire that the Government should put pressure upon the Commission so far as the merits of this question are concerned. That would be an improper thing to do, and would probably be resented by the Commission; but when it comes to a question as to the order in which these subjects should be dealt with, and as to whether an interim Report should not he presented, I do think that the opinion of so large a number of Members of this House and gentlemen in the country ought to have weight with the Royal Commission; and if they knew—and they could easily be assured—that there was this strong opinion to be found amongst so large a number of influential gentlemen, they would, I think, deal more speedily with the matter. I trust that the clergy's long-deferred hope will at length be fulfilled. Right honourable Gentlemen on both sides of the House have borne witness, in eloquent terms, to the unselfish devotion with which the clergy discharge their duties. Certainly the great body of the clergy show a devoted public spirit which is not always equalled in other professions, and is certainly never excelled. If men who have done, and are doing, such good work can be proved to be suffering under a grievance, the Royal Commission and this House ought to do* its best to remove it.

* MR. CARVELL WILLIAMS

I am not surprised that the noble Lord who seconded this Amendment was conscious of the incongruity of his position. When we have a Government in office which has so liberally dealt out sops and doles to various classes, if not to all classes, of its supporters, it is not at all surprising that the Established clergy should think their turn has come to obtain something. But, surely, it is somewhat surprising to find two of the firm supporters of the Government moving and seconding an Amendment which, if carried, would prove fatal to the most important financial proposals of the Session. If this Amendment is carried the Budget is defeated. Apparently the mover and seconder of the Amendment object to the reduction of the tobacco duty and to the concession with regard to the income tax, and they think that the surplus that has resulted from Liberal legislation should be applied for the benefit of the Established clergy. The mover of this Amendment said he would not attempt to suggest any remedy for the state of things which he described, but the honourable and gallant Member knows that whatever remedy is provided will involve a new endowment for the Established clergy. That is the broad fact with which this House will have to deal, and with which the public will deal—namely, that every shilling which is remitted to the clergy will have to be found by some other portion of the community—by the ratepayer or the taxpayer. It may mean a grant from the National Exchequer. I observe that the Tithe Owners' Union has estimated that the relief of the clergy from taxation upon tithe would amount to about £80,000 a year. This would be an entirely new departure on the part of Parliament, or, rather, it would be a reversion to an old practice which was abandoned because of its injustice. It is seventy-five years since Parliament voted the last grant for building churches, and since then members of the Church of England have had to extend their work in the only proper way; that is, by means of voluntary subscriptions added to the ecclesiastical revenues at their disposal. Parliament has granted nothing by way of additional endowment to the Church for nearly three-quarters of a century. The object of this Amendment is to return to the practice of past times and to create a new endowment. The mover and seconder of this Amendment have spoken of the strong feeling which exists in favour of granting some relief to the Established Church clergy, but those honourable Members seem to think that the strong feeling exists all on one side. Do they not recognise the fact that a largo portion of the community object to the application of public funds to the maintenance of ministers of either the Church of England or of any religious body whatever? We have been threatened with strife upon the presentation of the Report of the Commission now silting, but I venture to say greater strife will inevitably follow the adoption of the Amendment now before the House. I therefore warn, honourable Members opposite, who have been talking too much as though this were a question between the clergy and the Government alone, and there were not other parties whose opinions would have to be consulted—namely, the ratepaying and taxpaying portion of the community. The honourable and gallant Member who moved this Amendment talked as if the incomes of the clergy were derived from the same sources as the incomes of lawyers and doctors, and ignored the fact that the endowments of the clergy are derived from the land. Honourable Members opposite also ignored the fact that these hardships of which they now complain were distinctly taken into account when the Tithe Commutation Act was passed; and, further, honourable Members have ignored the fact that the reverend gentlemen who have taken upon themselves the cure of souls have done so with the knowledge that their incomes were liable to these reductions. The honourable and gallant Member who moved this Amendment said he did not care how these hardships originated, but it seems to me that a great deal depends upon the origin of the present system.

* COLONEL MILWARD

I was stopped in that branch of my argument because I was out of order.

* MR. CARVELL WILLIAMS

I assume, then, that the honourable and gallant Member might have made out a better case than he did if he had been permitted to go into the origin of the system. I have noticed with great satisfaction that the facts stated by honourable Members opposite have made so great an impression upon the minds of members of the Church of England that they are raising a large fund with a view to relieving the clergy. That is a most proper proceeding, and one which does members of the Church of England great credit. But have the mover and seconder of this Amendment considered the effect of their success upon these voluntary efforts for the benefit of the clergy? Those who are raising this fund have many difficulties to contend against, such as the impression that the Church of England is a rich Church, and does not need more funds. There is the further difficulty that Churchmen, as a rule, have not been trained in such habits of liberal giving as Nonconformists have. There is also grave dissatisfaction in the Church of England at the state of things which exists there; and, lastly, many of the laity are indisposed to contribute liberally for the maintenance of the clergy, because they think they should have a share in the government of the Church. Now it is proposed to put a still more formidable difficulty in the way of those who are raising this fund. Depend upon it that, if the clergy hold out one hand for voluntary contributions and seek to plunge the other into the national purse, both methods cannot succeed; for the laity will say, "If you go to Parliament, let it give you all that you desire; we shall refrain from giving you what you ask." I can imagine that honourable Members opposite may be indisposed to pay attention to advice coming from a person holding my views, and therefore I would venture to give them a piece of advice which comes from a quarter they cannot regard with either suspicion or dislike. The honourable Member for the Oswestry Division of Shropshire wrote a letter to the Times not many days ago, which, closed with this striking passage— It is not just to exempt one class at the expense of others. It is not expedient to compel by Act of Parliament either ratepayers or taxpayers to contribute towards the spiritual services of the Church. Churchmen must bear their own burdens. There may be anomalies in the law of rating, there may be mequalities of assessment, but a better remedy must be found for these evils than exempting clerical income from tithe rent-charge on account of the spiritual services attached to its ownership. That comes from a friendly quarter, and from one who has shown that he understands the position which clergymen occupy and the duties they are called upon to discharge, I hope that this Amendment will be rejected.

* MR. JEBB (Cambridge University)

It appears to me that the honourable Member who has just spoken overlooked at least two very vital facts: first, that the occupier of a tithe rent charge occupies it because he does certain work, renders certain services to the community second, that since 1836, that is since the passing of the Commutation of Tithes Act, tithe-rent charge has fallen about 35 per cent. in value, so that for £1 of tithe rent charge a clergyman on an average receives only about thirteen shillings. The honourable Member spoke as if any relief granted from Imperial taxation to the clergy would be a new endowment to the Church of England, but the honourable Member does not deny, or attempt to disprove, that the clergy labour under exceptional grievances, that they are suffering injustice such as is suffered by no other class in the community. That was shown very clearly, it appeared to me, by the honourable and gallant Member for Stratford-upon-Avon, and by the noble Lord the Member for Rochester, who followed him Not until what we assert can be disproved—namely, that the clergy labour under an exceptional grievance—can it be denied that it is right for the clergy to come to this House and ask for the redress of a great wrong. I venture to submit to the House that, as my noble Friend the Member for Rochester, and the honourable and gallant Member who preceded him, most truly said, it is an indication of the gravity of this question that it excites the deepest interest. very widely and very generally, all over the country, and that there is a very strong feeling about it. I will give an indication of the effects of the present state of things from a place with which I am familiar—the University of Cambridge. No one who knows the University of Cambridge would deny that there is a marked tendency to a decrease in the number of candidates for holy orders, and that that decrease has set in, roughly speaking, within the last ten years. A great number of the candidates for holy orders come from country parsonages, and it has been well said that the country parsonages have been one of the most valuable recruiting grounds for the service of the Church. But now so many clergymen are suffering dire poverty that many who in former days would have sent their sons to the Universities can do so no longer. And supposing a father can manage to send his son to the University, before a young man takes holy orders, whatever his desire to take that calling upon him, he is bound to consider whether it is a calling in which he can live without the load of sordid care which now rests upon a large portion of the clergy, more especially since the passing of the Agricultural Rating Act of 1898, and whether these conditions will impair his power to discharge his duties in an efficient manner. With that prospect before him, a young man will, in many cases, rightly refrain from taking holy orders. It will be a very serious thing, not only for the Church of England, but for the whole country, and above all for the poor, and especially for the agricultural poor, if the Universities cease to supply their proper quota of candidates for orders. Let that position be borne in mind when we come to the House and ask on the part of the clergy that they should receive some relief from Imperial resources. But I wish to say one thing that has been?aid often before in similar discussions, but cannot be said with too much emphasis, that the clergy do not ask for any exceptional treatment. It is unfair to talk of the clergy asking for special endowment. They do not come in forma pauperis they appeal to the House because it represents justice. They ask for their admitted rights as citizens, and nothing more. The clergy have been patient— how patient is known only to those who are conversant with the inner history of many a country vicarage. But it is not only their right, it is their duty to make their remonstrance heard against the wholly exceptional burden under which they labour; a burden which must interfere with their opportunities and power to discharge their duties, which must interfere with their energies, and must circumscribe their ability to minister to the temporal as well as the spiritual interests of the poor. We make this appeal to the Government, and we know that the Government fully appreciates the grievances from which the clergy suffer. That has been admitted on two occasions by the Chancellor of the Exchequer, and in common with other Members of the House, I feel certain that no one can be more desirous than the right honourable Gentleman the Chancellor of the Exchequer, or nobody more desirous than the Government, to remedy a grievance which has been recognised as exceptional and unique. I have no doubt the Government will seek to take the earliest opportunity of doing so. Our desire, the desire of my honourable Friends and myself, is respectfully to urge upon the Government the extreme desirability of rendering this relief at the earliest possible moment.

* MR. JEFFREYS (Hants, N.)

While I sympathise with the Amendment, I think the remedy which the mover and seconder have indicated is in the wrong direction, because, as I have always maintained, the only way of relieving the tithe-payers of their rates and taxes is by a scheme of redemption. Something has been said about the Report of the Local Taxation Commission being issued as soon ns possible, so that we may know what they would do; but we have already had two Reports from Royal Commissions. There was the important and influential Commission on tithe rent charge which sat in 1891, which was presided over by the late Lord Basing, and of which the right honourable Member for Wolverhampton was one of the members. That Commission reported unanimously in favour of a tithe redemption scheme. There was also the Royal Commission on Agricultural Depression, which reported in favour of tithe redemption, and yet no Government takes any notice of these recommendations. When the present Government were in Opposition the Chancellor of the Exchequer put a Question on the Paper to the Government of the day asking why they did not introduce a tithe redemption scheme. The Government refused to do so. Now my right honourable Friend the Chancellor of the Exchequer gets a chance himself, but he does not introduce a tithe redemption scheme. We are asked about the Report of this Royal Commission, but I do not see what good the Report will do, for the Government will probably not do anything. The method of tithe redemption is no new scheme; it was introduced in the Glebe Land (Sales) Act, passed two years ago. If that method can be applied to the sale of glebe land, why not in respect of tithes? In the case of Greece the Government lately guaranteed a loan, and the money was subscribed at 2½ per cent. Why should not the Government guarantee a loan on the land at 2½ per cent., to pay off the tithes? The honourable Member for Rochester found great fault with the way in which the assessment committees assessed tithe, but I think the honourable Member is entirely wrong. The law is that the tithe is assessed at the annual value as regulated by the Tithe Act.

VISCOUNT CRANBORNE

That is not the question.

* MR. JEFFREYS

My noble Friend is in error. The assessment committees cannot go beyond the law; they carry out the law, and are not allowed to make the reductions which the noble Lord desires. What I want to insist upon is that the assessment committees must assess the tithe at its annual value. The honourable Member for Rochester mentioned a case in which the tithe-owner had £60 a year, and had to pay £225 to a curate and £46 in rates and taxes. The honourable Member must have made a mistake.

VISCOUNT CRANBORNE

No; I did not make a mistake.

* MR. JEFFREYS

A tithe-owner, like other people, has to pay his rates and taxes.

VISCOUNT CRANBORNE

This is a case where the tithe came to £60, and out of that, if I may use an Irish expression, the owner had to pay £225 to a curate and £46 in rates and taxes.

* MR. JEFFREYS

That is going into a different question. Many honourable Members seem to think that land and tithe are the only classes of property in the parish which pay rates; but, as every honourable Gentleman knows who has a house in the country, he has to pay a high rateable assessment on it. It will also be within the knowledge of the House that our farmhouses and farm buildings are separately assessed, and I think it is a great shame. The friends of the clergy make a mistake when they bring up this question as if the clergy were the only class that suffered. There are other people besides the tithe-payers who are very heavily burdened. No doubt the rates of the country have risen, but it is on account of the natural requirements of the people. The people in the county now insist upon having good roads, and the roads in the country are a great deal better than the roads in London. We pay an immense amount of money in the country on the improvements in roads and on steam-rolling. In the year 1867 we did not spend nearly so much as what we now spend. In Hampshire, for instance, we spend £2,000 a year on steam rolling for the benefit of ladies and gentlemen who come from the towns, in order that they may bicycle in comfort over our roads. The State ought to keep up the highways. The rates are increasing, no doubt, year after year, not because any Act of Parliament has been passed to relieve the land by throwing a heavier burden upon the ratepayers, but because of the natural requirements of the ratepayers, who ask for better roads, more police, isolation infectious hospitals, and other improvements. All these improvements take money, and have to be borne by the ratepayers. With reference to the burden of local taxation, all that has already been considered by a Royal Commission; but I may point out to the House that the assessment of a parish where building is taking place is constantly altering. In some country parishes the assessment remains the same year after year, but in parishes where new houses are being erected it is constantly altering. On the other hand, where houses are unoccupied, they are not assessed, and therefore redemption would not, in the long run, make any great difference, because all these varying circumstances would be considered. Mr. Speaker, I will not continue the discussion on that point, because you have told me I cannot go into the redemption scheme, but I would point out to my honourable Friend, who objects to those heavy payments by the clergy out of a slender income, that the best thing he can do is to urge the Government to carry out the recommendations of two Royal Commissions which have already reported on the subject, and not wait for the report of another Royal Commission, which might not be as favourable. He cannot do better than urge the Government to bring in a redemption scheme as quickly as possible.

MAJOR RASCH (Essex, S.E.)

Of course, I am aware that the views of an agricultural Member on questions of finance are not of the slightest interest to Members of this House. All I want to say is that I support the Amendment of the honourable Member for South Warwickshire, and I further desire to call the attention of the Chancellor of the Exchequer to the possibility of the remission of the land tax under a certain amount. An Amendment to this effect was moved to the Budget resolution, and a similar resolution will be moved in Committee. I speak entirely from an impartial standpoint. I am not a member of the Church Committee, and I do not suppose they would take me as a recruit even if I offered myself. The case of the clergy is undoubtedly uncommonly hard. The Rating Act, which has relieved the necessities of the agricultural interest to some extent, has done much more harm than good to the clerical tithe-owners. When rates are fixed tithe is considered; when rates are reduced it is not considered at all. The parson is the only man who pays rates on his clerical income. There is one case with which I will trouble the House. It is that of a rector of a parish in the division I represent. His income is £145 a year, but it is reduced to £89, and after that he has to pay £44 a year, leaving him only half his nominal income. Surely the Chancellor of the Exchequer, who has reduced the tobacco duty by £1,100,000, could spare a tenth of that sum to relieve the injustice of which we complain, seeing that there is an increased revenue under every head, and that £3,500,000 is obtained from death duties, which some years ago would be absolutely impossible. On the question of the death duties I should like to say that there never was such a case of sic vos non vobis as that of the right honourable Gentleman the Member for West Monmouth and the death duties; and if I, as an agricultural Member, had thought as much about the death duties five years ago as I have done since, I should not have gone into the Lobby against the right honourable Gentleman, as I did then. I hope the Chancellor of the Exchequer will give his favourable consideration to the case which has been presented on behalf of the clergy.

* COLONEL WILLIAMS (Dorset, W.)

It was said by the honourable Member for the Mansfield Division that this is a question between the clergy and the Government, but that there is a third party to it—the ratepayer. I think there is a third party, but it is not only the ratepayer, but the nation at large, for it must be remembered that the Amendment only proposes a remission in favour of clergymen in whoso case it can be shown that they are contributing more than their due share of local taxation. I do not believe that any feelings of honourable Members with reference to the Established Church would prevent them from removing an injustice if it be proved to exist. There is a great deal of confusion as to what tithe really is. I was much struck the other day, in reading the Report of the Local Taxation Commission, with the following question, put, I think, by the Chairman, to a witness:— "Is not tithe received, and rent paid, and can they be classed alike?" But surely the proper way to look at it is this: the land produces a certain value, which is divided into two parts, which I may call the temporal part and the spiritual part—one for temporal purposes, the other for religious purposes. The part which is given for religious purposes has been, by prescription and law, entitled the parson's freehold, but it is not a freehold in the strict sense—it is not the actual possession of so many acres; it only means the freehold enjoyment of the income from the land. When we come to the rating of the land it is necessary to find a certain basis for assessment, and that basis is found in two entirely different ways for the two parts. The religious part of the land is assessed at practically its full value, with a few slight reductions, but when we come to the temporal part there is, first of all, deducted from it the whole of the value of the religious part. Suppose the rent of a farm is £600, and the tithe £150; the proportion of rent to tithe is four to one, but before you deal with the assessment you deduct the tithe from the value of the farm—£l50 from £600—leaving £450, and reducing the proportion between rent and tithe from four to one to three to one. In that way alone an injustice is created as against the tithe-owner, because he has to par on a greater proportion as compared with the other part of the land. Then it is contended that the product of the land in the case of tithe comes into the owner's pocket without any effort. In the case of the temporal product we take into consideration that farmers have certain charges to meet, and these are deducted before he is assessed. But that consideration is not allowed to enter into the case of tithe, and it is assessed at its full value, when it seems is to me the same amount of labour is required to produce the value of the land whether that value is used for temporal or religious purposes. It is ridiculous to blame assessment committees, as they cannot do anything else; but I should like to put it to the Government—for the injustice, instead of being an injustice by practice, is an injustice by law—whether the law will not be altered. Another argument is sometimes mentioned why tithe should be assessed at its full value, and that is its security. But a bank is not rated higher than a powder mill, because the occupation carried on in it is safer. Income from consols does not pay more income tax than a less safe income from another source, and I do not understand why tithe should, for rating purposes, be assessed higher than other property. It is also said that tithe did not participate in the full effects of the fall in agricul- tural prices. That is quite true, but the fact only helps to emphasize the difficulties of the case, because it throws a larger burden of extra rates upon the tithe than would otherwise be the case. I hope I have not detained the House too long, but I wish very earnestly to impress on the Government that this is a case of injustice, and hardship. I have not said a word about the sufferings of the clergy. That is not germane to the question, but assuredly they have suffered. This is a question of justice. It is on that ground I wish to put it, and I hope the Government will effect a remedy.

MR. ROBSON (South Shields)

Honourable Gentlemen opposite have been unanimous in their accord that an additional injustice has been inflicted on the clergy by reason of the Agricultural Rating Act. The note struck in that respect has been re-echoed by other Members of this House. Now, I venture to say that that is a sentiment that meets with accord on this side. It is an injustice that an increase of rates should be thrown on any particular class with undue pressure, and that is the injustice which the noble Lord proposes to perpetuate and increase in regard to another class. The ratepayers do not entirely consist of those having agricultural interests. There are also other interests—the unfortunate tradesman, the cottager, the ordinary resident, who has to pay rates. Now, what honourable Members opposite propose is, that the whole burden of the increased rates should be thrown on the trading and residential community, and that which they denounced as an injustice in the case of the clergy does not appear to them as an injustice in the case of the trading and residential community. Now I waited to see if anyone would answer in objection to the Amendment. We have heard of various hardships on the clergy. The noble Lord the Member for Rochester gave one instance of a clergyman whose outgoings exceeded his income. Well, Sir, I belong to a profession, the far larger proportion of the members of which would, I think, say that their outgoings considerably exceeded their income; and yet I do not see the able and distinguished head of my profession in his place to put forward this plea on our behalf. Rates are paid on buildings which, year after year, do not bring a profit, so that the plea that a man's outcome exceeds his income is somewhat novel. I think an honourable Member opposite hiss advanced an argument which many of his friends would be glad to withdraw. He pointed out that he observed in the University he represented there were fewer graduates coming from the country parts, and that of those who did come, fewer of them showed any desire to go back to country parts. He said that this change had taken place within the last few years, with the fall in agriculture. Now, Sir, it would be a most unfortunate thing if fewer persons entered the Church, because it so we would be much the poorer. Is it to be suggested that I he community as a whole are to be called upon to contribute towards the provisional clergy of the Church of England, for that would be the plain result? Because some members of the Church of England find they are not getting sufficient stipend, therefore the State is to be called upon to make good the deficiency in the funds of the wealthiest Church in the world. That is not creditable to the Church of England.

MR. HEYWOOD JOHNSTONE (Sussex, Horsham)

Mr. Speaker: we are attempting to deal with one corner of a vast subject, but I do not think anyone is likely to form an opinion from what is spoken from the floor of this House. I sympathise with the difficulties under which the clergy are labouring, and with the support of the Government, which acknowledges the grievances under which the clergy were labouring in the matter of local taxation, but I think the remedy lies in another direction altogether. I think, myself that it would have bean impossible for the Government to have dealt with this subject in the course of the Agricultural Rating Bill, because, if I rightly understand that Measure, it was founded on the second Report of the Royal Commission, and I do not think there was one single word in that which alluded to the position of the tithe-owner as a ratepayer. On the other hand, if it was to be admitted that the tithe was to be regarded on the same footing, it would be impossible to exclude the laymen from the benefit of the Act. But, Sir, the grievance is a very real and true one. I had only this morning a letter from a clergyman, In which he said he had a demand for poor rate for £21 for the half-year on an income of £100. Let any honourable Member try and understand what a half-yearly rate of £21, or a yearly rate of £42 on an income of £100, means. I think it will be admitted that the clergy have just reason to complain. In my opinion, the true remedy is by changing the law of assessment. If clergymen were assessed on a true basis the grievance would disappear. It would be out of order for me to enlarge on that subject at the present time, but I thoroughly agree with what fell from the honourable and gallant Member for Essex, and an attempt should be made in the present Session of Parliament to deal with the question, and the best thing would be to relieve all the small livings from the burdens under which they at present labour. I hope the honourable and gallant Member will put down that Amendment, and, if he does, I will give him my support.

* THE CHANCELLOR OF THE EXCHEQUER (Sir M. HICKS BEACH,) Bristol, W.

This has been rather a remarkable Debate for the Second Reading of a Budget Bill. It is pointed out by the honourable Member for the Mansfield Division that this Amendment is directly aimed at the financial scheme of Her Majesty's Government, and that its passage would involve not only the defeat of that scheme, but the resignation of the Government who proposed it. Well, Sir, I don't think that is the desire of my honourable Friend who proposed the Amendment. He has fully explained to the House that his desire is, not to carry the Amendment or to divide the House on it, but to call the attention of the House and the public to what in his opinion is a very considerable grievance on the part of the clergy. Now, I do not complain at all of that course, for after a full Debate last year the House, by a considerable majority, affirmed the existence of the grievance. But I must say I rather regret some of the suggestions which have rather unwittingly been made to the House in the course of the Debate. Now, of course, my honourable Friend who proposed this Motion and my honourable Friend the Member for Cambridge University had no idea in their minds of a grant from the Exchequer, either to recoup the owners of tithe rent charge for the reduced value of the property, or to redress any difficulty in finding a sufficient number of University candidates to take orders in the Church of England. That suggestion was made by the honourable Member opposite, and, of course, from his point of view, it led him to a comparison between a voluntary and Established Church, and a threat that all such demands would be resisted. Well, I do not believe that any honourable Member on this side of the House could reasonably dream of making such demands. Now, what is the question before us? As my honourable Friend the Member for Sussex said, the question is really one of local taxation, and not of Imperial taxation in the first instance, and I regret that in the course of the discussion of this matter in the country, requests have been made to Her Majesty's Government which point to nothing less than the total exemption, as I understand them, not merely of the tithe-rent charge, but of the whole income of the clergy from local taxation. I do not believe that any such proposition as that is a practical one; I don't believe it would be just to the other classes of the community. It in all very well to say that you ought not to tax clergymen in this way more than the lawyer or the doctor, but, as a matter of fact, they have been taxed in this way for centuries past. That being so, to ask the Government to relieve property from taxation which has been so long subject to it, either at the expense of other ratepayers or at the expense of the taxpayers generally, is not a practical request. I admitted last year, and I feel now, that the case of the clergy with reference, to local taxation is hard. I think there is a great deal in what my honourable Friend who has just sat down said with reference to the manner in which the tithe charge is assessed. Other speakers on this side have alluded to the same point, and it was alluded to in the discussion last year. I do not myself believe—if I may venture to say so with all respect to those who have made them—all the statements which have been made as to the extraordinary amount of rates compared with their incomes which are sometimes paid by the clergy. I have investigated some of these statements myself, and I have found that the clergyman—no doubt unwittingly— has returned the total amount of rates which he paid, as if they were paid merely on the small income of his benefice, though a considerable part of them was charged on the value of an excellent house. Nobody can contend that the clergyman ought not to pay rates on his house as much as anybody else. Therefore, I feel that very often cases of this kind have been brought forward which have not been sufficiently tested before being submitted to the public. But what is the real position? My honourable Friend the Member for Cambridge University says there has been a wrong committed which requires a remedy, and my honourable Friend who moved this Amendment says that a remedy should be found. But nobody has suggested what the remedy should be.

* MR. JEFFREYS

Yes; I did.

* THE CHANCELLOR OF THE EXCHEQUER

Yes, the honourable Member for Hampshire did suggest that the tithes should be redeemed. I know that he has devoted great attention to this question, and I think there is a good deal to be said for his view of the case. I think, also, that the tithes should be redeemed. But I do not think that you could carry through Parliament a scheme for the compulsory redemption of tithes. If you can only introduce and carry a scheme for the voluntary redemption of tithes, the redemption money, if invested in any securities in which it could be invested for the benefit of the living, would return so low a rate of interest as to deprive the tithe-owner of a very considerable part of his present income. But, Sir, with that exception, no one has suggested what the remedy is to be. As I said last year, and as has been admitted in the course of this Debate, this is but a part of the great question of local taxation which is at present under the consideration of a Royal Commission. I stated last year, and I will state again to-day, that it is absolutely impossible for us to take one part of this question of local taxation out of the hands of that Commission, and to make a proposal with regard to it without any suggestion from the Commission, that in their opinion it is a matter which should be dealt with before any other part of the question. That is the position now. It has been stated by more than one of thy honourable Members who have taken part in this Debate, notably by my noble Friend the Member for Rochester, that the clergy have had a special grievance inflicted upon them on account of the passing of the Agricultural Rating Act. That statement has been very frequently made. I have seen it constantly repeated in the columns of the press and I have seen it supported with great delight by those who are vigorously opposed to the Agricultural Rating Act. Well, at my instance, my right honourable Friend the President of the Local Government Board collected a very large number of cases in which complaints were made by clergymen that the Agricultural Rating Act had injuriously affected them, and he had those cases investigated by officers of his department on the spot. I have the records of several of the cases here. There are some 15 or 16 cases. I cannot, of course, go into details, because this really is only an incidental question, and it is impossible to go at length into the rating question now, but perhaps I may be permitted to give the general effect of some of the cases, as the matter has been raised. I do not believe for a moment that it can be shown that— except to a very small amount indeed, and in a very few cases—the Agricultural Rating Act has injuriously affected clergymen at all. What has happened has been this. No doubt there are many cases in rural parishes in the country where the charges on the rates have increased owing to increased expenditure, but that is not due to the Agricultural Rating Act. No doubt there are other cases in which, immediately after the Agricultural Rating Act came into operation, the rates in the parish enormously went up. I have some cases here. But why? Everybody who knows anything about the way in which local taxation is levied knows this: that very often the precept of the collecting authority on the parish will be for one part of the year very much larger than in the preceding or the subsequent part of the year. A parish is in debt to the spending authority, and a larger sum has to be raised in one half-year to meet the balance than would be raised in an ordinary half-year, and the following and subsequent half-years are very much less. That constantly happens. Then there have been cases in which the guardians, as a spending authority, have made to the Local Government Board incorrect returns of the money that has been spent, and consequently the Local Government Board did not give sufficient grant in the first instance. Subsequently the mistake has been rectified. If I am not wearying the House, I should like to quote three or four cases which show what I mean. Here is the case of a Wiltshire parish, where a clergyman complained that his rate had increased 1s. 5d. in the £. To anybody who knows the poundage rate that is a very large amount. Now, what does that mean? It was found to be due to increased county council expenditure and to greatly increased exceptional expenditure for the year by the guardians and by the district council. The same reason accounted for an increase in a Hampshire parish. In a Berkshire parish the rates had increased by 11d. in the £. Of that increase no less than 52 per cent. was due to county council expenditure, 30 per cent. to guardians' expenditure, and 69 per cent. to the district council requirements. In a Suffolk parish the rate in the £ was doubled, and the clergyman put it down to the Agricultural Rating Act. His rate was raised by £21 in the year simply because the parish had raised very much less than was required in the year before the Agricultural Rating Act was passed, and very much more than was required after the Act came into effect. In a Derbyshire parish the total increase was 2s. 2d. in the £ because the requirements of the local authority had increased. The parish had also been over-rated 1s. 3d. in the £ by the guardians, 4½d. in the £ was due to the county council expenditure, and only 2¾d. was due to the Agricultural Rating Act. Then here is the case of a Gloucester parish, which I know well, where it was alleged by a clergyman that the vicar had had his rates raised by £10 by the Agricultural Rating Act, while a large farmer was only relieved to the extent of £1 in all. The overseers of the parish, however, after the parish had been credited with its share of the agricultural grant, tried to strike a rate on the old basis, and thus rated agricultural land twice over. This was declared illegal, and when the legal rate was raised the agricultural land was relieved by 8d. in the £, while the rate on tithe rent charge was increased by 2d. in the £, due, as in other cases, to increased expenditure. In the union of St. Ives the rate was said to have risen from 2s. to 3s. in the £. An exceptional highway rate of £135 accounted for a rise of 10½d. in the £, but the rate fell to £23 in the immediate succeeding half-year. I have picked out the worst cases I could find, and I should be very glad to show the results to any honourable Member who takes an interest in the matter. I have all the facts by me, and I can assure honourable Members that these are fair samples of the result, when the cases are investigated. I can only repeat that, in my belief, the effect of the Agricultural Rating Act in raising the rates paid either by the owners of tithe rent-charge or by cottagers or shopkeepers in any parish has been absolutely infinitesimal, and practically confined to those cases where it is very well known that the Act did not provide a corresponding grant for the overseers' expenses and for the parish council rate, of which, after the passing of the Act, land only paid half. Sir, it appears to me that I have really detained the House too long upon this matter, and I can only say that I sympathise as much as any honourable Member of this House with the position in which many of the clergy find themselves under the present condition of affairs. Their incomes have fallen heavily owing to the fall in tithe rent charge. There are symptoms that tithe may tend to increase next year. If this year is going to be a fat year in corn averages, and supplants, as it will supplant, a lean year, the result will tell at once. I feel that this question will be considered sympathetically by the Royal Commission in dealing with the subject of local taxation; and I can only add what I said last year on behalf of Her Majesty's Government—namely, that if we have any proposal before us from the Royal Commission which may alleviate the condition of the clergy in this matter, our best attention will be given to it with the view of finding a solution which will relieve them, and at the same time be fair to other ratepayers.

* SIR W. HARCOURT

I do not rise for the purpose of taking part in this general discussion; I am quite content to leave the question to be settled between the right honourable Gentleman and his supporters. I only desire to take notice of one statement which he made, and which I think was an important one bearing on this question. He asked, Is it possible that clergymen can claim to be exempted from the rating of tithe? and he added that they have been rated ever since the time of Elizabeth. Yes, Sir, but not only have the clergy been rated since the time of Elizabeth, but the landed interest also has been rated since that time. The right honourable Gentleman says it would be utterly impracticable to exempt from the charge an interest which has been rated since the time of Elizabeth, but he found no difficulty in exempting from one-half of the charge an interest which has likewise been rated ever since the time of Elizabeth. This was done in a moment under the pretence of the ruin of that interest which he says now has had a fat year, and he offered the consolation of a fat year to the clergyman, and for the landowner in that fat year he gives him exemption from half the charge. This discussion is an admirable reading on the Agricultural Rating Act, and from that point of view I listened to it with the greatest interest, and it will be studied throughout the country by those classes which have been charged since the time of Elizabeth, but which have not been exempted from half their charges. Those classes are the clergymen, the tradesmen, and the householders of the country, and I think the right honourable Gentleman must know what is the opinion that exists not only in the towns, but the rural districts among those who do not happen to belong to the exempted interest. Then the right honourable Gentleman made another remark. He said this question of rating is a great question. So it is. He added that it cannot be dealt with in regard to one interest alone. But it has been dealt with in regard to one interest alone, and every proposition which the right honourable Gentleman has laid down in his speech is a contradiction and a condemnation of the principle on which the Agricultural Rating Act was passed.

* THE CHANCELLOR OF THE EXCHEQUER

What I said was that we had ourselves referred this question of local taxation to a Royal Commission, and we could not, without a Report from them, take one part of the question out of the cognisance of the Royal Commission we had appointed and deal with it separately. The Agricultural Rating Act was based on the recommendation of a Royal Commission, which had been appointed by the Government of which the right honourable Gentleman was a Member.

* SIR W. HARCOURT

Yes, Sir. But they would not wait for the Report of the Royal Commission. We pressed it over and over again, but in so great a hurry were they that an interim Report was prepared in order—there being a surplus which they inherited—to make a gift of the surplus to the landowners of the country. That interim Report was brought forward and the money of the taxpayer was disposed of at once without any such consideration of the whole matter. Yet we are now told that unless you consider the whole question of rating it is very unfair to deal with one interest alone—that of the clergyman; it would be quite impracticable. But you found no difficulty in dealing with a much larger interest than the clergy, and leaving out in the cold the tradesmen, the householders in the towns and in the country, and you committed, in my opinion—and I have never altered that opinion—a grave injustice; and, as far as I can observe, throughout the country that opinion is growing and asserting itself on every occasion when the constituencies are able to speak upon the subject. I do not wonder that one of the interests which have suffered as the clergy have suffered should make this protest. I do not agree with the right honourable Gentleman in his statement that where rates rise they do not fall more heavily upon the non-exempted classes. It unquestionably does so. I know instances in which it has done so, and I am not surprised at this outcry. But the largest interest of all consists in the householders of this country, who have had no relief from this charge, and no exemption. I do not wonder that the Chancellor of the Exchequer finds himself in difficulties. He knows that if he had to confer the same boon on the other classes of the community which he has granted to one particular class it would cost many millions of money, probably five times as much as he has granted to this particularly favoured interest. Every occasion like the present throws light on the injustice of that act of class legislation, and it will open the eyes of the community, and, I hope, tend to prevent in the future such unjust financial legislation as that exhibited in the Agricultural Rating Act.

COMMANDER BETHELL

I do not quite gather which side the right honourable Gentleman takes in his argument, whether he supported the clergy or not, and I do not suppose that anybody else does. I want to observe that my right honourable Friend the Chancellor of the Exchequer, oddly enough, omitted to comment upon the suggestion that has been so often made to remove the complaints made by the clergy. I pointed out to the honourable and gallant Gentleman opposite and to my right honourable Friend that the clergy stand in a different position from the owners of other hereditaments, for the reason that their income which is taxed comes from the land, and that on the land, if it is assessed, the assessment is diminished in virtue of the tithe the clergyman pays. The claim, therefore of the clergy, which I understand to be made, is that they should be treated as the other occupiers of land are treated, and that is a claim which is undoubtedly just. They are differentiated from other people. The incomes of other people do not come from land in the way in which the tithe comes from land. The tithe-owners claim the same exemption, no worse and no better, that the occupiers of land have, and, seeing that the occupiers of land have had that relief, I maintain that the clergy ought to have the same relief. It is perfectly true that the question is complicated by non-clerical owners of tithe, but I do not think that that is a complication which makes a solution of this question so difficult as the Chancellor of the Exchequer seems to suggest. At any rate, in his reply upon this question, my right honourable Friend ought to have dealt with this subject, and ought to have shown us why it is that the tithe-owner draws his income from land, and that the value of that land having diminished in virtue of the tax he is not to be relieved of part of his rate in the same way as other occupiers of land are relieved. I do not think that there is any considerable demand upon the part of the clergy to be relieved altogether of rates; all that they claim is that they should be relieved of half the rates in the same sense as, and no less and no more than, other occupiers of land are relieved.

MR. BARTLEY (Islington, N.)

I am one of those who objected to the system on which the Agricultural Rating Act was carried, and I am sure that this Debate clearly shows that the passing of that Act was premature, because it did not embrace the whole of the cases. I heartily sympathise with the Resolution, and if it is carried to a Division I should certainly vote for it. It seems to me that the clergy are entitled to the same advantage as others have had under the Agricultural Rating Act. But even the clergy do not include all the cases of hardship, and that shows clearly what a mistake it is to deal with a question of this sort piecemeal. When this large sum of two millions was being dealt with, two years ago, the Government should have fairly adjusted it for the relief of all hardships, so that justice could have been done to all classes concerned. Take the large class of factory owners; there are many cases in which owners of factories pay in rates more than they are producing in income. Their case is equally as hard as that of the clergy, although they are not quite so successful in appealing to our sympathies as the clergy are. It seems to me to be a very unfortunate thing to deal with a matter such as this without dealing with it as a whole; and that is my great objection to the course the Government' have taken in this matter, that they have dealt with it piecemeal, and have dealt injustice to other sections of the community which are outside the special classes.

* MR. MORE (Shropshire, Ludlow)

considered that the grievance of the tithe-owner was not so much from the small point of rating as it was on the point of tithe being charged on corn averages, with which tithe had no necessary connection. He had seen a letter in the Times some time ago to the effect that Lord Grey, who wrote it, said that he was the only survivor of those who fixed the corn averages, and admitted the mistake in not making tithe a fixed charge. In the year 1888 he himself moved for a Committee of the House to inquire into the subject. He then said that tithe would fall to 60, and those hon ourable Members who represented the Church in the House in those days ridiculed the idea, when then it was at par. It was a difficult subject, no doubt, for the Chancellor of the Exchequer to deal with, but the difficulty consisted of not knowing at what figure it ought to be fixed. He did not agree with the Chancellor of the Exchequer that the recent, slight rise in the, price of wheat would do anything at all to relieve the clergy. He based that conclusion on his experience of the misleading character of the market prices of barley, because it was a fact that very often the best barley did not get into the tithe averages at all, it having been sold privately. These corn averages were injurious to the farmers, and were acknowledged to be most unjust to the tithe-owners. But it was not the Land Rating Act that had increased rates on tithes beyond the expense of the assistant overseers. He had examined many cases sent him, and found they were all mistakes. It was the expense of county councils that increased the county rates, and so increased the rates on tithes. In one case rates were increased eleven times, frequently quadrupled, and the clergy complained, as the ratepayers generally complained.

* MR. J. G. TALBOT (Oxford University)

I wish to express my satisfaction with the general tone of this Debate. I have the honour to represent a considerable number of those who suffer. The Debate upon this question to-day has been of a uniform character, no one on either side of the House having denied the great suffering which many of the clergy are now enduring. As has been pointed out, it is owing to the increased standard of their work which now prevails that their burdens are greater than they were formerly, for such increased provision often falls upon the clergy themselves. Whether or not the operation of the Agricultural Rating Act has intensified the burdens of the clergy nobody can deny the fact that the clergy bear a great proportion of the local burdens of the country, and I should hope the right honourable Gentleman the Chancellor of the Exchequer would have no difficulty in providing that all persons assessed under a certain value should be exempted from the land tax, which would relieve to a certain extent, the burdens the clergy have to bear. I rise in support of the honourable Gentleman who brought forward the Resolution this afternoon, but I would suggest to him that he should be satisfied with the discussion he has raised, and not ask for a decision of the question, because this matter, if pressed to a Division, would affect the whole of the financial provisions of the year, which I am sure my honourable and gallant Friend does not desire. All that he wished to do has been done by the sympathetic discussion which has taken place.

* COLONEL MILWARD

After the appeal which has been made to me by the right honourable Gentleman the Member for the Oxford University and the honourable Member for Rochester I ask the permission of the House to withdraw this Motion. We have taken the only opportunity we had of bringing the matter before the House, and I thank the right honourable Gentleman the Chancellor of the Exchequer for the manner in which he has listened to the proposal.

MR. LABOUCHERE

Certainly the honourable Gentleman opposite who has been wailing over the cruelties which have been perpetrated upon the clergy of the Church of England is thankful for very small mercies. The Chancellor of the Exchequer has told them that there is nothing whatever in their case, and that he will not aid and abet them in any way, and then they get up—one honourable Gentleman gets up from the bandit bench, if I may use the expression, and the honourable and gallant Gentleman who raised the discussion now wishes to withdraw his Motion. No, Sir, we will not agree to your withdrawing it, and as I said to my honourable Friend the Member for Mansfield, "if you will sacrifice yourself, I will sacrifice myself, and if you will tell with me, we will tell for the Motion, and force these honourable Gentlemen to go to a Division. "Now, I do point out to the House that the honourable Gentlemen opposite ought, to be ashamed of what they have said to-day. The Church of England is the richest Church in the world, and they say they are worse off than any Dissenting community in the country. Where do the Dissenting clergy get their money from? They get it from their flocks. Well, then, it follows that the honourable Gentlemen opposite, instead of coming here and attempting to put burdens on the shoulders of other people, should have put their hands into their own pockets and subscribed for themselves. I do not know where we shall stop if this is allowed to go on. When I first entered into political life I came into the House

as a staunch Radical, and what were the Radical opinions in those days? Not to endow the Church any further, but to disestablish it—not to give it more, but to take away that which it had.

Question put— That the words proposed to be left out stand part of the Question.

The House divided.—Ayes 215; Noes 27.—(Division List No. 124.)

AYES.
Allan, William (Gateshead)	Dixon-Hartland, Sir F. Dixon	Kennaway, Rt. Hn. Sir J. H.
Allen, Wm. (Newc. -und-Lyme)	Dorington, Sir John Edward	Kenyon-Slaney, Col. William
Allsopp, Hon. George	Doughty, George	Lafone, Alfred
Atkinson, Rt. Hon. John	Douglas, Rt. Hon. A. Akers-	Lawrence, Sir E. (Cornwall)
Baden-Powell, Sir G. Smyth	Drage, Geoffrey	Lawrence, W. F. (Liverpool)
Bailey, James (Walworth)	Duckworth, James	Lawson, John Grant (Yorks)
Balcarres, Lord	Duncombe, Hon. Hubert V.	Lawson, Sir W. (Cumberland)
Balfour, Rt. Hn. A. J. (Manch)	Fardell, Sir T. George	Leng, Sir John
Banbury, Frederick George	Farquharson, Dr. Robert	Lewis, John Herbert
Barlow, John Emmott	Finch, George H.	Llewelyn, Sir Dillwyn-(Swns'a)
Barnes, Frederic Gorell	Finlay, Sir Robert Bannatyne	Lloyd-George, David
Barry, Francis T. (Windsor)	Fisher, William Hayes	Lockwood, Lt.-Col. A. R.
Barton, Dunbar Plunket	Fison, Frederick William	Loder, Gerald Walter E.
Beach,Rt.Hn.SirM.H. (Bristol)	FitzGerald, Sir R. Penrose-	Logan, John William
Beaumont, Wentworth C. B.	Fitzmaurice, Lord Edmond	Long, Rt. Hon. W. (Liverp'l)
Bhownaggree, Sir M. M.	Flannery, Fortescue	Lough, Thomas
Bill, Charles	Fletcher, Sir Henry	Loyd, Archie Kirkman
Billson, Alfred	Fowler,Rt. Hn. SirH.(Wol'tn)	Macartney, W. E. Ellison
Blundell, Colonel Henry	Fry, Lewis	Maclure, Sir John William
Bolton, Thomas Dolling	Garfit, William	McArthur, Chas. (Liverpool)
Boscawen, Arthur Griffith-	Gedge, Sydney	McCalmont, Mj.Gn. (Ant'mN)
Broadhurst, Henry	Gibbons, J. Lloyd	McEwan, William
Brodrick, Rt. Hon. St. John	Giles, Charles Tyrrell	McIver, Sir Lewis
Brown, Alexander H.	Goddard, Daniel Ford	McKenna, Reginald
Buchanan, Thomas Ryburn	Godson, Augustus Frederick	Mappin, Sir Frederick Thorpe
Bullard, Sir Harry	Goldsworthy, Major-General	Martin, Richard Biddulph
Burns, John	Gordon, Hon. John Edward	Mendl, Sigismund Ferdinand
Butcher, John George	Gorst, Rt. Hon. Sir John E.	Montagu, Hon. H. S. (Hants)
Buxton, Sydney Charles	Goschen,Rt.Hn.G.J.(St.Geo's)	More, Robert Jasper
Caldwell, James	Goschen, George J. (Sussex)	Morton, A. H. A. (Deptford)
Cameron, Sir Chas. (Glasgow)	Graham, Henry Robert	Morton, E. J. C. (Devonport)
Carvill, Patrick G. Hamilton	Gray, Ernest (West Ham)	Moss, Samuel
Cecil, Lord Hugh	Green, W. D. (Wednesbury)	Mount, William George
Chaloner, Captain R. G. W.	Griffith, Ellis J.	Mowbray, Rt. Hon. Sir John
Chamberlain, Rt.Hn. J. (Birm.)	Gunter, Colonel	Muntz, Philip A.
Chamberlain, J. A. (Worc'r)	Haldane, Richard Burdon.	Murray, Rt. Hn. A. G. (Bute)
Chaplin, Rt. Hon. Henry	Hamilton, Rt. Hon Lord G.	Murray, Chas. J. (Coventry)
Charrington, Spencer	Hanbury, Rt. Hon. Robert W.	Nussey, Thomas Willans
Clare, Octavius Leigh	Harwood, George	O'Brien, P. J. (Tipperary)
Clark, Dr. G. B. (Caithness)	Heaton, John Henniker	Orr-Ewing, Charles Lindsay
Clarke, Sir E. (Plymouth)	Helder, Augustus	Pease, Jos. A. (Northumb.)
Cohen, Benjamin Louis	Henderson, Alexander	Phillpotts, Captain Arthur
Collings, Rt. Hon. Jesse	Hill, Rt. Hn. Lord A. (Down)	Pierpoint, Robert
Compton, Lord Alwyne	Hoare, Edw. B. (Hampstead)	Platt-Higgins, Frederick
Cook, Fred. Lucas (Lambeth)	Hogan, James Francis	Plunkett, Rt. Hon. H. C.
Corbett, A. C. (Glasgow)	Holland, Hon. Lionel R.	Powell, Sir Francis Sharpe
Cornwallis, Fiennes S. W.	Horniman, Frederick John	Pretyman, Ernest George
Crilly, Daniel	Howard, Joseph	Priestley, Sir W. O. (Edin.)
Cripps, Charles Alfred	Hozier, Hon. Jas. Hy. Cecil	Purvis, Robert
Crombie, John William	Hughes, Colonel Edwin	Rankin, James
Cross, H. Shepherd (Bolton)	Jackson, Rt. Hon. W. L.	Reid, Sir Robert T.
Cubitt, Hon. Henry	Jeffreys, Arthur Frederick	Renshaw, Charles Bine
Curzon,Rt.Hn.G.N.(Lanc.SW)	Jessel, Capt. H. Merton	Richardson, Sir T. (Hartlep'l)
Curzon, Viscount (Bucks)	Johnstone, John H. (Sussex)	Rickett, J. Compton
Dalbiac, Colonel Philip Hugh	Jones, David B. (Swansea)	Ridley. Rt. Hon. Sir M. W.
Dalziel, James Henry	Kearley, Hudson E.
Ritchie, Rt. Hon. Charles T.	Souttar, Robinson	Wedderburn, Sir William
Roberts, John Bryn (Eifion)	Stanley, Lord (Lanes)	Wharton, Rt. Hon. John L.
Roberts, John H. (Denbighs)	Stanley, Ed. Jas. (Somerset)	Whiteley, George (Stockport)
Robertson, Herbt. (Hackney)	Steadman, William Charles	Whiteley, H. (Ashton-und-L.)
Robson, William Snowdon	Stevenson, Francis S.	Whittaker, Thomas Palmer
Roche, Hon. J. (East Kerry)	Sullivan, Donal (Westmeath)	Williams, John Carvell (Notts)
Russell, T. W. (Tyrone)	Talbot, Lord E. (Chichester)	Williams, J. Powell (Birm.)
Rutherford, John	Talbot,RtHn. J. G.(Oxf'dUniv.)	Wilson, H. J. (York, W.R.)
Samuel, H. S. (Limehouse)	Tennant, Harold John	Wodehouse, Edmond R. (Bath)
Scoble, Sir Andrew Richard	Tomlinson, Wm. E. Murray	Wortley, Rt. Hn. C. B. Stuart-
Seely, Charles Hilton	Valentia, Viscount	Wyndham, George
Sharpe, William Edward T.	Wallace, Robert (Perth)	Young, Com. (Berks, E.)
Shaw, Chas. Edw. (Stafford)	Walton, Joseph (Barnsley)
Shaw-Stewart, M. H. (R'nfr'w)	Wanklyn, James Leslie
Sidebotham, J. W. (Cheshire)	Ward, Hon. R. A. (Crewe)	TELLERS FOR THE AYES—
Sidebottom, Wm. (Derbysh.)	Warr, Augustus Frederick	Sir William Walrond and
Sinclair, Louis (Romford)	Webster, R. G. (St. Pancras)	Mr. Anstruther
Smith, Hn. W. F. D. (Strand)	Webster, Sir R. K. (I. of W.)
NOES.
Bartley, George C. T.	Hayne, Rt. Hon. Chas. Seale-	Wallace, Robert (Edinburgh)
Bethell, Commander	Howell, William Tudor	Welby, Lieut.-Col. A. C. E.
Bowles, T. G. (King's Lynn)	Laurie, Lieut.-General	Willoughby de Eresby, Lord
Brookfield, A. Montagu	Lowther, Rt. Hon. Jas. (Kent)	Woods, Samuel
Curran, Thomas (Sligo. S.)	Moon, Edward Robert Pacy	Yoxall, James Henry
Dilke, Rt. Hon. Sir Charles	Myers, William Henry
Doogan, P.C.	Owen, Thomas
Dyke, Rt. Hon. Sir W. Hart	Rasch, Major Frederic Carne	TELLERS FOR THE NOES—
Gibbs, Hn. Vicary (St. Alb'ns)	Strutt, Hon. Chas. Hedley	Mr. Labouchere and Mr.
Greene, W. Raymond- (Cambs)	Tanner, Charles Kearns	Maddison.
Hardy, Laurence	Verney, Hon. R. Greville

Bill read the second time, and committed for Thursday.

* SIR C. DILKE (Gloucester, Forest of Dean)

had given notice of the following Amendment— That recent declarations of Ministers outside Parliament appear to reveal a need for defence preparations inconsistent with the reduction of taxation proposed in the finance measures of the year. He said: The ground on winch I am opposed to the Second Reading of the Bill is so fairly stated in the Amendment winch I would have moved had the forms of the House permitted me to do so, that it is unnecessary for me to detain the House at any length in presenting reasons. Since the Chancellor of the Exchequer made his Budget speech several circumstances have occurred which go to show that he is less likely than he was at that time to have at, his disposal the money he dealt with in that speech. As regards one of these matters, the result of the appeal against the decision on the death duties, I understand, is likely to cost him a million of money, though, no doubt, the honourable Gentleman is hoping against hope that the House of Lords would upset the decision of the Court of Appeal. We wait for judgment of the House of Lords in this matter. Though it would not be right to discuss the matter now, it should be mentioned as likely to make a hole in the finances of the country. There is one matter, in regard to which the Chancellor of the Exchequer himself informed the House that it would be his duty to make further demands, and that was in relation to the expedition to Khartoum. He recently informed the House that this country would have to contribute towards the expenses incurred by the Egyptian Government in connection with this expedition.

* THE CHANCELLOR OF THE EXCHEQUER

I did not say that. I said I should have to make a proposal in regard to it, and I may now say that the proposal will not affect the Budget.

* SIR C. DILKE

We have had experience on former occasions of such matters which were not intended to affect the Budget, of the year, but which ought to have affected that Budget, and which did affect the Budget in the year which followed. We cannot go further in this matter until we know what the proposal of the Chancellor of the Exchequer will be. The third matter which has affected the finances of the year, since the speech on the Budget, concerns the enormous increase in the shipbuilding programme of the Empire of Russia. I should not be in order in doing more than mentioning speeches made by Members of the Government, which pointed to a certain difference of opinion between this country and Russia, but the Estimates of the First Lord of the Admiralty, as accepted by the Chancellor of the Exchequer and referred to in his Budget speech, were attacked at the time as being dangerously low in regard to naval construction in the present year. Last year an additional Vote of half a million had to be asked for, and rumour says that there is to be an additional Vote for the present year. Now, however, we can only deal with proposals on which the Bill was based, and accepted by the Chancellor of the Exchequer in February last. Since the Estimates were accepted by the Government there has been a very large increase in the shipbuilding programme of Russia. The First Lord of the Admiralty has given the House information with regard to that change. He was asked a question to which his first answer was most reassuring. After he had given the answer to that question, a statement appeared in the newspapers which was quite different, and the right honourable Gentleman corrected the statement he made the previous day. Certainly, the increased in the shipbuilding programme was very large indeed; but besides the figures contained in his statement, we have the admitted fact that an Imperial ukase has been issued in Russia under which an enormous amount of money is to be spent on naval construction during the next few yeans. The First Lord of the Admiralty had already had a very heavy shortage of expenditure on shipbuilding and naval works, owing to the labour dispute, and other causes. Before that time alarming speeches were made by Her Majesty's Ministers with regard to our relations with foreign Powers. The Chancellor of the Exchequer in the month of January made a speech of the most alarming kind, and which undoubtedly caused a great deal of depression in all kinds of securities. The alarm raised by that speech was somewhat allayed by the declarations made by the First Lord of the Admiralty and the right honourable Gentleman him- self; but more recently we have again been alarmed by rumours of a speech by the Secretary of State for Foreign Affairs, who is also Prime Minister, and therefore in a position of the highest responsibility, made at a banquet of the Institute of Country Bankers, in which he drew, according to the statements made by persons who were present—for the speech was not reported—a very alarming picture of the foreign relations of this country, and insisted on the necessity of this country making preparations for war. An explanation was given by the right honourable Baronet the Member for the University of London, who was chairman at the dinner, and who wrote to the newspapers in order to remove the impression which the Prime Minister's speech had produced. He admitted the depression of securities and the flatness of the Stock Exchange which had followed the delivery of that speech, but he said there was no justification whatever for the panic which had taken place, because, he said, Lord Salisbury had merely dwelt on the advisability of increasing the naval and military estimates in face of existing circumstances. Now, Sir, that is my case. I do not need to ask what the Prime Minister actually said at that banquet or to refer to the alarming report which appeared next day. It is sufficient for my case to know from the explanation made by a Member of this House, who was in the chair on that occasion, that the Prime Minister's speech amounted to an appeal to the bankers of this country to assent willingly to the large financial sacrifice and the great interference with trade which an increase of taxation would involve. Two days after that speech was delivered the Secretary of State for the Colonies made a speech which also appears to have produced an alarming impression in the country. I cannot now deal with that speech, but there will be an opportunity of doing so on a future occasion. At present I rely on the admission made by the right honourable Baronet who was the chairman at that banquet to which I have referred, that the nobleman who is Secretary of State for Foreign Affairs and Prime Minister stated that under present circumstances they ought cheerfully to assent to a large increase in the naval and military expenditure of this country. And yet in face of that declaration the Government come forward to propose a reduction of expenditure. I cannot understand how, having regard to the speeches made by Ministers, the Government can come to this House and propose a reduction of taxation. There seems to be an inconsistency between their speeches and such a proposal, and no one, so far as I can learn, outside their own particular supporters can approve of it in the face of the speeches to which I have referred. I cannot but think that this apparent inconsistency on the part of Members of Her Majesty's Government must have a damaging effect upon their conduct of affairs in regard to our foreign relations, because the Powers with whom they are conducting difficult and delicate negotiations at the present time must know that they are not in earnest if they combine these violent speeches to which I have referred with a reduction of taxation. There should rather be a reason for increasing taxation, and in the face of such declarations as have been made by the Prime Minister, I have voted against this Bill, and should have wished to obtain an opportunity for making the Motion which stands in my name on the Paper.

* MR. WANKLYN (Bradford, Central)

Sir, in view of the Second Reading of this Bill, I have referred with much interest to the speeches made by the Chancellor of the Exchequer during the past two years, and if the House will permit me I should like to1 compare two of those speeches which bear on the Debate to-night. The first of those speeches was delivered at Bristol on the 13th of November, 1896. It was a particularly interesting meeting, because there was also present the noble Lord the Secretary of State for War, who addressed the meeting at some length. Lord Lansdowne dealt with the increasing expenditure upon the Army and Navy, and he said our fleets would not be efficient unless our coaling stations were held by the Army, and we should not hold our place amongst the nations of the world unless we were able to follow up a blow struck at sea by a blow struck on land. The noble Lord referred to the large increase of our commerce, and pointed out that, in view of the continual expansion of our Empire, the opening of new markets was essential to our best interests, and in conclusion he warned the meeting that, while our fleets had increased enormously, the garrisons for our coaling stations, which were vital to the existence of the fleet, were below their strength. The Chancellor of the Exchequer in reply said that if his noble Friend the Secretary of State for War required that there should be an increase in the Estimates for the Army similar to that for the Navy, he must venture humbly to demur to any suggestion of the kind. So much for the speech of November 13th, 1896. But after the short interval of a year and three months there was another meeting in the same part of the kingdom, and by the irony of fate it fell to the lot of the Chancellor of the Exchequer to have to make a provisional declaration of war.

* MR. SPEAKER

Order, order! The references which the honourable Member is making to speeches made in 1896 and 1897 do not appear to bear upon the Motion before the House.

* MR. WANKLYN

Mr. Speaker, my point is to enter a protest against a reduction of taxation, in view of the potential difficulties which we shall have to face in the next 10 years.

* MR. SPEAKER

The honourable Member is entitled to argue that the speeches of Ministers show that the provision made by the Government is inadequate to the needs of the State, but not to compare in detail former speeches of the Finance Minister.

* MR. WANKLYN

Well, Sir, of course I will not pursue that matter in deference to your ruling, and I will go at once to my argument. My point, Sir, is this: the Chancellor of the Exchequer, on the late occasion to which I have referred, spoke of keeping "an open door" at any risk; but we know what has happened since then, and that if this door has not been shut in our face, there has been shown every disposition to close it. If the right honourable Gentleman does not know what will happen during the next 10 years, I will venture, Sir, to tell him. Yes, Sir, for I venture to think that many of our difficulties to-day have arisen from the fact that the right honourable Gentleman has not looked far enough ahead. I would point out, as a comparison between those two speeches to which I have referred, that the right honourable Gentleman has not looked ahead even for 15 months, much less than for 10 years. But during the next 10 years it is quite clear that Russia will complete her railways and fortify Port Arthur until it is practically impregnable. And what will happen then? Having completed her railways and fortified Port Arthur, she will snap her fingers at us and close the "open door" in our face, unless in the meantime we are able to deal with the weak points in our armour. Well, Sir, of course it may be asked, is there never to be a remission of taxation? Is there to be no limit to the burden of armaments? For myself I can only say that I see no possibility of any remission of taxation or any limit to the increase of armaments for the next 10 years, for it does seem to me that the next 10 years are big with fate for the future of the Empire. I will quote, Sir, if I am in order—and I pray your indulgence as a new Member—from the work of the right honourable Baronet who has just sat down. In his book on Imperial Defence, which is, I think, a most valuable national work, the right honourable Gentleman says (page 42)— What is the Power with which our enemy will have to contend? Is it Great Britain or the British Empire? And then, Sir, on the following page the right honourable Gentleman says— But the resources of the British Empire are so vast that if it were believed that they would be fully and freely employed and were reasonably organised for defence no statesman of any nation in his sober senses would dream of provoking a conflict. And yet, Sir, while this problem trembles, in the balance the Chancellor of the Exchequer proposes a remission of duty on tobacco. During the next 10 years we might accomplish the federation of the British Empire on a basis of defence, and this being done, we can, as a federated Empire, hold our own. Before sitting down I desire to make one suggestion which might case the burden of taxation. For two generations the people of this country, ever since the Crimean War, have been hugging themselves with the belief that the adoption of Free Trade would become universal, and that with, the universal adoption of Free Trade there would be a general disarmament, and that the millennium would arrive. The very reverse has happened. Daring the last two generations there has been a great formation of nationalities. With the formation of these nationalities has set in an era not merely of protection, but ox prohibition, with a general call to arms. That, Sir, is the exact truth. It is idle, I know, to talk of conscription. The Briton is a free man, and you cannot force him. But I suggest that Ministers might begin at the beginning, and teach the children in the State-aided schools that physical education is as important as mental or spiritual education. When the children leave school every inducement should be given to them to join the Volunteers and become efficient, and afterwards to join the Army Reserve. In this way I think we might, in the course of one generation, form a territorial army of great magnitude and considerable efficiency, which would free our navy and enable it to make concerted attacks. I can only say, in conclusion, that if this principle were adopted—and it does seem to me to be not merely a fad of my own or of more distinguished people, but to be within the scope of practical politics— throughout the Empire, you would be able to compel the peace of the world, which is desirable above all things to a great commercial Empire like our own.

* SIR W. HARCOURT

I feel bound to support Her Majesty's Government against the 10-year Budget of the honourable Member who has just sat down. The fundamental principle of the honourable Member's speech was that during 10 years there shall be no reduction of taxation in this country. I doubt whether that is a doctrine which will commend itself to the generality of the people of this country. He had one other suggestion, which was that we should cultivate in this country the love of athletics. I have not observed myself that that is our national deficiency.

* MR. WANKLYN

I beg the right honourable Gentleman's pardon—athletics in concrete form.

* SIR W. HARCOURT

The most concrete form of athletics I am acquainted with, I should say, is football, and we are not defective in that respect.

* MR. WANKLYN

I beg the right honourable Gentleman's pardon. I regard football in great part as a waste of energy, and I desire to see it put into a more concrete form.

* SIR W. HARCOURT

I will not detain the House with a discussion as to what form of athletics is to be adopted by the federated Empire at the conclusion of 10 years. Coming to the Amendment of my right honourable Friend, I am sorry to say I cannot support that Amendment. So far from thinking that during the present Parliament and the present Administration there is likely to be too much diminution of the burden of taxation, I must say I have always regretted that there has not been a great deal more. The real truth is that the expenditure of this country, as has been pointed out in the speech in opening the Budget this year by the Chancellor of the Exchequer (who claimed me, I think, as his only disciple on that occasion), is alarming, and, I venture to say, dangerous. He has stated that the expenditure of this country, including the subsidies to local taxation, will now amount to £116,000,000, a sum which those who have ever been responsible for the finances of the country will know is far more formidable than any of the scares which are the principal causes of this expenditure. I have lived, Sir, long enough to have passed through a great many of these scares, which never came to anything at all; we were, first of all, going to be conquered by the Russians, then there was the battle of Dorking immediately after the Franco-German War, and there are some people who are always in a state of alarm as to what is going to happen, and who remind me of the old women who never venture to retire to rest without imagining that there is a burglar underneath the bed. Sir, my right honourable Friend seems to have been alarmed by two circumstances which have not shaken my nerves at all. One was, I will not call it the inarticu- late, but the unreported speech of the Prime Minister, addressed to the bankers. Well, bankers are a timid folk as a class, but I have been assured personally myself, not only by the chairman of the dinner, but by some other people present, that there was nothing whatever alarming in the speech at all. What the Prime Minister had to do was to satisfy the bankers that an expenditure of £116,000,000 a year was a good thing. He said nothing about additional taxation, but he spoke of additional expenditure. The additional expenditure this year was stated by the Chancellor of the Exchequer, as compared with that which he originally provided last year, to be £5,000,000. Now, if you go into the society of bankers, and say you are going to increase the public expenditure by £5,000,000 in a particular year, it is necessary to impress them with the urgency of making such additional expenditure. As for saying that the Stock Exchange was disturbed by this unreported speech, that does not alarm me at all, because I always remember the saying of Sydney Smith, which I think was a very true one, that the greatest fools in the world are the three per cents., and why they rise, and why they fall, for reasons which no sensible man can understand, is one of the marvels, I think, of modern civilisation. Then he seems to have been much intimidated by another speech, and, no doubt, a very alarming speech, as to combinations which would be worse than anything that ever took place in the wars of Napoleon, which rendered it necessary that we should go round Europe, cap in hand, seeking alliances. That may have scared people for four and twenty hours, but they recovered from it, and they thought, and I think justly thought, that it was only the fun of the Colonial Secretary. The nerves of mankind have been completely restored, and now there is no alarm. We need not go into great additional expenditure on that account. I take the state of affairs from what I regard as a responsible source, the head of the Government, who is also Foreign Secretary. Did he use alarming language when he went to meet the ladies of the Primrose League? He told them, on the contrary, that everything was perfectly right. He said that nothing could be better; that Russia, had taken something which was very bad for her; that we had got something which was excellent; that all the arrangements which had been made were perfectly advantageous; that we were not to judge by foolish dispatches —dispatches were often foolish—but by results, and that the results were entirely satisfactory. Why, then, are we to forego this very small reduction of taxation which is offered us now out of the plenitude of the yield of taxes? I suppose that never in the history of this country had there been so many and such great surpluses from which the people have derived so little advantage. And then, when a small advantage is offered —the crumbs from under the table of the Chancellor of the Exchequer—my right honourable Friend wishes that those crumbs should be swept up, or, indeed, taken and baked into a new loaf. I confess I do not share that view at all. In his speech, the Prime Minister and Foreign Secretary stated, particularly pointing to Russia, that we ought not to be jealous of those Powers which had access to territories which our arms could not reach. What does that mean? When we have such a statement, not from what I may call, without disrespect, an outside Minister, but from the Foreign Minister, who is responsible for the relations of this country with other States, why in the world should we be alarmed and put into this condition of panic, and be asked to overthrow the Budget of the Chancellor of the Exchequer, who, I presume, on the authority of the Cabinet, is satisfied that the condition of affairs at home and abroad is such as to justify a remission of taxes to that amount? The Chancellor of the Exchequer gave us the figures to show that this Parliament and this Government have increased the expenditure of this country by 12 millions sterling a year. A very formidable figure that, and one which requires a good deal of explanation and a good deal of justification. I cannot now, on this Amendment, refer to all the items which constitute that expenditure; that will come later on, when we come to consider the expenditure of the Budget generally.

* MR. SPEAKER

The right honourable Gentleman is apparently not aware that the general question is before the House. There is no Amendment before the House

* SIR W. HARCOURT

Then, Sir, I am afraid I must go on a little longer. I thought the right honourable Gentleman moved his Amendment, and, speaking on that Amendment, it would not have been possible to go into the general question.

* SIR C. DILKE

The other Amendment was negatived.

* SIR W. HARCOURT

So far as that is concerned, then I may leave it where it is. I do not think the House will be disposed to depart, save in some details, from the general proposals of the Chancellor of the Exchequer. I heard something said, which I should gladly hear discussed upon Committee of the Bill, as to the relative merits of relieving tea or tobacco. From my point of view, the decision of that question depends very much upon which of the two commodities the consumer will obtain the largest share of the reduction. It has been said that out of the tobacco reduction the consumer will get very little, while in the case of tea he will get the larger proportion; but I should very much like to hear the opinion of experts, who know more about the matter than I do. I should like to ask the Chancellor of the Exchequer one or two questions with regard to the reduction of the Debt in the past year. The right honourable Gentleman stated that it amounted to £6,600,000, but he added that there was £1,016,000, which ought to be added to that, as it had been issued to the National Debt Commissioners, but not employed. I do not quite understand how that took place, or how it came not to be employed.

* THE CHANCELLOR OF THE EXCHEQUER

May I explain?

* SIR W. HARCOURT

If you please.

* THE CHANCELLOR OF THE EXCHEQUER

The National Debt Commissioners were unable to invest this money within the year, and it went over to last year.

* SIR W. HARCOURT

Then I understand that, practically speaking, the reduction of the Debt last year would amount to a million more—that is, £7,600,000?

* THE CHANCELLOR OF THE EXCHEQUER

Yes.

* SIR W. HARCOURT

That is what I wished to know. Now, as regards the disposal of the surplus, which amounted, I think, to three millions odd, the right honourable Gentleman has disposed of a large part of that which is called the old Sinking Fund, setting it apart for the new public buildings. Although I have heard that very much criticised, I think it is justifiable upon this ground, that the old Sinking Fund ought to be employed in the reduction of debt, and it comes to the same thing if you apply it to discharge a liability which would ultimately result in debt. There is one other point upon which I must make an observation; that is that about three-quarters of a million, I think £750,000, of what is properly the expenditure of this year has been provided for out of the surplus of last year. That is a very dangerous practice, because, after all, when you are dealing with a surplus for the reduction of taxation you ought not to manufacture that surplus out of money which has been regularly appropriated for the purpose of the payment of debt. But there are extenuating circumstances in this case, I admit, because the fact is that the surplus of last year was largely created by the impossibility of doing the work of the Navy, and therefore there is some excuse for employing it this year, when that work is passed over from last year to this. I mention this because I do not think it should be allowed to grow into a precedent. There are peculiar circumstances this year, and I hope we shall hear from the right honourable Gentleman the Chancellor of the Exchequer that he does not mean to make this a regular practice in dealing with the old Sinking Fund. In the past I have been guilty of it myself to a small extent, where I had a deficit—something like £200,000—in order to prevent the necessity of imposing new taxation. I shall not criticise the Estimates which the right honourable Gentleman has presented this year, as I know how dangerous it is for those who are not behind the scenes to judge in these matters. All I can say is that, in all the circumstances of the case, I think they are very sanguine. The right hon- ourable Gentleman has proposed to increase the allowances under the system of graduated income tax. To that I cannot object. It is a principle which I have adopted and extended, and I am not sorry to see the Conservative Party carry it still further. I should, perhaps, have preferred to increase the allowances below £500 rather than carry them up to £700. But in consideration of this striking tribute to the principle of graduation, I am not prepared to depart from his proposals. The right honourable Gentleman has a proposition on the subject of "grogging," I had a desire myself to deal with the subject in 1894, when I dealt with the spirit duties, but I received such vehement opposition from the honourable Gentlemen who sat opposite that I could not carry the additional burden of "grogging" upon my back at the time, and I wag obliged to drop it; but I think the right honourable Gentleman is right in dealing with it in this way. We come now to the question of this enormous expenditure. The right honourable Gentleman the Chancellor of the Exchequer says that he has preached sermons upon the subject, but that no man listens to his sermons, and, least of all, his own colleagues. What happens to the people who pay no attention to sermons it is not for me to say, but I am disposed to think that it is not well for them in the future. That may, I fear, be so with the colleagues of the right honourable Gentleman. There is a large part of that expenditure which, in my opinion, is unjustifiable. There was thrown away the best part of two millions of money in the relief of agricultural rates. That was perfectly unjustifiable—absolutely unjustifiable. An attempt was made to impress the country with the notion that the agricultural interest was ruined. I venture to say that the agricultural interest is at this time as well, or better, off than any interest in the country. [Cries of "No, no," from the Government Benches.] No landowner ever admitted that agriculture was prosperous, even in the days when wheat was 120 shillings a quarter. If honourable Members care to read the history of those times, they will see that the landlords were always grasping for more, and therefore I do not accept that interruption of my statement as an indi- cation that the agricultural interest is badly off. The agricultural interests are not satisfied now; they never will be satisfied, as they never have been satisfied at any time in the history of this country. In that manner, as I have said, the better part of two millions sterling was thrown away. In my opinion, it was also absolutely unjustifiable to throw away £600,000 or £700,000 more upon the Voluntary schools. I read an account from the mouths of the bishops themselves, complaining that since this grant subscriptions have fallen off. That was undoubtedly the fact. This system of subsidies to local taxation has grown until you now have them reaching 12 millions of money. What advantage have you gained by that? I would ask any gentleman, in his own place, where he resides, and especially in the country, does he find the rates lower than they were since this was begun? I do not, and I doubt very much whether anybody else does. These subsidies, in my opinion, are very slightly, if at all, to the advantage of the community. What good could not the Chancellor of the Exchequer have done with 12 millions of money? Does the country understand the price it is paying for the subsidies? The system of subsidising local taxation may be practically represented by sixpence on the income tax. In my opinion that is a bad system of Imperial taxation, and you should have proceeded on a different footing. Well, Sir, another item, which, in principle, I should be the last to quarrel with, is the increase in the Education Vote; but, Sir, as the right honourable Gentleman himself, in his Budget speech, indicated, judging from the great authority of the Vice-President of the Committee of Council, we have the worst education in Europe, certainly at the greatest expense, and you have before you unquestionably a question of far larger expenditure if you are going to make your education system good for anything at all. You have secondary education in view, which must necessarily involve much larger expenditure than you have had before. Yes, Sir, but, of course, the great increase of this expenditure has been in the Army and the Navy. It has arisen from that spirit which has grown up, and of which the Prime Minister spoke, and against which he warned everybody, and especially his own Party —that desire to make war upon everybody, and to take everything. That was the warning he gave on the first night of the Session, and he has continued that warning—I don't know whether he gave it at the bankers' banquet. That has been the main cause of the growth of expenditure. I know, Sir, that when I was responsible for the finances of this country in 1893, when this large expenditure began to assume anything like its present proportions, I ventured to warn this House that this expenditure would profit them very little, and that they would not relatively improve their position. Well, we have heard people talk about the universal supremacy on the seas. Of course, all the nations in the world are not going to accept that supremacy; and when we began to build ships they began to build still more, and although you may begin to build against one or against two Powers, you cannot build against three or four without finding that your relative position is very much what it was when you began—or, perhaps, rather worse. My right honourable Friend the Member for the Forest of Dean (Sir C. Dilke) spoke of the increased armaments by Russia. Well, of course, if you increase your armament Russia will increase hers—you lead the way. The result of it all is that the relative position is not improved at all. Sir, this is a very serious matter, because I am quite sure, and the Chancellor of the Exchequer knows that as well as I do, there is no certainty that times will always be as prosperous as they are now. You are spending up to the margin of a very high income indeed, and the time will come when that prosperity—there is a trough as well as a crest in the wave—will cease. What are you going to do in the trough of the wave? Then, of course, you must have additional taxation. I do not see the Member for King's Lynn (Mr. Gibson Bowles) here at this moment. But when that time comes you may depend upon it that the weight of that increase must fall upon the income tax and upon the death duties. I think honourable Gentlemen opposite will do well to take that into their consideration, and not allow thei rnerves to be shaken to an extent which will involve them in that kind of liability. I had not intended to occupy so much of the time of the House, but, Sir, I, of course, rejoice with the Chancellor of the Exchequer at the largo revenue which he has at his disposal. I only trust that he will be able to resist, as I am certain he will be willing and eager to resist, these demands, resting, I believe, upon no solid foundations for a great and increasing expenditure, and that when he comes to consider the distribution of those great surpluses for the relief of the country from the burdens which it already bears, I am sure he will find upon this side of the House, as well as upon that, every desire to assist him in the task of giving to the country the benefit of those surpluses which he has been so fortunate as to enjoy.

On the return of Mr. SPEAKER after the usual interval,

DR. TANNER (Cork, Mid)

I beg to call your attention, Mr. Speaker, to the fact that there are not 40 Members present.

Upon a count, the requisite number of Members were found to be in their places.

* MR. YERBURGH (Chester)

There is just one point with which I wish to deal. With regard to the system of taxation, I for many years have found myself in thorough agreement with the right honourable Gentleman. With regard to the question of the agricultural interest, the right honourable Gentleman said that agriculture was in a most flourishing condition, but I do not know upon what data he bases this statement. My experience of the agricultural interest extends over three or four counties, and I may say that, so far as I know, that interest is not in a nourishing state at all. There has been, it is quite true, a certain rise in the price of wheat, but the number of farmers growing wheat in this country is so small that this has had very little effect upon them. With regard to the question of our defences, as has been said, it is quite true that our expenditure has reached a very high limit, but I think we are apt to forget, when we consider the amount to which it has reached, that we have an enormous trade to protect; and if we take into consideration the amount spent for the purposes of defence in this country and compare it with the amount spent by other countries, we shall find that, although our commerce is infinitely larger than various other European countries, our expenditure upon that head is less. Now, the Chancellor of the Exchequer, in his speech upon the introduction of the Budget, said that this country spent on the defence of every 1,000 square miles of territory less than France, Germany, and Russia. I desire to point out what our merchant shipping costs us per ton. This country spends per ton on her merchant shipping £2 3s. 2d. Germany spends more than that, and Italy, France, the United States and Russia also spend more, Russia spending no less than £16 4s. 5d. Therefore, I do not think it can be said that our expenditure for the purposes of defence is in any way extravagant or excessive. But, in considering this question of naval expenditure, I think we must take into account the various duties that our fleet has to perform. Now, Sir, these duties have been outlined in the Report of a Committee which sat on the naval manœuvres in 1888. I understand that amongst the duties laid down were that our commerce should be protected abroad, and that a reserve squadron should be provided for home waters. And, further—

* MR. SPEAKER

Order, order! The honourable Gentleman is going into matters of detail which are not relevant to the question raised in this Finance Bill.

* MR. YERBURGH

I was attempting to show that, so far from reducing taxation, it was incumbent upon the Chancellor of the Exchequer to have put an estimate before the country for strengthening the fleet so as to equip it for the efficient discharge of its duties. There is one point which I should like to bring before the House, which I think has been brought prominently before the country within the last few weeks, and that is the question of a reserve of wheat in case of war. Now, I know, because I have had the honour of reading his speech, that the Chancellor of the Exchequer has had this matter before him. He did not, however, handle in a very gentle manner the defects of the scheme for a reserve, which I believe he called an absurd folly. Now, I am bound to admit it is quite possible that many people may not agree with this proposal, but I think, before the right honourable Gentleman makes use of such strong terms, surely he should give some consideration to the principles involved in the scheme, and the manner in which it is proposed that those principles should be carried out. I venture to say that our position with regard to our food supplies is a very critical one, and deserves the serious attention of the Government, and this is why I have dealt with the position of our fleet. I would ask, is our fleet in such a position as to enable it to give effective protection to our food supply? A noted Admiral has stated that our fleet should include about 186 large cruisers, but we have only got 133.

* MR. SPEAKER

The honourable Member is now going into matters not relevant to the question of taxation. The honourable Member is entitled to say that, in his opinion, there are certain matters which necessitate larger taxation, but to discuss along with them the question of the food supply and the condition of the fleet is going into details which are out of order.

* MR. YERBURGH

I bow to your ruling, Mr. Speaker. I think the Chancellor of the Exchequer would have acted more wisely if he had devoted this money to the building of another cruiser, or to re-arming with quick-firing guns the ships which are now armed with muzzle-loaders.

MR. BROADHURST (Leicester)

I only wish to say this: what I complain of is that the Chancellor of the Exchequer, in this great and prosperous year, which is unexampled in its revenue income, has made no provision whatever for less prosperous years, and he is spending the whole of the surplus in a manner which I do not consider is the best that could have been devised in the interests of those who have earned the revenue. I quite recognise that he has made a reduction in taxation upon the tobacco duty of over a million sterling or a million and a quarter. Well, I think I stated at the time the Budget was introduced that, in my opinion, that reduction would be of no benefit whatever to the workers, and my complaint, was that out of this extraordinary revenue of £116,000,000 of money the working people, who have mainly contributed this large sum, are receiving no benefit from it whatever. The reply was that the small consumers of tobacco would be relieved of taxation. Now, so far as I can understand from inquiries I have made in quarters which are well informed on this subject, the half-ounce buyer will get no benefit at all.

* THE CHANCELLOR OF THE EXCHEQUER

Yes, he will.

MR. BROADHURST

Well, he may do in this way. He may get a better article, but it will be a drier article and it won't last as long as the old article; and to the man who is getting 12s. a week income, however advantageous the better quality might be to his constitution, he will think most of the half-ounce which lasts longest in the process of smoking. That, I think, will be the practical view taken of it by the agricultural labourer and by the general worker. Now, Sir, if there are any classes connected with the tobacco trade who will get an advantage out of this reduction in taxation, it will be, I fear, the great merchants and the large manufacturers. Now, I do not accuse—and I should be very sorry to accuse—the Chancellor of the Exchequer of having that intention, but that will undoubtedly be the result of this arrangement. The poor man, who has to make his purchases in small quantities of the cheapest article, will not be benefited by this reduction. That is the point, and I believe the more you inquire into it the more plain and the more certain will that be found to be the case. I wish that the Chancellor of the Exchequer had given more thought to the subject than he appears to have done, and I am certain that had he done so he would have seen that the million and a half presented to the tobacco trade of this country would have been more effective had it been devoted to the reduction of the tea duty instead of to the reduction of the tobacco duty, because there is not the complication in connection with the tea trade as there is in the tobacco trade, and the benefit would not have been swallowed up by merchants and dealers, but would have given a direct and certain benefit to the people who most need it. Well, Sir, that is the view which has impressed itself more strongly upon my mind as time goes on with regard to this Budget, and I find the not only in my own mind but in the minds of a great number of people whom I have met in the country in various parts since the Budget was introduced, there is the same opinion. What the workers feel is this: that the Chancellor of the Exchequer had a magnificent sum at his disposal, such as no one ever dreamt of having, and he let the opportunity pass by of doing a great and a just act to those who most needed it, and who should be the first to receive rewards from the States—namely, the workers of our country, who are almost on the verge of starvation even when they are fairly well employed. I cannot see why the Chancellor of the Exchequer might not have made an experiment in old age pensions. ["Oh, oh!"] Why not? There is no reason in the world why it should not be done. It would have been equally as welcome to the workers as the experiment being tried now of paying off the rates of the rich landowners. I do not suppose—in fact, I should not have expected—that the Chancellor of the Exchequer would have dealt with the whole subject on the lines and to the extent advocated by a great number of Members of this House, and by some of his own colleagues; but, at any rate, he might have experimented down to 70 years of age with the meritorious farm labouring community, and he might have devoted out of the great sum he is now disposing of a sufficient sum of money from the revenue to have provided a reasonable pension to all old labourers and their wives over 70 years of age.

* MR. SPEAKER

That is not relevant, and the honourable Member is out of order in going into details.

MR. BROADHURST

I do not wish in any way to depart from the proper scope of the discussion with regard to this Bill, neither do I intend to go into the details of old age pensions; but I think I may be allowed to suggest that the Chancellor of the Exchequer might have ear-marked a few millions of this money for some scheme of old age pensions to be hereafter devised. The general com- plaint as to this Budget is that the workers get nothing out of this money. I quite recognise and appreciate the proposals of the Chancellor of the Exchequer with regard to the small incomes, but that does not touch the weekly wage-earner, although it touches a very meritorious class of the community. As far as the right honourable Gentleman has gone in that direction, no one can approve of his action more ardently than I do, but I complain that the great body of workers of the United Kingdom have got nothing out of the Budget except the statement that they will get their tobacco better—for no one suggests that they will get it cheaper.

* THE CHANCELLOR OF THE EXCHEQUER

I understand that in some cases it will certainly be cheaper.

MR. BROADHURST

Up to the present, at all events, the authorities seem to say that it will not be cheaper, but will only be altered in quality, and not price, to the small purchaser. But, of course, if the Chancellor of the Exchequer says it will be cheaper, if only a halfpenny an ounce—though the right honourable Gentleman does not give the name of the special tobacco the price of which will be reduced—we will trust to his general statement that there will be such a reduction.

* THE CHANCELLOR OF THE EXCHEQUER

If the honourable Member is a smoker, I shall be happy to hand over to him a certain advertisement offering tobacco at a cheaper rate as a consequence of the Budget proposals.

MR. BROADHURST

I think the right honourable Gentleman must be a very favoured personage in this respect. I myself am a considerable patron of the tobacco trade, and have bought in, all directions, but I have found no difference either in price or quality up to the present time. As to that, of course, we must leave it to time to tell whether we poor consumers or the Chancellor of the Exchequer are right with regard to our share in the millions of money that have been placed at the disposal of the trade. I join heartily in the expression of regret that the Chancellor of the Exchequer has not set aside some portion of his great income for educational purposes. I do not for a moment suppose that we shall succeed in altering the proposals of the present Budget, but, if the right honourable Gentleman is open to a suggestion for next year, I sincerely trust that he will make a memorandum of the complaints which have been submitted to him to-night, and will, if he has the money to dispose of, dispose of it in the manner most likely to benefit those entitled to receive the benefit, and not after the fashion of this year, when even the right honourable Gentleman himself is in some doubt whether those entitled to benefit will or will not actually benefit. I suppose we cannot divide against the Second Reading, but I do hope that next year, if the Chancellor of the Exchequer is fortunate enough to have another such sum at his disposal, he will make some provision for coming years when the income may be less.

MR. GIBSON BOWLES (Lynn Regis)

I think the House will recognise that the very important considerations—touching the whole of the Budget —which were raised by the right honourable Baronet the Member for the Forest of Dean have been dismissed with less attention than they deserved at the hands of his fellow-Leader, the right honourable Gentleman the Member for West Monmouth. Of course, we expect disagreement from those benches, and therefore we are not surprised to find that the right honourable Baronet the Member for the Forest of Dean takes one view of Foreign affairs—in which he is an expert—and that the right honourable Gentleman the Member for West Monmouth takes another. I have always considered the right honourable Member for the Forest of Dean somewhat of an alarmist with regard to his continued demands for an increase of the Army and Navy—demands which I have thought are not necessitated by circumstances; but now it is the Government who are the alarmists. The whole of the apprehensions which have been aroused with regard to the situation of the country and the constantly suggested doubts as to the wisdom of diminishing expenditure have been aroused by speeches from Members of the Government. There is the Chancellor of the Exchequer, for instance, who was going to declare war for an "open door," if necessary.

* THE CHANCELLOR OF THE EXCHEQUER

We have got the open door.

MR. GIBSON BOWLES

Yes, Port Arthur is the open door. And then the strange thing is, that, having this open door, you have your Colonial Secretary going down to the country and denouncing a friendly Power as having violated its engagements and broken its promises, and declaring that there were in the Ministry no spoons long enough to deal with such a Power as this. I do not, however, propose to dwell on this subject for very good reasons. In the first place, the most alarmist of all the speeches was treated with so little regard by the Prime Minister, and it seems he had hardly even read it; and therefore we may well treat this Finance Bill on the lines on which it presents itself— those of a prosperity Budget. With regard to the details, let me remark that the remissions which are made are either trivial or mischievous—in some cases both. There is the land tax remission, which is trivial alone, but the alteration in the income tax is certainly not only trivial, but is also undoubtedly mischievous. I am perfectly convinced—and I think everybody who has considered how the rich are getting poorer and the poor richer, and how increasingly large is the number of persons able to bear taxation, will take the same view—that the tendency of these exemptions is mischievous altogether. The principle, I maintain, is a false one, for if you exempt altogether these men at the lower end of the income tax scale they forget what taxation is. But it is not only a false principle to exempt them—it is especially false when they are exempted upon improper grounds. All exemptions of this kind should be founded on one ground alone—that of poverty. I can admit the claim of a man who has only £300 a year, and I would extend it to the man who has only an income of £400, because I think that under certain conceivable circumstances such a man may be put to want the necessaries of life; but beyond a £400 income I cannot conceive that a man is poor, or that he has any claim at all to exemption from taxation. I would suggest that if further exemptions are to be made they should be made to those who have less than £400 a year. If you are going to make exemptions from the payment of income tax at all those exemptions should be made at the lower end of the scale. I hold that the man who has £400 a year does not come within the poverty-stricken class, or, if he does, it is the poverty which requires that he must wear a top hat instead of a round hat and a frock-coat instead of a short jacket. That is not real poverty; it is mere emotional poverty. That is the sort of exemption he has made, and you will observe that all his real remissions are reserved for those incomes under £400 a year. These exemptions should be made on one ground alone—that of poverty; but a man with £400 a year was not on the verge of poverty at all. I now reproach the Chancellor of the Exchequer with having invented national paupers, who were really no more paupers than some of the millionaires of the right honourable Gentleman opposite were real millionaires. Well, Sir, I have another objection, and that is that the Chancellor of the Exchequer, in acting as he has done, has most wantonly exaggerated the principle of graduation—which the right honourable Gentleman opposite admires so much, but which I do not admire at all, but abominate and detest—and he has carried it up to such an extent as to reach the limit of £700. But, if up to £700, why not £7,000, and even further? Why should not some future Minister carry it to £7,000, or even to people of above £100,000? It seems to me, Sir, that, with regard to the income tax, the concession which the right honourable Gentleman has made is a concession, not to the poor and needy, but to the predatory politicians, who wish to tax everybody who has got a little more than themselves. The right honourable Gentleman the Chancellor of the Exchequer is not a bimetallist, but he seems to be a neo-Socialist. Now, Sir, with regard to the tobacco duty, which he has reduced by 6d. in the pound, the right honourable Gentleman told us that he expected that more tobacco would be sold for the same price, or that the same tobacco would be sold at a less price. But even the honourable Member for Bristol doubted whether the reduction would reach the consumer, and the Member for Liverpool —who is also an expert in the tobacco trade—said, when he spoke on this subject, that the benefit might reach the consumer, but only in the form of less adulteration; that is, the consumer would get the same amount of tobacco, but there would be more tobacco in it and less straw. Then, Sir, the Chancellor of the Exchequer suggests that the advertisements will be cheaper, but, in my opinion, a Chancellor of the Exchequer who believes in advertisements is really past argument. I thought in these days that nobody believed in advertisements, but this argument seems to be a licence allowed only to the Front Benches in this House. But we are told, I think upon authority more convincing than that of advertisements, that this remission will not reach the consumer at all, and that it will be absorbed by the traders and manufacturers. Some have gone so far as to say that this proposal suggests a sort of "Bristol bird's-eye Budget." I do not agree with that, and I am perfectly convinced that the Chancellor of the Exchequer intended the beneficial effects of this Budget to be extended over the whole country, but I believe he has been mistaken with regard to the effect on the consumer of the remission of the tobacco duty, for he has made it under conditions which will prevent it being a benefit to the consumer, for it will be absorbed by the traders and manufacturers. Sir, if there was one thing more than another which induced the electors of this country to return to power the Members who have created the present Government, it was this: that they expected to find in this Government the protectors of the rights of property, which had been too often abused. I cannot help saying that the disappointment of those who voted that way with that object is most profound, and it has become most profound of all when they think of the proposals of the Chancellor of the Exchequer and his dealings with the death duties. In the three Budgets he has introduced since the present Government came into office practically nothing has been done for the victims of that nefarious Act which was passed by the right honourable Gentleman opposite and his obedient followers. I do think that of all the disappointments afforded by this Government no disappointment is equal to that which the right honourable Gentleman the Chancellor of the Exchequer has afforded in his dealings with the death duties and the victims of that taxation. There were half a dozen things in that Act absolutely crying aloud for reform, and not one of them has been touched. I do not ask for any interference with the principle of that Act. I have always believed that it would be improper to attempt any such thing. That time will come about the year 1900 or 1901, and not till then, because by that time it will be found that the Act is very much more disappointing than was anticipated. It will then be past praying for, and we shall have to leave it where it is at present. Meanwhile the injustices are crying aloud for a remedy without any relief being afforded by the right honourable Gentleman. There is the unjust and unnecessary burden which is placed by the Finance Act of 1894, or, rather, by the Death Duties Act of 1894, upon the residual legatee, who is made to pay all the duties, instead of a remedy being given to recover from each legatee his fair portion; in fact, there are a dozen things crying aloud for a remedy which the Chancellor of the Exchequer might have touched, every one of which might have been remedied during the time he has been in power, but he has not touched one of them. Now, Sir, one change, at least, we had a right to expect from this Act, and that is with regard to the dispensing power of the Treasury. In this the Chancellor of the Exchequer was almost under an engagement—I say that it almost amounted to an engagement— to introduce certain clauses, such as I have suggested, into this very Act. We all remember, with feelings of some humiliation, that in June, 1895, what I have always considered to be the most un-English and shabby evasion— and it was the evasion of his own Act which the right honourable Gentleman opposite perpetrated in 1895—when he excused the Emperor of Russia £14,000 duty. Now, the right honourable Gentleman has had his return for that in Port Arthur. The present Chancellor of the Exchequer defended him in that, and said he had derived great advantage from it, and he has got his consolation in Port Arthur. The Committee on Public Accounts thought this change should be made. The effect of it was that the Treasury and the right honourable Gentleman made a minute on the 31st December last year, ordering the Inland Revenue to prepare a clause giving the dispensing power in accordance with the report of the Public Accounts Committee, where the clauses or principles were concerned. That should have been inserted in this very Act which we are now discussing, but there are no such clauses in the Act. It is true the right honourable Gentleman has explained that in his opinion these clauses could not be conveniently introduced into this Finance Bill, because they do not deal with the finance of the year. But the principal object of this Finance Bill is to amend the law, and where does the inconvenience arise? In my opinion there is no inconvenience whatever. The necessity for the change has been acknowledged by the right honourable Gentleman himself; so much so that he thinks the clauses are more suitable for a separate Bill. That I do not think would be quite so easy, because, observe, it is to apply to cases of clauses and principle. But these are dealt with in the principal Act, and are covered by that Act, and so they ought to be remedied in the Act itself. That Bill has not yet been introduced, and the First Lord of the Treasury told us to-day practically that no further Bills would be introduced this Session unless they were absolutely non-contentious. I do not know, if these clauses are not inserted in this Act, what their fate is to be, but if I were going to make a sporting offer I should say that it would be very difficult to get this Bill through this Session. This Finance Bill does not contain those clauses drawn up by the Public Accounts Committee. What will be the effect of their exclusion? Why, that the Chancellor of the Exchequer will exercise this power outside the law, instead of having it regulated by the insertion of proper clauses in the Bill itself. Another clause which I contend is absolutely necessary in this Bill, as shown by the answer of the right honourable Gentleman himself, is with regard to the question as to whether duty is or is not pay- able on property in the case of the death of a life tenant who has previously surrendered his life interest. At the end of the year, I think it was in July, 1895, the law officers of the Crown gave it as their opinion that in such cases the duty was leviable; and what did the right, honourable Gentleman do? The House would naturally suppose that he proceeded to act upon the opinion of the law officers of the Crown, but he did nothing of the kind. He took the opinion of the law officers, and took it upon himself to mutilate their decision. and he said, "I will act upon this opinion up to a certain point, but beyond that point I will absolutely disregard it, and act contrary to it." I am sorry not to see in his place the late chief law officer of the Crown, who would, perhaps, have been able to enlighten the House with his opinion upon that subject. He undertook to take the opinion of the law officers, and that opinion itself was that the duty was leviable whenever a death took place after the Act. But the right honourable Gentleman said, "I will levy the duty in some instances, and I will not levy it in others." That was done by an executive act of his own. I say. Sir, that dispensing power of that sort ought not to be thus exercised, and if the right honourable Gentleman in tends to continue this variation from the opinion of the law officers of the Crown he ought to put it into a clause and embody it in this Act. I now come to another point. The right honourable Gentleman the Chancellor of the Exchequer is positively so enamoured of these death duties, and so determined to carry out the system of the right honourable Gentleman the Member for West Monmouthshire, and to win his praises and compliments across the Table —compliments which they bandy between each other whenever finance is mentioned —he is so determined to do this that he will not give us the two small remissions which he promised us. In the Budget speech of the right honourable Gentleman, upon which the Bill is founded, he promised two small trifling alleviations under the death duties, amounting to £208,000. I submit to this House that he has shown nothing but ill-will towards the victims of these death duties. One is the succession duties, and the other is postponement of the duties. He is so enamoured of them that he will not give the alleviation he has promised with regard to them. What occurred? Fourteen, days after he had promised these remissions of the death duties he comes down to this House and tells us that he is going to withdraw these promised remissions, because, forsooth, the Court of Appeal had given a decision against the Crown in the case of the Attorney General v. Beach, in which case the whole of the question as to whether on the death of the life tenant any duty was payable was discussed. So that the reason that the decision was against the Crown, and for that reason alone, the Chancellor of the Exchequer tells the House that he is going to withdraw those small remissions of death duties winch he had promised only 14 days before. Let me remark that the decision of the Court of Appeal was a very important and a very serious one, because it said that that duty was not payable, and, consequently, it followed that all such duties that had been levied up to that time had, under the circumstances, been unlawfully levied, and undoubtedly every farthing of duty so levied will have to be returned. The right honourable Gentleman may fight as he likes, but I repeat that he will have to return every farthing he has levied without the authority of the law. I undertake to say that that will be done if that decision be upheld by the House of Lords. But did that decision justify the right honourable Gentleman in withdrawing the remissions of duty which he had already promised? Not at all. There was not the slightest justification. The right honourable Gentleman two years ago admitted that the point was extremely doubtful, and he founded that opinion upon what was absolutely the opinion of the highest authorities. He knew it was possible, he must have believed it to be probable, that the Court of Appeal would decide as it did decide, and yet with all this knowledge he came down and promised these remissions, and before the possible had occurred; and after the Court of Appeal had given its decision, it is absurd to tell us that he had an idea that it was an entirely new and unexpected event; or, because it was entirely new and unexpected, that he must withdraw the small paltry alleviation of £280,000 that he had absolutely promised more than a fortnight before. Such conduct is not becoming the Chancellor of the Exchequer. If the Chancellor of the Exchequer cannot foresee what everybody else foresaw, what many of us predicted, including so humble a layman as myself, upheld as we were by high legal opinion, then the sooner the Secretary to the Treasury is promoted to a higher office the better. This withdrawal has absolutely no justification in the decision of the Court of Appeal, and I cannot myself understand why so paltry a step was taken in connect ion with a matter which was not unexpected. I must say it looks much less like finance than temper. I have one other word, and the last. It is with respect to this very case which the Chancellor of the Exchequer puts forward as justifying him in withdrawing the remission of duty which he has promised in his Budget speech. I am sorry to do it, but I do not think I can escape charging the right honourable Gentleman with an absolute breach of faith. I hesitate before so doing, but I fail to find any other term which precisely expresses what he has done in this very matter, which, as I say, he puts forward as a reason for withdrawing the promised remissions. Two years ago he undertook twice—first to the honourable Member for the Woodbridge Division of Suffolk, who certainly is most amiably disposed to the Chancellor of the Exchequer, and to whom the Chancellor of the Exchequer is equally amiably disposed; and, secondly, to me, before this House and to this House, that if the proposed Amendment by the honourable Member for Woodbridge was withdrawn he would pay the reasonable costs of both sides in the case of the Attorney General v. Beach, in order to obtain a final and authoritative decision of the law. He has withdrawn that promise, and has now announced that he will not pay the costs of the respondent in the House of Lords. I say that when one considers what occurred—and perhaps the House will bear with me while I recall the words of the Chancellor of the Exchequer—this does create a breach of faith to the House, and one which really ought to be most amply explained, in a way that I am unable to conceive, or else with- drawn from, and the Chancellor of the Exchequer now undertakes to do what it is his duty to do, and pay for it. On the 3rd July, 1896, the Member for Woodbridge moved an Amendment, and the Chancellor of the Exchequer then said that all he wanted was an authoritative decision which would settle the law, and that he would be prepared to pay the reasonable costs of both sides. Upon that my honourable Friend withdrew the Amendment. I was interested from the beginning in this Amendment, I had a certain inventor's patent right in it, and I was not thoroughly satisfied with my honourable Friend the Member for the Woodbridge Division for withdrawing it. So little satisfied was I that six days after I moved it myself, and for this very good reason, because, as I pointed out at the time, that in case he did not accept the Amendment, and should the decision of the courts go against him, he would either have to return a large sum of money, or he would have to ask the House of Commons to pass an Act of Indemnity for his unlawful act. That will now very probably have to be done; but if he asks for an Act of Indemnity I do not believe he will get it. In reply to me the Chancellor of the Exchequer said that he would pay the reasonable costs of both sides, and it was not till after the Court of Appeal had decided against him that on the 12th May last he suddenly announced—I will undertake to say to the astonishment and amazement of everybody who has followed this question—that he refused to pay the costs of the respondent in the House of Lords.

* THE CHANCELLOR OF THE EXCHEQUER

That is not the fact, Sir.

MR. GIBSON BOWLES

Now, really the right honourable Gentleman forces me to quote from an eminent work, the Official Reports of this House. I take care, Sir, to bring my authorities down with me as well as to verify my quotations. On the 12th May (I am quoting from "Hansard"), in reply to a question from myself, after having dealt with other matters, the Chancellor of the Exchequer said— It is not intended to pay the costs of the respondent in the appeal to the House of Lords. Mr. Gibson Bowles: Did not the Chancellor of the Exchequer absolutely undertake to pay the reasonable costs of both sides? Did he make any restriction to the effect that the undertaking should apply only to the inferior Court? The Chancellor of the Exchequer: Yes, I did. Mr. Gibson Bowles: No. The Chancellor of the Exchequer: I did. We were quite content with the judgment of the Divisional Court. Now let the House appreciate that. [The CHANCELLOR of the EXCHEQUER rose to explain.] No, no, no! Let me finish, first. I do not want my speech to be broken up into little bits. We were quite content with the judgment of the Divisional Court. He had paid the costs there. Yes, he would pay the costs, forsooth, when the decision goes in his favour, but not when it goes against him. Now what becomes of the denial of the right honourable Gentleman on the statement that I have made, that he said he would refuse to pay the costs? I undertake to say that I have absolutely and amply proved that what I said was correct. I have only two more words to say, and perhaps the right honourable Gentleman will save his defence till I have said them. I say that the right honourable Gentleman has applied a theory throughout the whole of these Debates on the death duties which we had no expectation that he would have applied. In 1894 Property went down from Jerusalem to Jericho, and fell among death duties, which fell upon him and wounded him and left him for half dead. Then, when this Government came into power, we thought that, if it was not the good Samaritan, it was, at any rate, the priest or the Levite; but no, not at all, it is only another form of the death duties, and instead of treating the victims of these duties with charity and commiseration, and trying to heal up their wounds, it seems to me as if he is only looking for another opportunity to inflict further wounds upon them. We are disappointed at the treatment we have received from the right honourable Gentleman, and I cannot call his conduct with regard to this undertaking to pay the costs of both sides by any other name than that of a breach of faith. If he can prove that I am wrong I shall only be too glad to own that in some respects I am mistaken. All I can say is, that before making this charge I have looked through every word of "Hansard" since 1896, and have never found any qualification whatever of his original undertaking, nor any repudiation of it, until I came to May of this year. Under these circumstances I shall only be too glad if the right honourable Gentleman can clear himself of the charge which it has been my unfortunate duty to make. So far as the public records of this House go, I am perfectly justified in complaining of the way in which he has dealt with this subject. I regret that it has fallen to my lot to raise this matter, but I have had no choice. I have assisted in it from the beginning, I have always taken the greatest interest in it, and I have endeavoured to do my duty to the right honourable Gentleman and to the sufferers from the new legislation, and I am disappointed at the attitude of the Chancellor of the Exchequer. As the case stands at present, although I hesitate to do so, I cannot characterise his conduct in any other way than that of a breach of faith.

MR. BUCHANAN (Aberdeenshire, E.)

I do not intend to enter into this contest between the honourable Member and the Chancellor of the Exchequer upon this question, because there are no two Members who are better capable of taking care of themselves and give efficient answers to each other than the right honourable Gentleman and the honourable Member for King's Lynn. When this subject first came before the House we were told that this devising power was exercised in an extra-legal fashion, if I may use such a word. I quite agree with the honourable Member for King's Lynn that it would be better that it should be made an intra-legal power, and under a power given to the Treasury by Act of Parliament. I am confident that the Chancellor of the Exchequer will do his utmost to bring forward legislation on the subject, and give the Treasury this power, which undoubtedly it ought to have, and which it ought to exercise only on exceptional occasions. The honourable Member began his speech to-night, as so many honourable Members have, by criticising this Bill on the ground that the Government did not spend enough, and that they ought not to remit taxation. Now, I go on entirely different lines. My complaint against the Chancellor of the Exchequer in the present and the two previous Budgets is that, so far from his not having spent enough, he has spent altogether too much. He has remitted no special taxation, and has made no special effort to diminish the National Debt. He challenged criticism upon his three Budgets. He has come into office at a time of exceptional and unparalleled prosperity, when year after year he has had gigantic surpluses rolling in upon him, due in part to the Finance Bill, and in part to the period of exceptional prosperity through which we are passing. He has had these surpluses rolling in without his having imposed a single item of taxation. He has told us that the increase of the revenue of the country during these three years has been something like 12 millions of money. He has told us he has spent it. He has added to the expenditure of the country by the sum of 12 millions a year. I am not going to dwell upon a topic which has been touched so well and deftly by the right honourable Gentleman the Member for West Monmouthshire, but there are two or three observations which I should like to make with regard to this matter. First of all, the Chancellor of the Exchequer, notwithstanding the opportunity he has had of so doing, has not diminished the national indebtedness, but, on the other hand, has increased the expenditure of the country, and this year the right honourable Gentleman has neglected the practice of economy. With regard to the reduction of debt he has told us in his Budget speech that there was a reduction of six and a half millions of money. He was asked by the right honourable Gentleman the Member for West Monmouthshire as to a million of money which comes in in the present year, but which will rank as a reduction for the year 1898–99. He stated that during the past 10 years there had been a reduction of £66,000,000 of debt, and that that was an average of six and a half millions of money per annum, and if he had cast his eye back he would have seen that the average would have gone back to the year 1880. The question I should like to ask is this: if six and a half millions of money per annum in reduction of debt is an adequate amount to devote to that purpose in 1880 or in 1890, is it adequate in the present year, in a time of unexampled prosperity, with a largely increased revenue? Let me present the House with a single figure upon the subject. In 1881–82 the net revenue, according to the return of the honourable Member for Wolverhampton, was £74,000,000 sterling; 10 years later it was £86,000,000; and this year we may take it that it will be £103,000,000 or £104,000,000. Now, six millions and a half of money devoted to the reduction of debt, out of a revenue of £74,000,000, is a much larger sum than a similar sum devoted out of a revenue of £104,000,000. A very much larger sum, and devoted with less burden upon the country. The burdens upon the country and the total debt charge were just the same 20 years ago as they are to-day. The reduction is very much less now. The amount devoted to the reduction of the debt charge was very much greater than you had; in 1887 about 34 per cent, was devoted to that purpose, but only about 25 per cent. is devoted to it now. I really do think that the right honourable Gentleman the Chancellor of the Exchequer ought to give us now some reason why he had not given a greater reduction. During the three years he has been in office he suspended the old sinking fund in the first year for the purpose of naval works, and in the second year for the purpose of military, and this year for the purposes of public buildings. In that way he has withdrawn a very considerable amount of money—from the old sinking fund last year alone some three and a quarter millions of money. I am not disputing his right to do that, but if he does do so it is clearly more incumbent upon him to discover some alternative means of reducing the debt of the country, and we are strengthened in making this demand by the Budget speech delivered by the right honourable Gentleman two years ago. In that speech he was pressed by the honourable Member for Wolverhampton to make some special effort for the reduction of the National Debt. The honourable Member for Wolverhampton quite recognised the difficulties of the position of the right honourable Gentleman at that time, owing to the price of Consols. The Chancellor of the Exchequer said he would rather not be pressed upon the subject then, but he would give this matter his consideration, with a view of putting before the House and the country some further and better proposals by which advantage might be taken of the exceptional prosperity of the country. I think we might now get some explanation from him on the subject. I do not propose to detain the House in view of what has taken place to-night and during the last two or three years, and owing to the way in which we have increased our naval expenditure with a view to meeting possible trouble in the future; but I do think the right honourable Gentleman should have reduced that which is pre-eminently a war tax, namely, the income tax. If it had been put forward by any fiscal authority in this country 10 years ago, or even six years ago, that the income tax should be left at 8d. in the £ in such times of prosperity as we have had, no one would have been more surprised than the right honourable Gentleman himself. The first time he had the honour to hold the office which he now adorns was in 1885. He then had to make up a make-shift Budget, in order to carry on to the end of the year. One of the proposals then made was that, in order to find money, the income tax should be raised to 8d. in the £, and that was consented to by the House. In the next year, 1886, the right honourable Gentleman the Member for West Monmouthshire, who was then the Chancellor of the Exchequer, maintained the income tax at 8d. in the £, and the very first person who protested against that was the present Chancellor of the Exchequer. If he turns to the Hansard Debates of the 15th April, 1886, he will find confirmation of what I say. He will find in the discussion upon the Budget of the right honourable Gentleman the Member for West Monmouthshire that one of the first observations of the present Chancellor of the Exchequer was an observation of great regret, that upon that Measure the House should be asked to sanction an income tax of 8d. in the £ Now, if he objected to the income tax of 8d. in the £ of 1886, he surely ought to have taken advantage of the opportunities he has had during the last three years. He might have chosen for reduction what is, as I have said before, pre-eminently a war tax, which, if he reduces in times of prosperity, he can easily increase again in times of trouble. The only other point which I wish to urge is this: I have stated how the Chancellor of the Exchequer has not made use of his great opportunities of reducing taxation, but more than that, and worse than that, he has largely increased the permanent expenditure of this country. In times of unparalleled prosperity he has told us that the expenditure has gone up by 12 millions of money. He has permanently increased the naval and military expenditure by six and a half millions of money. I am not disputing the right to do so. He has had the opinion of the House and of the country, behind him, and if honourable Gentlemen want to find fault with him upon that score, then they should find fault with the Government of which he is a Member, whose policy has made that expenditure necessary. He was justified in making that expenditure, and he made it on the ground of public opinion. He has increased the education expenditure by £1,750,000 and local taxation by £2,500,000, and including the amount required by the Irish Local Government Bill and the Scotch Local Government Bill, which will come in the course of the next year or the year after, he has increased the expenditure by £3,000,000. In saddling a charge of this kind upon the country, the Chancellor of the Exchequer has, in my opinion, shown himself to be a lax guardian of the public purse. There is no occasion on which I feel a greater distrust of the right honourable Gentlemen on both the Front Benches than when the ex-Chancellor of the Exchequer congratulates the present Chancellor of the Exchequer, and the other way about. The present holder of that office told us that two years ago he preached a sermon of economy. His speech on that occasion was seconded by the right honourable Gentleman the Member for West Monmouthshire, and the sermon was as barren of all consequences as sermons usually are, but he says this year being pressed for increased expenditure by Members of this House, and by his colleagues, he was unable to resist. But is that a true statement of the case? Is that the proper way for him to put it to us, when we know perfectly well that we have attempted to urge questions upon this House for the curtailment of this expenditure of money? We know how powerless we are. We had an instance of that in the early part of this evening, to which I need not refer. I will give an instance which occurred in the earlier part of this Session—when a Motion was brought before this House, upon which it was urged that better terms should be given for harbour loans, and that money might be advanced for railways on better terms. That was proposed by the honourable Member for Hampshire, and all sections of the House —Members of every political complexion —supported it; but the Chancellor of the Exchequer did not even trouble to reply to that demand himself; he deputed the task of replying to the Secretary to the Treasury, who replied, I might almost say, with brutal frankness, that we might take the terms of the Harbour Loans Act—which are absolutely useless—if we pleased, and that was all. I only bring that before the House to show how easy it is for any Chancellor of the Exchequer to refuse any demands which are made upon him, and yet he says he cannot resist the rapacity of his colleagues. In saying that, in my opinion, he shows himself false to his trust as Chancellor of the Exchequer. He is the one barrier we have to put up against the rapacity of his colleagues, and when they press their demands, which must result in a heavy charge being placed upon the taxpayer, it is the Chancellor of the Exchequer who is bound to resist them. If he does not resist them, he must take the responsibility of that expenditure upon his own shoulders. With regard to what the right honourable Gentleman the Member for West Monmouthshire said when he dealt with the large expenditure, which he characterised as pure wastefulness, I entirely agree; and I desire to point out to the House that if any Government have been neglectful in this regard it is the present Government, and the Chancellor of the Exchequer must be held to be responsible. Now, it has been pointed out by the right honourable Gentleman the Member for West Monmouth that the local taxation grant comes to 12 or 13 millions of money. I will limit myself to the grant paid to the local taxation fund, which began 10 years ago. In the year 1891 that grant amounted to five millions of money; between the years 1891 and 1892 it increased to seven and a half millions of money; between 1892 and 1896 it remained stationary; but since the right honourable Gentleman the present Chancellor of the Exchequer came into office it has risen by leaps and bounds, first to eight millions and a quarter, and then to nine millions and a half, at which it stands in the present year, and when the whole amount of the Irish Local Government Bill and the Scotch Local Government Bill has to be reckoned as well it will amount to 10 or 11 millions. I do think that the Chancellor of the Exchequer, in saddling the expenditure of the country permanently with a charge of this character, has hardly been a safe guardian of the public purse; although, during the three years he has been in office he has not neglected to preach to us economy, there is no doubt, in my opinion, that he has sadly neglected to practise it.

* SIR J. FERGUSSON (Manchester, N.E.)

The honourable Gentleman who has just sat down has, to a large extent, answered himself, because, though he reproached the right honourable Gentleman the Chancellor of the Exchequer with not reducing the National Debt, he pointed out that the money had been expended in accordance with public demands, and that there was no surplus left with which to make any reduction. It is hardly necessary to say that if the revenue, which, as he says, is so large, is required for these purposes, there is no other source from which the National Debt can be reduced. My honourable Friend at the end of his speech, and I think it was the only charge of extravagance he was able to bring against the Chancellor of the Exchequer, alluded to the large and growing sums devoted to local taxation. Now, I remember demands being made in this House, and resolutions passed demanding that relief should be given to local taxation, and it was only by the Consolidated Fund that that demand could be satisfied. Now I am concerned more especially to offer if not objections, at all events an expression of doubt as to the wisdom of the financial scheme in another particular and I hope I shall be able to state it without in any way transgressing or trespassing upon a subject not before the House. The prominent part of the Budget is the reduction of taxation upon a particular item, and I cannot help expressing my doubt as to whether it is wise to reduce taxation in such a direction. Since the Budget was framed, and since the right honourable Gentleman made his Budget speech, many things have happened, many things which may make us doubt whether it is not wise to keep a reserve in view of possible contingencies. To grant a reduction upon taxation which is easily borne and scarcely felt, but which, if foregone, is not easily replaced, may cause hereafter grave difficulty. I will not describe the Measure next on the Paper (the Reserves Bill); nobody would say it is the best expedient that can be found for the emergency, but we are told that any other expedient would cost too much money. Well, it is manifestly to the interests of this country that our military forces should be efficient, and if we deprive ourselves of the narrow margin we possess how can we supply the necessary funds for possible contingencies? If you look at our interests all over the world, where our rights may be challenged at any moment, there is no doubt it is most essential for the diplomatic force, upon which our supremacy rests, to be supported by material force. How can that material force be supplied if we deprive ourselves of the margin which is not now more than sufficient to meet the contingencies which may arise? It is hardly necessary to say that all the Government asked for is used for the protection of the country, but it is not showing any want of confidence in the Government if some of us ask that they would now reconsider some of the proposals which would seem to deprive them of the margin which they may possibly require.

* MR. J. A. PEASE (Northumberland, Tyneside)

After the speech which has fallen from the honourable Gentleman on the other side of the House, I will not occupy more than a few moments, but I want to draw attention to the increase of the expenditure during the last few years, and accentuate what has already been said upon that subject. In my humble judgment, when we are comparing one year's expenditure with another, we ought to include all the expenses of the country. Now we have eliminated from many of our accounts the contributions to local taxation, and we have eliminated the cost of all the works in connection with capital items of expenditure, such as barracks, naval works, and Uganda Railway. If all these items were added together, I think the House would be astonished to find that whereas in 1895 the expenditure of the country was £101,000,000, it has now reached for the year ending March, 1898, the sum of £117,639,000. In other words, while the population has increased during that period, only 2.28 per cent., the expenditure, and consequently the revenue, has increased something like 15 per cent. Now, I represent a constituency in which any expenditure on naval construction is very welcome, and my constituents are quite prepared to agree to any increase of expenditure from that point of view, but they are not satisfied that we are getting as a nation our money's worth in connection with this enormous expenditure which is now going on. I do not think that the Voluntary system, as it is called, really accounts for the difference between the enormous sums we pay, as compared with those paid by many foreign nations. If we look to the estimated expenditure for the year ending in March next, we find that nearly 107 millions will be the expenditure charged against revenue, and there will be, over and above the local taxation contribution of £9,500,000, I suppose, the inevitable Supplementary Estimate, probably reaching to a million pounds more, that will have to be provided for within the current year. The right honourable Gentleman says that is provided for, but it was provided for in the year before, and yet we had Supplementary Estimates to the amount of £3,100,000, for which a margin was only allowed of £1,900,000. We shall then have a large sum for special items of capital expenditure under the Naval Defence Act, or other Acts. The estimated expenditure of 116 millions for the current year will therefore probably be exceeded by two or three millions, and I should not be surprised if we reached 120 millions for the total expenditure of the current year. I have spoken of extravagances in connection with the Army and Navy. I believe the money voted for these Services may be required at the present time, but I believe it is only required in consequence of the policy of Her Majesty's Government in connection with Foreign affairs. Of course, it would not be in order for me to deal now with that matter in any detail, but it appears to us on this side of the House that the policy which has necessitated this large expenditure for the Army and Navy is not a resolute or straightforward policy, and it is wanting in that foresight which would tend to secure economy in the military and naval establishments. There is also extravagance in connection with doles and State grants in aid of Voluntary schools without any accompanying conditions to secure educational efficiency. There are two millions a year going to English landlords, and there is a further grant to Irish landlords in order to bribe them to accept the Irish Local Government Bill. That cannot be considered as anything else than a bribe, for it must be well known to honourable Gentlemen opposite that the Irish landlords would not have accepted the Local Government Bill unless they had received a contribution from the Exchequer.

SIR R. PENROSE FITZGERALD (Cambridge)

I beg leave to contradict that statement of the honourable Gentleman.

* MR. J. A. PEASE

I quite agree that the honourable Gentleman himself would have been prepared to accept the Local Government Bill without such a contribution, but I know that there are many Irish landlords who would not have been prepared to do so. These local taxation contributions and grants in aid are, in my opinion, financially unsound, and in that regard also I believe that the present Government ought to be blamed. The right honourable Gentleman who last addressed the House has justified those grants on the ground that incidence of taxation makes grants in aid necessary. I am one of those who believe that every individual in this country ought to contribute something directly to the revenue of the country, and I would like to see the teetotaller pay just as much as anyone else to the revenue of the country. I should like to have such a graduated system of taxation as would secure that everyone should contribute to taxation in proportion to his means. I know that that is an ideal very difficult to realise, but we are going in the right direction. So far, for example, as the reduction of the tobacco duty is concerned, I am in accordance with the Chancellor of the Exchequer, and I believe that he will find that the revenue from tobacco will be increased, and that the relief he has afforded in that direction will in a year or two be made up to the Exchequer. Sir, I am obliged to the House for listening to these observations, and I trust that the Chancellor of the Exchequer will resist these demands which are constantly made upon him for grants in aid for local purposes, because I believe they only promote extravagance and lead to waste of public money.

* MR. J. LOWTHER (Kent, Thanet)

Sir, the honourable Member for the Tyneside Division has indulged in a lament over the extravagance of our expenditure, but I think he knows that owing to the fact that the great mass of voters pay little or no taxation, nothing is more popular with the electorate than bloated expenditure. Honourable Members are no doubt aware that economy in Imperial expenditure has become an obsolete cry. I remember that in my early Parliamentary days every Member addressing his constituents used to insist upon the necessity of economy, but it is not so now, and the conventional reference to the subject has even vanished, I believe, from Queen's Speeches of recent years, since the old relations between taxation and representation have been abandoned. I think it is almost impossible to resist the conclusion that the right honourable Baronet the Member for the Forest of Dean has made out an unanswerable case. It is no doubt a matter of opinion on which Members may differ, whether this country ought to adopt the principle of economy in expenditure so far as to keep down the demands for the Ser- vices and for education, and all those purposes which require so much money, but Her Majesty's Government have not taken that line. The Government say we must build, I do not know how many more ships than any other Power, for the position of this country renders it necessary. How, then, do we stand in that regard? The Chancellor of the Exchequer confesses his inability, and the inability of anyone in his position, to resist public demands in the direction of additional expenditure. As the right honourable Gentleman has pointed out, many of these demands are automatic. They are beyond his control, beyond the control of his colleagues, and beyond the control of the country itself. In regard to some of these matters, Parliament is not master of its own actions, and yet, knowing that, my right honourable Friend the Chancellor of the Exchequer comes down and proposes a Budget at a time when there is great national anxiety with regard to the condition of affairs abroad—an anxiety which my right honourable Friend has not himself largely helped to dispel—in which he asks us to surrender an important item of revenue. Well, it brings me to the question of what kind of taxation it is that my right honourable Friend proposes to reduce. He knows very well that indirect taxation once given up is very difficult to reimpose. Some of us are old enough to remember the unfortunate and suicidal act of Sir Stafford Northcote with regard to the sugar duties. Sir Stafford Northcote, at a time when the revenue was supposed to be advancing by "leaps and bounds," flung to the winds a tax for the repeal of which there was no serious demand—an act which, I believe, was seriously regretted by himself before many weeks were over, and which everybody, unless it be the right honourable Member for Monmouthshire, has deprecated as being foolish and unwise. It appears to me that the Chancellor of the Exchequer is fatally following in those footsteps. Some of the money voted for the Navy was held in reserve last year, but the naval preparations of foreign Powers will force his hand in respect of naval expenditure. Unquestionably the receipt from Customs and Excise duties have reached dimensions which are certainly above the average at the present time, and when the inevitable set-back takes place, where is the Chancellor of the Exchequer to look for the million odd which he is so gleefully casting away to-night? Unless he adopts an entirely new method of finance he will find it very difficult to replace what he is about to take off. What does that bring us to? The income tax, which has reached an enormous figure, will have, undoubtedly, to be increased in the near future. I would rather that there had been no reduction in taxation, and that the money should have been kept for urgent requirements, but if there was to be a reduction, the Chancellor of the Exchequer might have taken a halfpenny off the income tax. He could then, when the emergency arises—and arise it must—put that halfpenny back, and perhaps add another halfpenny to it. But how, in time of need, is my right honourable Friend going to replace the indirect taxation which he is now recklessly taking off? I am afraid it will be the old story over again. Indirect taxation once given up is very difficult indeed to reimpose. The consequence will be that an addition will have to be made once more to the income tax which, for a time of peace, is already disgracefully high. I say that my right honourable Friend's Budget is most unsatisfactory and most unsound. He has reduced an indirect tax which nobody complained of until he announced from his place in Parliament that it was his intention to reduce it by over a million. No one had over felt the tobacco duties to be irksome, and no one is grateful to the Chancellor of the Exchequer for having reduced them. The honourable Member for Leicester, who represents at any rate the Trade Unionist section of the labouring classes, and speaks with authority on this subject, said the reduction of the tobacco duty would be of no benefit to the working classes. He told us that he was a consumer of tobacco upon a relatively large scale, but said he had not found the quality improved, or the price a fraction cheaper, in consequence of the Budget. I am a non-smoker, and, therefore, am not an authority on the subject; but it seems to be the opinion of smokers that whatever benefit may accrue from the reduction will go, not to the consumer, but to the retailer. If the consumption of tobacco is increased, I doubt if the community will be very much benefited thereby, for people smoke quite enough already. I claim that it is unsound finance to reduce an indirect tax which nobody felt excessive, for which reduction there was no popular demand, and which it will be very difficult to replace. But how about another reduction of my right honourable Friend—namely, his reduction to certain privileged classes of income tax payers? I object to the dangerous development of the principle of graduated income tax proposed in the Budget. It is the last thing we would have expected from a Conservative Chancellor of the Exchequer, with a large majority at his back, and no doubt it will be improved upon by my right honourable Friend's successors. So long as it was a question of relieving those who could plead poverty, the principle, though unsound, was intelligible. It was intelligible to say that a certain class of the Queen's subjects were so poor that they ought to be relieved in respect to taxation; but in this case the principle is carried so far that I see no reason why another year it should not be carried several hundreds a year further, and become a thoroughly graduated income tax. The Leader of the Opposition, when he introduced his monstrous Budget of 1894, declared that in dealing with the death duties he was only following the example of his predecessor, the present First Lord of the Admiralty. Therefore, when Conservative Chancellors of the Exchequer establish dangerous Radical and Socialistic principles, they cannot complain if eventually they get the blame when, their successors advance upon those principles and make them intolerable to the community. We did not, of course, expect that, my right honourable Friend the Chancellor of the Exchequer, who had in this House denounced the death duties amidst deafening cheers, would have abolished them, but we did expect that he would have modified them in a friendly sense towards those who had been mulcted by them. The action of the Chancellor of the Exchequer with regard to death duties is a great disappointment to the right honourable Gentleman's political friends, not only in Parliament, but throughout the country. He has done practically nothing to afford substantial relief to the payers of death duties. I must express my great disappointment at this Budget, which, in my opinion, extends very much unsound principles of finance. The principles of taxation adopted are most unconservative, and I do not think I have ever heard a more unsatisfactory or unsound Budget than the one under discussion, and I believe, whatever may be said in this House, that it is a most unpopular one in the country.

MR. BUXTON (Tower Hamlets, Poplar)

We have heard a good deal about the speeches of the Members of the Government, but I think the House and the country are prepared to accept the policy of the Government rather than the speeches that have been made. The Government have stated that they have asked the Chancellor of the Exchequer for the amount of money which they consider is sufficient to ensure the safety of the country, but a surplus of £2,000,000 is a surplus which they can deal with in time of peril; therefore, I think the Government are very wise in remitting the taxation which they propose. It seems to me that this million and a half which is to be given in remission of taxation had much better be put into the pockets of the consumers and the trade of this country, and if the Government at some future time find it necessary to increase taxation for the time being for the safety of the country, they can do so; but in the meantime the country and the consumer have had the benefit of the remissions. My quarrel with the Government is a different one; it is that they have not chosen an article of indirect taxation upon which there will be much benefit to the consumer or the trade of the country, because at the best the Chancellor of the Exchequer can only give 6d. in the pound upon tobacco, which will not reduce the price except very slightly, but will only improve the tobacco. Now, some honourable Members upon this side of the House think that if the Government give a reduction of taxation, the reduction ought to go to the consumer and not to the middleman. We also think the Government ought to deal more substantially with the tea duty rather than the tobacco duty; but I am not going to discuss that question to- night, as it is obvious to anyone who has studied the matter that the reduction of the tea duty would go directly into the pockets of the consumer, and that the consumer would practically enjoy the whole benefit of the reduction of taxation. When you reduce a duty from 3s. 2d. to 2s. 8d. I think it is highly improbable that the consumer, even in the slightest degree, will benefit from it. The right honourable Gentleman the Chancellor of the Exchequer has not pleaded the question of revision, because he gave the House the option of having the reduction off tea or off tobacco. It has been shown that the loss through the reduction of 2d. in the pound upon tea would be slightly in excess of the loss caused by the reduction of 6d. upon tobacco. The right honourable Gentleman who spoke just now talked of the danger of surrendering taxation, because, when once taken off, it would not be reimposed.

* MR. J. LOWTHER

I think my honourable Friend misunderstood me. I said the reduction of a tax could not be remedied by putting it on again. You know perfectly well it cannot.

MR. BUXTON

That the tax being reduced, it cannot be increased again? Well, we have had that experience in the Crimean War in regard to tea, and only a year or two ago the tobacco tax itself was increased by 4d. That 4d. was found not to answer, and I think the mere fact that the increase of 4d. was found to be of no advantage to the revenue, and did not bring in what was wanted, shows that a similar arrangement would not go to the consumer. The other proposition upon the Budget is one in which I entirely agree with the right honourable Gentleman—namely, the proposed remission of the income tax, and applying the graduation to a higher scale than at present. I should be sorry to see the remission of the income tax placed below the £160 it is at present, and I think the right honourable Gentleman has done right in increasing the graduation up to £700. Some honourable Gentlemen suggest a scheme of income tax upon a valuation basis, but I think that would not be economical. We get the valuation in the death duties. The increasing of the graduation of the income tax is a matter to which I give my cordial consent. We have had some criticism from the honourable Member for King's Lynn and other honourable Members upon the death duties, but I do not understand the honourable Member for King's Lynn; because, although he said it would be wrong to give away any of this surplus in taxation, he was so opposed to the death duties that we should have lost millions a year. I take it we on this side of the House are glad the Chancellor of the Exchequer has maintained the principle of the death duties of 1894, and the process of collection, and has declined to give way to pressure brought to bear upon him, so as to reduce the proceeds of the tax. If a case of real hardship could be shown, that hardship could be remedied; but I think it is a dangerous thing to attempt small changes in a great tax, carefully thought out in this House, because an attempt to relieve hardships would lead to greater hardships in the end. With regard to the reduction of debt, I for one rejoice that the Chancellor of the Exchequer is allowing the new Sinking Fund to act freely, and to reduce a large amount annually, but I regret that he has not seen his way to increase the principle of the old Sinking Fund. I think we ought to remember two things, as the Chancellor of the Exchequer pointed out, that while we are reducing the National Debt each year we are standing at a greater expenditure every year in consequence of our local bodies; and while we have reduced the national indebtedness by £6,500,000. our local indebtedness has increased by £11,500,000. If we add the national and local indebtedness together it amounts to £930,000,000; and I think we ought not to relax our efforts to reduce the National Debt. I think it cannot too often be remembered that in our old Sinking Fund we have the greatest possible reserve in time of war. The mere fact of having a large annual Sinking Fund would enable us to raise £250,000,000 in time of war without increasing taxation at all. My honourable Friend, in speaking of the income tax, described it as essentially a war tax, but, unfortunately, we have now to meet a war tax in times of peace, and I do not think, under the existing circumstances, that 8d. in the £ is too great. I think it is most important to maintain a large Sinking Fund, and in that respect I think the Chancellor of the Exchequer has failed in that part of his duty; and I certainly do wish also that he had seen his way to dealing with some branch of indirect taxation which would have given a greater benefit to the consumer.

* THE CHANCELLOR OF THE EXCHEQUER

This Debate has ranged over a great variety of topics. It has not been directed only to the question of taxation, which is the ordinary subject for discussion on a Budget Bill, nor even to the question of the expenditure, to meet which that taxation is necessary. It has extended to other matters with which on this occasion I think I can hardly be expected to deal. The right honourable Baronet the Member for the Forest of Dean commenced this Debate by referring to certain speeches of certain Members of the Government which, in his opinion, were alarmist and incompatible with the reduction of taxation proposed by the Bill now before the House. Other Members have dealt with the strength of the Army and of the Navy, with the food supply of this country, with the subject of our Foreign policy generally, and last, but by no means least, an honourable Gentleman opposite has attempted to embark on a discussion on the question of old age pensions. I will only say, with reference to the observations of the right honourable Member for the Forest of Dean, Her Majesty's Government have framed their proposals of taxation, and expenditure upon a consideration of the circumstances before them. If the circumstances should change, of course the matter would have to be reconsidered; but we are perfectly sensible of the pledges which we have given with respect to the defences of the country, and particularly with respect to the Navy, and I repeat that any matter that might cause an alteration in the balance of power in the world would command our most anxious consideration, and, if necessary, we should be prepared at the proper time to lay proposals before Parliament. But I deny altogether the description of the speeches to which the right honourable Baronet has referred, as speeches of an alarmist character, incompatible with the Bill before the House. He was good enough to refer to a speech of mine, and I notice, with some regret, that more than one honourable Member has had so little to do lately that he has spent his time unprofitably in reading my past speeches. So the honourable Member for Aberdeenshire actually discovered a speech of mine delivered in 1886, and the honourable Member for Bradford has evidently gone through a course of my extra-Parliamentary utterances during the last three years. Of course, the right honourable Member for the Forest of Dean was quite entitled to comment on what I said about the "open door" in China. My view is that the "open door" has been maintained, and is likely to be maintained, and I am utterly unable to understand how it is that some honourable Members appear to consider that because Port Arthur has been leased to Russia by China, and is not to be used as a commercial port, the doctrine of the "open door" has been infringed, whereas we all know that Port Arthur was always a closed port. The right honourable Gentleman referred to an unrecorded speech of the Prime Minister. I think unrecorded speeches had better not be referred to, because I am convinced that no one can possibly tell what an unrecorded speech really was. But if that unrecorded speech be judged by the utterances of the Prime Minister which have been reported, I am convinced that nobody can say that his utterances have been of an alarmist character. Then, in the last speech delivered by my right honourable Friend the Secretary for the Colonies, I fail to find anything incompatible with the proposals made for the protection of the country, or with the proposals made for taxation in this Bill. I turn to a question appertaining more directly to my own Depart- ment. Reference bus been made to the reduction of the National Debt, and the honourable Member for Aberdeenshire criticised me for having failed to make what he considered sufficient provision for the reduction of the Debt during the past three years. I have made at least as great provision for that as has ever been made before, and I do not think it is quite fair of the honourable Member to surest that, by diverting the old Sinking Fund to the purposes of naval and military works and public buildings, it has been diverted from its proper purpose. I do not suppose that any honourable Member would contend that it was unnecessary to incur expenditure on naval and military works and on public buildings, that the expenditure which we proposed for those purposes was too great, or that it would not have been provided for properly by borrowing. That, I think, is admitted, or, at any rate, is not disputed; therefore I maintain that a surplus which would, under ordinary circumstances, have been devoted to the old Sinking Fund, and expended in the purchase of Consols at a price 10 or 12 per cent. above par, was infinitely better used when allocated to naval and military works and public buildings. Instead of borrowing fresh money for these purposes, I think I might almost claim, as part of the sum which I have been able to devote to the reduction of the public debt, the money which has been devoted to these purposes of permanent utility, for otherwise they would have had to be provided for by borrowing. But however that may be, taking the amount devoted in the three past years to the redemption of debt, quite as much has been devoted as in any previous year. I will say, further, that I have redeemed my promise to which the honourable Member for East Aberdeenshire referred, of considering in what way that sum might be most economically used. It has not been used very largely for the purchase of Consols; it has been used for the redemption of floating debt of other kinds, and in that way it has been used far more economically than if it had been devoted to the purchase of Consols. I turn now to the question of expenditure. The right honourable Member for West Monmouthshire dealt with that subject. He dwelt for some time upon what I put before the House in my Budget speech—the great increase in the expenditure of this country during the last three years. He questioned a great part of that expenditure; he said that he looked upon the expenditure under the Agricultural Rating Act for England and under the Education Act, as far as. Voluntary schools are concerned, as unjustifiable. The right honourable Gentleman said that before; it has often been repeated by honourable Members opposite in this House and in the country. I do not think this is a very convenient or necessary time for me to enter into a defence of these Acts. They were discussed at great length in the House; they were assented to by a great majority of the House, and they are the law of the land. But I did notice that in the speech of the right honourable Member for West Monmouth that, although he demurred, to expenditure of this kind in aid of local taxation in England, he said not a word about Scotland, and did not even refer to the Irish Local Government Bill of the present year. I do not quite know whether the right honourable Gentleman includes in his condemnation those grants in aid of local taxation which we have made in Scotland and Ireland, as well as in England. If he does, I am rather surprised that he did not visit them with the same denunciation here, and does not record his vote against them, as he has not done during the passage of the Irish Local Government Bill. But the right honourable Gentleman went on to find fault with the whole system of what he called subsidies to local government. That is a system which was, to a considerable extent, rectified and set on a better basis in the year 1888. A good many subsidies were then abolished, and local taxation, in the shape of licences, was substituted for them, which is certainly a measure of reform. When the right honourable Gentleman came into office in 1892, he was face to face with these, subsidies to the extent of 10 million a year. He confirmed this by his Finance Act of 1894, and he has no right after that to find fault with anything that existed before the present Government came into office. Then he went on to dwell on the expenditure on the Army and Navy. I admit that the expenditure of the Army and Navy is very large; that it has largely increased during our tenure of office. But the honourable Member for East Aberdeenshire was perfectly right when he said that that increase has been due, not to me, not to any of my colleagues, not to the Government as a whole, but to the practically unanimous demand of the people of the country. The Navy Estimates, since the year for which we are first responsible, have increased by more than five millions a year. The Army Estimates have increased, adding the Colonial force, by practically one and a half million, and it may be, in future, we shall have to face a still greater increase. I do not think, in view of the expenditure which is demanded by the great majority of the people of this country, which, in our judgment, is necessary for the defence of the Empire—I do not think the honourable Member was justified in blaming me because I had not devoted more in paying off debt, or in the reduction of taxation. It is true that I have had to deal with a great revenue, but it is also true that I have had to meet unexampled expenditure, and it is impossible for any Chancellor of the Exchequer, in view of the necessary demands to which I have referred, to do more in reducing debt or taxation than it has been my lot to do. Now, I come to the reduction of taxation proposed in the Bill before the House. We shall have a better opportunity in Committee for dealing with the question of tobacco and tea. That question was touched upon by the last speaker and the honourable Member for Leicester, who are great champions of tea. I gave the reason in my Budget speech which had induced me to prefer tobacco to tea; and I would only add now that further consideration has convinced me that I was right, if I were to have regard to the two things to which I think every Chancellor of the Exchequer must have regard—first, in reducing taxation upon an article of large consumption, to provide that the reduction shall in some manner or other reach the consumer; and, secondly, to bear in mind the future prospects of the revenue. I disagree altogether with the suggestion that what I have done has been a surrender of an important branch of revenue. I attach very great importance to the information, which reaches me from all sides, even from critics of this reduction of the tax upon tobacco, that the loss of revenue may not be even so large as I have anticipated, and that increased consumption will certainly soon recoup the revenue. That seems to me to be a matter of the greatest importance. I do not deprive the revenue, as it was deprived in the case of sugar, of any object of taxation. I simply reduce the taxation on an article which is taxed to the extent of 500 per cent. of its unmanufactured value in the belief that by doing so I shall recoup the revenue and lighten the burden of the consumer. Now, it is perfectly true that on all kinds of tobacco it may not be the case that the consumer will gain the benefit of a cheaper article. I said as much in my Budget speech. I was surprised, however, to hear what fell from the honourable Member for Leicester. He argued that the poor man—the half-ounce man, as he called him—would prefer to have that half-ounce in water and tobacco to having it in dry tobacco.

MR. BROADHURST

May I put it in my own way? He would prefer to have, as a rule, a half-ounce of tobacco which would last longest in the process of smoking.

* THE CHANCELLOR OF THE EXCHEQUER

But if you put enough water in it would last through the whole day. The reason that I do not want to argue the question now is because I believe I shall be able to convince the Committee, when we come to the point, that the consumer will benefit, and largely benefit, by the proposal. I will just point out that it is not the fact, as was stated by the honourable Member who has just sat down, and was said on previous occasions by the right honourable Gentleman the Member for West Monmouth, that a reduction of 2d. in the duty on tea would represent the same sum as I anticipate the reduction of 6d. in the pound of tobacco will cost. It is true that it appears to have cost about £1,100,000 in 1891 to take 2d. off the tea duty; but if the right honourable Gentleman will look at the Returns of the tea duty receipts from 1889 to 1893 he will find it perfectly clear that the reason why it cost so little is this: that the reduction was anticipated, and the clearances of tea which ordinarily should have been in the year previous to that in which the duty was reduced were delayed, and were made in the year in which the duty was reduced, thus diminishing the receipts in the previous year and increasing them in the year in which the reduction was effected. I think the right honourable Gentleman will see, if he looks, that is perfectly proved by the figures, which bear out the calculations given me by my advisers in this matter, which are that to take 2d. off the tea duty would cost rather more than £1,610,000. I now come to two other parts of the Budget on which considerable criticism has been made from this side of the House. My right honourable Friend the Member for Thanet differs very largely from me, I am afraid, in financial views. He accuses me of Socialistic principles on account of the small alteration I propose with regard to the income tax. Let me state what the alteration is to which such great importance has been attached. Right honourable and honourable Gentlemen opposite see in it a system of graduation extending and unfolding itself through the whole income tax. I see nothing of the kind. What are the facts? I do not propose any further exemption from the income tax at all. I leave the law just as it is. What I propose is a further abatement. Now the present system extends the abatement up to £500 a year, and the result is that a man with an income just under £500 receives the abatement and pays at present a 6d. income tax, while the man with an income just over £500 pays an 8d. income tax. Now, I desire to get rid of that abrupt transition. I desire to extend the abatement to £700, so that the transition may be gradual. I look upon that as a reasonable proposal, and one which will give very considerable benefit to a large number of small professional incomes. But when I am asked to see in it a Socialistic principle, or the adoption of the principle of a graduated income tax generally, I must demur. I proposed the alteration to make the present system of abatement fair throughout, and for no other purpose whatever. Then, as to death duties. I have nothing to complain of what the right honourable Member for Thanet said on that matter. He admitted that it would not have been possible for me to alter the principle of the Finance Act of 1894. I have never undertaken to do so. Before the present Parliament was elected I said that it would be impossible to do so, and, further than that, I have always contended that when a duty of that kind is in existence, as long as it is maintained, you have to see that it is not evaded. For that reason I have resisted the insidious proposals of the honourable Member for King's Lynn, and, whatever he says, I shall continue to resist them, because I know perfectly well that his object is to destroy the Act, not legitimately, but by evasions which will prevent its working. The honourable Member for King's Lynn accuses me of breach of faith in regard to a certain case under the Act now before the Court. He said I had promised that the Trearsury would pay the costs of the parties in that case, in order that the matter might be tried. I made that promise, and I have performed it. The matter came before the Divisional Court, and it was decided against the taxpayer, and the costs were paid. In the Court of Appeal a decision was given against the Crown, and the costs were paid by the Crown, of course. We have appealed from that decision, and I have made no promise in regard to the costs of the appeal. What happened was this: On August 3rd last year, before the first appeal was proceeded with, I was asked whether, in view of the decision given in the Divisional Court, I proposed that the expenses of appeal should be met by the Treasury. I answered that when the Treasury undertook to pay the costs of this case in the Divisional Court it was on the distinct understanding that if the Crown were successful and the case was taken to the Appeal Court it would be at the appellant's own expense. The Crown was successful, and no reason has been shown for departing from the arrangement originally made, and it has not been departed from.

* MR. J. LOWTHER

I did not understand that.

* THE CHANCELLOR OF THE EXCHEQUER

I do not complain of my right honourable Friend, because he always treats me fairly in debate. But the honourable Member for King's Lynn made an unfair attack upon me. He said that he had looked through "Hansard," but he never read the answer which I have mentioned. I have fulfilled the promise I have made. But I go further. I will not rest under a charge of breach of faith in the mind of a man whose opinion I respect, and if my honourable Friend the Member for the Woodbridge Division tells me that what I said binds me to pay the costs of this further appeal I will do it. I will not say anything in answer to the honourable Member for King's Lynn. I wish to explain to the House one matter in connection with the death duties which I think may require some explanation. In my Budget speech I mentioned two proposals which I intended to make. The first was a postponement of the payment of duty in certain cases where property was settled in a marriage settlement for the lives of husband or wife; and the second was the reduction of succession and legacy duties on collaterals and others below lineals, where the estate duties had been paid. It was my intention to make these proposals in this Bill. But when the decision was given against the Crown in the Court of Appeal in the case to which I have referred, I was obliged to reconsider the position. Now I think the honourable Member for King's Lynn need scarcely have denounced me for the course which I have taken in this respect. When I announced these new proposals he said one was of no account, and the other was wrong, and this evening he denounced me for having withdrawn them. Why did I withdraw them? Because in the present condition of the law with regard to the estate duty upon settled property I could not safely propose, until we obtained the decision of the House of Lords, any alteration in the estate duty on settlements. It would be dealing with a matter which is in reality still sub judice, and to postpone duty in such cases might certainly give an opportunity for the transfer of life interest to the immediate successor, and thus provide an escape from the duty altogether, if the judgment in the case which has just been heard finally holds good. As to the other point it is undoubtedly the case that duty has been paid during the last three years under the opinion of the law officers of the Crown, which opinion was over-ruled by the decision in the Court of Appeal. If the judgment in the Court of Appeal should be confirmed by the House of Lords, the result will be that a considerable amount of duty will have to be returned to those who have paid it; how much I cannot at present say, but it will be a large amount, because the payment has been going on for three years. I am obliged to provide for that. I thought the fairest way to provide for it was by declining to touch the death duties in this respect until I saw what that financial position was. I fell bound to withdraw those two proposals in the Budget from this Bill in consequence of the decision to which I have already referred. Now, I do not know that there is any other question there; there has been a good deal of criticism of my proposals, as is natural on the Second Reading of the Budget Bill, but I do not gather that there is any intention to oppose the Second Reading. When we get into Committee we shall be able to discuss the details. We can then have full discussion on tea, tobacco, or any other matter which may come before the Committee; at present I trust the House will be willing to conclude the Debate and give the Bill a Second Reading.

* CAPTAIN PRETYMAX (Suffolk. Woodbridge)

As I have been referred to in the course of this Debate, and the honourable Member for Kind's Lynn has found fault with me, and has found even more serious fault with the right honourable Gentleman the Chancellor of the Exchequer, I feel that I ought perhaps to say one or two words upon this matter. I would in the first instance remark that I took the undertaking of the Chancellor of the Exchequer as to the costs of the Attorney General v. Beech to apply to an authoritative decision, and I thought that if it were necessary to obtain that decision to go from court to court we were entitled to ask the Chancellor of the Exchequer to fulfil his pledges. I also understood that this case was taken to the Courts in the public interest, and therefore the cost should be paid out of the public money. I think we may take it that the right honourable Gentleman the Chancellor of the Exchequer would not apply public money to private interests. Of course I do not know what view the House may take of the matter, but my own view in regard to this particular case is this: that the law as now applied is manifestly unfair, and inflicts great hardship. But, on the other hand, I am not prepared to say that if the decision of the Court of Appeal is carried out to the full it will not free one class of property at the expense of another. So long as these death duties exist they should be applied as fairly as possible as between settled and other classes of property. It therefore appears to me to be more desirable to amend the Act in a fair and reasonable manner, if an Amendment can be agreed upon between the extreme points, having regard to the decisions we have obtained, and it appears to me that that is a matter which it is desirable should be decided on the floor of this House. In the Beech case some of the parties thought it desirable in their own private interests to carry the case to the Court of Appeal, before it could be decided whether the public interest might not be better served by amending the Act in this House, and upon that, in my opinion, the Chancellor of the Exchequer is absolutely free from the undertaking he gave to pay the costs in the public interest. I do not feel justified in the present state of affairs in asking him to pay the costs of the proceedings in the House of Lords. The parties who are now interested in this case perfectly understood when they took the case to the Court of Appeal that they would have to pay their own costs. They were fully acquainted with that fact. The honourable Member for King's Lynn appeared to be unaware of what had occurred, and he thought that an authoritative decision was to be obtained, and that we should be fully justified in pressing the Chancellor of the Exchequer to pay the costs. Under the circumstances, I think the right honourable Gentleman has acted in a manner with which we have no right to find fault. With regard to the withdrawal of the concessions or modifications which were announced on the introduction of the Budget, I welcomed those concessions, not because the amount of relief they would have afforded was large, or nearly sufficient to deal with the hardships which may arise, but because they show a desire to do something. I must associate myself with the honourable Member for King's Lynn in saying that there is a large class of people who feel that they are treated hardly by the working of this Act, and these hardships can be modified without injuring the Act in any of its principles. At the same time we feel that, as a very large number of these particular hardships deal with settled property, it is hardly fair to ask the Chancellor of the Exchequer to deal with the cases as to settled property until he knows how settled property stands; and until he gets a decision upon the Beech case we cannot ask him to make any great concession. When next Session we have, as I hope we shall, an authoritative decision, we can ask him to take the whole case into consideration, and to make larger concessions than he has done. In addition to such future concessions I think we shall be entitled upon the Committee stage of this Bill to put down, with, the hope that the Chancellor of the Exchequer will accept them, clauses dealing with any cases which show especial hardships, and which can be shown to be cases not contemplated by the Act of 1894 as cases in which the duty should be payable at all.

SIR J. LENG (Dundee)

I desire to say only a few words. I recognise that the proper time to discuss this question is when it goes into Committee, but I think the interval before that time might be profitably utilised in considering whether the £1,120,000 which is to be remitted from the tobacco tax is to go into the pockets of the consumer or not. I do not know whether the right honourable Gentleman is aware that a circular has been issued by tobacco manufacturers in Scotland to the effect that they will only be able to make a reduction of 1d. in the £ to the retailer. They say 2d. will be required to meet the lack of moisture, and the other 3d. will be required to meet the extra cost consequent on the war affecting supplies from Cuba and Manila. Now, although the lower grades of tobacco consumed by the people at large are not affected by these considerations, it appears to me the consumer will obtain no benefit from this concession whatever.

MR. GIBSON BOWLES

Perhaps, as a matter of personal explanation, I may be permitted to intervene for a moment. I stated the case with regard to the promises of the Chancellor of the Exchequer as I gathered it from his public statements. I have gathered now from the honourable Member for Woodbridge that the right honourable Gentleman has made other arrangements with the parties to the suit of which I was not aware. Under the circumstances, although I think the language used in this House justified my making use of the expressions I did, as those arrangements have been made known, I feel bound to withdraw the charge I made against the right honourable Gentleman of a breach of faith, and to express my regret that I used the language I did, in ignorance of the arrangements which had been made privately.

* THE CHANCELLOR OF THE EXCHEQUER

I accept entirely the statement of the honourable Member. I would only point out that if the honourable Member had listened to what I have read out to the House he would have seen that the arrangement with the parties was made by the Inland Revenue officials.

Motion agreed to.